Every year some find they can't get the 'universal' retirement pension

Do you look forward to getting NZ Superannuation at 65? Well, you'd better be good at reading the fine print.

Every year a number of Kiwis find they're not entitled to our "universal" NZ Super. Or not at the same rate as everyone else. Some of the common reasons are that they've married a foreigner, worked overseas for several years, take long overseas holidays, want to retire to Australia or elsewhere or haven't lived in New Zealand for long enough between 50 and 65.

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All of these people have been caught by a gotcha in the NZ Super legislation. As Claire Dale, research fellow at the University of Auckland's Retirement Policy and Research Centre points out, the application form is 24 pages long.

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Perhaps the most contentious part of the law is section 70 of the Social Security Act 1964, which says if you or your partner are entitled to an overseas "state-administered" benefit, it will be deducted from your NZ Super.

Often, you will be required to go through the process of applying for pensions from those countries although it won't mean more money in your pocket.

On the surface this is only fair.Why should someone get double the income when they only worked half the time in New Zealand?

The reality is a lot more complicated and not always fair.

Section 70 "direct deductions" are a subject that spawns countless Catch 22 situations. Case number SSA096/14 heard by the Social Security Appeal Authority last year was one such instance. A 74-year-old man married a woman from Britain only to find that the Ministry of Social Development (MSD) took his NZ Super away, expecting him to survive on his wife's overseas pension.

The problems with the direct deduction policy are multiple. It is applied in some cases to private retirement savings, for example the Canada Pension Plan, which of course it should not be.

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The couple planned to spend six months in each country and had agreed to be responsible for the outgoings on their own properties.

The man's appeal failed, although authority chairwoman Marilyn Wallace commented in the decision that the case was an example of the apparent unfairness of the law.

The MSD says this rule applies even if the spouse or partner doesn't qualify for NZ Super in his or her own right.

There are arguments that some overseas "state-administered" pensions that are deducted are more like KiwiSaver and should be paid over and above NZ Super -- although individuals and groups such as Pension Protest have had little luck in getting the Government to budge.

Dale says there have been reviews by the MSD that recommended excluding foreign state pensions built up by voluntary contributions, but this hasn't happened.

One such example that has been through the courts and appeal authorities is that of Dr William Roe.

Roe argued that he was told when he migrated from the United States to New Zealand he would be entitled to NZ Super on retirement. But when he retired, the then Department of Social Welfare found Roe and his wife were receiving US Social Security payments and deducted them from their NZ Super, meaning they got none. The Roes argued they had paid taxes in New Zealand and so should be entitled to receive NZ Super -- and what's more, their US payments related to payments they had made as employees into individualised accounts, not a universal pension.

New Zealand has bilateral deals with Australia, Canada, Denmark, Greece, Ireland, Jersey and Guernsey, the Netherlands and Britain that allow people to use their residency in New Zealand to qualify for a state pension in the agreement country (and vice versa) or to receive up to 100 per cent of NZ Super.

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Sissi Stein-Abel, one of the founders of the NZ Pension Protest website, quotes the example of Germany, where the pensions that are deducted from NZ Super are contributory funds deducted from people's salaries. "How can [this] be identical to NZ Super, which is funded from general taxation and paid like a social welfare benefit?"

Another big problem that Kiwis come across is the rule that they only receive NZ Super while living in Australia to the level of the Australian Age Pension that they qualify for.

That pension is means tested, says Stein-Abel.

New Zealand has bilateral deals with Australia, Canada, Denmark, Greece, Ireland, Jersey and Guernsey, the Netherlands and Britain that allow people to use their residency in New Zealand to qualify for a state pension in the agreement country (and vice versa) or to receive up to 100 per cent of NZ Super, says Dale.

The reciprocal superannuation agreement between Australia and New Zealand says Kiwis living in Australia whose assets and income fail the means test for the Australian Age Pension have their NZ Super reduced to nil as a result.

There are cases where people eligible for NZ Super here regardless of their spouse's earnings have lost their entitlement when they moved to Australia because of those earnings.

Another gotcha for Kiwis who have lived overseas during their working lives is that there is a requirement to be resident and present in New Zealand for 10 years after the age of 20 and five years after turning 50.

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What's more, retired Kiwis moving to Australia must apply for the Australian Age Pension within 26 weeks. If not, they could have the NZ Super paid to them for that 26 weeks clawed back. Not everyone will know that.

Kiwis who move to non-agreement countries usually receive only a pro-rata of NZ Super according to what proportion of their working lives they spent in New Zealand, says Stein-Abel.

The Catch 22 is that Kiwis need to apply for NZ Super before moving to non-agreement countries.

People's lives aren't always that straightforward.

One man appealed after the NZ Super he was receiving in Australia was cut off because he moved to Fiji.

He didn't realise he needed to be resident in New Zealand at the time of his application for NZ Super to be paid when he moved to Fiji.

Another gotcha for Kiwis who have lived overseas during their working lives is that there is a requirement to be resident and present in New Zealand for 10 years after the age of 20 and five years after turning 50.

The message is unless you've lived in New Zealand all your life, haven't married a foreigner and don't want to travel, you'll need to read the NZ Super fine print very carefully.

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Time spent in agreement countries such as Australia, Britain, Canada, and others, or work as a missionary, for the armed forces or as a VSA volunteer, count towards that but there are still fish hooks.

One Kiwi found this out when he returned to New Zealand in 2014 expecting to qualify for NZ Super. Because he'd only ever visited New Zealand in the years from 2002 to 2015 and not lived here, he wasn't entitled to NZ Super and would have to wait a further five years until he was nearly 70 to qualify.

He argued unsuccessfully that he'd been on temporary contracts while overseas and was "ordinarily resident" in New Zealand.

One couple appealed but found that, because they were "ordinarily resident" in the country where they were doing missionary work, they didn't qualify for NZ Super.

Many Kiwis spend their working lives dreaming of their round-the-world adventure or of retiring to some far-flung tropical paradise. There are hoops to jump through if they want to receive their NZ Super while away.

The general rule is that you can travel and get paid for up to 26 weeks of the year and still get NZ Super. Anyone who stays away longer than 30 weeks and doesn't meet the criteria must repay the NZ Super they received while away.

A woman who flew to Hong Kong on a one-way ticket and continued to receive her NZ Super was caught out this way. Because she stayed longer than 30 weeks, she had to repay the money from her first 26 weeks away.

The message is unless you've lived in New Zealand all your life, haven't married a foreigner and don't want to travel, you'll need to read the NZ Super fine print very carefully.