Legal action planned over ‘stolen’ funds

Reparation sought for "unfair" and "fraudulent" policy, writes Charles Anderson.

The New Zealand Seniors Party is organising a class action law suit to sue the Government for billions of dollars of what they say is ‘‘stolen’’ money from overseas pensions.

Under the Social Security Act expat New Zealanders or migrants, upon reaching 65, will have their superannuation docked depending on how much they receive from their overseas pension.

Figures show last year more than 85,000 people were affected by the legislation for a total of almost $350 million.

Party executive member Paul Norfolk said it will sue the Ministry of Social Development to get some of that money back.

He said the lawsuit would seek reparations from the money docked by the Government under an ‘‘unfair’’ and

‘‘We could bring the Government down with this because it’s billions.’’

Section 70 of the act treats all government-administered overseas pensions the same regardless of whether people pay voluntarily into them.

A recent review by the Commission for Financial Capability recommends specifying that voluntary contributions to overseas pensions not be deducted from New Zealand superannuation.

It also calls for an immediate change in a clause in the law that ‘‘fraudulent’’ policy. We could bring the Government down with this because it’s billions. means a person’s pension can be docked if their spouse gets an overseas pension.

The lawsuit comes on the back of a Nelson man’s case against the Government being accepted to be heard by the Human Rights Review Tribunal. Malcolm Larsen’s pension is deducted because his Norwegian wife receives an overseas pension. However, he said that it was unfair as he had lived and worked in New Zealand all his life.

A Ministry of Social Development spokesperson would not comment on any pending legal action but said the aim of the policy was to ensure that all qualifying New Zealand residents receive an equitable level of state pension.

‘‘The policy means that New Zealanders who have lived in New Zealand all their lives are not disadvantaged compared with others who have worked overseas, or immigrants to New Zealand who have entitlement to overseas state pensions.’’

Norfolk said he agreed with NZ First MP Denis O’Rorke’s Private Member’s Bill which proposes throwing out Section 70 and offsetting the losses to the Government by increasing the time required to be eligible for New Zealand Superannuation from 10 years living in New Zealand to 25.

O’Rorke said he was confident that if his bill was drawn it would have consensus in the house and called on the Government to adopt it as its own.

‘‘Currently the law is an absolute mess.

‘‘This will make it much simpler. It’s common sense stuff.’’

He said 25 years residency before becoming eligible for superannuation was much more common around the world than 10 years.

‘‘This bill will be much less controversial and more accessible and has support of academics and experts generally.’’