A Petition and a Preview

In April 2006, a petition was launched calling for a full Parliamentary Inquiry into the ongoing abuse of pension rights of many elderly citizens.  A short bulletin accompanying the petition, “Superannuitants Shortchanged”, featured several statements extracted from the Executive Summary of this website.

Grey Power supported the petition.  As the number of signatures climbed into the thousands, the Ministry of Social Development wrote to Grey Power denouncing “Superannuitants Shortchanged” as inaccurate and an attempt to discredit the Government, Ministers, officials of MSD and others.

The Ministry’s reaction to the petition is a preview of how it will confront any accusations of wrongdoing.  It also confirms there are individuals within the Ministry who have devoted their careers not to serving the nation but maintaining and defending measures intended to penalize members of the public.  From the Ministry’s letter to Grey Power, certain extracts (italicized below) require a response:

“One in every four” (New Zealanders affected by current retirement policy) should read, “One in every ten”.

The Ministry is ignoring retirees who have never applied for NZ Super (e.g. Ruth’s husband Bill) and the many people denied NZ Super because they were not actually resident in New Zealand on reaching 65.  Also excluded are the thousands of people of retirement age who have worked a major portion of their lives in New Zealand but who now live in non-agreement countries and are therefore denied the right to NZ Super.

The amount of $400 million is a considerable over-estimate of the current annual revenue from the direct deduction policy.

The choice of wording in “Superannuitants Shortchanged” was unfortunate.  It should have read: “The government takes advantage of the elderly to the tune of more than $400 million a year.”  This figure includes the $185 million of direct deduction revenue acknowledged by the government as well as the NZ Super denied the thousands of people living in non-agreement countries.

Although it is correct to say that 52,000 New Zealanders are affected by the direct deduction policy, there are only approximately 10,000 people whose pensions are captured by the provisions of section 70.  The remaining 42,000 have their pensions deducted under the Social Security Agreement between New Zealand and the UK.

The argument is fatuous.  The word 'captured', however, says it all.

Direct deduction is neither an income test nor an asset test.

Participation in most overseas social security programs is compulsory.  A common misconception is that, under a contributory scheme, every person gets an amount directly relative to the contributions.  A number of contributory schemes are actually partially funded by governments. 

The point is irrelevant.  It makes no difference whether an overseas pension is voluntary or compulsory, government funded, partially government funded or not government funded - MSD/WINZ grabs all it possibly can.

The first report (on NZ Super) to government was in 2003 and not six years ago.

We have a copy of the first report on NZ Super - submitted to the government in 2001. 

The law is being interpreted and applied correctly, which is why the various appeals against the direct deduction policy have failed.

The interpretation and application of the law is a direct result of the Ministry (then the Department of Social Welfare) obtaining a landmark decision when it supplied misleading information to the Courts in the Roe Case.  It is not true that all appeals against Section 70 have failed (refer the Rai Case).

If a change to the outcome of these appeals is to occur, the existing law would need to be changed.

There was no change in existing law following the decision favoring the appellant in the Rai Case.  Instead, MSD appealed the decision.  When the appeal was dismissed, was it not then the responsibility of the Ministry to recommend to Parliament a change in existing law?

Attempts to cast doubts on the credibility of the organizers of the petition - as exemplified above - provide a valuable insight as to how the Ministry is likely to respond in the event of a Parliamentary Inquiry.  It is particularly significant that so many statements in “Superannuitants Shortchanged” have not been challenged by the Ministry.

Replying to questions by National MP Sandra Goudie, Mr Benson-Pope has acknowledged that Section 70 contains no specific reference to “state-funded” or “private” or “non-contributory” pensions.  The Minister has confirmed that the direct deduction of overseas pensions is left entirely to “the opinion” of the Chief Executive of the Ministry of Social Development.

New Zealand is asking its Parliament: How can Opinion - the opinion of one man - be accepted as Law?

Last modified: February 21, 2007