By Maria Kaufmann
We first came to New Zealand in the early 1990s. My husband and I were in our forties, a professional couple at their peak earning years. Contrary to our original plan to make New Zealand our permanent new home, we left late in that decade when the effects of what became known as the Asian Crisis were also felt in New Zealand. Income was patchy; prospects for stable employment were poor. However, we are planning on returning in the near future to take early or semi-retirement in New Zealand, the country we still prefer for its laidback lifestyle. But there is a problem: the New Zealand pension system.
When we decided to leave New Zealand, we did have some savings that might have allowed us to stay and sit out the crisis. We could have done nothing, living off the money set aside for a rainy day. We could have depleted our reserve funds and eventually gone on the state benefit, costing the Government money rather than paying it taxes from income earned from employment. We have seen many for whom this seemed a more convenient option than actively pursuing a career, be it in New Zealand or elsewhere, and standing on their own feet financially.
Long-term planning built on sand
We didn’t want to take the risk. Instead of watching our savings melt away, wasting our best years and earning capacity, we decided to take our skills back to Europe where job prospects were better. However, I wish to point out that during our years in New Zealand we did work; we did make a useful contribution to the local economy; we did pay taxes.
My husband had taken on New Zealand citizenship and we had come to value the many benefits New Zealand lifestyle offers. The decision to leave wasn’t taken lightly, and was solely based on the necessity to earn a living. Our plan was to work hard, make some decent money in Europe and return with savings that would tide us over until our pensions kicked in.
Ever since taking up my first salaried job after graduation, up until the early 1990s, I had worked and paid into the German compulsory employer/employee-funded pension scheme. At the time I moved to New Zealand my pension entitlement was fairly modest, but it was a reassuring base for retirement planning.
The everlasting myth of universal Super
My husband, who had no German pension entitlement, wasn’t overly worried about retirement because he would be getting a New Zealand pension – so he was told. After all, NZ Super was universal, neither needs-based nor means-tested, and paid to every New Zealand citizen or resident who had fulfilled their ten-year residency requirement. This was, and still is, a widely held belief and there was no reason for us to doubt or double check it at that stage.
As an avid internet user, and as the information on the web became more comprehensive and accessible, I eventually found a Government website where all the information on eligibility for NZ Super was neatly listed. There was nothing new, just the reassuring information that what I had been told back in New Zealand was actually true. This must have been in the early 2000s.
Checking back with the WINZ website in disbelief, I subsequently found out that in the meantime this crucial information had been added. Why that late? And how should I explain this to my husband? It took me two years to pluck up the courage to do so and to get it off my chest. However, I had used the time to research the issue more thoroughly, found an ally, and decided to do something about it rather than just quietly accept my fate. The idea of Pension Protest was born, albeit it was still vague at the time.
Maria Kaufmann only found out
on the internet about Section 70, Direct Deduction Policy and Spousal Provision.
“I eventually found a Government website where all the information on eligibility for NZ Super was neatly listed. There was nothing new, just the reassuring information that what I had been told back in New Zealand was actually true. This must have been in the early 2000s.”
“It was only two years ago that I stumbled upon an alarming piece of information on the internet, Section 70”.
“Until today, I see this myth of universal Super perpetuated in the New Zealand media.”
“My husband, who is not eligible for a German pension, will not receive New Zealand Superannuation either when we return. He would, though, if he were single.”
“Isn’t a wealthy couple, where the wife has been the homemaker and hence has earned no income of her own, an economic unit, too? Yet they are both eligible for New Zealand Superannuation.”
“When it comes to taxation, there is no income splitting for couples as economic units to reduce the income tax they have to pay.”
“Quite obviously the New Zealand pension system is riddled with a number of inconsistencies.”