No happy retirement due to legalised fraud
By John B Albers
(President of the Multi-National Superannuation Council and Interim Committee Member for the AOW Lobby Club)
Both organisations I represent resent the Direct Deduction policy, as applied by Work and Income New Zealand (WINZ). The AOW Lobby Club speaks mainly for persons with a right to a Netherlands AOW pension. AOW stands for Algemene Oudersdoms Wet and is the Dutch old age pension. The Multi-National Superannuation Council represents all nationals who derive a pension, or part-pension, from an overseas pension scheme.
I would like to express many thanks to the Human Rights Commission, in particular the Chief Commissioner Rosslyn Noonan, for this report to be done. And a thank you to Dr Claire Dale and her team for their excellent work in compiling ‘Working Paper 2009-2.
When I spoke to the Chief Commissioner in 2002, she was not informed about the frustration of pensioners with a right to a part overseas pension. The Chief Commissioner’s advice was: write to the Human Rights Commission, the Ministers of the Crown, and Members of Parliament.
Many letters, all to no avail
Over a period spanning eight years, we have written many letters to the New Zealand government, all to no avail. But the Human Rights Commission has taken heed and ordered this working paper to be done.
When between the late 1940s up to 1957 there was a migrant wave from the Netherlands to New Zealand to fill the shortage of workers during the economic growth of New Zealand, those would-be migrants were properly informed. They were promised that after 20 years’ work or residency, and having reached the qualifying age, a New Zealand pension would be available.
Migrants from that era did, and still do receive the full New Zealand pension.
However, migrants arriving in New Zealand from the Netherlands after 1957 had built up a part Netherlands pension that would only be paid at age 65, anywhere in the world. Bizarre as it was, all those migrants leaving the Netherlands after 1957 were informed by the New Zealand authorities that a full New Zealand pension would be paid. The only condition would be that the person had to be in New Zealand for 20 years or longer and needed to reach the qualifying age of retirement.
This was not to be true. Their overseas pensions were subjected to the contentious Direct Deduction Policy, or DDP. The promise of a full New Zealand pension was broken and the Direct Deduction Policy was never revealed to would-be migrants before they made their decision.
Most people affected feel that it is grossly unjust to reduce a superior pension to the level of New Zealand Super. In doing so the New Zealand government is monetarily benefiting. Or could the Direction Deduction Policy approach even be called legalised fraud?
I will give you an example, taking myself as instance. At the age of 64 and three months I did receive a full New Zealand Super. At age 65, I got pressurised to apply for the Dutch AOW pension. When granted, I received 11% of the AOW pension. This equates to NZ$ 4,384.44 per year. This amount is deducted from my New Zealand Super. For 40 continuous years of work New Zealand now pays me only NZ$ 9,844.33.
To me, and thousands of others affected by the DDP, this is totally unacceptable.
The ladies who never left New Zealand
Another example. Ladies who never left New Zealand during their entire working life, by marrying a man from overseas are not receiving a New Zealand pension at all. The Multi-National Superannuation Council and AOW Lobby Club have written many letters to the Ministers of the Crown, Members of Parliament, always with the response, that we should have no higher pension than the person who never left New Zealand – hence the example of the ladies who never left New Zealand. This questions the morality of the Direct Deduction Policy. If the pensioner is not to benefit, how is it the New Zealand Crown can benefit from certain groups of people?
The Minister now in charge of the Direct Deduction Policy has cancelled all correspondence on this matter with the Multi-National Superannuation Council and AOW Lobby Club under the pretence the topic is not on the agenda. But it should be on the agenda because this DDP issue will not go away. Future pensioners, children and grandchildren who have been overseas will be similarly affected.
A few years ago the Multi-National Superannuation Council proposed an amendment to the DDP. It is very similar to proposal number 2009-2 in the Executive summary and is also endorsed by the AOW Lobby Club. We then received answers, for example from a senior minister, saying: "This is an interesting solution to a difficult problem.” Another minister from a smaller party wrote: “Your proposal is an elegant, noble and simple solution to a festering problem.” But nothing was done by either minister.
A large but totally unfair monetary advantage for the NZ Crown
We now hope, with the help from the Human Rights Commission, to find a politician who has the courage to take this matter to Parliament.
In conclusion: the Direct Deduction Policy is giving the New Zealand Crown a large, but totally unfair monetary advantage. The person who never left New Zealand but married a foreigner with an overseas pension, and all other people affected by the DDP are feeling betrayed, frustrated. Some are emotionally and physically affected by it, which does not allow for a happy retirement.
(Speech held at the Overseas Pension Forum in Auckland on 24 February 2010; edited for the publication on this website.)
John Albers is the President of the Multi-National Superannuation Council and also represents the AOW Lobby Club of mainly Dutch people who receive a Dutch old age pension. Both groups resent the Direct Deduction Policy.
“Dutch migrants from the era between the late 1940 and 1957 did, and still do receive the full New Zealand pension.”
“For migrants who came after 1957 the promise of a full New Zealand pension was broken and the Direct Deduction Policy was never revealed to would-be migrants before they made their decision.”
“In doing so the New Zealand government is monetarily benefiting. Or could the Direction Deduction Policy approach even be called legalised fraud?”
“The Minister now in charge of the Direct Deduction Policy has cancelled all correspondence on this matter under the pretence the topic is not on the agenda. But it should be on the agenda because this DDP issue will not go away.”
“We now hope, with the help from the Human Rights Commission, to find a politician who has the courage to take this matter to Parliament.”