The Ministry of Social Development (MSD) said the policy was a “long-standing feature of New Zealand’s system” designed to treat taxpayers fairly.
Figures provided to the Herald show the amount of money coming in from overseas pensions – and being deducted from local ones – has been growing year on year since 2021, from $442 million to $590m.
The numbers do not include people who are eligible for the New Zealand pension, but choose not to apply for it because they already know they won’t get it.
Meanwhile an average of 95,000 overseas pensions are received by New Zealand citizens each year.
The highest amount of overseas pension money in 2025 came from the United Kingdom, with $328,500,000 recorded, followed by Australia, with $152,900,000.
From July 2019 to June 2024, MSD received 15 legal challenges relating to pension deductions, but the outcomes of these cases were not provided in an Official Information Act response.
Auckland man Jim Wolfson says the government policy that allows his overseas pension to be deducted from his New Zealand one is the world’s “unfairest law”. Photo / Michael Craig
A spokeswoman for Social Development Minister Louise Upston said no changes to the policy were being considered.
‘Reverse Robin Hood’
Wolfson, formerly of the United States, has lived here for two decades and is a dual citizen, but receives none of his New Zealand pension due to the deductions, which he called “bizarre and macabre”.
“You can be a multimillionaire and still get it. You can be broke and still get it,” he said.
He felt it was unjust for him to receive none of the local pension despite it not being means tested.
“I just keep getting by every month … I have grandchildren I’ve never met and don’t ever expect to.”
Wolfson receives a little over $900 in the hand each week, but due to high debts that cost him about $500 a week, he has “virtually nothing” left over once he has paid all his bills.
“I haven’t been more than about 30km from my home in about six years,” he said. “I’m a pauper.”
He has not been able to return to the US to visit family and is still driving the car he bought when he first moved to New Zealand.
“I couldn’t survive if I had a mortgage. I couldn’t survive if I had a car payment,” he said.
Wolfson said the deduction policy was “the world’s unfairest law”, calling it “reverse Robin Hoodism”.
“I feel like somebody who’s in prison for a murder they didn’t commit.
“I say that the NZ Government has already stolen over $300,000 from me, thus turning my golden years into abject poverty.”
To make things worse, Wolfson is also ineligible for the Winter Energy Payment because of the deductions. He would be eligible for the payment if he received even a cent of the pension, but because his pension is deducted to zero, he misses out on the extra help for winter power bills.
“It means I can’t heat the place as much as I would like to. It’s cold in here quite often,” he said.
Sissi Stein-Abel has campaigned against New Zealand’s pension deduction laws for years.
MSD general manager for international disability and generational policy Harry Fenton said the policy ensured people received “equitable levels of support” and the arrangements were fair to taxpayers.
He said direct deduction, “a long-standing feature of New Zealand’s system”, ensured people who had lived or worked overseas were not financially advantaged over Kiwis who remained at home.
‘Just not paradise’
Pension campaigner Sissi Stein-Abel said the amount of money the Government saved by deducting from people’s pensions was “constantly rising”.
“There are probably 50,000-60,000 people who don’t receive any New Zealand Super,” she said.
The data does not capture how much money the Government is saving in Winter Energy Payments for people whose pension has been deducted to zero.
Stein-Abel has been campaigning against pension deductions for years and recently became a pensioner herself. She does not receive her New Zealand pension due to the deductions.
She said she knew of “quite a few people” who had moved out of New Zealand because they had “had enough” of the deductions, including one person who decided to move back to their home country despite having lived here for 40 years.
Stein-Abel cannot afford to move home to Germany and her husband is a Kiwi. She has been caring for him after he suffered a stroke, which made the deductions feel all the more unjust.
“I care for a New Zealander with my overseas pension,” she said.
“It kind of makes me so angry and has given me a really negative attitude about New Zealand.
“It is totally unfair in a country that says everyone gets a fair go … New Zealand is just not paradise on Earth.”
Melissa Nightingale is a Wellington-based reporter who covers crime, justice and news in the capital. She joined the Herald in 2016 and has worked as a journalist for 12 years.