Tolley Anne: Social Assistance (Portability to Cook Islands Niue and Tokelau) Bill — Second ReadingText is subject to correctionTolley Anne: Social Assistance (Portability to Cook Islands Niue and Tokelau) Bill — Second Reading[Sitting date: 29 April 2015. Volume:704;Page:2977. Text is subject to correction.]Hon ANNE TOLLEY (Minister for Social Development):I move That the Social Assistance (Portability to Cook Islands Niue and Tokelau) Bill be now read a second time. This bill seeks to provide greater pension flexibility for people who wish to live in the Cook Islands Niue and Tokelau. This Government wants 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.Current pension portability arrangements allow people to take their New Zealand superannuation to 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 this arrangement New Zealand superannuation is paid at a minimum of 50 percent after 10 years’ residence in New Zealand rising to 100 percent after 20 years’ residence. There are also general portability provisions that cover all other countries with which New Zealand does not have a social security agreement. The payment formula for the Special Portability Arrangement is more generous than the payment formula for the general portability provisions. This is because 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 agreements with New Zealand. There are currently nearly 650 people receiving their New Zealand superannuation in the Pacific and approximately 300 of those people live in the Cook Islands.Currently 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. Consequently people who wish to receive New Zealand superannuation in the Cook Islands Niue or Tokelau are not able to leave New Zealand until they are 65 which is the age of eligibility for New Zealand superannuation. Should they choose to return permanently to the Cook Islands Niue or Tokelau prior to the age of 65 they lose their ability to apply for New Zealand superannuation. This bill will remedy that situation by eliminating the “resident and present in New Zealand” requirement for the Special Portability Arrangement in respect of the Cook Islands Niue and Tokelau. The bill will allow persons to move to the Cook Islands Niue and Tokelau after attaining the age of 55 and apply for their New Zealand superannuation or veterans pension from these Pacific Islands at age 65. People still need to live in New Zealand until they are 55 because in order to be eligible for New Zealand superannuation or the veterans pension a person must have lived in New Zealand for 10 years since the age of 20 five of which must have been after the age of 50. This rule of 5 years’ residence over the age of 50 applies to all applicants for New Zealand superannuation.The Social Services Committee has examined the bill and recommends by majority that it be passed with only minor amendments. These amendments are to change references in the bill to the War Pensions Act 1954 to refer to corresponding provisions in the Veterans’ Support Act 2014.The select committee received 13 submissions on the bill all but one of which were generally supportive. However the majority of submissions sought the removal of the 5 years’ residence over 50 rule for applicants in the Cook Islands Niue and Tokelau. The Social Services Committee decided that this aspect of the bill should not be changed because the rule applies to all applicants for New Zealand superannuation and therefore it would not be right to remove it for only those people who wish to move to the Cook Islands Niue or Tokelau. I fully support the select committee’s decision. The 5 years’ residence over 50 rule is about ensuring that there is some connection with New Zealand close to a person’s application for New Zealand superannuation. People born in New Zealand who move overseas prior to the age of 50 and then return to New Zealand at a later stage are also required to meet the 5 years’ residence over 50 rule before they become eligible for New Zealand superannuation. It would be inequitable to remove this requirement for people who have moved to the Cook Islands Niue or Tokelau before turning 50 but still require this rule to be met by those New Zealanders who move to other countries and wish to access New Zealand superannuation when they turn 65.We must also bear in mind that without the 5 years’ residence over 50 rule there would be nothing preventing a person born in New Zealand who then lived overseas for most of their life returning to New Zealand at 65 years and claiming New Zealand superannuation. So the 5 years’ residence over 50 rule attempts to keep a balance between supporting New Zealand’s ageing population and ensuring people who were born here but have limited connection to New Zealand do not access New Zealand superannuation.Another issue raised in submissions on the bill was the applicability of the changes in the bill to all Pacific countries. The change is restricted to the Cook Islands Niue and Tokelau because this bill is about recognising New Zealand’s close constitutional relationships with these Pacific Islands that enjoy shared citizenship with New Zealand and unique legal arrangements. Both the Cook Islands and Niue have adopted constitutions enabling self-government and free association with New Zealand. Free association is a status distinct from that of full independence in that it allows the Cook Islands and Niue to maintain New Zealand citizenship while administering their own affairs. Tokelau is a non-selfgoverning territory of New Zealand.It is important to note that this bill is also about ensuring the economic and social viability of the Cook Islands Niue and Tokelau. Depopulation and its related social and economic consequences are longstanding issues for the Cook Islands Niue and Tokelau. The current resident and present in New Zealand requirement has been described as a disincentive for those people who are established in New Zealand to return home before the age of 65. Removing this disincentive could potentially help boost economic development and skills capacity in these islands through an increased return of experienced people able to apply skills acquired in New Zealand effectively in their home communities. People returning at age 55 would have the capacity to contribute to the workforce 10 years in advance of the age of qualification for New Zealand superannuation. As pension payments are paid in gross it is expected that local income and value added tax will be paid by returning migrants to contribute to the local economy.As I said before people who wish to live in 22 Pacific countries already receive better provisions than other superannuitants who wish to live overseas because they are covered by the Special Portability Arrangement. People paid New Zealand superannuation under the arrangement receive 50 percent after 10 years’ residence in New Zealand rising to 100 percent after 20 years’ residence. This compares with the general portability provisions that provide 10/45ths of the total rate of New Zealand superannuation after 10 years’ residence rising to 100 percent after 45 years’ residence.Currently the portability provisions for the veterans pension and New Zealand superannuation are exactly the same. One submission argued that portability provisions for the veterans pension and New Zealand superannuation should be separated. I understand that this issue was also raised in the context of the Veterans’ Support Act which was passed in December last year. The veterans pension has been paid at the same rate and under the same conditions as New Zealand superannuation since its introduction in 1990. There does not appear to be any pressing reason to change this situation and the select committee did not suggest it.I want to reiterate that this Government wants 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. This Government also wants to ensure that superannuitants have as many options as possible as to where they choose to live. By allowing people to apply for New Zealand superannuation and the veterans pension while resident in the Cook Islands Niue or Tokelau this bill will achieve both these things. Finally I want to thank the select committee for the work it has done on the bill. I commend this bill to the House.