Social Assistance (Residency Qualification) Legislation Bill

on behalf of the Minister for Social Development: Malo ni tau huhuga a te Takitaki Fono. Malo ni, ko te vaiaho fakamanatu o te Gagana Tokelau. I greet you, Madam Deputy Speaker. I acknowledge that this is the week of the Tokelau language.

I move, That the Social Assistance (Residency Qualification) Legislation Bill be now read a second time.

This bill seeks to provide greater pension flexibility for New Zealanders who wish to live in the Cook Islands, Niue, and Tokelau. This bill reflects the Government’s commitment to a Pacific reset. We want to continue to grow and strengthen our existing and new relationships in the Pacific, and this bill is an important part of this. We want to make sure that those countries and territories that have close constitutional ties with New Zealand are recognised and that their ongoing economic and social viability is supported. We also want to ensure that superannuitants have as many options as possible as to where they choose to live.

New Zealand superannuation and veterans pensions are our main forms of income support for older New Zealanders. New Zealand superannuation is payable at age 65 years to any New Zealand citizen or resident who is ordinarily resident in New Zealand when he or she applies, and who has been resident and present in New Zealand for 10 years over the age of 20, and also for five years over the age of 50. Veterans pension is the alternative pension for veterans and their partners who qualify for New Zealand superannuation based on the veterans’ qualifying operational service.

Current pension portability arrangements allow people to take their New Zealand superannuation or veterans pension to one of 22 Pacific countries and territories, including the Cook Islands, Niue, and Tokelau. The provision that makes this possible is called the Special Portability Arrangement. Under the arrangement, New Zealand superannuation and veterans pension is paid at a minimum of 50 percent after 10 years’ residence in New Zealand, rising to 100 percent after 20 years’ residence. The Special Portability Arrangement is designed to recognise the contribution Pacific peoples make to New Zealand and the inability of Pacific countries and territories to fulfil the reciprocal obligations necessary to conclude social security arrangements with New Zealand. There are currently 408 people receiving their New Zealand superannuation or veterans’ pensions in the Cook Islands, Niue, and Tokelau, and 351 of those people live in the Cook Islands.

Generally, to be eligible under the Special Portability Arrangement, a person must be resident and present in New Zealand on the date of his or her application. An amendment to the Special Portability Arrangement introduced in 2015 allows people residing in the Cook Islands, Niue, or Tokelau to apply for New Zealand superannuation or veterans’ pension from the Islands, rather than needing to be resident and present in New Zealand at the time of their application. The intent of this change was to remove a disincentive for people to return to the Cook Islands, Niue, or Tokelau to live. However, the change has had a smaller take-up than expected. It is now evident that the 2015 change, while removing some disincentives for skilled people to return to the Cook Islands, Niue, and Tokelau during their working lives, did not achieve the desired effect of encouraging people to move back to and remain in those countries.

The Governments of the Cook Islands and Niue are concerned that the five years over age 50 residence requirement is the reason for the low take-up of the amendment made in 2015. They consider that the five over 50 residence requirement is deterring skilled people from returning and contributing to their countries. They are also concerned that the five years over 50 residence requirement may induce some people to return to New Zealand in order to ensure that they will be able to claim New Zealand superannuation or veterans’ pension later on. This bill will remedy these concerns by allowing the requirement that a person have five years’ residence and presence in New Zealand over the age of 50 years to be met instead with residence and presence in New Zealand, the Cook Islands, Niue, or Tokelau, or any combination of those countries.

The Social Services and Community Committee has examined the bill and recommends that it be passed without amendment, and I want to acknowledge and thank the members of that select committee for the work they have done on this bill. One of the issues raised in the submissions on the bill was the effect the changes would have on the economic activity of Niue. It was suggested that the bill could have a detrimental effect on the economic activity in Niue by creating an incentive for Niueans to live in New Zealand in order to become eligible for New Zealand superannuation or veterans pension.

This bill is about supporting the economic and social viability of the Pacific Realm countries. Depopulation and its related social and economic consequences is a longstanding issue for these Islands. This bill will reduce the incentive for people to return to New Zealand in order to satisfy the five years over 50 requirements, and this will help boost economic development and human resource capacity by allowing highly skilled people to continue to contribute to their communities in these countries.

It was also suggested that full entitlement to New Zealand superannuation and veterans’ pension should be extended to all New Zealand citizens in Niue, regardless of whether they have resided in New Zealand. This would not align with New Zealand’s approach to superannuation, in which the residency requirements are there to ensure that a person who is applying for New Zealand superannuation or veterans pension has a connection to New Zealand. Also, the constitutional arrangements in Niue mean that they are responsible for their own tax and welfare systems. I want to thank those who took the time and effort to make submissions to the committee.

Another submitter raised concerns about the implementation of the changes, and suggested that the application process be automatic, if possible. The Ministry of Social Development is working with the Ministry of Foreign Affairs and Trade to consider how to provide services for applicants. The Ministry of Foreign Affairs and Trade has an established presence in the Islands, and already has local relationships and infrastructure in place. To expedite an initial backlog of applications when the bill is passed, people will be able to register that they intend to apply.

I want to reiterate that this Government wants to continue to show that we value our Pacific neighbours and acknowledge our constitutional ties with the Cook Islands, Niue, and Tokelau—after all, they are family to many of us. The citizens of these nations share New Zealand citizenship and through this bill we’re able to better respond to the needs of those citizens. I commend this bill to the House.

Debate interrupted.