Hon David Benson-Pope, MP
Minister for Social Development and Employment
Member of Parliament for Dunedin South

2 March 2006 Media Statement

Labour delivers on promise of fairer pensions

Labour is delivering on its promise of fairer treatment for the partners of people in longterm residential care.

Social Development and Employment Minister David Benson-Pope last night gave the New Zealand Superannuation and Veterans' Pension (Entitlements of Spouses and Partners of People in Longterm Residential Care and Remedial Matters) Bill its first reading in Parliament.

The Bill will extend eligibility for single rates of New Zealand Superannuation and Veterans' Pension to all pensioners living in the community, with a spouse or partner in long-term residential care.

"This change recognises that even though people in this situation are married, they are unable to benefit from sharing household costs with their spouse," said Mr Benson-Pope. "It is part of a package of positive initiatives that benefit older New Zealanders that are set to kick-in from 1 July, including improvements in the rates rebate scheme, extending lower doctors and prescription fees, and continued phase out asset of testing."

The change will benefit approximately 2,000 superannuitants and veterans' pensioners by $59.03 net per week, where they 'live alone'. If they are 'sharing' with another person, the increase is $39.36 net per week.

The Bill also removes from 1 July 2006 the sharing expenses rule, which has prevented some superannuitants and veterans’ pensioners from receiving the living alone payment. The sharing expenses rule currently operates as a somewhat strict and arbitrary form of income testing for the living alone payment. In some cases, superannuitants and veterans’ pensioners have been denied eligibility for the living alone payment because they receive modest contributions to their household expenses from others, such as family members.

The Bill will mean that eligibility for the living alone payment will be based solely on actual living arrangements: "It will therefore ensure a fairer treatment for all superannuitants and veterans’ pensioners who are living alone."

The Bill also increases the period of time a person can continue to receive New Zealand Superannuation or Veterans' Pension while overseas and working voluntarily for an aid agency from 52 weeks to 156 weeks. This will therefore remove the financial disincentives that inhibit older volunteers from making a longer contribution to service abroad.

ENDS

Fact Sheet: Changes created by the New Zealand Superannuation and Veterans' Pension (Entitlements of Spouses and Partners of People in Long-term Residential Care and Remedial Matters) Bill

Living Alone Payment For Anyone Whose Spouse/Partner Is In Residential Care
Extends the eligibility for single rates of NZS and Veterans' Pension to all superannuitants and veterans' pensioners living in the community, with a spouse or partner in long-term residential care.

This change recognises that even though people in this situation are married, they are unable to benefit from sharing household costs with their spouse.

The change will benefit approximately 2,000 superannuitants and veterans' pensioners by $59.03 net per week (where they 'live alone' – if they are 'sharing' with another person, the increase is $39.36 net per week).

This change is estimated to have a net fiscal cost of $6.059 million in 2006/07 (assuming an implementation date of 1 July 2006), rising to $6.723 million in 2009/10.

Simplify Eligibility For Living Alone Payment
Simplifies the rules for the living alone payment, so that entitlement to the living alone payment for superannuitants and veterans' pensioners is based solely on actual living arrangements. This removes the sharing expenses rule, which created confusion around whether someone was actually living alone or not.

There are around 30 applications a year, which have been affected by the 'sharing household expenses' rule. Those newly eligible will benefit by just under $20 net per week. The change to eligibility rules will have an estimated net fiscal cost of $135,000 in 2006/07 (assuming a 1 July 2006 implementation date), rising to $150,000 in 2008/09.

Extend Times Payment Can Continue For Volunteers Working Overseas
Increases the period of time a person can continue to receive NZS or Veterans' Pension while overseas and working voluntarily for an aid agency from 52 weeks to 156 weeks.

Currently there are about 40 older volunteers who are working overseas for aid agencies who would benefit from the extended entitlement period. The estimated net fiscal cost of the change is $266,000 in 2006/07, rising to $295,000 in 2008/2009.

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