πŸ’Ό Benefit payments

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The Old Age Pension Act 1898 was the first public provision of a pension to a broad category of New Zealanders rather than to a limited group of former government employees (Government legislation for pensions for much of the nineteenth century were limited to providing funds for former civil servants or wounded soldiers). An Old Age Pension Office was formed as a branch of the Colonial Treasurer’s Department in 1898 to administer the Act (please refer to Agency Code AAFT for a detailed history of this department and its successors).

The Act provided a small pension payment to New Zealanders over 65 years of age, who satisfied the means test, good character and residency requirements. Until 1913 applications for pensions were made in a public court, with the intention being that both applicants and the pension system would be publicly accountable.1 To be eligible the applicant must have resided continuously in New Zealand for twenty-five years prior to their application, and have lived a ‘sober and reputable life’ for the past five years. Both men and women were eligible for the old age pension, but Chinese and ‘other Asiatics’ were specifically excluded by the legislation. Maori were theoretically eligible for the pension subject to the exclusion of those already receiving money under other legislation. However in practise Maori access to pensions was limited by discretion of officials appointed under the Act. Officials were able to evaluate communally held property and determine whether a share in such property placed an applicant above the maximum income threshold for a pension. The official attitude favoured lower pension rates for elderly Maori, because “it is by all argued that the claims and needs of a Maori living in Maori fashion are much less than those of a European, and a marked distinction should be made.” 2

The second decade of the twentieth century saw the introduction of a number of new categories of pension, providing income support for a range of New Zealanders. The Widows Pension Act 1911 established a pension available to widows with children. Payment was subject to a £100 per annum maximum income, and like the old age pension it imposed character criteria, with applicants being required to be ‘of sober habits.’ 3

The Military Pensions Act 1912 also established a new pension, payable to veterans of the New Zealand Wars. This was subsequently incorporated into the main body of Pension legislation with the Pensions Act 1913. It differed from previous military pensions in being payable to all veterans, rather than being limited to those disabled while in service. The pension was paid at £36 per annum, a higher rate than the old age pension of £24. A further military pension was subsequently implemented to make provision for soldiers who were injured or the dependents of soldiers who were killed during the Great War. The War Pensions Board was established by the War Pensions Act 1915, with responsibility for assessing claims. However the Pension Department administered applications and made pension payments subject to the decisions of the Board as to eligibility. The Commissioner of Pensions also held the position of Secretary on the War Pensions Board. War pensions were more generous and comprehensive than civil pensions to reflect the special nature of military service.4

The Miners Phthisis Act 1915 likewise established a new pension, for the benefit of miners incapacitated by diseases associated with exposure to coal dust. The Miners Pension was implemented when their work had an essential status during World War I. Payments were made by the Pensions Department and were subject to means testing, and medical assessment.

A further pension introduced in this period was the epidemic allowance, implemented to support the dependents of those who died during the 1918 Influenza Epidemic. During the emergency period these payments were administered by the Health Department, but responsibility was transferred to the Pension Department in 1920, following the end of the outbreak. A means-tested pension for the blind was also introduced in 1925, and was administered by the Department. Family Allowances were introduced in 1927, providing a small allowance for the third and each subsequent child in a family. Allowance availability was subject to a means test, limiting it to low income families. The Act also required the signature of the father of the family, with deserted wives not eligible for the payments. The Pension Department was also responsible for this allowance.

In 1922 the pensions payable to former government employees were removed from various government departments and became the responsibility of the Pension Department. Pensions payable to Civil Servants under the Civil Service Act 1908 had previously been administered in the Treasury, while military pensions for those injured while on service in the South African (Boer) War had been administered by the Medical Branch of the Defence Department. These employment pensions joined the main body of public pensions under the administration of the Pension Department.

Pension payments continued during the Depression period, but amounts decreased, and new measures were introduced to provide some income support for the large number of unemployed. The Unemployment Act 1930 established a fund to provide a sustenance allowance for the unemployed. The allowance was funded by an unemployment levy on male workers, and payments were authorised by an Unemployment Board, also established by the Act. The sustenance allowance was means tested and subject to a stand down period of two weeks without employment. It was paid for a maximum of thirteen weeks unless that period was extended by special recommendation of the Board. During this period the Unemployment Board rather than the Pension Department were responsible for the payment of the allowance to unemployed persons

The Pensions Amendment Act 1936 restored most pension amounts to pre-Depression levels. The 1936 legislation also implemented other reforms, such as the removal of discrimination against ‘Asiatics’ who became eligible for old age and other pensions. The Employment Promotion Act 1936 reformed the framework created by the Unemployment Act 1930, establishing instead the Employment Division of the Department of Labour. The Division administered relief for unemployed persons, promoted work and industries for absorption of surplus labour and placed unemployed persons in industry through the State Placement Service. As with the Unemployment Act, relief was funded through a levy on all adult males. Under the Employment Promotion Act the Division was responsible for the payment of the unemployment allowance in New Zealand.

Invalidity Pensions were introduced in 1937, replacing blind pensions. These were available to persons aged 16 years and older who were permanently incapacitated for work provided that the condition of invalidity came about in New Zealand. These and other pension payments remained the responsibility of the Pension Department until 1939, when the Social Security Act 1938 came into effect.

The Social Security Act created the Social Security Department, replacing both the Employment Division and the Pension Department. Effectively the Act combined the staff and functions of the two bodies into a single Department, with responsibility for administration of a number of aspects of New Zealand’s new social security framework. The Social Security Department administered payment of the various monetary benefits provided for under the 1938 Act.

The Social Security Act restructured a number of pensions. The old age pension was substantially altered from its existing format, being divided into two distinct payments. The superannuation benefit was a small universal payment to all those satisfying the residency and age requirements, while the age benefit was a larger, means tested payment to those who satisfied the residency, age and income requirements. The Act provided for a gradual annual increase in the amount of the universal superannuation, with the expectation being that it would ultimately supplant the means tested age benefit. The maximum income threshold for the family benefit was increased, with amendments in 1940 making the allowance payable for all children, rather than only for the third and subsequent children in a family. Other recipients of benefits under the legislation included widows, orphans and invalids.

The Social Security Department remained responsible for the payment of pensions and benefits until its disestablishment in 1972. The benefit framework had remained relatively stable during the Department’s thirty-three year history, with low unemployment levels and general economic prosperity placing little pressure on the infrastructure. Only limited reforms of the social security structure occurred. The Social Security Amendment Act 1945 introduced a universal family benefit in place of the means tested family benefit. In its first year the benefit was paid at ten shillings per child to 485,000 children, at a time when the New Zealand population was approximately 2 million. Another significant development was the creation of the Domestic Purposes Benefit to provide income support for a group, generally of solo-parents, who were excluded from many other benefits. In 1968 the emergency benefit was systemised into the domestic purposes emergency benefit. Payment of the benefit remained discretionary until its institution in statute in the Social Security Amendment Act 1973.5

The Social Welfare Department was formed in 1972 from the old Social Security Department and the Child Welfare Division of the Department of Education. This agency then became responsible for the administration of a large portion of New Zealand welfare law, including the payment of benefits.

Benefits, and particularly the old age pension or superannuation benefit, became politically controversial issues during the 1970s, with the Labour Party proposing a compulsory superannuation saving scheme, and the National Party endorsing a non-contributory superannuation plan, to be funded out of general taxation. The National Party victory in the 1975 general election saw the termination of the contributory plan and implementation of the non-contributory system, with pension payment levels being linked to the average wage. The Social Welfare Department retained responsibility for the administration of payments.

Another substantial reform carried out in this period was the implementation of the Accident Compensation Commission, or ACC, framework. Established in 1974, the ACC functioned as a universal national accident insurance scheme. The Corporation met a variety of the costs associated with personal injuries arising from accident. Payments included for medical treatment, and earning-related income support for time away from work due to injury. The ACC legislation implemented a new system of monetary income payments, which existed separately from the social welfare benefit and pension system.

Entitlement to benefits and the level of payments also underwent significant reform during economic restructuring in the 1980s and 1990s. Amongst the changes were the abolition of most universal benefits, such as the family benefit, and its replacement with a means tested allowance. A number of benefit payment amounts decreased, including those for superannuation, unemployment and domestic purposes.

Various structural changes occurred during the 1990's and early 2000's to the administration of benefit payments. In 1991 the New Zealand Income Support Service was created as a separate business unit within the Department of Social Welfare to manage the Department’s benefit and pension payment functions. The Service was then amalgamated in 1998 with the New Zealand Employment Service and the Community Employment Group (both formerly branches of the Department of Labour) to establish an independent Department of Work and Income New Zealand (WINZ) which became responsible for the administration of benefit payments.

In 2001 WINZ (retaining the branding of Work and Income New Zealand) was merged into a new Ministry of Social Development as the service delivery branch of the Ministry, administering the payment of pensions and benefits on behalf of the New Zealand Government, including superannuation, the unemployment and independent youth benefits, the invalid and sickness benefit, and the widow’s and domestic purposes benefit.

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Function

F0063

1898 ‑ 

Benefits or pensions in New Zealand were regular payments made by the government to people fitting within certain specified criteria. These differed from the various social insurance schemes created in New Zealand and internationally because they were non-contributory. Some payments were means-tested, being available only to those below a maximum income or property threshold, while others were β€˜universal’, not requiring applicants to satisfy financial criteria. Such payments were widely described as pensions in the late nineteenth and early twentieth century, becoming more generally known as benefits from the 1930s.

Show History

The Old Age Pension Act 1898 was the first public provision of a pension to a broad category of New Zealanders rather than to a limited group of former government employees (Government legislation for pensions for much of the nineteenth century were limited to providing funds for former civil servants or wounded soldiers). An Old Age Pension Office was formed as a branch of the Colonial Treasurer’s Department in 1898 to administer the Act (please refer to Agency Code AAFT for a detailed history of this department and its successors).

The Act provided a small pension payment to New Zealanders over 65 years of age, who satisfied the means test, good character and residency requirements. Until 1913 applications for pensions were made in a public court, with the intention being that both applicants and the pension system would be publicly accountable.1 To be eligible the applicant must have resided continuously in New Zealand for twenty-five years prior to their application, and have lived a ‘sober and reputable life’ for the past five years. Both men and women were eligible for the old age pension, but Chinese and ‘other Asiatics’ were specifically excluded by the legislation. Maori were theoretically eligible for the pension subject to the exclusion of those already receiving money under other legislation. However in practise Maori access to pensions was limited by discretion of officials appointed under the Act. Officials were able to evaluate communally held property and determine whether a share in such property placed an applicant above the maximum income threshold for a pension. The official attitude favoured lower pension rates for elderly Maori, because “it is by all argued that the claims and needs of a Maori living in Maori fashion are much less than those of a European, and a marked distinction should be made.” 2

The second decade of the twentieth century saw the introduction of a number of new categories of pension, providing income support for a range of New Zealanders. The Widows Pension Act 1911 established a pension available to widows with children. Payment was subject to a £100 per annum maximum income, and like the old age pension it imposed character criteria, with applicants being required to be ‘of sober habits.’ 3

The Military Pensions Act 1912 also established a new pension, payable to veterans of the New Zealand Wars. This was subsequently incorporated into the main body of Pension legislation with the Pensions Act 1913. It differed from previous military pensions in being payable to all veterans, rather than being limited to those disabled while in service. The pension was paid at £36 per annum, a higher rate than the old age pension of £24. A further military pension was subsequently implemented to make provision for soldiers who were injured or the dependents of soldiers who were killed during the Great War. The War Pensions Board was established by the War Pensions Act 1915, with responsibility for assessing claims. However the Pension Department administered applications and made pension payments subject to the decisions of the Board as to eligibility. The Commissioner of Pensions also held the position of Secretary on the War Pensions Board. War pensions were more generous and comprehensive than civil pensions to reflect the special nature of military service.4

The Miners Phthisis Act 1915 likewise established a new pension, for the benefit of miners incapacitated by diseases associated with exposure to coal dust. The Miners Pension was implemented when their work had an essential status during World War I. Payments were made by the Pensions Department and were subject to means testing, and medical assessment.

A further pension introduced in this period was the epidemic allowance, implemented to support the dependents of those who died during the 1918 Influenza Epidemic. During the emergency period these payments were administered by the Health Department, but responsibility was transferred to the Pension Department in 1920, following the end of the outbreak. A means-tested pension for the blind was also introduced in 1925, and was administered by the Department. Family Allowances were introduced in 1927, providing a small allowance for the third and each subsequent child in a family. Allowance availability was subject to a means test, limiting it to low income families. The Act also required the signature of the father of the family, with deserted wives not eligible for the payments. The Pension Department was also responsible for this allowance.

In 1922 the pensions payable to former government employees were removed from various government departments and became the responsibility of the Pension Department. Pensions payable to Civil Servants under the Civil Service Act 1908 had previously been administered in the Treasury, while military pensions for those injured while on service in the South African (Boer) War had been administered by the Medical Branch of the Defence Department. These employment pensions joined the main body of public pensions under the administration of the Pension Department.

Pension payments continued during the Depression period, but amounts decreased, and new measures were introduced to provide some income support for the large number of unemployed. The Unemployment Act 1930 established a fund to provide a sustenance allowance for the unemployed. The allowance was funded by an unemployment levy on male workers, and payments were authorised by an Unemployment Board, also established by the Act. The sustenance allowance was means tested and subject to a stand down period of two weeks without employment. It was paid for a maximum of thirteen weeks unless that period was extended by special recommendation of the Board. During this period the Unemployment Board rather than the Pension Department were responsible for the payment of the allowance to unemployed persons

The Pensions Amendment Act 1936 restored most pension amounts to pre-Depression levels. The 1936 legislation also implemented other reforms, such as the removal of discrimination against ‘Asiatics’ who became eligible for old age and other pensions. The Employment Promotion Act 1936 reformed the framework created by the Unemployment Act 1930, establishing instead the Employment Division of the Department of Labour. The Division administered relief for unemployed persons, promoted work and industries for absorption of surplus labour and placed unemployed persons in industry through the State Placement Service. As with the Unemployment Act, relief was funded through a levy on all adult males. Under the Employment Promotion Act the Division was responsible for the payment of the unemployment allowance in New Zealand.

Invalidity Pensions were introduced in 1937, replacing blind pensions. These were available to persons aged 16 years and older who were permanently incapacitated for work provided that the condition of invalidity came about in New Zealand. These and other pension payments remained the responsibility of the Pension Department until 1939, when the Social Security Act 1938 came into effect.

The Social Security Act created the Social Security Department, replacing both the Employment Division and the Pension Department. Effectively the Act combined the staff and functions of the two bodies into a single Department, with responsibility for administration of a number of aspects of New Zealand’s new social security framework. The Social Security Department administered payment of the various monetary benefits provided for under the 1938 Act.

The Social Security Act restructured a number of pensions. The old age pension was substantially altered from its existing format, being divided into two distinct payments. The superannuation benefit was a small universal payment to all those satisfying the residency and age requirements, while the age benefit was a larger, means tested payment to those who satisfied the residency, age and income requirements. The Act provided for a gradual annual increase in the amount of the universal superannuation, with the expectation being that it would ultimately supplant the means tested age benefit. The maximum income threshold for the family benefit was increased, with amendments in 1940 making the allowance payable for all children, rather than only for the third and subsequent children in a family. Other recipients of benefits under the legislation included widows, orphans and invalids.

The Social Security Department remained responsible for the payment of pensions and benefits until its disestablishment in 1972. The benefit framework had remained relatively stable during the Department’s thirty-three year history, with low unemployment levels and general economic prosperity placing little pressure on the infrastructure. Only limited reforms of the social security structure occurred. The Social Security Amendment Act 1945 introduced a universal family benefit in place of the means tested family benefit. In its first year the benefit was paid at ten shillings per child to 485,000 children, at a time when the New Zealand population was approximately 2 million. Another significant development was the creation of the Domestic Purposes Benefit to provide income support for a group, generally of solo-parents, who were excluded from many other benefits. In 1968 the emergency benefit was systemised into the domestic purposes emergency benefit. Payment of the benefit remained discretionary until its institution in statute in the Social Security Amendment Act 1973.5

The Social Welfare Department was formed in 1972 from the old Social Security Department and the Child Welfare Division of the Department of Education. This agency then became responsible for the administration of a large portion of New Zealand welfare law, including the payment of benefits.

Benefits, and particularly the old age pension or superannuation benefit, became politically controversial issues during the 1970s, with the Labour Party proposing a compulsory superannuation saving scheme, and the National Party endorsing a non-contributory superannuation plan, to be funded out of general taxation. The National Party victory in the 1975 general election saw the termination of the contributory plan and implementation of the non-contributory system, with pension payment levels being linked to the average wage. The Social Welfare Department retained responsibility for the administration of payments.

Another substantial reform carried out in this period was the implementation of the Accident Compensation Commission, or ACC, framework. Established in 1974, the ACC functioned as a universal national accident insurance scheme. The Corporation met a variety of the costs associated with personal injuries arising from accident. Payments included for medical treatment, and earning-related income support for time away from work due to injury. The ACC legislation implemented a new system of monetary income payments, which existed separately from the social welfare benefit and pension system.

Entitlement to benefits and the level of payments also underwent significant reform during economic restructuring in the 1980s and 1990s. Amongst the changes were the abolition of most universal benefits, such as the family benefit, and its replacement with a means tested allowance. A number of benefit payment amounts decreased, including those for superannuation, unemployment and domestic purposes.

Various structural changes occurred during the 1990's and early 2000's to the administration of benefit payments. In 1991 the New Zealand Income Support Service was created as a separate business unit within the Department of Social Welfare to manage the Department’s benefit and pension payment functions. The Service was then amalgamated in 1998 with the New Zealand Employment Service and the Community Employment Group (both formerly branches of the Department of Labour) to establish an independent Department of Work and Income New Zealand (WINZ) which became responsible for the administration of benefit payments.

In 2001 WINZ (retaining the branding of Work and Income New Zealand) was merged into a new Ministry of Social Development as the service delivery branch of the Ministry, administering the payment of pensions and benefits on behalf of the New Zealand Government, including superannuation, the unemployment and independent youth benefits, the invalid and sickness benefit, and the widow’s and domestic purposes benefit.




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