New research has revealed the emotional strain of pensioners caught offshore due to COVID-19 border closures and the impact of having their NZ Super payments stopped, repayment demands issued, and the difficulties navigating government bureaucracy to solve the problems.

Te Ara Ahunga Ora Retirement Commission has conducted interviews with some of those stranded about their ordeal, and their experiences dealing with the Ministry for Social Development (MSD) and MIQ.

Throughout 2021 and 2022, Retirement Commissioner Jane Wrightson was contacted by more than 50 people to advocate on their behalf as they faced having their pensions stopped and repayment demands issued after 30 weeks away.

“No one could have predicted the borders would have been closed for as long as they were. Most pensioners experienced significant financial hardship and stress as they navigated their return through a crowded online MIQ system and dealing with MSD,” says the Retirement Commissioner.

“Some early concessions were made for superannuitants who had travelled during the Trans-Tasman bubble, after intervention by myself and others. But those who fell outside of this, or were further afield, had to grapple with an inflexible and often unsympathetic appeals process to challenge repayment demands.

“What was most surprising is that maintaining existing pensions would cost the taxpayer nothing. The administrative cost of the decisions to cease pension payments and demand repayment must have been significant. By comparison, other arms of government moved quickly to roll out additional and new financial support to other New Zealanders.

“MSD’s administrative decision-making seemed biased towards saying no. Assessment of what is a ‘reasonably foreseeable’ legal exemption, so that pension payments could be retained, was tightly defined despite border closure being a very rare event.

“The appeals processes experienced by the people who used them appeared to be inconsistent with some natural justice principles. Some people were not given proper opportunities to present their position.”

The study revealed shared frustrations with dealing with MSD, finding that many who they dealt with lacked empathy and showed little appreciation of the stress they were under. Early advice was not helpful or accurate for a number of interview participants and several were incorrectly told they could pause their pension with no penalty.

“I felt like I was being treated as a criminal. Like they’d caught me out. I explained to them why I was there, but they said you should have known before I left. I wasn’t going on holiday! I can prove it, that she [his Spanish partner] was in hospital. She couldn’t do a thing for herself,” said one participant who flew to Spain after March 2020.

Those who had MSD case managers tended to feel their interactions were more empathetic but still found the process a struggle.

“There was one guy who became my case manager. Every day I was writing emails. To their credit he did the best he could. I mean, there’s no use railing against someone administering the law. It was the law that was the issue. MSD people were very sympathetic, it was the organisational / legal position that was lacking humanity,” reported another participant stuck in France.

When it came to those who appealed MSD’s decision, many found the process arduous, particularly being required to print out and return documents while overseas. Those that went to the Benefit Review Committee (BRC) hearings found the process highly unsatisfactory.

“They hadn't read it, and so it was really disappointing to attend that meeting to hear that before we even started, we were on the back foot, you know, and these people treated us like criminals. And they did say to us that ‘You're not going to get any further on this’. I don't know the exact words, but they see this is just a paper exercise,” said a participant who flew to Australia from March 2020 (outside the travel bubble).

Overall, the study found:

• The stress of navigating the new MIQ ‘virtual lobby’ process compounded the angst and anger triggered by MSD’s initial communications regarding pension cessation.
• There is the belief that MSD did not communicate in a timely way with MIQ to understand what impact the ‘virtual lobby’ system would have on the income of people being prevented from returning within the required timeframe.
• Apart from the financial burden carried by superannuitants who had their pensions stopped, the mental toll the process took on participants is very apparent, particularly relating to the concept of having a debt to the government.
• The reliance on paper documentation complicates the appeals process and resulted in repetition, errors, and delays.

The Retirement Commissioner is calling for consideration to be given to three areas she sees could be improved in the event of something similar happening in future:

• Set up a process for independent review and testing of legal positions in novel circumstances and/or where decisions will have significant adverse impacts. Careful consideration and review is more likely to lead to the correct operational answer and avoid the protracted and difficult experiences that were reported before the MSD position finally changed.
• At the very least, the BRC should be able to obtain separate legal advice on any contentious issue involving statutory interpretation, rather than simply adopting the MSD legal position. This is consistent with natural justice obligations which require, among other things, that the BRC approach each review application with an open mind.
• MSD should adopt a policy of constructively engaging with alternative legal positions, such as the legal opinion commissioned by the Retirement Commissioner and provided to MSD. While MSD eventually changed its policy consistent with this legal advice, there was no discussion or acknowledgement around the issues that were raised at the time resulting in ongoing delay before a different approach was adopted. The absence of engagement also meant opportunities for transparency and learning were lost.

Accompanying this study, Te Ara Ahunga Ora has published a technical policy paper focusing specifically on the globally mobile population and the key legislative principles of ‘resident and present’ and ‘ordinarily resident’ that underpin current NZ Super settings . There have been changes to NZ Super settings over the past few decades that recognise a more globally mobile population. However, the paper concludes there are further opportunities for improvement, both legislative and operational.

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