Direct deductions

In general, when a client is living in New Zealand and receiving a Korean old age benefit it will be directly deducted from their New Zealand benefit.

The amount to deduct is the rate of the benefit after any tax deductions in Korea but before any New Zealand tax deductions.

The Korean old age benefit is deducted from:

• the gross rate of New Zealand Superannuation or Veterans pension and
• the net rate of any other New Zealand benefit, including Accommodation Supplement

Note any other deductible benefit or pension from Korea that is not covered by the Agreement the gross amount should be deducted.

When a client is already getting a New Zealand benefit or pension at the time the Korean old age benefit is granted the deduction will be processed by International Services.

Details should be sent to International Services with verification of the rate, type of Korean benefit or pension, the grant date and the name of the organisation making the payment.

If the client is already getting a Korean old age benefit or other benefit or pension when a New Zealand benefit or pension is being granted the direct deduction can be added using the SWIFTT process.

Not all benefits and pensions received from an overseas country are deductible. You should contact International Services for advice on the deductibility of overseas benefits and pensions before applying the direct deduction.

When it is determined that the overseas benefit or pension is not deductible it must be treated as income and taken into account for any income tested assistance the client receives.

International Services must be advised of all clients who are receiving a Korean old age benefit or other benefit or pension.

International Services is responsible for ensuring the New Zealand benefit or pension is reviewed when a Korean benefit is granted or when there are changes to the Korean payment rate.

When MSD matches a client's information with information from Korea, MSD must send a written notice of adverse action to the client.

A notice of adverse action is only required upon receipt of the first information match.