Dual entitlement

Until January 1968, British immigrants who had lived in New Zealand for twenty years enjoyed dual entitlement.

They received their New Zealand pension in full in addition to any retirement pension they might be receiving from the United Kingdom.   The position changed in 1969, however, when the 1956 UK/NZ Agreement was being revised.  Section 70 of the Social Security Act 1964 required that New Zealand pensions would be reduced by the amount of any pension paid under the social security system of another country - including the UK.

In the new (1970) Agreement however, a concession was obtained for those people who, before 1970, based on British government advice, had been paying voluntary contributions to the UK pension from New Zealand.  Under this concession, a number of British pensioners are still enjoying dual entitlement: they are exempt from the direct deduction policy, receiving two state pensions - the UK National Insurance pension and NZ Super - without reduction.

The concession was not advertised widely in Britain - and not at all by New Zealand authorities.

Perhaps an annual income of hundreds of millions of dollars was too considerable a bonanza for the New Zealand government to relinquish.  The upshot was that 99% of British migrants never learnt, or learnt too late, that they might qualify to receive both pensions by making voluntary payments.

Not surprisingly, the previous government appeared to be considerably embarrassed by the dual entitlement anomaly, loth to admit that the Ministry of Social Development operates a discriminatory two-tier pension policy that does not treat all overseas pensioners on an equal basis. 

To admit to dual entitlement would be to admit to double standards.

Instead, former Finance Minister Michael Cullen chose to answer enquiries with explicit denials:

“Claims … that many New Zealanders have two state pensions (are) not correct …  Claiming that some New Zealand citizens are already exempt from the direct deduction policy … is not correct.”

Although the dual entitlement provisions were not made known to most British immigrants, New Zealand's Deputy Prime Minister was certainly aware of them.

Ever since the direct deduction policy was formulated in 1964, New Zealand governments have insisted that there should be no double dipping.

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