Migrant pensioners living ‘close to breadline’ after failing to win appeal against deductions

A couple who moved to New Zealand from the United Kingdom 50 years ago say that deducting any of their UK pension from their Kiwi one is “grossly unfair, unlawful and fraudulent”.

However, despite a determined appeal to the Social Security Appeal Authority they have failed to overturn a decision which snips their Kiwi pension by just over $7000 a year.

The Authority has dismissed their appeal against a decision by the Ministry of Social Development, which was upheld by a Benefits Review Committee, to reduce their entitlement to New Zealand Superannuation because they received an overseas pension.

They had raised the “commonly traversed issue” as to whether a person who received an overseas pension should have their entitlement to New Zealand Superannuation (NZS) reduced, the authority said in its decision released in May.

The Cambridge couple, who were not named in the decision, said it had further diminished their financial position and they were now “living close to the breadline”.

The pair were New Zealand citizens and have lived here for 50 years. They had paid taxes in New Zealand and have contributed to the New Zealand economy for a large part of their working lives.

Before they moved they made what was described as minimal contributions to the UK National Insurance Fund, meaning they were both entitled to a basic UK pension, but not the full pension.

One of the pair’s entitlements was £43.59 (currently NZ$90.22) per week and the other received £25.79 ($NZ25.79) per week.

Their UK pension was paid into a trust account set up for the benefit of their children.

They were granted the New Zealand pension when they reached the age 65, in March 2011 and February 2014 respectively. They received the married rate of New Zealand super less their UK pension, which meant the annual deduction of NZ super for one was understood to be $4563 per year and $2699 for the other.

They argued that deducting an overseas pension from their Kiwi Super amounted to discrimination against immigrants in New Zealand, was an infringement of personal property rights, and a contravention of various laws designed to provide protection from discrimination when accessing social services from government agencies.

The couple felt they were entitled to full New Zealand super in addition to their UK pension, and sought the return of all deductions since 2014.

They submitted that as their UK pension was a payment of their own contributions, they did not gain a “benefit” and would not disadvantage any New Zealanders by receiving both their UK pension and NZ Super.

Further, they did not receive their UK pension in New Zealand as it was paid into a trust account in the United Kingdom for their children and they could not access it.

“As such, they consider that they have never personally received their UK pension,” the authority said.

It noted that the couple’s position was, they said, supported or acknowledged by senior officials, politicians and the judiciary.

The authority said their UK pension fell within the category, as defined by law, that must be offset against New Zealand super.

It said the decision was based on the “unsurprising policy” that people who were absent from New Zealand for part of their adult lives should not be in a better financial position than people who were in New Zealand for all their adult lives.

The authority said the key provision was a section of the Social Security Act which was in force when the issue arose.

It meant that the New Zealand pension or benefits would be reduced where a person who received that pension or benefit also received a “benefit, pension, or periodical allowance” from overseas.

The High Court and Court of Appeal have confirmed that pension payments from the United Kingdom met the criteria for deduction under this section of the law, with two exceptions, neither of which applied to the couple.

The Ministry said the direct deduction policy had been in place in New Zealand since 1938.

It was created so New Zealand taxpayers were “not expected to expend money” to provide retirement superannuation that was greater than what a New Zealand taxpayer would receive if they lived and worked for their entire life in New Zealand.

The authority was satisfied that the appeal had to be dismissed.

Tracy Neal is a Nelson-based Open Justice reporter at NZME. She was previously RNZ’s regional reporter in Nelson-Marlborough and has covered general news, including court and local government for the Nelson Mail.