Social security agreements  

New Zealand’s social security agreements are few and far between.

Social security agreements modify the rules in legislation by allowing persons covered to receive up to full New Zealand Superannuation while they are resident overseas and overseas residents to apply for New Zealand benefits.  Social security agreements also allow contributions or residence in an agreement country to count as residence in New Zealand for the purpose of qualifying for NZ Super, and for residence in New Zealand to count as contributions or residence in the other country.  This is known as totalisation.

New Zealand has a social security Agreement with the United Kingdom which has not been revised since 1983 and does not provide for payment of NZ Super to New Zealanders resident in the United Kingdom.  In 1988 the New Zealand government agreed to allow the payment of NZ Super overseas under social security agreements and New Zealand has since entered into seven such agreements with Australia, Canada, Denmark, Greece, Jersey and Guernsey, The Netherlands and the Republic of Ireland.

Over the past nine years the New Zealand government has noticeably failed to increase the number of countries with which it has social security agreements.  The government's stated intentions cast a shadow over the possibility of reciprocity with the United States, and nothing has been done that would improve the prospects for increased social security portability with other nations in the foreseeable future.

Social security agreements are subject to misconceptions.

Most people don’t realise that social security agreements are all about the protection of personal entitlements - to be precise, the removal of arbitrary barriers, such as nationality and current place of residence, that would otherwise prevent the proper payment or receipt of portable pensions and benefits.

Some people wrongly believe that the purpose of any two countries’ social security agreement is to have an approximately equal contribution by both parties to that agreement - an equally-balanced “cost-sharing” arrangement.  Some people would even go so far as to say that each country should share equally in the cost of the pensions or benefits paid to individuals.  Unfortunately, such a vision of what any social security agreement should provide is quite unrealistic.

Equal funding at national or individual level is never possible due to the many factors and circumstances that determine how much each country would have to pay:  the numerical imbalance of eligible persons between the two countries, the difference between each country’s rate(s) of portable benefits and pensions and the different lengths of time people spend in each country and in other countries.  It starts to get too complicated to even consider achieving an “equal share”.

Furthermore, there is very little scope to manipulate or change these factors so that the outcome is an equally-balanced “shared” contribution of funds by both agreement partners.  Any such attempts trample people’s basic human rights to respectful treatment of their honourably-earned entitlements.

Social security is about safeguarding human rights.

Over many years the New Zealand government has shown little respect for the basic principles of social security law, namely, the protection and safeguarding of personal entitlements against abuse.  The New Zealand government refers to social security agreements as “cost-sharing” arrangements.  Ministry of Social Development officials have enthusiastically pushed this one step further by dragging such private pensions as the Canada Pension Plan into New Zealand’s pension deduction policy.

Indeed, the Social Security Act 1964 dictates that the funds obtained under the application of section 70 are to be added to the (Michael Cullen) New Zealand Superannuation Fund to subsidise and guarantee the affordability of future NZ Super payments.

Section 70 abuses individual rights.

It is little wonder countries like Austria, Germany, Sweden, Switzerland and the United States have shown such distaste to date for entering into social security agreements with New Zealand.

Although the former government’s Review of New Zealand Superannuation failed to implement any of the recommendations offered in a 2004 Report to encourage other countries to enter such agreements, the New Zealand government appears eager to conclude a social security agreement with the United States.

British pensions
Dutch pensions
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