Reference: 20260163

6 May 2026

Spencer Jones
[FYI request #33986 email]

Dear Spencer

Thank you for your Official Information Act (OIA) request, received on 7 March 2026.
You requested the following:

1. Any actuarial valuations, forecasts, or modelling estimating the current or
projected cost of veteran entitlements administered under the Veterans’ Support
Act 2014.

2. Any scenario modelling assessing the fiscal impact of potential changes to the
statutory definition of “veteran”, including modelling relating to non-operational
service personnel.

3. Any fiscal risk assessments, sensitivity analyses, or long-term projections
prepared for Budget Economic and Fiscal Updates, Half-Year Economic and
Fiscal Updates, or other fiscal strategy reports that consider veteran entitlements.

4. Any modelling or financial analysis prepared in response to judicial decisions
affecting veteran entitlements, including analysis of potential fiscal impacts
arising from relevant case law or appeal decisions.

5. Any briefings, aide-memoire, Cabinet papers, or internal Treasury advice
discussing the long-term fiscal risk or liability associated with veteran entitlements
or potential expansion of eligibility under the Veterans’ Support Act 2014.

6. Any actuarial or demographic modelling estimating the current or projected
population of veterans eligible for entitlements under the Veterans’ Support Act
2014.

Parts 1-4 and 6 were transferred to the New Zealand Defence Force to respond.

The time to respond was extended by 20 working days.

Information being released

Please find enclosed the following documents:

Item  Date
Document Description
Decision
1.    15 November
Email – update on veterans issue
Released in part
2024
1 The Terrace
PO Box 3724
Wellington 6140
New Zealand
tel. +64-4-472-2733

https://treasury.govt.nz

I have decided to release the relevant parts of the documents listed above, subject to
information being withheld under one or more of the following sections of the OIA, as
applicable:
•
section 9(2)(f)(iv) – to maintain the current constitutional conventions protecting
the confidentiality of advice tendered by Ministers and officials,
•
section 9(2)(g)(i) – to maintain the effective conduct of public affairs through the
free and frank expression of opinions, and
•
section 9(2)(k) – to prevent the disclosure of information for improper gain or
improper advantage. This reduces the possibility of staff being exposed to
phishing, social engineering and other scams. This is because information
released under the OIA may end up in the public domain, for example, on
websites including Treasury’s website.

Information to be withheld

There is additional document covered by your request that I have decided to withhold
in full under the following sections of the OIA, as applicable:

•
advice stil  under consideration, section 9(2)(f)(iv) – to maintain the current
constitutional conventions protecting the confidentiality of advice tendered by
Ministers and officials.

In making my decision, I have considered the public interest considerations in section
9(1) of the OIA.

Please note that this letter (with your personal details removed) and enclosed
document may be published on the Treasury website.

This reply addresses the information you requested. You have the right to ask the
Ombudsman to investigate and review my decision.

Yours sincerely

Oliver Parsons
Manager, Infrastructure Security and Government

2

Update on Veterans issue
From Craig Tester [TSY] </O=EXCHANGELABS/OU=EXCHANGE ADMINISTRATIVE GROUP
(FYDIBOHF23SPDLT)/CN=RECIPIENTS/CN=4BE4E94CC2F749CA9DD593FE3405705F-78BC234A-0D>
Date Fri 2024-11-15 2:46 PM
To
^Parliament: Lachlan Stark <[email address]>
Cc
Stacey Wymer [TSY] <[email address]>; Dasha Leonova [TSY]
<[email address]>; Jayne Winfield [TSY] <[email address]>; Kamlesh
Patel [TSY] <[email address]>; Pooja Patel [TSY] <[email address]>; Michael
Lonergan [TSY] <[email address]>; Thomas Parry [TSY]
<[email address]>; Aroha Leighton [TSY] <[email address]>

Hi Lachy,

Please see below some information on the Veterans issue we discussed yesterday. Let me know if you have
any immediate questions. I’ll be on leave next week so please contact Michael and Pooja on any required
follow up.

Please treat the below as legally privileged.

STARTS

The issue

Former and current NZDF personnel that meet the legal deﬁnition of a veteran (through participating in a
deployment or activity that is declared to be ‘qualifying operational service’) are able to access a range of
entitlements under the Veterans’ Support Act 2014. A ﬁnancial liability exists to reﬂect the lifetime cost of
those entitlements and is based on the point at which the veteran becomes eligible to receive support from
the Crown.

We understand that a court judgement regarding the interpretation of the legislation will become eﬀective on
Monday 18 November. We understand this judgement will make it harder for Veterans Aﬀairs to deny a claim
and therefore signiﬁcantly widen the ability of veterans to access entitlements under the Act. It is expected to
see the current Veterans’ Support Entitlement Liability increase from its 30 June 2024 valuation of $2.905
billion to between $5.156 - $7.292 billion (an increase of up to $4.387 billion). s9(2)(g)(i)

As this liability has been created from a past event that has already occurred (personnel having already
completed qualifying operational service) this means the costs need to be recognised now.

The increase in the liability will create an expense (recorded upfront) that is recognised directly to net worth,
which we believe does not fall within the deﬁnition of a remeasurement, and so will require an appropriation
(discussed further below). While there is some judgement involved in considering whether an expense is a
remeasurement, in this case our view is the cost has come about because of a past Government decision.

Implications of the court ruling

Accounting and ﬁscal implications

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The ﬁnancial and ﬁscal implications of this are the following:

1. There will be an immediate increase in the existing Veterans’ Support Entitlement Liability, as outlined
above.

2. An immediate expense (non-cash) is recorded reﬂecting an estimate of the present value of the full cost
of the future entitlements (equivalent to the increase in the Liability). This expense is recorded directly
against net worth, so there is no direct impact to the operating balance.

3. As the obligation is discounted to present value, the discount incorporated into the liability value
unwinds over time. This increase is recorded as an interest expense and therefore will have an on-going
adverse impact on OBEGAL.

4. Overall, as the Crown’s obligation to settle this liability would increase, there will also be an increase in
the cash payments made to veterans over time, which will have an adverse impact on net core Crown
debt.

Appropriation implications

1. As an obligation and corresponding expense will need to be recognised upfront at the point a ruling is
determined there would need to be an appropriation in place to authorise this expense. Given that the
current level of authority will not be suﬃcient any expenditure will need to be covered by Imprest
Supply.

2. The Imprest Supply (Second for 2024/25) has authority to incur expenses of $16 billion. If the expense
ends up being at the higher range outlined by NZDF there is a risk another Imprest Bill will need to be
passed. The timing of the ruling may mean the authority provided under Imprest Supply may not be in
place prior to recognising the expenses, which would result in unappropriated expenditure.

3. The on-going unwind expenses will also require an increase to appropriations.

Budget management

s9(2)(g)(i)

Other future implications

Defence have noted that this change will also create additional cost pressures in future:

1. This will require Veterans Aﬀairs to assess a higher number of claims and process a higher number of
payments. This will lead to departmental cost pressures which will either require new funding or result
in an increase in the backlog of claims.

2. The additional increase in the liability from each new veteran will be greater than under the previous
interpretation of the Act, requiring either additional funding in future or a reduction in the number or
scale of future deployments.

s9(2)(f)(iv)

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s9(2)(f)(iv)

Next steps

We will continue to seek further information from NZDF on the above issues, including further information on
the expected costs and ﬁnancial assumptions, any broader implications of the ruling, s9(2)(f)(iv)
s9(2)(f)(iv)

We will be considering how any court decisions will be reﬂected in the 2024 Half Year Economic and Fiscal
Update. The ﬁscal forecast are due to be ﬁnalised on Wednesday 27 November. At this stage we have not
formed a view on the treatment in the ﬁscal forecasts.

NZDF will prepare a paper providing advice to Ministers on the issue and options to address it (including
options for appeal and legislative change). We will provide further advice on the ﬁnancial / ﬁscal impacts and
Budget treatment in advance of this paper.

ENDS

Craig Tester | Senior Analyst, Justice, Security and Government Services | Te Tai Ōhanga – The Treasury
Email: [email address] Phone: s9(2)(k)
Visit us online at https://treasury.govt.nz/ and follow us on Twitter, LinkedIn and Instagram

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Document Outline