The Infamous Roe Case

In the infamous Roe Case, the New Zealand Government was able to thwart a legal challenge in order to retain its direct deduction policy. The significance of this case cannot be over-stated.

Dr William Roe and his wife, originally from the US and living in Nelson, had their NZ Super payments stopped when the Department of Social Welfare (DSW, now WINZ) discovered that they were receiving Social Security payments from the US. In 1987 Dr Roe appealed DSW's actions in the High Court. The Roe Case was the first and most notable of any legal challenges to the direct deduction policy.

The NZ Government needed to win this case at all costs - otherwise its ability to appropriate other second- tier, earnings-related, contributory overseas pensions would be jeopardized. If DSW failed to crush Dr Roe's appeal, it could cost the Crown in the decades to come billions of dollars in lost revenue.

Without legal counsel, Dr Roe inadequately framed the issues and was ill-equipped to confront the combined legal forces and financial resources of the Social Security Commission and Crown Law. It was a pushover: Dr Roe lost his appeal.

It was convenient for the government that Chief Justice Davison accepted evidence from civil servants without questioning its veracity. It was also convenient that the judge did not consider it necessary to obtain qualified American opinion as to the correct nature of the US Social Security program.

As a result, Chief Justice Davison dismissed Dr Roe's appeal on two erroneous points of law.

The first was based on the misrepresentation of US Social Security as "income maintenance assistance" granted to retired persons by the US Government.

There are two forms of US Social Security. One, an atypical benefit known as Supplemental Security Income (SSI) is indeed a form of government support, a minimal amount granted to persons in dire need. The second, more general form of US Social Security, is paid under the terms of government-protected Old Age Insurance, comprising monthly payments based on the length of one's work history and how much one has paid into the system. This was the pension that the Roes received: a contributory, earnings-related pension not granted to anybody but paid only to those who have contributed to the program.

The second point of law was based on a fictitious principle of international social security.

Davison summarized:

"Governments of countries do not consider it their obligation to pay retirement benefits to a person when another government is already doing so."

Chief Justice Davison's assessment was wrong. He was in fact quoting verbatim from a Crown-prepared statement that has been used endlessly by civil servants and politicians to justify the direct deduction policy. There is no such principle.

The International Labor Convention Number 157 protects the rights of individuals to state-sponsored pensions they have legitimately earned. Furthermore, European Convention 1408/71 Article 46 specifically prohibits nations from consuming age-pensions earned in other countries. These principles of international social security are honored around the world - except by New Zealand.

Dr and Mrs Roe (both now deceased) had neither the financial resources nor the stamina to appeal the decision. Two decades on, given the prohibitive cost for any pensioner to question a High Court decision, the Roe Case decision has never been appealed or challenged.

The Roe Case became a legal landmark, providing the government the legitimacy it desperately needed. This travesty of justice continues to be used to this day by politicians, civil servants, and in the Courts, as the justification for dismissing appeals against the direct deduction policy.

NZ Pension Abuse has posted a copy of the Court Summary (9 pages) on this website detailing the judge's flawed decision and his patronizing attitude towards Dr Roe. (Refer: Court Summary: the Roe Case)

In January 2005, Sarah Patterson, an American attorney specializing in US Social Security submitted a letter to Parliament. Ms Patterson had won a high-profile social security case involving a New Zealander and become familiar with details of the Roe Case as well as s number of pension appeals in the NZ High Courts. She was also aware of the Crown Law rejection of Ruth's case and Robert Hesketh's refusal of legal assistance (refer: The Human Rights Commission).

Ms Patterson's letter questions decisions made in the NZ Courts involving US Social Security, observing that NZ civil servants had misunderstood and misrepresented US Social Security and as a result the Courts have been wrong in their decisions. A copy of her letter was sent to Ruth to assist in her appeal with the Human Rights Commission. Neither Parliament nor the Human Rights Commission has ever acknowledged the existence of this important letter.

OTHER HIGH COURT DECISIONS

Beginning with the Roe Case, under the authority of the chief executive of the Ministry of Social Development, the High Court has been provided with distorted and incorrect information that has resulted in decisions establishing the following:

(i)Foreign pensions no longer have to be analogous to, or have like contingencies with, NZ Super in order to be directly deductible

(ii)The Hogan Case, 2002 (involving the deduction of a second-tier Canadian pension), established that overseas pensions no longer need to be identical to NZ Super

(iii)"Age-related" is no longer a criterion

(iv)A widow's pension from overseas can now be deducted from NZ Super

(v)The Tetley-Jones Case, 2004, established that the chief executive no longer needed to be specific in his determination of foreign pensions subject to the direct deduction policy.

When the MSD chief executive was asked if he could specify in complete and exact detail how the Crown determines that the US Social Security pension has like contingencies with NZ Super, he admitted that he was unable to specify in complete and precise detail the similarities between the two retirement programs. Some generalities were provided, the strongest justification being that his authority to deduct US pensions from NZ Super had been upheld by the High Court - with its decision in the Roe Case!

The Courts are bound to abide by legislation enacted by Parliament but the decision process involving the deduction of overseas pensions is a gray area where important policies have been established not by the Courts or Parliament - but by a bureaucrat, with no questions asked. This is a matter of serious concern.

Questionable methods have been used to establish that superannuation schemes within New Zealand (such as the Government Superannuation Fund and KiwiSaver) cannot be likened to pensions from abroad.

Teachers Super is defined as an "occupational" pension - therefore, according to the chief executive, it is different to overseas pensions. The term "occupational" is not found in social security legislation, but after being used by the chief executive the definition becomes accepted as law. Several overseas pensions subject to Section 70 can also be described as "occupational"

THE SANT RAJ RAI CASE: A MAJOR SETBACK FOR THE CROWN HAS SERIOUS IMPLICATIONS

In 2004, for the first time in an appeal involving pensions, the High Court ruled in favor of an appellant.

WINZ had attempted to deduct the government pension of Fijian immigrant Mr Sant Raj Rai. The Court ruled in his favor on the basis that his pension was a civil service pension and not government-funded. For the first time in a Court of Law, the MSD chief executive was found to be wrong in his determination of overseas pensions subject to direct deduction.

When the decision went against the chief executive, undermining his hitherto unquestioned authority, the Ministry marshaled all its forces to appeal the decision.

What business did the Ministry have in going to the High Court to appeal a case involving a single, minor pension?

The Court records for the Sant Raj Rai Case, and subsequent appeal, reveal that the chief executive took particular exception to the wording in the ruling that the Fijian pension was "not government-funded". From the records, it appears that the chief executive was not asking, but insisting that the judge change the wording. The Court dismissed his appeal.

Why was the chief executive so concerned over the wording that the Fijian pension was "not government-funded", and why was he so anxious for the judge to change the wording? The answer is very simple.

For decades, under the direction and authority of the chief executive, MSD/WINZ has been appropriating billions of dollars in overseas pensions from elderly people. The majority of those pensions have not been government-funded.