Techno Freak

Hi all,

I'm looking for a consultant/specialist for advice (paid, of course), regarding family members options for relocation.

It's a somewhat complicated affair, so we need someone that is up to date and knowledgeable on UK/Australian/NZ Pensions, tax and visas.

Basically, Emma's parents are looking to relocate to Australia, they have moved UK-Aus-NZ-Aus-UK-NZ etc etc several times over the years and want to finally settle in Aus but only if they can essentially live as an Australian, (i.e. full visa/medical rights and transfer the NZ state pension to an Australian Aged Pension).

A very brief background:-

In and out of UK/Aus for many, many years. Ended up in NZ around 2003 ish with the dilemma that their Australian PR visa was about to expire if they didn't return to Australia, but they only needed to stay in NZ a short while longer to get NZ citizenship. They chose NZ citizenship and 'lost' their Australian PR. So, they have been NZ citizens for maybe 6-7 years from memory, possibly longer.

They are eligible, and they do indeed draw, an NZ State Pension.

They derive an income from the UK from an investment property, and they live and are tax resident in NZ.

They pay NZ tax on the UK income and I believe on the NZ state pension?

What they want to do:-

They have been told that the have enough years (over 10) accrued from previous times living in Australia that they may be eligible to become Australian residents again.

They are hoping that they can move to Australia and become Australian PR, NZ pensions department advised them that if they are eligible for that then their NZ state pension may also be paid from Australia instead as the Australian Aged Pension?

There are several reasons for wanting to move to Australia, a large one being financial. As they understand it, if they qualified for Australian residency via their NZ citizenship and the pension transferred to Australian Aged Pension they would received a larger Australian pension than if they stayed and continued to drawn the NZ one.

Also, as NZ has no tax free threshold, if they were tax resident in Australia they would save a little on their tax bill as the property income from the UK would be within the Australian tax free threshold.

The problem is, no one can say for sure if they would get the Australian residency and if they did, whether they'd be ellibgable for the Australian Age Pension. The best they can find out so far is that NZ have said it looks like they would qualify based on the documents they have been able to find showeing time in/out of Australia over the years, but the only way to find out is to move to Australia and apply and see what happens.

The worry is, they can't afford to keep moving countries and I am worried that without knowing all the ramifications, moving from NZ to here and becoming tax resident here may end up being far worse off if they can't achieve what they are hoping to? (I worry that they come here and end up not elligeable for the Australian Age Pension and then NZ stop paying NZ pension it if they are no longer NZ resident?) and they'll pay tax in NZ first with no tax credit from Australia.

So, as you can see, a little complicated.

What we would like to do is arrange for a professional to look at their circumstances, listen to what they actually want to do and then perhaps come up with a few scenarios on what would happen, and what pensions and tax would be available if say:-

Stayed in NZ with everything 'as is'
Moved to Australia, became tax resident here and achieved PR and drew an Australian Age Pension (timescale? tax issues etc)
Moved to Australia, were not eligible for a pension transfer and how NZ would treat that? ould NZ continue to pay state pension? Tax issues etc.

If there is anyone on here that knows of a specialist that could help with this, (in NZ would be good so they can meet face-to-face, they are in Wanganui), but anywhere is fine if they can phone/e-mail etc and Emma and I would look to pay the fees so that we can hopefully find some sort of direction for them.

Thanks in advance.

Tony.

Bermudashorts

You would be better looking for financial advisor recommendations in the main Australia forum, this section is not read by as many and is about the visa process not financial planning.

I will comment on visa and perhaps a couple of other things to best of my knowledge.

As NZ citizens they can live in Australia but as temporary residents. I am aware of no visa that can be applied for on the basis of "ten years accrued" living in Australia, other than former resident visa, but that is for people who lived here as children and I believe there is an age limit on it too.

Have they ever actually tried for a resident return visa though? Or have they assumed they can not get one. If they have not tried before it might just be worth trying again for that. They would know one way or another pretty quickly with this visa. Maybe just one of them apply for it to save a fee in case it is a refusal, it is only a couple of hundred dollars I believe.

If that fails, there is the parent visa. It is expensive and will require them to pass the balance of family test, i.e. have more (or equal number of) children in Australia than not in Australia.

I have never heard about "transferring" a NZ pension to an Australian one before, but then no reason why I would have. The Australian pension is a means tested income support for older people than a pension as we understand it in the UK. Are they really that hard up? People that can afford to relocate as often as they have are not usually so hard up, so that sounds a bit odd to me. Also, not that I know this, but as the Australian "pension" is means tested, then maybe the house in UK would preclude them.

Anyway as I said, maybe ask in the main Australia forum for recommendations.

msmyrtle

Just as an aside: there is special provision for NZ citizens that can prove they were in Australia on a SCV prior to 26 Feb 2001 - BUT based on what the OP wrote it looks like they became kiwis after that date so they wouldn't have been on that SCV.

Techno Freak

Thanks for the replies.

Bermudashorts - that's right, I completely forgotten that the Australian Age pension was means tested. This may all be a moot point, I ran the calculators and they would be far worse off even if ther were able to come over.

msmyrtle - Yes, they definatley became NZ citizens AFTER 2001. It was probably around 04/05 at a guess.

This is why I'd like to get them proper, professional advice before they move countries again. If they moved here on the premise of a full Australian pension they may well end up far worse off due to the means testing.

If they moved here as Kiwi's and kept their tax residency status as NZ and NZ pension then they'd also be worse off, still paying NZ tax (higher than Aus for low incomes), but with the Aus cost of living and open to AUD/NZ currency fluctuations. That's assuming you'd even be allowed to live here as a Kiwi with your tax status and affairs in NZ?

Cheers.

Bermudashorts

No definitely not, you can't just pick a tax status. If they live here they are Australian residents not NZ residents.

Techno Freak

Bermudashorts - Thanks

It seems that a New Zealander in Australia effectively gets twp pensions.

The Australian one is means tested.

The NZ one is not, but CANNOT be more than the equivalent Australian pension (current it is a little less).

It gets vague from there as it reads like this, from what I can piece together:-

1 - NZ pay you the NZ pension still, at the rate you would have it you were still there.

2 - Aus look at you rental income AND NZ pension income for asset test, then reduce your Australian Pension payment to suit.

3 - Where I get lost is, the NZ payment cannot be more that the AUS payment, so do you only then receive the lower assessed Aus payment or the assessed Oz payment PLUS the NZ one that they used for the means test?

I found this link:-

Welcome to the NZ Pension Abuse website.

""New Zealanders who are 65 or older and live in Australia may be eligible for both an Australian Age Pension and NZ Superannuation, depending on the amount of their working life they spent in each country. Australian age pensions are income and asset tested, so any income or assets a New Zealander has will affect the amount of Australian Age Pension payable. In addition, the rate of NZ Super payable in Australia cannot exceed the amount of the Australian Age pension that would be payable if the New Zealander was entitled to receive an Australian Age Pension but was not entitled to receive NZ Super. This means that where a New Zealander cannot receive the Australian Age Pension because their income and assets exceed the limits, that person cannot receive NZ Super in Australia."

In spite of repeated claims that NZ Super is a "Universal Pension without means or asset testing", the New Zealander who goes to live in Australia puts his/her entitlement to NZ Super at grave risk. Aussie rules mean that NZ Super suddenly becomes a means tested benefit with the result that many Kiwis loose the lot – neither New Zealand nor Australia will pay them a cent."

Which suggests to me that you get only the lowers, assessed Australian amount as the NZ payment cannot be more than the Australian equivalent, however, if that's the case, you're not actually getting the income from NZ that they have used to asses you down to the lowest payment?

Am I understanding that correctly? Seem highly unfair to asses you based on an income only then to not be given the income that the assessment was made on?

Or, you you get the NZ pension still AND the assessed Aus amount?

I'd love to hear from an NZ pensioner that is living in Australia and has gone through this.

I might cross-post a link on the main forum.

Cheers.

Bermudashorts

Again, with no knowledge of this but reading the link, it appears that the NZ state pension becomes effectively means tested if the NZ citizen moves to Australia. And if they don't qualify for an Australian pension because of means testing, then they no longer qualify for NZ pension either. Although if they stayed in NZ it is not means tested.

Have the couple really made no private provision for their retirement at all, like super etc in all these years?

Buzzy--Bee

This bit would be tax-free if they moved here as New Zealand citizens on the TR444 (SCV) visa as earnings overseas are not taxed in Australia on that visa.

BB

Techno Freak

To be honest, it's not much more than the tax free threshold anyway. It's the impact it has on the pensions means test that makes the big difference.

Techno Freak

They did, but Mr. Maxwell took it to the bottom of the ocean with him. Since then they went into business, did well with the first business and had a shocking time with their second, almost sending them completely broke. The property in the UK become the 'private' pension, and whilst not enough to live on on it's own, it is enough to make a big dent in the means tested age pension.

My problem is, I can't find anyone to confirm the above paradox. You see, Australia include the NZ pension in the means test, which is fine. But then NZ say they only pay a maximum of the outcome of the Australian means testing, do you see the Catch 22? Australia take the NZ pension payment into account to assess the Australian payment, which reduces the payment, then NZ say theyll only pay up to that amount so you don't get the NZ portion that Australia has assessed you on? 'Hope that makes sense? It may not be the case, but that's how it reads to me.

Hopefully someone in the know can help clarify.

Bermudashorts

I would assume that the NZ pension is not counted when looking at the Australian income assets and income test. Is it making the difference? I would have thought the investment property would be the deal breaker.

I understood Maxwell pension funds were replaced by the Mirror Group and the government.

lesleys

Do they claim any UK state pension?

spouse of scouse

With very few exceptions, ALL income and assets, whether the source is local or overseas, are taken into account to determine whether a person is eligible for a full, part or zero Age Pension in Australia.

Pollyana

Could I suggest you maybe contact Alan Collet and his colleagues at Go Matilda? They are up with UK and Aus financial stuff for certain, and Alan is also a registered agent so is up with any visa issues

Bermudashorts

Well this makes no sense with the NZ pension, so maybe it is an exception. Because from reading, if they don't qualify for the Australian pension, the NZ pension will be stopped. A strange rule, maybe, but it is there in black and white.