Pensioners volunteering overseas with aid agencies will be entitled to receive superannuation payments for up to three years of their assignments, under proposed changes to legislation announced today by Aid Minister Marian Hobbs.

Under current law, New Zealand Superannuation can be paid for up to 52 weeks while a superannuitant is working overseas for an aid agency such as Volunteer Service Abroad (VSA).

"Superannuitants are an important source of volunteers for VSA as they are well placed in life to take part in volunteer work," Marian Hobbs said. "They make up 11 percent of the total number of people in the field for VSA this year.

"VSA tell us that some older volunteers have requested a shorter assignment than the standard two years, so that they wouldn't be financially penalised. But shorter-term assignments significantly increase VSA's costs.

"The government is proposing to extend the payment period so that volunteers can receive New Zealand Superannuation for up to 156 weeks. This period would cover the needs of volunteers who go overseas on a two-year assignment, and then wish to extend their assignment by up to a year.

"The proposed changes to the law will address the financial disincentives for both VSA and superannuitants associated with a 52 week assignment. VSA advise that two years is the optimum assignment period for a volunteer to make a worthwhile contribution and adapt to the local culture and community."

The legislation will come into effect on 1 July 2006 via amendments to the New Zealand Superannuation and Retirement Income Act 2001 and The War Pensions Act 1954.

The net fiscal cost of the changes to legislation will be approximately $0.266 million in 2006/07, rising to approximately $0.295 million in 2008/09. Costs will be funded from the Official Development Assistance allocation.