Overseas pensions

For every one dollar you get from an overseas pension, your New Zealand (NZ) payment is reduced by one dollar.

If your overseas pension amount is more than your NZ payment, you will only get the overseas pension.

You have a partner who gets an overseas pension

If your partner gets an overseas pension, we'll look at whether they get a NZ payment.

• If your partner does get a NZ payment, we'll reduce this first. If their overseas pension amount is more than their NZ payment, they will only get the overseas pension. We'll then start reducing your NZ payment with the excess amount.
• If your partner doesn't get a NZ payment, we'll reduce your NZ payment. 

If you get NZ Super or Veteran's Pension

Your partner's overseas pension will only affect your NZ Super or Veteran's Pension payments if they are included in your payments. You could include your partner in your payments before 9 November 2020. They will be included in your payments because they don't qualify for NZ Super or Veteran's Pension themselves.

If you get any other payments from us, your partner's overseas pension will affect these payments as outlined in the bullets above.

How we work out the deduction

We'll convert the amount of your overseas pension to NZ dollars and take that off your NZ payment. This is done using the gross (before tax) rate.

Example - single with an Australian pension

Ben gets NZ Super of $606.67 gross a week. He also gets an Australian pension of AUD$5,642.12 a year.

1. We convert his Australian pension to NZ dollars using the exchange rate: $5,642.12 x 1.08 (exchange rate) = $6,093.49 a year.
2. We work out the weekly amount: $6,093.49 / 52 (weeks) = $117.18.
3. We deduct the Australian pension from the NZ payment: $606.67 minus $117.18 = $489.49 gross a week.

Example - couple with a UK pension

Carl and Andrea are married and both get NZ Super of $461.41 gross each a week. Carl also gets a UK pension of £46.82 a week. 

1. We convert Carl's UK pension to NZ dollars using the exchange rate: £46.82 x 1.93 (exchange rate) = $90.36 a week.
2. We deduct the UK pension from Carl's NZ payment: $461.41 minus $90.36 = $371.05 gross a week.

Exchange rates

For most countries we use an average exchange rate from the 16th of one month to the 15th of the next. To work this out, we look at an average exchange rate between:

• the overseas currency, and
• the New Zealand dollar.

Some countries tell us the actual exchange rate. In this case, we'll compare this with the exchange rate that Westpac provides us. We'll use the one that is best for you.

Some countries use more than one exchange rate. If this happens, we'll use either:

• the actual exchange rate, or
• the average of the exchange rates for the month, whatever is best for you.

Generally the overseas agency pays your overseas pension directly into your bank account. This is called the 'Direct Payment Option'. 

Using the Direct Payment Option means:

• you’ll get 2 separate payments:
  • your overseas pension from the overseas agency (based on their payment cycle), and
  • your NZ payment from Work and Income (either weekly or fortnightly)
• your overseas pension payments will vary as the exchange rates change
• you're responsible for paying New Zealand tax on your overseas pension if you're getting NZ Super or Veteran's Pension.

 Your overseas pension will be paid using the Direct Payment Option unless you tell us you want the Special Banking Option. 

Special Banking Option

You can choose to use a Special Banking Option if you get an overseas pension from:

• Australia
• Guernsey
• Ireland
• Jersey
• the Netherlands, or
• United Kingdom.

Using the Special Banking Option means:

• you receive 1 payment from Work and Income that is the total amount you’re entitled to 
• changes in the exchange rate will not affect your overseas pension payments
• New Zealand tax on your overseas pension is already deducted.

The policy is there to ensure that people who have lived overseas and in NZ get the same amount of help as people who have only lived in NZ.

This is outlined under sections 187-191 in the Social Security Act 2018.