in the tropics

NZ makes it easier to retire in the tropics

By Sophie Foster Hildebrand

FOR some people, the thought of retir ing in an island country, with sunny days and moonlit nights is appealling.

But one problem has been the collection of

superannuation.

New Zealand has decided to do something about the problem and from the beginning of last month, anybody living in New Zealand who qualifies for New Zealand Superannuation or Veterans Pen sion can take their pension with them if they retire to certain Pacific countries.

NZ prime minister Jenny Shipley announced the new initiative in February this year that extended the existing Special Portability Arrangement to include more Pacific countries and increased the rate of

payment will be increased for some people.

The new system covers American Samoa, Northern Mariana Islands, Cook Islands, Palau, Federated States of Micronesia, Papua New Guinea, Fiji, Pit cairn Island, French Polynesia, Samoa, Guam, Solomon Islands, Kiribati, Tokelau, Marshall Islands, Tonga, Nauru, Tuvalu, New Caledonia, Vanuatu, Niue, and Wallis and Futuna. According to NZ officials, there are no ethnic criteria.

“Anyone can apply to have their New Zealand Superannuation or Veterans Pension paid to them in the listed Pacific countries. The option is not limited only to people of Pacific country descent,” a press statement said.

But retirees have to beware of cer

tain provisions which must be fulfilled to qualify for the deal.

Barbara Gilbert, Manager Interna tional Affairs office of Work and Income NZ says “It’s important that people are aware that only those who already qualify residentially for a New Zealand pension are included in this change. If they are not sure they should contact us.”

Gilbert said “people who usually live in Pacific countries will not qualify unless they already get a New Zealand pension.”

“People who are already living in Pacific countries cannot apply for New Zealand Superannuation or Veterans Pen sion, even if they have previously lived in

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New Zealand. Pensions will not be granted to people who come back temporarily to New Zealand in order to apply.” To qualify for New Zealand Superannuation or Veter ans Pension, people must have reached the

qualifying age (currently 64).

They must have lived in New Zealand for at least 10 years after the age of 20, five years of which must be after the age of 50. People must be ordinarily resi dent in New Zealand when they apply.

Another condition is that to be able to take their payments to the Pacific coun tries, people must be going to live there for more than 52 weeks.

They must apply to Work and Income NZ for overseas payments before leaving New Zealand.

“Most Pacific countries are covered by the changes, but people should check with us before making any decisions about their future,” said Gilbert.

The payments are calculated by sev eral formulae. Those who have lived in New Zealand for 20 years or more after the

age of 20 will receive the base rate of New Zealand Superannuation or Veterans Pen sion overseas.

People who have lived in New Zealand for 10 years will get half the base rate of New Zealand Superannuation or Veterans Pension overseas.

However, the New Zealand govern ment will not pay any supplementary pay ments overseas. This means there will be no Living Alone Allowances, Disability Allowances, or Accommodation Supple ments paid overseas.

According to the NZ officials, the payments will not be taxed in New Zealand.

“Payments will not have New Zealand tax deducted from them. People will receive New Zealand Superannuation or Veterans Pension at the gross rate. The country the person has retired to may tax the payment.

It is the person’s responsibili ty to pay any tax due in the country to which they have retired. People should check with the tax department in the Pacif ic country they are retiring too before they leave New Zealand,” an official statement

said.

The pension will be paid in New Zealand every two weeks, or into the over seas bank account of the retiree every four weeks. The NZ government says the over seas bank account must be in the person’s name (or a joint account) in the country in which they usually live.

People can travel away from their stated “home” country for up to 26 weeks without their holiday affecting their New Zealand Superannuation or Veterans Pen sion.

If a person returns to New Zealand for a holiday, then their New Zealand Superannuation continues at the overseas gross payment rate. This is particularly important when a person returns to New Zealand for medical treatment.

The officials says that if a retiree decides that their return to New Zealand is permanent, then they revert to domestic New Zealand Superannuation or Veterans Pension.

For further information, call Work and Income NZ International Affairs office on 0800 777 117. ■