AOW, pension and tax in New Zealand: who levies what, and what comes off

Does your AOW come off your NZ Super?

Yes, and that is the sharpest surprise. New Zealand has a direct deduction policy for overseas government pensions. Work and Income, New Zealand's benefits agency, puts it bluntly: for every dollar you receive from an overseas pension, a dollar comes off your New Zealand payment. The conversion is done on the gross amount. If your overseas pension is higher than your NZ payment, you receive only the overseas pension.

And there is no way around it: if you or your partner is entitled to an overseas pension, you are obliged to apply for it. So there is no stacking.

Will you actually get NZ Super?

Probably not, and that makes the previous question academic for most emigrants. For NZ Super you have to be 65, hold a resident visa and have lived in New Zealand for a number of years. That number is rising from ten to twenty years, staggered by your date of birth. Whoever was born on or after 1 July 1977 needs twenty years. On top of that, without exception: at least five years since your fiftieth birthday.

One softening: the social security agreement lets the time you were insured under the Dutch national insurance scheme from age twenty count towards that residence requirement. But what you bring in that way is then offset against your AOW. So for your old age, count on your Dutch AOW and pension, and treat NZ Super as a top-up you may not get.

What do you lose in the Netherlands?

Two things that don't come into play with a European destination.

Qualifying non-resident taxpayer status lapses. Under that scheme you keep your Dutch deductions and tax credits as an emigrant. It applies only to the EU, the EEA, Switzerland and the BES islands. New Zealand falls outside it. No mortgage interest relief, no tax component of the tax credits. What remains is the entrepreneur's allowance for a Dutch business and the tax-free allowance in box 3.

The protective assessment becomes work here. If you have built up a pension, an annuity, a substantial shareholding or an endowment insurance linked to your own home, the Belastingdienst imposes a protective assessment on emigration. Within the EU you get a payment deferral automatically. New Zealand is outside it. There you apply for the deferral yourself and sometimes put up security: a bank guarantee, a mortgage right or a pledge. Arrange that before you leave. If you stick to the Dutch rules for ten years, you can then ask for the assessment on pension and annuity to be waived. For a substantial interest the assessment stays valid indefinitely.

For your year of emigration, finally, you file the M return. Adjust your provisional assessment before you leave. Otherwise you spend a year paying advances on deductions you no longer have.

In Vertrekklaar this is phase 3 of 5 of the journey, step 3.2: the same steps, but for your situation — in your order, tickable, and with the deadlines watched. See the whole journey to New Zealand or go straight to step 3.2 in the open plan.