A Dunedin man is accusing the Government of blackmail after he was told to apply for his British pension or risk losing his New Zealand superannuation.
And the man is not alone.
Figures released to the Otago Daily Times reveal 43,000 people were entitled to receive both United Kingdom and New Zealand pensions.
In 2009, the Ministry of Social Development deducted more than $170 million of United Kingdom pension entitlements, up from $154 million in 2008.
Deputy chief executive students seniors and integrity services Hilary Reynolds said overseas pensions were paid to the New Zealand Super Fund.
"An overseas pension such as the United Kingdom Pension is treated as a direct dollar-for-dollar deduction of the New Zealand social security pension," Mrs Reynolds said.
Under the Social Security Act, the Ministry of Social Development is required to ask any dual citizen or resident receiving a New Zealand pension to apply for the overseas equivalent of that pension, she said.
Anyone refusing to apply for an overseas social security pension could have their New Zealand pension suspended, or if they were applying for a New Zealand pension their application might then be refused.
However, a retired Dunedin man, who declined to be named, said he did not want to apply for his United Kingdom pension after watching his wife claim it several years earlier.
"She was no better off."
The former United Kingdom resident said he was happy to forgo his United Kingdom entitlement until he received a letter from the ministry requesting he apply for it - or face losing his New Zealand pension.
"To me, that is just blackmail," the man said.
A case before the European Court of Human Rights to increase previously "frozen" pensions for ex-pat Britons would only result in the New Zealand Government getting more money, he said.
The couple had worked for that entitlement, yet the money was used to subsidise their New Zealand pensions - which they had both worked for, he said.
"They are making millions. To me it is not fair ... that is our money."
