When I’m Sixty-Four

We had an interesting reference query at the North Auckland Research Centre the other day, about the old age pension (superannuation) in New Zealand. When did it start? Was it ever for 55 year olds? What dates were the changes to it made?

The original 1898 pension ....
It was a fascinating journey finding out the information. Old age pensions in New Zealand were first introduced in 1898 for people 65 and up. The new pension was subject to a means test, and the requirements were pretty stringent. The maximum amount someone could receive was set at 18 pounds per annum, which equates to about $36 in today’s currency. This scheme lasted for 40 years, and it shaped the subsequent Social Security Act of 1938.

Ref: JMB01, Grace Barr (centre) & family group, c. 1900, Rodney Image Collections, North Auckland Research Centre

Age Benefit and Universal Superannuation ....
The 1938 act brought in a new pension in 1939 called Age Benefit. This was largely the previous pension under another name, and like the original pension it was also means-tested, but it did lower the age of entitlement to 60 and boost the payment to 30 shillings a week ($156 per annum). Under the new act, those who weren’t entitled to the Age Benefit received an annual payment called the Universal Superannuation once they turned 65. This equated to $20 per annum, and in 1960 it was increased so that it was on a par with the Age Benefit. In 1970, the rates for both were increased significantly, reflecting the higher cost of living.

Ref: JMB02, John Mason Barr (right) of Kaukapakapa & family group, c.1940, Rodney Image Collection, North Auckland Research Centre

 Bringing it up to date – NZ Super and the Community Wage ....
1970 wasn’t the end of the changes that decade. In 1977, New Zealand Superannuation replaced the Age Benefit and Universal Superannuation.  The age of entitlement for NZ Super was reduced to 60 yrs old.  There was no income test applied to it, but it was (and still is) taxable. NZ Super remained unchanged until 1992, when the age entitlement was raised to 61 and set to raise a further year until 65 years was reached.   At the same time a 55+ benefit was introduced. This 55+ benefit had the same conditions and rates as the Unemployment benefit, but a more relaxed work test applied. This benefit is now called the Community Wage.

Ref: JMB03, John & Olive Barr, Grampian Road, Auckland, c.1970, Rodney Image Collection, North Auckland Research Centre

If you want to find out more about the legislation, be sure to check out the following resources:  

• Preston, David   Retirement income in New Zealand: the historical context.  Office of the Retirement Commissioner, May 1999.
• Background Note 2000/13 3 August 2000  Welfare benefits trends in New Zealand - this has a time line outlining the changes to benefit rates and eligibility.
• 'Super History: NZ's super system unique',  GoodReturns.co.nz, 26 March 2001.
• 'Social Security: Scope of Legistration 1938', edited by A. H. McLintock, originally published in 1966, Te Ara - the Encyclopedia of New Zealand, updated 22 April 2009.
• 'First Labour Government of New Zealand', Wikipedia, updated 5 Janury 2013.
• '3.3 Policy change in 1977', The Treasury Kaitohutohu Kaupapa Rawa, WP 05/09.
• 'The New Zealand Pension System In An International Context, An Outsider's View', Einar Overbye, Deputy Director, Social Security Unit, Institute of Applied Social Services, Oslo, Norway.

Author: Anne Bowden, North Auckland Research Centre