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International payments

Provisions allowing overseas payments of financial assistance

There are three main provisions that allow financial assistance from New Zealand to be paid overseas. These are:

All three provisions cover the payment of New Zealand Superannuation and Veteran’s Pension.

Social security agreements also cover the payment of some main benefits.

Social security agreementsTop

What do social security agreements do?

Migrants and emigrants can use periods of residence or social security contributions in countries with which New Zealand has a social security agreement to meet the residency requirements for some New Zealand benefits and pensions.

This means:

Countries New Zealand has a social security agreement with

New Zealand currently has social security agreements with:

Details of the current agreements follow.

Australia

This agreement covers:

Under this agreement, individual pensioners receive dual payments, one from each government. Payments are calculated according to the proportion of each individual’s working life (between 20 and 65 years) spent in each country. The payment of New Zealand benefits and pensions in Australia also depends on the rate of Australian pension the person would be paid if they had not lived in New Zealand22. This is referred to as the ‘capped’ rate and may mean a person has a New Zealand entitlement to a nil rate of payment.

Periods of residence in New Zealand can help people going to Australia to qualify for the Australian benefits or pensions covered by the agreement. Conversely, periods of residence in Australia will help people coming to live in New Zealand to qualify for New Zealand benefits or pensions covered by the agreement.

For those clients living in New Zealand, payments are reduced by the rate of Australian pensions paid into New Zealand, and may also be reduced by pensions from a third party that clients are entitled to. Clients living in Australia may have their New Zealand entitlement reduced by pensions from a third country which clients are entitled to23.
At the end of June 2012, there were 9,592 people receiving Australian benefits and pensions in New Zealand. There were 30,504 people entitled to New Zealand benefits and pensions in Australia at that time24. Of these:
Benefit reimbursements are paid to Australia by New Zealand for benefits paid under the 1994 agreement with Australia. The 1994 agreement was superseded by the current agreement, which was ratified in 2002. The annual payment amounts are set out in Article 26 of the 2002 agreement and are scheduled to stop in 201525.

The reimbursement for the financial year ending 30 June 2012 was NZD$37.4 million (AUD$29.2 million).

The United Kingdom

Periods of residence in New Zealand can help people going to live in the United Kingdom (UK) to qualify for UK pensions and certain other social security payments. If living in New Zealand, periods of residence in the UK or contributions to the UK National Insurance Scheme can be used to meet residency criteria for some New Zealand benefits. Those living in New Zealand may also qualify for payments of UK pensions.

New Zealand payments are reduced by the amount of UK state pensions or benefits clients receive. At the end of June 2012, there were 49,193 people receiving both UK pensions and New Zealand entitlements.

As the UK agreement is a host agreement only, clients are generally not entitled to payments of New Zealand benefits or pensions in the UK if they move there permanently.

The Netherlands

Periods of residence in New Zealand can help people to qualify for payments from New Zealand while they are living in the Netherlands. The rates of payment are based on whole months of residence in New Zealand since age 20 years. The payments covered are:

Periods of residence or insurance in the Netherlands can be used to meet the residency criteria for New Zealand benefits within the scope of the agreement. Conversely, periods of New Zealand residence can help people going to the Netherlands to qualify for Netherlands benefits or pensions covered by the agreement.

New Zealand payments are reduced by the amount of Netherlands state pensions or benefits clients receive while residing in New Zealand.

At the end of June 2012, there were 3,739 people in New Zealand entitled to Netherlands pensions. At the same date there were 1,233 people in the Netherlands entitled to New Zealand benefits and pensions. Of these people:

The Republic of Ireland

Periods of residence in New Zealand can help people to qualify for payments from New Zealand while they are living in Ireland. The rates of payment are based on whole months of residence in New Zealand since age 20 years. The payments covered are:

Periods of insurance in Ireland can be used to meet the residency criteria for New Zealand benefits and pensions under the agreement. Periods of residence in New Zealand can help people to qualify for Irish benefits and pensions covered by the agreement.

New Zealand payments are reduced by the amount of Irish state pensions or benefits clients receive while residing in New Zealand. New Zealand payments into Ireland may be reduced by some Irish benefits and pensions, and by any benefits or pensions clients are entitled to receive from a third country.

At the end of June 2012, there were 228 people in New Zealand entitled to Irish pensions or benefits. At the same date there were 122 people in Ireland entitled to New Zealand benefits or pensions. Of these:

Greece

Periods of residence in New Zealand can help people to qualify for payments from New Zealand while they are living in Greece. The rates of payment are based on whole years of residence in New Zealand since age 20 years. The payments covered are:

Orphan’s Benefits and funeral grants may also be payable at the full New Zealand rates.

Periods of residence in New Zealand will also help people who have made limited social insurance contributions in Greece to qualify for Greek pensions.

Periods of residence and/or social insurance contributions in Greece may be used to help people to qualify for New Zealand benefits and pensions within the scope of the agreement.

New Zealand payments are reduced by the amount of Greek state pensions or benefits clients receive while residing in New Zealand. New Zealand payments into Greece are reduced by any benefits or pensions paid by a third country.

At the end of June 2012, there were 15 people in New Zealand entitled to social security payments from Greece. At the same date there were 339 people in Greece entitled to New Zealand benefits or pensions. Of these:

Canada

Periods of New Zealand residence can help people to qualify for payments from New Zealand while living in Canada. The rates of payment are based on whole months of New Zealand residence since age 20 years. The payments covered are:

Periods of residence in New Zealand also help people who have made limited contributions to the Canadian scheme, or who have insufficient periods of Canadian residence to qualify for a Canadian pension.

Periods of residence or social insurance contributions in Canada can be used to meet the residency criteria for New Zealand benefits and pensions within the scope of the agreement.

New Zealand payments are reduced by the amount of Canadian state pensions or benefits clients receive while residing in New Zealand.

At the end of June 2012, there were 1,528 people in New Zealand entitled to Canadian pensions or benefits. At the same date there were 655 people in Canada entitled to New Zealand benefits or pensions. Of these:

Denmark

Periods of New Zealand residence can be used to help people to qualify for payments from New Zealand while living in Denmark. The rates of payment are based on whole months of New Zealand residence since age 20 years. The payments covered are:

Periods of residence in New Zealand also help Danish nationals who have made limited contributions to the Danish scheme, or who have insufficient periods of Danish residence to qualify for a Danish pension. To qualify for a Danish pension under the agreement, a person must be either a Danish citizen or a New Zealand citizen.

Periods of residence or social security contributions made in Denmark can be used to meet the residency criteria for New Zealand benefits and pensions within the scope of the agreement.

New Zealand payments are reduced by the amount of any Danish state pensions26 or benefits clients receive while residing in New Zealand.

At the end of June 2012, there were 102 people in New Zealand entitled to Danish pensions or benefits. At the same date there were 64 people in Denmark entitled to New Zealand benefits or pensions. Of these:

Jersey and Guernsey

Periods of residence in New Zealand can help people to qualify to receive New Zealand payments while living in Jersey or Guernsey. The rates of payment are based on whole years of New Zealand residence since age 20 years. The payments covered are:

Periods of residence in New Zealand also help people who have made limited contributions to the Jersey or Guernsey insurance schemes to qualify for pensions available under those schemes.

Periods of contribution to the Jersey or Guernsey social insurance schemes help people to qualify for New Zealand benefits and pensions within the scope of the agreement.

New Zealand payments are reduced by the amount of Jersey or Guernsey state pensions or benefits clients are entitled to while residing in New Zealand. New Zealand payments into Jersey or Guernsey are reduced by any benefit or pension clients are entitled to from a third country.

At the end of June 2012:

Special portability arrangement for Pacific countriesTop

Periods of New Zealand residence can help people to qualify for New Zealand Superannuation or a Veteran’s Pension while resident in one of 22 Pacific countries. Only people eligible in their own right can receive New Zealand Superannuation under this provision. Non-qualified spouses are not able to receive a payment under this provision.

Pacific countries covered by the arrangement are:

Payment rates are based on a client’s period of residence in New Zealand since the age of 20 years. People residing in New Zealand for:

At the date of application, clients must be:

At the end of June 2012, 589 people in 14 Pacific countries were entitled to payments under the special portability arrangement.

The significantly higher uptake of special portability as opposed to general portability reflected:

General portability provisionsTop

This provision applies to people who are:

– do not have social security agreements with New Zealand
– are not covered under the special portability arrangement for Pacific countries

Applications under this provision must be made while the applicant is resident in New Zealand.

Before 5 January 2010, people living outside New Zealand could receive 50% of their New Zealand Superannuation or Veteran’s Pension under this provision.

From 5 January 2010, clients can receive up to 100% of their New Zealand Superannuation or Veteran’s Pension under this provision. The rate of payment depends on the proportion of the person’s working life (between 20 and 65 years) spent in New Zealand.

The principal destinations are the People’s Republic of China, the United States, Thailand, India and the Philippines.

At the end of June 2012, 466 people in 61 countries, and 116 people travelling in one or more countries, were entitled to a pension payment under the general portability provision.

Total payments to New Zealanders living overseasTop

At the end of June 2012, 34,146 New Zealanders living overseas were entitled to payments of a New Zealand benefit or pension overseas28. Of these people:

The number of people entitled to payments of New Zealand Superannuation, a pension or a main benefit while living overseas increased by 17,430 (104%) between 2008 and 2012. This increase was attributable to the number of clients who had moved from New Zealand to Australia. Growth in the number entitled to payments while in Australia accounted for 95% (or 16,582) of this increase.

Foreign pensions paid into New ZealandTop

Some people receive a reduced rate of New Zealand Superannuation, Veteran’s Pension or main benefit because they are also receiving overseas pensions while living in New Zealand.

Numbers of MSD clients entitled to an overseas pension

The number of MSD clients entitled to overseas pensions increased between 2008 and 2012

The number of MSD clients entitled to overseas pensions increased by 28% (14,724 people) between 2008 and 2012. Clients entitled to Australian and United Kingdom (UK) pensions accounted for 85% of this increase.

A large but decreasing majority of MSD clients entitled to overseas pensions were entitled to pensions from the UK

In 2012, 73% of these clients were entitled to pensions from the United Kingdom, compared with 79% in 2008. Over the same period, the proportion of these clients who were entitled to a pension from:

Compared with 2008, in 2012 MSD clients were also entitled to more overseas pensions from Canada, the People’s Republic of China, Germany, the United States of America and 51 other countries.

22Australian assessments assume all New Zealand residence as time in Australia and subject the rate to means testing. It is this rate that is then compared with the proportional New Zealand rate calculated. New Zealand will pay the lower of the two rates. The rate of Australian pension is also subject to a means test.
23This is only applicable to those clients who have used residence in the assessment of the New Zealand rate and excludes Australian citizens and Australian permanent residence visa holders.
24This includes people entitled to assistance from New Zealand, but who qualify for payment at a nil rate of payment.
25The final payment under this agreement will be a bulk payment for the aggregate reimbursable amount for the following five years.
26This includes pensions paid by the Arbejdsmarkedets Tillægspension (ATP).
27The inclusion of Sickness Benefits in this agreement is solely to allow people to use contributions to the Jersey or Guernsey insurance schemes to qualify for a Sickness Benefit in New Zealand. Sickness Benefits are not paid outside New Zealand except to people who qualify under the Social Security Act 1964.
28This figure includes 567 clients living in Australia who qualified for payment at a nil rate of payment, and 348 other clients in different countries whose payments had been temporarily stopped as at 30 June 2012.