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Social Assistance (Payment of New Zealand Superannuation and Veteran’s Pension Overseas) Amendment Bill

In Committee

Wednesday 21 October 2009 (advance copy) Hansard source (external site)

Part 1 Amendments to New Zealand Superannuation and Retirement Income Act 2001

KingHon ANNETTE KING (Deputy Leader—Labour) Link to this

The Social Assistance (Payment of New Zealand Superannuation and Veteran’s Pension Overseas) Amendment Bill has only two parts to it, so it is a pretty simple, straightforward sort of bill. The first part deals with amendments to New Zealand superannuation and the second part deals with the veterans pension. Part 1 deals with the substance of the changes that have been made to New Zealand superannuation. It sets out the new formula, and it sets out the new conditions that relate to superannuation and the ability for New Zealanders to choose to go and live in another country and take their superannuation with them.

The bill has received a lot of support. Although submissions were made for further amendments to this part, it was not possible for the Social Services Committee to make those changes. But I tell the Minister that I was pleased with the work that her department did, in providing to us very logical reasons why we could not alter this bill at this stage, but officials set out that there was the ability, either under the Income Tax Act or in other work that could be done by her department, to address some of those issues raised.

Many people made submissions on this part of the bill that had nothing to do with the bill, so we did not hear their submissions. But some did manage to slip in their desire for a change to be made to section 70 of the Social Security Act 1964, which relates, as the Minister knows, to the direct deduction of an overseas pension. I know that that is not part of the bill, but I put on the table that it was a serious issue raised. I think it would be good if we could have a response about whether the Government is considering addressing this issue, which has been seen by many as unfinished business.

The first changes that were made to enable people to take a pension overseas were made by the fourth Labour Government in April 1990, and that is when the 50 percent formula was first set up. The 50 percent formula has meant that people did not have enough of their pension to be able to live in another country. We are changing that now to enable people to be able to live, when they go overseas.

I think that the changes that have been made in this bill are fair. I listened to Sir Roger Douglas in his contribution, and I think that he probably has the wrong end of the stick. This legislation was not proposed to be put in place either by a Labour Government or by a National Government to give some advantage to Pacific people who come here to work so they can get a better pension. It has been a genuine attempt to try to improve the amount of money, based on a fair formula, for people to be able to take that money and go to another country. The formula is one that I think a lot of work has gone into. I know, as part of the previous Government, that we looked very hard at how we could have a fair formula that we could use in this legislation. As it works out, I believe that what we have come up with in the select committee, which the Minister and the National Government have agreed to, enables fairness to take place between New Zealanders who have worked for 40 years and paid taxes all that time and those who have been here for a lesser time, in terms of that formula.

In terms of issues raised, I wonder whether the Minister could give an indication as to whether she intends to look at some of the issues around the non-qualifying spouse. I will talk later about the veterans pension when that comes up; issues were raised about that.

Overall, we totally support this legislation. Very few changes were made at the select committee. I believe that the changes made in this part of the legislation have enhanced it, and made it better, and the Labour Opposition totally supports it.

The question was put that the amendments set out on Supplementary Order Paper 77 in the name of the Hon Paula Bennett to Part 1 be agreed to.

Amendments agreed to.

Part 1 as amended agreed to.

Part 2 Amendments to War Pensions Act 1954

KingHon ANNETTE KING (Deputy Leader—Labour) Link to this

As I said, this part deals with amendments to the War Pensions Act 1954. This was an area where the members of the Social Services Committee probably wished that we could make some changes to the bill, but that was not possible.

The change that was asked for by the RSA related to the fact that New Zealand superannuation and the veterans pension are linked in terms of the portability provision that we are making. The argument that the RSA put to us is that people are entitled to receive superannuation at a certain age—65 years in New Zealand—and people receive a veterans pension based on a disability that relates to an injury that the recipients had sustained while in the service of their country. People may be eligible for a veterans pension before the age of 65 years. They may be eligible for it at age 45, for example. The RSA argued to us that people on veterans pensions should be able to take their veterans pension to another country where they wished to live, because they were entitled to it by virtue of the criteria that enabled them to have it. It asked why portability had to be linked to an entitlement to New Zealand superannuation.

The RSA made a very strong case. I am aware that a review of the War Pensions Act is taking place. It was started under Rick Barker, the Law Commission has done a lot of work on it, and I suspect, hopefully, that there will be a rewrite of and a relook at what is provided to our war veterans. I ask the Minister whether she and the Government are considering making changes for war veterans, going forward, that would line up with what we heard at the select committee with regard to that submission from the RSA. I think it was a fair request, and war veterans do feel quite aggrieved by the fact that they are linked to New Zealand superannuation, when their pension is nothing to do with age but all to do with having a disability. This part of the bill also puts in place the same conditions for war veterans as for New Zealand superannuitants, so the portability arrangements are the same for them.

That is the only question that I have. I tell the Minister that the RSA raised a serious issue with us.

BennettHon PAULA BENNETT (Minister for Social Development and Employment) Link to this

I take the opportunity to clarify a couple of points that I think need to be clarified in this debate, and certainly in this Committee stage. First of all, the Social Assistance (Payment of New Zealand Superannuation and Veteran’s Pensions Overseas) Amendment Bill does not change the position for our Pacific peoples. That position was set in 1999; this bill does not make changes to it. The honourable member who spoke earlier, in the second reading debate, might like to take note of that: there are no major changes for the Pacific. They have had this position before; they will continue to have it under this bill. There are no drastic changes. I actually think we should acknowledge and note the contribution that Pacific people make to New Zealand when they come here to work, whether for 10 years, 20 years, or longer, which we see in the children of the Pacific peoples who moved here. They should have that recognition. I know that view is shared by most members in this Chamber. I am not here to make points on that, or on anything else.

I would like to correct Mr Hawkins on something he said earlier. He said Labour introduced this bill. The first reading of this bill was in March 2009, so it was introduced to the House by the National Government. There had been a long time to do something—

Hon Member

It was tabled in September 2008.

BennettHon PAULA BENNETT Link to this

But the first reading was certainly under this Government. We picked it up.

The amendments we are making to this bill in the Committee stage are technical. There are words that need to be corrected and that we think need a bit more clarification. This Government did not have to think too hard about acknowledging the ability of those who are older, our “supers”, to take their superannuation overseas. Giving people choice—recognising the freedom of where they spend their money and what they do with their own money—struck a chord with us, and was certainly in line with our thinking.

I make clear, though, that some of the reciprocal agreements we have with Australia that have come up in this bill are clear: in any country no one wants someone who is not a local of that country to be better off than the locals. When New Zealanders move to Australia, for example, even if they are in their senior years, they should not be financially better off as far as the scheme that they are getting under a reciprocal agreement goes. It is as simple as that. We certainly have the same arrangements in New Zealand. That is what is causing problems, if you like, in section 74J, as substituted in clause 14, and it is causing a very staunch debate for some. That section is relevant to this Committee stage, because the provision directly affects the amount of money that people are getting in their hands. This is what the bill is about.

I wanted only to clarify a few things. I am certainly looking forward to the third reading. We do not want to hold up the passage of this bill through the House. It is going through under urgency, and it has the support of the Committee. I am happy to address any other concerns.

HawkinsHon GEORGE HAWKINS (Labour—Manurewa) Link to this

The RSA has been concerned for a long time that people were not able to receive their payments overseas. That was based on the injuries that occurred to them. It is very important, therefore, that they should not have to wait, if they were injured, and qualified when they were 45 years old, until they turn 65 to be able to draw their entitlement. I also, again, mention that all the preparatory work done on this Social Assistance (Payment of New Zealand Superannuation and Veteran’s Pension Overseas) Amendment Bill was done by Ruth Dyson when she was Minister. I think that is very important. I also say how pleased I am that this bill is going through under urgency. What disappoints me is that only one Minister has risen during the Committee stage thus far and had anything to say about the bill. I would have thought that the Minister of Defence, the Minister of Veterans’ Affairs, and the Minister for Senior Citizens would have risen in the Committee stage and had something to say. But as there is only one Minister here, that is not likely to happen.

The question was put that the amendments set out on Supplementary Order Paper 77 in the name of the Hon Paula Bennett to Part 2 be agreed to.

Amendments agreed to.

Part 2 as amended agreed to.

Clauses 1 and 2

Clause 1 agreed to.

The question was put that the amendment set out on Supplementary Order Paper 77 in the name of the Hon Paula Bennett to clause 2 be agreed to.

Amendment agreed to.

Clause 2 as amended agreed to.

The Committee divided the bill into the New Zealand Superannuation and Retirement Income Amendment Bill and the War Pensions Amendment Bill, pursuant to Supplementary Order Paper76.

Bill reported with amendment.

Report adopted.

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