OLD AGE PENSIONS.

Auckland Star, Volume LXIII, Issue 122, 25 May 1932, Page 8

OLD AGE PENSIONS.

A WELCOME REFUND. TOO MUCH DEDUCTED LAST MONTH. TEMPORARY RESPITE ONLY. Old. ago pensioners in Auckland who, last month had excess amounts deducted from their pensions because (as the "Auckland Star" revealed) recent legislation was not in accordance with the intentions of the Government, received a- pleasant surprise yesterday when they were given refunds. When the pensions were paid out last month, the National Expenditure Adjustment Act had not been passed by Parliament, and the section relating to old age pensions was interpreted by the Pensions Department as providing for a 10 per cent reduction in all pensions based on the full pension. The effect of this was to reduce all pensions by 7/7 a month, which is £4 11/ per year, irrespective of whether the recipient was receiving the full pension or not, instead of merely deducting 10 per cent from the amounts actually paid. This meant that a person who had been entitled to £1 a month received only 12/5 when the last payment was made on April 23; in this week's payment he received 18/ pension, plus 5/5 refund of the excess deduction made last month. Provisions of Law. Section 16 of the National Expenditure Adjustment Act makes the position clear, but its effect is to give pensioners a temporary respite only. The section reads: "Notwithstanding anything to the contrary in the succeeding provisions of this part of this Act the rate of pension payable to any person who is in receipt of a pension on the passing of this Act shall not be reduced by the operation of this part by more than 10 per cent thereof while the current pension certificate remains in force." The meaning of this section is that a pension already current at the time of the passing of the Act has been reduced by 10 per cent of the actual amount payable, until the next renewal, instead of *10 per cent of the full pension payable. At the next renewal the pension will bo reduced by £4 11/ a year, irrespective of whether it is a full pension or not, and the reduction in the exemption for income from £52 to £39 a year will also become operative. Under the old basis an old age pensioner with an income of £79 10/ a year was entitled, on account of the exemption of £52, to a pension of £18 a year, but now, with the reduction in the exemption to £39, plus the 10 per cent cut in the pension, amounting to £4 11/, lie will not be entitled to any payment. The full effect of the amendment of the Act will not be felt by the pensioners until the reduction in the exemption becomes operative. It will then bo found that all pensioners except those who have no other income will receive cuts of more than 10 per cent, the reductions in a number of cases being sufficient to wipe the pensions out altogether. . That is the way the Act is being interpreted, whether or not it represents the intention of the Government when the legislation was introducd. The Flat Rate Cut. The only concession that has been given to old age pensioners as a result of the passing of section 1G of the National Expenditure Adjustment Act is to ensure that the 10 per cent reduction shall be applied to the amounts actually shown on their present pension certificates. As these certificates are renewed the pensions are reduced by a flat amount of £4 11/ a year, and. the lowering of the exemption for income becomes effective. A person with an income of £52 a year will still receive £40 1/ pension ( £44 10/, less 10 per cent) during the currency of the present pension certificate, but when it is renewed he will be entitled to only £27 1/ a year, because of the reduction in the income exemption.