Sunday, June 23, 2024

Foreign Pensions and Tax Issues

DISCLAIMER: Letters to the editor are very welcome, but please note that these reflect the views of the individual writer, not those of Grey Power.

The foreign pension tax issues described in December’s GP Magazine occur often. I receive a small (under $300 yearly) foreign pension from a European country, which has no agreement with NZ.

The legislation states that MSD specifies bank fees, (which cover the cost involved in getting money from one country to another), and which are deducted as the foreign pension travels to NZ.

I was advised 10 years ago of bank fee amount, and heard nothing more until this year. MSD now insist on verification of bank fees. The foreign pension agency does not know the amounts, does not pay it and cannot help. It is important because MSD calculate the NZS total paid to the recipient by adding to what is sent by the foreign agency less the bank fee.

MSD claim that they routinely ask recipients for verification of bank fees, but this never happens, nor is there any follow-up when not provided. Also, MSD say that foreign banks or pension agencies advise MSD or the recipient, but again, they don’t. I have requested, but seen nothing showing others in receipt of similar foreign pensions are asked to verify bank fees so far. There are over 2,400 NZ superannuitants receiving a similar pension to mine, who clearly may be at risk soon – for one person I know, this could total $300 a year.

I have a 2 page list of misunderstandings, misinterpretations and mistakes with MSD since May, if this affects you, please contact me – carylb4t@inspire.net.nz

Caryl Blomquis

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