Sepuloni Carmel; Dyson RuthNEW ZEALAND SUPERANNUATION AND VETERAN'S PENSION LEGISLATION AMENDMENT BILLFirst ReadingHon CARMEL SEPULONI (Minister for Social Development): I move That the New Zealand Superannuation and Veteran's Pension Legislation Amendment Bill be now read a first time. I nominate the Social Services and Community Committee to consider the bill. At the appropriate time I intend to move that the bill be reported to the House by 30 March 2020.The New Zealand Superannuation and Veteran's Pension Legislation Amendment Bill aims to modernise and simplify New Zealand superannuation and veterans pension. The bill maintains and emphasises the core qualification for superannuation—that is reaching age 65 while meeting the residence requirements. It updates features that have become outdated over time. It also clarifies and improves the consistency of some of the details.Every New Zealander has a stake in New Zealand superannuation including the Minister for Seniors and veterans pension. They are our most common form of social assistance. Nearly 8000 New Zealanders receive one or the other. They play a critical role in older people's incomes. Around two in five seniors have almost no income apart from their pension and yet seniors have lower rates of income poverty and material hardship than any other group.Every New Zealander contributes in some way to providing New Zealand superannuation and the veterans pension and almost all of us will receive one someday. We have a responsibility to ensure that they continue to meet the needs of the seniors of today and into the future. Part of that responsibility is about ensuring the sustainability of this vital income support as our population ages. Part of it is also about adjusting the settings to reflect changes that are fair.The most significant change in this bill is a shift in how non-qualifying spouses are considered in New Zealand superannuation and veterans pensions. There are several ways that being in a relationship affects whether someone receives superannuation and how much they get. The most obvious is the rate that a superannuitant gets. A single person gets a higher rate than someone who's in a relationship. The bill doesn't change this because the difference in rates is based on the higher costs single superannuitants face and the more limited personal finances that single people tend to have to meet these costs. Rather the bill addresses the other ways that having a partner who does not qualify for New Zealand superannuation themselves may affect entitlements.First superannuitants currently have the option to include their partner who doesn't qualify in their rate. That usually happens when one partner doesn't meet the age requirements but in some cases it's a partner who's over 65 but is yet to meet the residence requirements. Together a couple including a non-qualifying partner get a little less than a couple who both qualify and they are also subject to an income test.People who are already included in their partner's superannuation can continue to be included under this bill but from 1 July 2020 superannuitants will no longer have the option to include their partner if they are not already including them. This change helps modernise our superannuation scheme and reflects a fairer way of administering this assistance.Savings provisions will allow people who are currently including their partner in their superannuation to continue doing so. That will last until the non-qualifying partner qualifies for New Zealand superannuation or veterans pension in their own right or until the qualifying partner chooses to no longer include their partner.The other way that being in a relationship can affect entitlement to New Zealand superannuation and veterans pension is if a superannuitant's partner has an overseas pension. New Zealand has a system of direct deduction. Direct deduction supports the country's ability to pay a universal pension based on age and a minimum period of residence. It promotes equity amongst seniors by ensuring that everyone receives the same amount of Government-administered retirement income. If someone receives a benefit or pension administered by an overseas Government it's deducted dollar for dollar from their entitlement to a New Zealand benefit or pension. But deduction also extends across a couple. If one partner gets an overseas pension that exceeds the value of their New Zealand superannuation or veterans pension then the rest is deducted from their partner's superannuation. There are some cases where the partner with an overseas pension doesn't qualify for superannuation at all and the entire overseas pension is deducted from their partner.The number of superannuitants and veterans pensioners affected by this spousal deduction is around 400 couples. We know that although this is a small group it had long been a source of distress and frustration for them. The policy exists to promote equity between couples with overseas pensions and couples who don't but in this case we don't think that outweighs the impact it has on those affected. The bill removes that spousal deduction from the standard rates of New Zealand superannuation and veterans pension. In general partnered superannuitants won't have their superannuation entitlement or energy payment affected by their partner's overseas pension.I'll come now to the other aspect of how the bill modernises and simplifies New Zealand superannuation clarifying and improving the consistency of some of the details. To continue with the theme of overseas pensions the direct deduction policy covers Government-administered benefits and pensions. It isn't intended to cover the provision that people make privately or voluntarily for their retirement; for example it doesn't cover another country's equivalent of KiwiSaver. However there are cases where people contribute to their Government-administered pension scheme over and above what they're required to do. One example of that is where someone moves overseas but chooses to continue paying into the State scheme from their home country. Even though these are voluntary contributions the resulting pension is still required to be deducted from a New Zealand benefit or pension. There's just one exception to that provided by the social security agreement between New Zealand and the Netherlands. This bill resolves that inconsistency by ensuring that any part of a Government-administered overseas pension that's based on voluntary contributions won't be deducted from a New Zealand benefit or pension.We are also improving the consistency of how we treat New Zealanders who do missionary works in other countries. The missionary provision allows a period when a person was a missionary overseas to count as residents for New Zealand superannuation and veterans pension. It's important to recognise other people doing similar work for secular organisations. While there's a similar provision specifically for Volunteer Service Abroad other secular humanitarian organisations aren't covered. The bill introduces a provision for humanitarian work overseas for a registered New Zealand charitable organisation to count this time as residence in New Zealand.The bill also amends the provision for missionaries to emphasise their connection with New Zealand. People who leave New Zealand for a new absence as a missionary from 1 July will need to have been ordinarily resident here before leaving and they will need to go on behalf of a missionary organisation that is a registered New Zealand charitable organisation.The bill provides a way to recognise trends in older people's living arrangements. A single superannuitant receives around $40 a week more before tax if they're living alone than if they share accommodation. To be considered living alone superannuitants need to live in one of several types of residence that are set out in legislation—for example a house or flat a motel room or a boat. The bill adds one more type of residence to that list: a self-contained mobile home. It also allows regulations to be made that set out additional types of residences in the future. This will ensure that the Government has the flexibility to respond in a timely way when new living arrangements do develop.The bill provides additional security for the level of New Zealand superannuation and veterans pension. For well over a decade—in fact since the 2005 confidence and supply agreement between Labour and New Zealand First—the net amount of superannuation paid to a couple who both qualify has been no less than 66 percent of the net average weekly wage. Legislation requires a minimum level of only 65 percent but given how long this arrangement has lasted so far it's appropriate to formalise the 66 percent setting giving superannuitants a greater level of assurance about their future entitlements.This is a bill that provides us with the opportunity to refresh our superannuation system contributing to its sustainability while not compromising the support we provide to those who qualify. So I commend this bill to the House.ASSISTANT SPEAKER (Hon Ruth Dyson): Before I call the next speaker could I just ask members—there's a lot of background chatter going on. There are lobbies available if people want to have extended conversation but it's really hard for the member speaking if people sitting particularly in close proximity are chatting. So if members could just respect the speaker please. Thank you.