Class action proposed against Ministry for illegally deducting overseas pensions

15 February 2017

The New Zealand Seniors Party is proposing class action against the Ministry of Social Development, claiming the Ministry is illegally deducting pensions from Kiwis who have worked overseas and immigrants relocating to New Zealand in their later years.

179576815-web.jpgThe Party points to a High Court case in 2004, in which WINZ had attempted to deduct the government pension of Fijian immigrant Mr Sant Raj Rai. The Court ruled in his favour on the basis that his pension was a civil service pension and not government-funded.  

The New Zealand Seniors Party claims the Ministry has disregarded this ruling and continues to illegally remove overseas pensions.

A spokesperson from the Ministry says that in this particular case, the court found that the particular pension in question, the Fiji Government Service Pension, met the definition of a “Government occupational pension” and therefore was exempt from direct deduction.

“We have applied the court’s decision in that case and in subsequent cases involving the Fiji Government Service Pension.”

The spokesperson says pension schemes vary between countries and contribution types so it shouldn’t be inferred that a specific high court decision should extend beyond the specific pension plan to which the decision relates.

“The Ministry deducts any overseas payment from New Zealand Superannuation and other New Zealand benefits if the payment meets the criteria of section 70. The Ministry currently defers the deduction of the portion of an overseas pension that is based on voluntary contributions.”

However, the Seniors Party claims the Ministry’s use of section 70 to deduct overseas pensions is not always within this criteria, pointing to examples where the Ministry has been challenged about deductions and had to repay deductions. It gives one instance in which the Ministry had to repay $88,000 to an Asian couple after being found in breach of the deduction process.

The Party says it is currently working on a case to bring more examples like this to light with the hope of bringing about change to the way overseas pensions are currently handled in New Zealand.

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