NZ approach to Cooks Super called 'selective means testing'
From Dateline Pacific, 4:02 pm on 29 September 2017
A retired Cook Islands accountant says the New Zealand government is out of order requiring Cook Islanders to forfeit their National Superannuation Fund savings if they accept New Zealand Super.
New Zealand Super has been made portable and Cook Islanders who qualify can receive it in the islands.
But those who also belong to the Cook Islands National Superannuation Fund have been told they will face dollar for dollar deductions.
About 4,600 people are likely to be affected and Geoff Stoddart, who was once the head of inland revenue in the Cooks, told Don Wiseman New Zealand's Ministry of Social Development doesn't understand how the local scheme works.
GEOFF STODDART: I see that as out of line. Look a heck of a lot of people currently live in the Cook Islands and a laot of them currently live in New Zealand and around 4,000 of them, over 4,000 who have contributed to this contributory scheme here in the Cook Islands, stand to suffer for it against the New Zealand Superannuation. Now New Zealand Super has got these rules of I think if you have lived in New Zealand 10 to 20 years and five years after the age 50 you qualify for New Zealand National Super. i think it is a gross figure of around $NZ19,000 -$20,000 per annum. And New Zealand authorities are going to deduct off that your savings, pension savings that you have made into the Cook Islands scheme. And I stress that the distinction is that the Cook Islands scheme is a contributory scheme. It has got nothing to do with the government here at all. And that is the iniquity of it. It's selective means testing. There has been an announcement already. There was a front page newspaper article on it yesterday where I was given a few quotes in the coverage. The Minister of Finance [Mark Brown] - he's done the responsible thing and he has given an announcement that he intends to take the issue up with the New Zealand government, so I admire our Minister of Finance for that. He's probably been caught off guard by his local board - the Cook Islands Superannuation Fund board - they have been sitting on their hands for a long time, they have been asleep at the wheel. I think the CEO and that board should be embarrassed that it has taken private sector people to bring the revelation out.
DON WISEMAN: The fact that the New Zealand authorities presumably thought that this was a government scheme - does this stun you that they didn't seem to know?
GS: It does stun. I can give you a little bit of history on that, Don. One of the local solicitors here made an enquiry much earlier on and the staff member dealing with it as the Ministry of Social Development thought that she was dealing what is called our universal pension, the equivalent of the New Zealand Super. She misunderstood. She didn't get her construction right. You see we do have a universal pension here in the Cook Islands as well. A universal one is a pension you don't contribute to, you get it as a right. We have one of those. It pays much less than the New Zealand one. The Ministry of Social Development thought they were dealing with that and the rules are you get one universal pension, not both. I am happy with that. I think all people are happy with that. You get one or the other. You can't collect one from one country and also one from another. And New Zealand's section 70 of the Social Security Act is intended I believe to effect to that. We have got a similar parallel provision in the welfare act here. Now I think that the starting point is that that Social Development staff member misunderstood at the start and then when it was pointed out that this was a contributory scheme that the lawyer was enquiring on, she held her position. And so that's the point that I am going to make sure our Minister of Finance is aware of . I stress again that you know it's a contributory scheme. It's a savings scheme. There is no government contribution to it at all. If people saved in the bank or saved in a sharemarket fund - any other form of investment would not be deducted against New Zealand Super.