Dozens of pensioners who had their superannuation payments cancelled because they were stuck overseas during the Covid-19 pandemic have tried, and initially failed, to have the debt overturned
Since the start of the year, 67 pensioners asked to repay 26 weeks' worth of superannuation have been heard by the Benefits Review Committee but only one has walked away with a win.
Beneficiary advocate Karen Pattie said something was not adding up.
She has taken six cases that failed in the committee to the Social Security Appeals Authority and has had a 100 percent success rate in overturning the committee outcome.
"Where we have not been successful in the committee, we've taken it through to the Social Security Appeals Authority – and this is the confusing bit because it then gets referred back to the ministry and overturned before it gets to the legal hearing of the Social Security Appeals Authority.
“We've had them all overturned to date in favour of the pensioner which indicates to me that there's something wrong with how it's being processed at Benefits Review Committee.”
MSD Client Advocacy and Review manager Diane Anderson said MSD may decide to reconsider its position after a case has been through a committee hearing if "new information comes to light".
She confirmed 14 appeals to the Social Security Appeals Authority were resolved prior to the hearing, seven cases were awaiting next steps and two recently filed cases were with MSD for an initial response.
One case has been through an Authority hearing but the outcome has not yet been delivered.
Pattie wants the details of the hearing made public saying the process has so far not been transparent.
“There is no reason given [when they are overturned], it's just that the ministry have changed their decision from the Benefits Review Committee outcome and are going to write the debt off.”
She urged pensioners who had incurred the debt or had been unsuccessful at the committee to give it another crack.
“My concern is that pensioners who don't pursue it will pay debt that isn't actually legally theirs to pay back.”
Seven thousand, three hundred and two payments were suspended and cancelled between April 2020 and March 2022.
The Superannuation and Retirement Income Act states if a superannuitant does not return to New Zealand within 30 weeks of being overseas, they may be asked to pay back the past six months' worth of payments.
That amounts to just over $12,000 for someone living alone.
“There's a real mental health cost for my pensioners that are on my books ... and I can't see the reason for it." – Karen Pattie, beneficiary advocate
In October 2021 MSD decided superannuitants who travelled to Australia between April 19 and July 23, 2021 when the trans-Tasman travel bubble was open, could not reasonably foresee difficulties in returning home, so they did not incur debt, but others who had travelled outside this timeframe did not benefit from this policy.
Earlier this year Retirement Commissioner Jane Wrightson sought legal advice on their behalf.
The advice from Dentons Kensington Swan indicated the policy the Ministry of Social Development was applying in not giving travellers outside of the travel bubble period relief, might not stand up in court.
“There are strong arguments that the ongoing application of the policy is unlawful in any event. It applies an overly broad interpretation of what could be reasonably foreseen based on general and unspecified risk. This wide interpretation is unlikely to be preferred by a court,” the advice released under the Official Information Act said.
“Given the vulnerability of the Ministry of Social Development's legal position, I think the solution is to properly and lawfully extend the existing [travel bubble] approach to other pensioners who similarly could not have anticipated what was to come and the impact on MIQ.”
MSD then extended the policy to apply to pensioners who went to other countries during that same travel bubble period. It also committed to reviewing every case, admitting for some clients the circumstances may also have been "unforseen".
Since January, 144 cases had been reviewed, with 32 overturned prior to a Benefits Review Committee hearing and 45 withdrawn.
Sixty-seven have gone through the BRC with 62 upheld, four partially upheld, and one overturned.
There are currently 151 reviews that have not yet been heard by the committee.
Pattie said the months-long wait time for a case to be heard took a huge toll on pensioners.
“It's a very vulnerable group and this kind of debt really does stress them out. Sadly, I've had one client pass away while waiting for [the] hearing and now there's a huge stress on their partner ... their case was launched last year which still hasn't been heard.
“There's a real mental health cost for my pensioners that are on my books ... and I can't see the reason for it.
Retirement Commissioner Jane Wrightson said pensioners who had been through the committee reported a “largely unsympathetic hearing”.
“We will be looking at NZ Super settings next year as this situation has not been satisfactory from my perspective and we want to see if the legislation could be improved or modernised.”
