New Zealand Superannuation and Veteran’s Pension Legislation Amendment Bill

So this is, of course, the New Zealand Superannuation and Veteran’s Pension Legislation Amendment Bill, and one of the questions that I’d like the Minister to just address in this committee stage for those that are listening is the aspect around non-qualifying partners. I think that is the area, as local members of Parliament, that we have probably received the most questions on. So I would ask that the Minister start by answering questions around the non-qualifying partners and why this decision was made, and also any transitional provisions, given that this legislation was originally meant to come in on 1 July: what does it mean for those who may have been planning for that provision to be in place?

Sorry, Madam Chair, I apologise for that delay, but of course, with this new system that we’re trialling, it’s not always clear whether the Minister will be responding straight away.

I too was going to ask the question that Hon Louise Upston has just made. I would also ask the Minister to give us a little bit more detail on the practical impact of removing the spousal deduction. When I spoke in the second reading of this bill last week I mentioned that this was the issue that probably as constituent MPs is most frequently raised with us. I also made the point that in my constituency of Hamilton West I have found that it’s particularly Dutch constituents who have brought this issue to my attention over a long period of time. I’m not an expert on the specific arrangements of pensions in Holland, but clearly it is something that has particularly rankled them. It’s good to see Marja Lubeck here because she might also be able to take a call and give us a little bit more detail, and I genuinely would welcome that.

But I think for those who are watching, who may not even understand what the spousal deduction refers to, it’s often easiest to understand when a specific example is given. Essentially, it will be dealing with a longstanding grievance that many have felt when, perhaps, they’ve entered into a second or third relationship with a New Zealander but their qualifying pension from overseas is deducted in order to ensure that they’re not receiving what was previously seen as, perhaps, a little bit of a windfall or an unfair advantage over those who are New Zealanders. And so, as I say, I’d be interested to hear from anyone who can give a little bit more of an illustration about the Dutch situation.

But it is worth making the point that this was work that initially commenced under the previous National Government, and I’m pleased to see that the current Government has picked it up. It did receive widespread support, both at its first reading—I wasn’t on the select committee, unfortunately, at the time that submissions were heard, but I know that there were quite a number of submitters, most of whom, I understand, spoke very strongly in favour of the spousal deduction issue. So it would be helpful in the committee of the whole House stage if the Minister could just help tease out a little bit about the practical implications of that, what it will mean for people, maybe giving us a few international examples; so there is that.

As I say, I’d be keen to hear the Minister’s answer to the question that was asked a moment ago. There was also concern from some submitters about the unfairness of what is being proposed with the non-qualified partners’ provision. So this would be the opportunity, I think, for the Minister, if she feels that she can give a satisfactory answer to that, to explain to those submitters and to anybody who’s listening what the basis for that is. I would welcome an opportunity if the Minister chooses to take a call.

I move, That the question be now put.

Thank you, Madam Chair. I’m happy to make a contribution to this part of the committee stage of this New Zealand Superannuation and Veteran’s Pension Legislation Amendment Bill.

I’d also like the Minister in the chair, Carmel Sepuloni, just to echo in terms of some clarification around the non-qualifying partners. I note that of the 50 submissions, in total, to this bill, 15 of the submissions commented on this particular part of the bill—the non-qualifying partners. One submitter supported this particular amendment—that was from Age Concern—and the remainder of those 15 did oppose this part. Largely, the reasons given were due to the timing, due to the adequacy of alternative support, and also due to the availability of information about the changes. It was acknowledged, during the select committee, that definitely the information was really readily not accessible and it was very hard to know what you’re looking for in that part.

I’d also like to note, in terms of the rate structure, the single rate versus the partners, there was an acknowledgment, of course, of the necessity to ensure that you are paying a higher rate to single superannuitants, but I did note also during the select committee that it came to my knowledge that a disproportionate number of seniors who receive the single rate are Māori or Pasifika. I was almost wondering if you could elaborate on any of that information there.

Also what came through was that in terms of the spousal deduction—

ASSISTANT SPEAKER (Hon Ruth Dyson): Sorry, Ms Loheni. I wonder if you could just ensure that your comments are addressing Part 1.

Sorry. Also, just in terms of the spousal deduction, the numbers given were that it would affect approximately 450 superannuitants for the 2022-23 period. I just want to clarify if that number is correct—the number that will be affected by the spousal deduction on that particular amendment. Thank you, Madam Chair.

I’ll speak broadly to Part 1, and, hopefully, it responds to some of Opposition members’ questions. But I won’t speak to the spousal deduction issue because that’s not covered in Part 1. That’s in Part 3, I think, of the bill.

Most of the policy changes in the bill are dealt with at least in part by Part 1, which includes all the amendments to the New Zealand Superannuation and Retirement Income Act 2001. As such, Part 1 largely only deals with New Zealand superannuation. We move into the veterans pension in Part 2. The changes in this part are: the closure of the non-qualified partner provision with grandparenting of existing non-qualifying partners, expanding eligibility to the living alone rate to single people in self-contained mobile homes, providing more equitable treatment between missionaries and secular charitable volunteers, correcting a drafting error affecting people needing to count time paying New Zealand tax while overseas as residents, updating the calculation of New Zealand super rates to match the current practice, and removing the special disability allowance from the New Zealand Superannuation and Retirement Income Act.

Most of these changes have an equivalent in Part 2, which amends the Veterans’ Support Act 2014 to ensure that changes also apply to the veterans pension, so I won’t talk about the veterans pension whilst we’re on Part 1. A signpost has been included near the beginning of the New Zealand Superannuation and Retirement Income Act 2001 to indicate its relationship with Social Security Act 2018.

There were some questions asked about the non-qualifying partner provisions in this particular bill. A superannuitant can chose to include their non-qualifying partner in their rate of New Zealand super. If they do, the couple receive an amount that is at most around $30 less per week than the amount for a couple who both qualify, but this amount is subject to an income test. Clause 11 removes the option for a superannuitant to elect to include their non-qualifying partner in their rate of New Zealand super from the commencement date.

That’s accompanied by a provision to continue existing elections to receive that rate, so that people who are already included as a non-qualifying partner don’t lose this rate unless their circumstances change. This is found in new sections 7 to 10 of Schedule 1AA of the New Zealand Superannuation and Retirement Income Act, inserted by clause 21 of the bill.

Clause 17 makes a complementary amendment. This has been made by the select committee to allow main beneficiaries or veterans pension recipients to receive the equivalent of a single rate if they have a superannuitant partner who receives a lower rate while hospitalised for more than 13 weeks. A large number of technical amendments accompany the closure of the non-qualifying partner provision, such as moving the grandparented rate to a separate part of Schedule 1.

I think what was really heartening with this bill going through the different processes in Parliament was that the Social Services and Community Committee I think, were generally in support of these provisions and have worked through really well the detail. So can I thank all of the select committee members for their work on this bill. Can I say that with the non-qualifying partner provision there seemed to be shared agreement that, actually, that was brought into play at a time that was quite different from now, a time when there was an expectation that perhaps the female partner in the relationship would be younger than the male partner in the relationship, that the male partner in the relationship would be the breadwinner, and therefore the younger female would be reliant on the working income of that male partner and then when that person was to retire, of course, on their superannuation.

So I think that really was the premise, and I think we’ve got a shared understanding of why that particular provision was brought in at the time. Times have certainly changed, and I’m glad that we have seen shared agreement across the House that, actually, it is no longer required. However, we also agree that it would be unfair to take it away for those who are currently accessing that particular provision. Hence, why the decision has also been made to grandparent that for those who are currently receiving it.

I just want to give the Government an assurance that it’s not the National Party’s intention to draw out discussion on this particular matter unnecessarily. We probably see that we can deal with the committee stage reasonably quickly. However, I was appalled when the Government whip sought to take a closure motion a short time ago without even having had a single contribution from the Minister or any Government member.

I make that point because I think it is very serious. We need to remind everybody who’s listening that we’re dealing with this bill under urgency. I don’t think it is an urgent matter; it’s certainly a significant matter, and we support it, particularly for those who are going to benefit from its provisions. But when the House is considering a matter under urgency, it is surely doubly important for the Government to engage properly in the discussion.

As I say, we’re not looking to drag it out unnecessarily. And I’m surprised, actually, that the Government didn’t seek to consider the entire bill as one question; that would have dealt with it perhaps a bit more quickly. And I do take on board the fact that I raised the spousal deduction and possibly should have waited for Part 3. So I apologise for that, but with respect to the Minister, she’s just made a five-minute contribution in which she’s probably spent four minutes and 45 seconds literally just going through, clause by clause, what is in the bill when my colleague the Hon Louise Upston and I had actually asked questions so she could explain what her thinking was—in particular, in responding to those submitters who had raised queries of unfairness. She may feel that she touched on it in the last five seconds, literally, of that contribution, but I don’t think that she gave considerable engagement.

I would invite her to just, in particular, respond to the question, therefore, that the Hon Louise Upston raised. I hope she will do that, and if the Government wish to consider the rest of the bill as one question, I am sure that the National Party would have no objection to doing that.

I’ll respond to a couple of questions raised by the member Tim Macindoe. Just issues about why this particular piece of legislation would be brought through in urgency—why not, actually? As has been mentioned by the Opposition, and we agree, there are some changes in here that have been long awaited by a group of New Zealanders. There’s agreement across the House on this. New Zealanders expect us to move through legislative changes at pace where we can. So I think that we’d all agree that this is one of the least controversial pieces of legislation that will come through urgency, and why would we not do that for those that are affected, particularly when there’s agreement and it’s not controversial?

The question about why I went through clause by clause at the beginning—I only did that because there were a couple of speeches that went before me that were touching on elements of the bill that are not in Part 1, so I thought it was important just to provide a brief overview of what actually is in Part 1. I’m quite content going through the bill by parts, because, actually, there are distinct differences. It allows us to speak to the specific parts of the bill, which I think are really important, rather than just have a broad, general discussion about the merits of getting rid of the non-qualifying partner provision, changing the spousal deduction policy, and a range of other things. I think we can do that adequately through the different parts if we debate it in that way.

My colleague did do a closure motion—that surprised me, too. But I’m quite happy to continue this debate where there are points to be made that are different and where there is a possibility, through this debate, that we might improve things. I thought I did respond to the honourable member Louise Upston’s questions, and if I haven’t, then perhaps let me know how, because I covered off what was happening with the non-qualifying partner provision, why we were grandparenting it, and why we were getting rid of it. So if there are questions that were not answered, then I’m more than happy to take those.

Thank you, Mr Chair. I’d like to move to another part of Part 1, which is around absence from New Zealand. Many people appreciated the change in the bill around those who were, in clause 9, carrying out missionary work, to be counted as if the person was ordinarily resident in New Zealand. A couple of the submitters, including Age Concern, who do great work in our communities, questioned why that wasn’t extended to secular organisations. So I’d like the Minister just to talk a little bit through clause 9 and the changes in clause 9 and why they weren’t extended to secular organisations that were working overseas.

I’ll speak to clauses 8 to 10, which had been put in place to provide more equitable treatment between missionaries and secular charitable volunteers, and also fix a drafting error.

People who serve overseas as missionaries have a broad provision allowing them to have periods of missionary service counted towards their New Zealand superannuation residence requirements, to which there is no equivalent for people who volunteer overseas for secular charitable organisations, other than the Voluntary Service Abroad. Clause 8 allows someone who volunteered overseas for an entity that is, or is affiliated with, a registered New Zealand charity, to use that time toward the New Zealand superannuation residence requirements, so long as they remained ordinarily resident in New Zealand. So the fact that they are registered New Zealand charities, I think, shows that we’re not precluding secular organisations from being able to qualify here.

Clause 9 amends the missionary provision to align better with the new approach for secular volunteers. People will need to carry out that missionary work for a New Zealand charitable entity affiliated with a religious body for it to count toward the requirements. But the current broader provision will apply if they begin their absence before the commencement date due to a savings provision in clause 5 of Schedule 1AA of the actual Act, inserted by clause 21 of the bill.

Clause 10 fixes a drafting error, with the rewrite of social security legislation, so that periods when a person or their partner was employed outside New Zealand and made income tax payments to New Zealand count toward the resident requirements for New Zealand superannuation. There is an accompanying validation provision in section 6 of Schedule 1AA of the Act, inserted by clause 21 of the bill. The residence qualification for veterans pension depends on the Act, so clauses 8 to 10 follow through to the veterans pension.

I don’t think there’s much more that I can say that will add value to the answer that I’ve given for the member Louise Upston, but, hopefully, the fact that I’ve clarified that it’s clauses 8 to 10 that provide more equitable treatment, actually, between missionaries and secular charitable volunteers helps to respond to that question.

In my previous contribution, I raised concern with the fact that this matter was being dealt with under urgency. In her reply, the Minister, the Hon Carmel Sepuloni, posed a question to us, and, effectively, it was: why not? She then went on to say, well, this is a significant matter; therefore, let’s deal with it under urgency.

Well, my answer to that is that this is becoming an abuse of the parliamentary process. All Governments, of whichever stripe, from time to time use urgency, but they should not be using it for run-of-the-mill legislation which should have been dealt with in the proper way, particularly when—

CHAIRPERSON (Adrian Rurawhe): Order! I will comment on that. The House has agreed to urgency. We’re now in the committee stage on a bill that has been to select committee. The member should, actually, under the new rules, speak to Part 1 of the bill, not to a disagreement that he has to part of the process.

I was seeking to answer the Minister’s question.

CHAIRPERSON (Adrian Rurawhe): That’s my ruling.

I’ll leave it at that. I wanted to answer the Minister’s question.

I just, really, want to ask the Minister a supplementary on the Hon Louise Upston’s question around eligible charitable work, just asking if workers like civil defence workers who might go overseas and work in areas of natural disaster in the Pacific—I don’t believe that they are seen as a charity—would they be considered in particular on that part of the bill.

I can answer that part of the question. It’s no.

I move, That the question be now put.

Is there any member that wants to take a call? No? I’ll go straight to the question, then.

The question was put that the amendments set out on Supplementary Order Paper 508 in the name of the Hon Carmel Sepuloni to Part 1 be agreed to.