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Pensioners to receive money ‘within days’

Friday October 10, 2014 Written by Published in Politics

A number of embattled pensioners collecting New Zealand superannuation are on the verge of claiming victory after the passing of an income tax amendment by Parliament.

With the passing of the Bill Wednesday night, six pensioners are expected to see the return of roughly $30,000 of the money seized by the treasurer last Christmas. A broader group of superannuitants will also be relieved of paying back taxes on their NZ superannuation payments.
Finance Minister Mark Brown said the back tax provision exempts the seniors from paying tax on all pension earnings earned until the end of 2012. Pensioners are now liable to pay tax from 2013 and onwards.
Brown said any pensioners who have paid tax during the exemption period will be entitled to a credit on any taxes owed.
The seized money will be returned once the Bill obtains the stamp and signature of Queen’s Representative Tom Marsters. “Then it becomes law,” said Brown.
Once those processes are completed, funds will be disbursed “within days”, he said.
“This is something we said we would do, and we couldn’t do it without getting into Parliament,” said Brown.
Pensioner activist group Grey Power has waged a lengthy battle with government officials over the pension tax issue, saying they should not be subject to back taxes as the pension was previously allowed to be earned tax-free.
Previously, Government claimed the pension payments had been taxable and the seized money was owed as back taxes.
In a letter to the editor this week, Grey Power Vice President Dennis Tunui said, “We’ll believe when we see the money”, and also made a demand for interest.
A second part to the bill includes a provision that permits the Ministry of Internal Affairs to make tax deductions on social service payments.
Roughly 350 pensioners have already volunteered to have tax deductions made as the payments are disbursed by the Ministry, and Brown says the bill will prevent other recipients from a surprise tax bill come tax return time.          

1 comment

  • Comment Link William Taramai Saturday, 11 October 2014 08:58 posted by William Taramai

    Editor, once again your paper had failed to address my previous challenged to the fairness of this tax. The Cook Islands are the only ones being taxed, triggered by the Double Tax Agreement document. None of the 31 other Pacific Countries under the pension payment schedule are. Seeing that taxing is well in motion, the CIP Parliament may as well get more money out of New Zealand and demand that the" living alone allowance"(withheld to overseas pensioners) be paid to qualifying pensioners in the Cook Islands. It can be argued that the Double Tax Agreement 2010 and its subsequent enforcements had paved the way forward to legally challenge the withholding of the Living Alone Allowance. I believe the amount is between $1600-$1800 per qualifying individual. Its a decent chunk of money if you ask me so I would urge MFEM to also throw the same arrogance applied to taxing the pensions towards getting this "bonus money" and backdated to the date that the agreement was signed, 2010. At a calculated guess based on 150 qualfying pensioners the amount, back dated to 2010 is somewhere in the region of $1.1M owed to pensioners but most of all, to the local economy.

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