Social Security (Overseas Pension Deduction) Regulations 2013

2013/463

Coat of Arms of New Zealand

Social Security (Overseas Pension Deduction) Regulations 2013

Jerry Mateparae, Governor-General

Order in Council

At Wellington this 25th day of November 2013

Present:
His Excellency the Governor-General in Council

Pursuant to section 132C of the Social Security Act 1964, His Excellency the Governor-General, acting on the advice and with the consent of the Executive Council, makes the following regulations.

Regulations

1 Title
  • These regulations are the Social Security (Overseas Pension Deduction) Regulations 2013.

2 Commencement
  • These regulations come into force on 16 December 2013.

3 Interpretation
  • In these regulations, unless the context otherwise requires,—

    average, in relation to a calculation period, includes (but is not limited to) the case in which there is only 1 exchange rate (in which case the average is that exchange rate)

    business day means a day on which a nominated bank is open for business

    calculation period means a period—

    • (a) beginning on the commencement of the 16th day of one month; and

    • (b) ending with the close of the 15th day of the following month

    calculation rate has the meaning in regulation 5

    cross rate means a currency exchange rate between the New Zealand dollar and the currency of a country paying an overseas pension computed from time to time, where applicable, by pricing the New Zealand dollar and the currency of that country against the United States of America dollar

    figure, in relation to the calculation rate, means an average of the cross rates at which the nominated bank would purchase an overseas currency for settlement by telegraphic transfer as at the opening of business on each business day during the calculation period immediately before the instalment period for which the calculation is made

    instalment period means a period—

    • (a) beginning on the commencement of the day on which an instalment of a benefit is paid; and

    • (b) ending with the close of the day before the day on which the next instalment of that benefit is paid

    nominated bank means a bank for the time being nominated by the chief executive.

4 Reduction formula
  • (1) Where section 70(1) of the Act requires a benefit to be reduced,—

    • (a) each instalment of the benefit must be reduced; and

    • (b) the amount by which each instalment is reduced must be calculated according to the following formula:

      (a × b) − c

      where—

      a
      is the amount of the overseas pension, in the currency of the country paying the pension, payable to the overseas pensioner during the instalment period; and
      b
      is the calculation rate determined under regulation 5; and
      c
      is the bank fee determined under regulation 6.

    (2) Unless provided otherwise in any agreement or convention with an overseas country adopted under section 19 of the Social Welfare (Transitional Provisions) Act 1990, a reference in this regulation to an instalment of a benefit or to an overseas pension is a reference to that instalment or pension before the deduction of income tax (if any).

5 Calculation rate
  • (1) For the purposes of the formula set out in regulation 4(1)(b), the calculation rate is,—

    • (a) in the case where subclause (2) does not apply, the figure for the currency of the country paying the overseas pension that the nominated bank notifies to the chief executive; or

    • (b) in the case where subclause (2) applies, the more favourable to the overseas pensioner of the following:

      • (i) the figure specified in paragraph (a); or

      • (ii) the currency exchange rate notified under subclause (2).

    (2) This subclause applies if a country (or a bank on its behalf) paying the overseas pension—

    • (a) notifies the chief executive or provides public notice (during the calculation period immediately before the instalment period for which the calculation is made) of the currency exchange rate used to convert that country’s overseas pensions to New Zealand currency for payment of that country’s overseas pensions in New Zealand, in which case the currency exchange rate for the purposes of subclause (1)(b)(ii) is that rate:

    • (b) notifies more than 1 exchange rate used to convert that country’s overseas pensions to New Zealand currency during a calculation period, in which case the currency exchange rate for the purposes of subclause (1)(b)(ii) is the average of those rates:

    • (c) notifies an average currency exchange rate used to convert that country's overseas pensions to New Zealand currency during a calculation period, in which case the currency exchange rate for the purposes of subclause (1)(b)(ii) is that average rate.

6 Bank fee
  • For the purposes of the formula set out in regulation 4(1)(b), the bank fee—

    • (a) is the amount in New Zealand currency (not exceeding $40) specified by the chief executive to compensate an overseas pensioner for any of the following fees that the chief executive is satisfied that the overseas pensioner has incurred:

      • (i) a fee charged by an overseas country’s bank to convert the currency of the overseas country into New Zealand currency for the purpose of payment of an overseas pension into New Zealand:

      • (ii) a fee charged by the overseas pensioner’s New Zealand bank to convert an overseas pension into New Zealand currency:

      • (iii) if the overseas country will not or cannot pay an overseas pension to a New Zealand bank account, an amount charged by an overseas bank to convert the currency of the overseas country into New Zealand currency for the purpose of payment of the pension into the pensioner’s New Zealand bank account:

      • (iv) a fee charged by an overseas country’s bank to load an overseas pension onto an electronic cash, credit, or debit card; but

    • (b) does not include—

      • (i) any fee charged by an overseas bank to receive an overseas pension if that pension is not transferred by that bank to a New Zealand bank; or

      • (ii) any fee associated with the overseas pensioner accessing an overseas pension loaded onto an electronic cash, credit, or debit card; or

      • (iii) any margin included in any currency exchange rate used to convert an overseas currency into New Zealand currency whether directly or indirectly.

7 Determination conclusive
  • Without limiting anything in section 81 of the Act, a determination made by the chief executive under section 70(1) of the Act in accordance with these regulations is conclusive.

8 Revocation

Rebecca Kitteridge,
Clerk of the Executive Council.


Explanatory note

This note is not part of the regulations, but is intended to indicate their general effect.

These regulations, which come into force on 16 December 2013, replace the Social Security (Overseas Pension Deduction) Regulations 1996. They set out the formula to be applied to determine the amount by which a benefit must be reduced to take account of the receipt by a beneficiary of a pension paid by another country. The authority to reduce a benefit for this reason is found in section 70(1) of the Social Security Act 1964.

The main changes in these regulations from the 1996 regulations are—

  • to provide that the average cross rate is calculated by the nominated bank on the telegraphic transfer rate at the beginning of every business day during a calculation period:

  • to provide that the Ministry can rely on the currency exchange rate or average currency exchange rate notified by an overseas country or a bank on its behalf used to convert its overseas currency to New Zealand currency:

  • to provide, where a currency exchange rate or average exchange rate is notified by an overseas country or a bank, that the reduction must be calculated on whichever of the notified rate and the average cross rate is more favourable to the overseas pensioner:

  • to specify more precisely the bank fees that are or are not to be taken into account in the calculation of the reduction (up to a maximum of $40).


Issued under the authority of the Legislation Act 2012.

Date of notification in Gazette: 28 November 2013.

These regulations are administered by the Ministry of Social Development.