History of Monetary Benefits
The Old Age Pensions Act 1898 established the basis of the present system, and was the only strictly “welfare” measure of any lasting importance in the first period of legislative activity in the nineties. It must, however, be viewed in the context of a series of measures, concerned with conditions of work and the regulation of wages, and the reform of the system of land tenure, all of which involved very directly the economic welfare of the mass of the population.
During the following 30 years the pension system was extended to include widows (1911), Maori War veterans (1912), miners (1915), and the blind (1924), while the size of the pensions was steadily increased and conditions of payment were made less stringent, though always subject to a means test. In 1926 family allowances were introduced at the rate of 2s. per week for each child in excess of two, again subject to means test. All these pensions and allowances were non-contributory.
The second great advance came with the passing of the Social Security Act 1938. This Act extended and increased the existing pensions, but it also introduced important innovations. It was intended to provide subsistence to all citizens who, in the face of economic difficulties arising from exceptional or unavoidable circumstances such as unemployment or old age, could not adequately maintain themselves or their dependants. The Act also provided the economic basis of a comprehensive health service. In principle, it was a contributory scheme, with a contribution levied on all income, but with no necessary relation between an individual's contribution and the benefits he received – the scheme therefore involved a considerable redistribution of income. The principle of the means test was abandoned with respect to superannuation benefits and medical benefits and, to emphasise the contributory nature of the scheme, the term “benefit” was substituted for the terms “pension” and “allowance”.
Although a distinction is made between “cash benefits” and “health benefits”, and although they are administered separately by the Social Security and Health Departments respectively, in fact both are entirely economic in nature. The introduction of health benefits did not include the establishment of new, or the expansion of old services, but met all or part of the cost to the user of already existing services.
Since the scheme came into operation the benefits have been steadily increased. As at 31 March 1965 cash benefits available were as follows, approximate weekly rate being given in brackets: Superannuation (£5); age, widows', invalids', and miners' (payable to sufferers from pneumo-coniosis) (£5); orphans' (2 10s. per child); family (15s. per child); sickness, and unemployment (£5). In the case of most benefits, additional sums are payable in respect of dependent wives (and in the case of widows, dependent children), while supplementary and emergency benefits may be paid in appropriate circumstances. The superannuation, family, and miners' benefits are not subject to means test. No person may receive a superannuation benefit in addition to any other cash benefit, except a family benefit, but, apart from this, all persons meeting certain residential requirements are entitled to superannuation benefit on reaching the age of 65. Age benefits (which are subject to means test) are payable usually from age 60. Benefits are financed chiefly from a charge of 1s. 6d. in the pound levied on all income. At 31 March 1965 the total number of persons (including dependent wives and children) in respect of whom social security benefits were payable, was 1,176,100, or approximately 45 per cent of the total population.
Since 1959 it has been possible, under certain circumstances, for persons in receipt of family benefit to capitalise this benefit in order to assist in the purchase of a house, to add to or alter a house, or to repay a mortgage on a house.
In 1958 the Social Security Department began the development of a Welfare Section, staffed by trained social workers, whose primary function is to provide a personal counselling and casework service to assist beneficiaries and others with personal problems over and above the economic problems which the benefits are intended to meet.