Why Can't We Stay Overseas As Long As We Want When We Get The Pension? - Ask Susan

Saturday, 8 February 2025, 8:41 pm
Article: RNZ

Susan Edmunds, Money Correspondent

Send your questions to susan.edmunds@rnz.co.nz

I'm not quite at retirement age yet but I'm planning. My daughter lives in Canada and I will go to visit her and potentially use her as a base to go sightseeing. I see that if you are away for more than 26 weeks you can lose your pension unless you make provisions with Work and Income.

If you have lived and worked in NZ and reach retirement why should there be any conditions on travelling if that's what you want to do? Sure, they need to keep tabs in case you pass away and guard against fraudulent activity, but this legislation feels out of touch with the needs of many families in this day and age.

I took your question to the Ministry of Social Development, which indicated it's basically about keeping the scheme affordable for New Zealand.

General manager for the international disability and generational policy group Harry Fenton said it had always been a feature of NZ Super that eligibility was based on residence in this country.

He said it was one of the aspects of the scheme that was designed to keep it fiscally sustainable.

He said people who wanted to travel could receive their pension for 26 weeks if they returned to New Zealand within 30 weeks.

"A person who wants to travel or live overseas for longer than 26 weeks can also apply under the general portability payments and their payment is proportional to their residence in New Zealand between the ages of 20 and 65.

"A person living permanently overseas may be able to receive up to the full rate of NZS if the country they're residing in has a social security agreement with New Zealand. What a person may be eligible to receive will depend on their personal circumstances and the provisions of the individual agreement. New Zealand has a social security agreement with 10 countries which includes Canada, Australia and the United Kingdom."

Fenton said people move to certain Pacific Island countries could also receive payment of the pension proportional to their time as a resident in New Zealand.

With all the articles on retirement they never mention if the money required includes money for rent or mortgage. I assume it doesn't so if someone does not have a mortgage-free house or is paying rent they will need more than this. Is this correct? Sometimes I think the costs need to be broken down more so people can see where the expenditure will be.

The Retirement Expenditure Guidelines that came out last month are based on what people are spending in retirement now.

You're right that because most people in that age bracket at present would have a mortgage-free home, there isn't much spending on home loans or rent captured.

You can see a breakdown in the report here.

I looked at this issue earlier in the week and there's a general consensus that younger generations will overall probably have to pay more for housing in retirement.

But whether they end up spending more overall is probably something we'll only see with time.

I'm a Kiwi who contributed to the Canadian Pension Plan for 10 years while living and working in Canada. I'm now residing back in NZ with no intention of returning to Canada. Is there a way to move my CPP contributions to KiwiSaver? If not, how do I access these at retirement?

Unless you're already at the age where you can withdraw your CPP investments, you can't move them into KiwiSaver, unfortunately.

At the moment, it's only possible to do that with Australian super.

But Kristien Taylor, a KiwiSaver adviser at Generate, says when you become eligible to withdraw your money, you will need to fill out a "New Zealand/Canada Agreement - Application for Canadian Old Age, Retirement and Survivors Benefits" form. You can find this by googling ISP 5054-NZL.

"We recommend seeking independent tax advice before making the decision to withdraw to ensure it's the best option for you, as lump sum withdrawals usually come with Canadian tax obligations.

"Once the funds are deposited into your bank account, of course you can then choose to invest those funds in KiwiSaver."

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