Summary Australia-NZ Social Security Arrangements

SUMMARY OF AUSTRALIA-NEW ZEALAND SOCIAL SECURITY ARRANGEMENTS

New Zealand has had a bilateral social security agreement with Australia since 1948. By 1969, this had become a full “host country” agreement under which New Zealanders enjoyed immediate access to all Australian benefits and Australians enjoyed similar privileges in New Zealand.

Under the Trans Tasman Travel Arrangement signed in 1973, New Zealand citizens who migrated to Australia enjoyed a special status involving essentially visa free entry, which in turn was reciprocated for Australian migrants to New Zealand.

In the 1980’s, when migration flows from New Zealand increased markedly, Australia became dissatisfied with what it perceived as an unfair welfare burden placed on it by New Zealand migrants.

In 1989 New Zealand agreed to reimburse Australia for age and disability support pensions paid to those who migrated to Australia after they became entitled to a benefit in New Zealand. A 6-month waiting period for unemployment related benefits was imposed on both sides of the Tasman. The 1989 agreement was intended as an interim arrangement only.

The current Agreement, signed in 1994, extended the six-month waiting period to sole parents. It required people to have lived in the country of emigration for 10 years before they could get preferential access to benefits for the aged, disabled, widowed and sole parents. The agreement altered the reimbursement provisions, making them reciprocal and extending them to all benefits paid to the age, disabled, widowed and sole parents with less than 10 years residence in the host country. New Zealand is to pay Australia the sum of NZ$169 million in 2001/02 towards the cost of old age, disabled and sole parent benefits received by New Zealanders in Australia.

In 1996 the New Zealand Government agreed to an Australian request to amend the Agreement to allow Australian domestic legislation imposing a two-year waiting period for unemployment related benefits on immigrants, to apply to New Zealanders. New Zealand also decided to reciprocate. Later Australia decided to extend the two year waiting period to widows and the partners of age and disability pensioners who did not qualify for those pensions in their own right or for a parenting payment. The waiting period for unemployment related benefits and partner allowances came into effect on 1 February 2000.

Australia remained concerned at the social security burden of migrant New Zealanders and the issue became a serious irritant in our relationship. Increasingly, the existing agreement also faced operational difficulties due to divergences in the two countries’ social security systems in the 1990s.

In August 1999 the two Prime Ministers agreed to a thorough review of bilateral social security arrangements. Australia claimed its social security costs for migrant New Zealanders were close to A$1 billion per year, while New Zealand pointed to the very strong contribution its citizens made to the Australian economy, including tax payments of around A$2.5 billion per year.

In October last year negotiations commenced with a view to devising more durable and stable arrangements for the future. As a way forward, it was acknowledged that mutual obligations should be confined to longer term benefits covered by a bilateral agreement and that policy on access to the broader range of benefits remained a matter for each Government.

The new trans-Tasman social security arrangements announced today (26 February) will comprise a more modern bilateral cost-sharing agreement and a series of new policy measures that Australia will introduce to restrict the access of New Zealanders to other social security benefits not covered by the new agreement.

ENDS