Pension Advice for ex-pats rtn to UK

Ex_pat123

Hi, can somebody please advise.

I am a UK national, I do not have enough NI contributions in the UK to qualify for a Full State Pension, due to having lived and worked in New Zealand for close on 20 years.

I have hearing conflicting information, despite the existence of some bilateral/reciprocal agreement between the UK and NZ, I have heard on one hand any work history in NZ only counts towards reaching the minimum 10 year work history for which you become eligible for a basic pension, therefore topped up via pension credit. 

I have also read, this is not necessarily the case and each year spent in NZ does count towards hitting the 35 year UK target.

I was advised by the DWP last year to collate enough proof for my time spent in NZ, however I have never been asked to submit this and despite advising DWP of my time spent in NZ they came to a decision in a matter of a few days, which gave me the impression that despite declaring time spent down-under, they gave it nil consideration.

There must be few ex-ex-pats who for whatever reason decide to return home, without realising that you may have to rely on pension credits.

I have appealed DWP's decision and am still waiting for an update.

Marcon

Ex_pat123 said:

Hi, can somebody please advise.

I am a UK national, I do not have enough NI contributions in the UK to qualify for a Full State Pension, due to having lived and worked in New Zealand for close on 20 years.

I have hearing conflicting information, despite the existence of some bilateral/reciprocal agreement between the UK and NZ, I have heard on one hand any work history in NZ only counts towards reaching the minimum 10 year work history for which you become eligible for a basic pension, therefore topped up via pension credit. 

I have also read, this is not necessarily the case and each year spent in NZ does count towards hitting the 35 year UK target.

I was advised by the DWP last year to collate enough proof for my time spent in NZ, however I have never been asked to submit this and despite advising DWP of my time spent in NZ they came to a decision in a matter of a few days, which gave me the impression that despite declaring time spent down-under, they gave it nil consideration.

There must be few ex-ex-pats who for whatever reason decide to return home, without realising that you may have to rely on pension credits.

I have appealed DWP's decision and am still waiting for an update.

I wonder if this will help - it looks pertinent: https://community.hmrc.gov.uk/customerforums/pt/cda622a8-b3ae-ed11-9ac4-00155d9c773d?msCorrelationId=b323115e-a10b-4ffc-a835-7f1018e44e34&instanceId=09a10d9e036c982a6acf1ed7f4e9558b44845127dddc55af67b87cd656dd4d77&tenantId=ac52f73c-fd1a-4a9a-8e7a-4a248f3139e1&portalId=e1cfc2ea-2de6-4c96-8e99-76600a349358&orgId=13212d7e-6a5d-4598-95ba-4a07545dbb67&environmentId=302efd07-28d9-4d2d-b558-96167951ad6a&portalApp=site-e1cfc2ea-2de6-4c96-8e99-76600a349358-UKw&portalType=Community%20Forums&portalProductionOrTrialType=Production&licenseType=Dynamics365&portalVersion=9.5.10.42&islandId=101&portalDomain=https%3A%2F%2Fcommunity-origin.hmrc.gov.uk&page=3 

Brie

Anything to stop you claiming from both NZ and UK?  I worked in a different commonwealth country and simply took my pension from both.  Might be different in that I get the max in the UK.  OH is different in that he has the same split but won't get the full UK SP so we're currently looking in to what gives us the best ongoing option.

Ex_pat123

Brie said:

Anything to stop you claiming from both NZ and UK?  I worked in a different commonwealth country and simply took my pension from both.  Might be different in that I get the max in the UK.  OH is different in that he has the same split but won't get the full UK SP so we're currently looking in to what gives us the best ongoing option.

You have to be resident in NZ to receive a NZ pension.

Re link above, yes I've seen that previously.

QrizB

Ex_pat123 said:

I am a UK national, I do not have enough NI contributions in the UK to qualify for a Full State Pension, due to having lived and worked in New Zealand for close on 20 years.

You don't qualify for a full nwe state pension (NSP) but you do qualify for a partial one?

How much UK pension do you currently qualify for? Are there any recent years that aren't full, and that you can buy?

https://www.gov.uk/check-state-pension

Ex_pat123 said:

...  eligible for a basic pension, therefore topped up via pension credit. 

Pension credit tops your total income up to a few pence less than a full NSP. If you have an occupational pension and/or personal pension on top of your state pension, such that your total income is greater than the full NSP, you won't be eligible for PC.

Do you have any pensions in addition to your partial NSP?

xylophone

https://www.workandincome.govt.nz/on-a-benefit/overseas-travel/nz-super-and-veterans-pension/living-overseas.html#:~:text=If you get NZ Super or Veteran's Pension and plan,re going to live in.

You can apply to keep your NZ Super or Veteran's Pension payments going while you're living overseas if you:

• intend to live overseas, and
• are not moving to the United Kingdom (UK).

If you're living in the UK, you can't get NZ Super or Veteran's Pension. You may be able to get a UK benefit or pension instead under the UK Social Security Agreement.

https://www.workandincome.govt.nz/pensions/travelling-or-moving/social-security-agreements/united-kingdom.html

Ex_pat123

I'm missing something like 15 years, I'm also trying to minimise the Pension credit portion as much as possible, as not only is it means tested, if I decided to move back to NZ, then it would stop. I've paid to cover a couple of recent gaps regarding NI contributions, but I can only go back so far, not that I would want to plug 15 years worth of gaps.

It's this so called reciprocal agreement which is the issue and which I was seeking further clarification/confirmation.

I was led to believe working in NZ counted towards UK NI contributions, while it does, unless I'm mistaken the caveat is that, it only covers you to ensure you have 10 years of NI contributions?

 

 

Marcon

Ex_pat123 said:

I'm missing something like 15 years, I'm also trying to minimise the Pension credit portion as much as possible, as not only is it means tested, if I decided to move back to NZ, then it would stop. I've paid to cover a couple of recent gaps regarding NI contributions, but I can only go back so far, not that I would want to plug 15 years worth of gaps.

It's this so called reciprocal agreement which is the issue and which I was seeking further clarification/confirmation.

I was led to believe working in NZ counted towards UK NI contributions, while it does, unless I'm mistaken the caveat is that, it only covers you to ensure you have 10 years of NI contributions?

 

 

You say you've appealed DWP's decision, so maybe wait for that?

pinnks

This bilateral Agreement is quite unusual.  The treatment seems differ depending on whether you were claiming your NZ pension before you left, or not.  Anyway, what follows is my take on the Agreement and how it interacts with the legislation but I could be way off the mark!

It looks as though Article 9 of the Agreement (the UK version is The Social Security (New Zealand) Order 1983 (legislation.gov.uk)) is applicable to those residing in the UK and claiming a state pension, who have periods of residence in NZ.  

Paragraph (2) (though the numbering appears to be missing on legislation gov uk), says,

"Where a person is [...] resident in, the United Kingdom and at the time when he was last in New Zealand he was receiving national superannuation under the legislation of New Zealand, [...], provided that he is over pensionable age [...] of the United Kingdom he shall be entitled, [...] to receive a basic retirement pension at the full standard rate under the legislation of the United Kingdom as if he satisfied the contribution conditions for such a pension. [...]"

So, the way I read that is that if you were receiving a NZ pension when you left then at pension age here, you get a full basic pension (under the old pension rules), so £156.20 per week (but see below re interaction with the 2016 changes in the UK).  I assume this does not apply to you anyway but is included for completeness.

Paragraph (3) then deals with a person who does not fall within paragraph (2), i.e. was not receiving a NZ pension when they left.  It says,

"[...] for the purpose of a claim for basic retirement pension [...] by a person to whom the provisions of paragraph (2) of this Article do not apply, a person [...] resident in, the United Kingdom shall be treated as if he [...] had paid a Class 3 contribution [...] for each week during which he was resident in New Zealand."

And that would seem to say that NZ residence is treated as/deemed to be payment of voluntary UK Class 3 when your pension is calculated for payment.  Weird, or what?

That would suggest that under the old UK state pension rules you would have, or be treated as having, 30 UK years by the time you reach UK pension age and would therefore get a maximum basic pension, i.e. £156.20 per week at 2023/24 rates.  On top of that you may get some additional pension from SERPS from your UK employment or a contracted out pension as appropriate, but your time in NZ has no impact on that. 

However, the UK state pension rules all changed in 2016, so how does the above now work?  Well, the Agreement says it applies equally to any future changes of legislation, so that would seem to mean that one would proceed as follows:

At 5 April 2016 a transitional calculation is done to put you onto the new rules, which essentially treats you as having reached pension age at that time.  You were awarded a "starting amount" for the new rules, as the higher of:

1. what you would have got under the old rules at that time, so a basic pension based on up to 30 actual, or deemed NZ, years, plus any UK entitlement to additional pension based on the normal rules (no deemed NZ years for that).  If you had 30 actual/deemed NZ years at 5 April 2016, this would be at least the basic pension max £156.20 per week at today's rates, plus any additional that may have been due at that time.

2. what you would have got had the new rules always applied, so based on a max of 35 actual/deemed NZ years divided by 35 multiplied by £203.85 being the new maximum, less any amount of COPE if you were contracted out during your UK employment.

My take is that the above is just what DWP would do for anyone, except your NZ years feed in to the max of 30 or 35 years as appropriate, and indeed into your post-2015/16 position.

From 2016/17 onwards, I think you would then add an actual, or deemed NZ, year to your starting amount until you reach the new max, just as a UK resident can add years 2016/17 and later.  It is as if the NZ years give you "NI Credits" albeit, the legislation treats them as having been paid Class 3, rather than credited.

DWP should be able to confirm whether that is their reading of the legislation/NZ Agreement and give you a full explanation of why that is, or is not, the correct way to apply the Agreement.  There may of course be other relevant legislation tucked away somewhere that I have not found...

Do others on here read the Agreement/legislation the same as me?

xylophone

OP, are you still resident in NZ?

Have you reached State Pension Age in either country?

Ex_pat123

xylophone - I'm living in UK, have been here since 2007, I reach pension age next month.

Thanks pinnks I will spend some time on what you have posted.