NZ Super recipients need to return to Aotearoa within 26 weeks to avoid losing their pension. Photo: RNZ
Anyone questioning why NZ Super recipients are generally required to live in New Zealand should think about whether they would be happy with the government paying Jobseeker benefits to people who had moved to Australia, one economist says.
Recipients of NZ Super can lose their pension if they are away for more than 26 weeks, unless they have applied to Work and Income before they leave and have had the travel approved.
Harry Fenton - the general manager for the Ministry of Social Development's international disability and generational policy group - says it had always been a feature of NZ Super that eligibility was based on residence in this country.
He said it was one of the aspects of the scheme that was designed to keep it fiscally sustainable.
He said people who wanted to travel could receive their pension for 26 weeks if they returned to New Zealand within 30 weeks.
"A person who wants to travel or live overseas for longer than 26 weeks can also apply under the general portability payments and their payment is proportional to their residence in New Zealand between the ages of 20 and 65.
"A person living permanently overseas may be able to receive up to the full rate of NZS if the country they're residing in has a social security agreement with New Zealand. What a person may be eligible to receive will depend on their personal circumstances and the provisions of the individual agreement. New Zealand has a social security agreement with 10 countries which includes Canada, Australia and the United Kingdom."
Some RNZ readers argued that was unfair and said those who travelled would not be creating a burden on the New Zealand healthcare system or other support services.
Economist Eric Crampton from the NZ Initiative said the problem with that argument was that those who were travelling overseas for long periods of time were generally retirees in better health than those who remained behind.
"Overall effects may not be clear-cut."
Shamubeel Eaqub, chief economist at KiwiSaver provider Simplicity, said the questions were driven by a fundamental misunderstanding of the way the pension system functioned.
"You haven't made any contributions during your working life for your retirement.
"Rather it relies entirely on the current tax take. So, to be really clear, NZ Super is welfare, not accessing your own money saved during your working life.
"Hence, there is a strong incentive to create eligibility rules - such as the residence one. It ensures that only those who live - and spend - in New Zealand are accessing this welfare payment, rather than those who wish to live and spend their time and money elsewhere.
"If a Kiwi is unemployed in Australia, should they get the New Zealand Jobseeker benefit? That's the equivalent welfare question without the age factor.
"It's not like KiwiSaver where you save your own money and you use it in retirement. It's an unwritten promise that because you've paid for people who are retired now some other people will pay for you when you retire. At its core we need to call it what it is, it's a welfare payment. If you think you deserve welfare payments when you're not living in the country it opens up a whole can of worms."
He said most people would think those who moved to Australia should not receive Jobseeker if they could not get work.
"Why is it different for this other form of welfare which is exactly the same? All the other New Zealanders working today are paying for this welfare.
"What gives you the right to say that even though I'm not living in this country I have the right to access it? Nobody is saying you can't access your KiwiSaver - I'd be outraged if that was the case. This is the difference between your pension savings versus access to a pension payment. Just because it's called NZ Super doesn't mean it's anything other than a welfare payment."
He said New Zealand would need to have a conversation about means testing NZ Super within the next few years, as Australia had.
"The reality is our NZ Super system is unaffordable because it's the biggest welfare payment, growing rapidly. We already can't build our hospitals and infrastructure."
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