SUPERANNUATION SCHEME

Press, Volume LXXIV, Issue 22335, 24 February 1938, Page 10

SUPERANNUATION SCHEME

Minimum Benefit Of 30/* Weekly? FULL DETAILS A CLOSE SECRET (From Our Parliamentary Reporter.] WELLINGTON, February 23. Officially the greatest secrecy is still being maintained about the provisions of the Government’s national superannuation scheme, on the preparation of which the law draftsman is now busy, but from the latest infbrmation available there appears to be every reason to accept as certain that the Government is aiming at £3 a week as the basis of the minimum benefit for superannuitants; It is apparently proposed to pay superannuation or pensions on the basis of 80s a week for hiisbdnd and Wife each, thus prdviding the total benefit of £3 weekly. No confirmation of this figure can Be securfe'd from official sources, but it is freely spoken of about Parliament Buildihgs as the figure decided on and now being written into the legislation, along with the other major provisions of the plan. Of course, from that basis there will have td Be various modifications according to age and circumstances,- bUt apparently the minimtim individual benefit uhder the scheme will be 30s. This figure Would not bring the benefit payable to a married couple much above the joint income figure now available under the existing pensions scheme. The Government has aimed always at increasing pension rates, and it is safe to assume that this new national scheme will not involve any decrease of the payments now available, so that on . a comparative basis 30s a week, or £3 a week for a couple, SeCms a v6ry likely figure td aitti at. tineinployihcnt Tax IVlay Go It 'also appears certain that under the scheme of superannuation the loWerihg of the existing pension age Will Make possible a big enough reduction in the ranks df the unemployed td enable the abolition df the unemployment tax. That this would be done was suggested from the Government side more than a year ago ; and from what can be heard in official circles the tax will go, Or at least will be transferred add become part of the taxation necessary to finance the scheme.- After that, it is reported, unemfildynient Will be paid for but of the Consolidated Fund, which, removed of the major liability for pensions, would ,be in a position- to meet that expenditure. ft is stated that the Governments gravest difficulty when preparing the scheme whs not to find a means ot financing iik launching, bUt to arrive at an actuarial formula Which would ensure successful working in years to come. Those preparing the scheme were faced with one vitally important fact apparently,- when advised that at the pfeserlt fate of pdpUlatidrt increase in the Dominion the time might come when the hunibef of yoUng workers coming into the plan as contributors might be so small that the scheme would fail to be self-supporting and the expenditure taken by superahnUitartts would dutbalance the payments into the fuhd; A Serious Obstacle

Already, it was stated, the number of young people, approaching the age when they will enter industry and Become edhriCfs ,was shelving a startling detlinfe. this facibr was, it is said; ohe df the most serious obstacles facing the preparation of the. scheme. Another, eventuality which had to be considered was the effect on the scheme of any sudden increase in the unemployed, who would pass from a contributing to a non-contributory basis; and thUs rob the scheme df considerable revenue. However, it appears that these obstacles Were overcome, at least on paper, arid that no majot modifications have been necessary in the plan as it was originally conceived by the Government, . ... ~ , i Orle reliable authority said to-day that the Government was particularly pleased with the progress made, and had found that rriany major objections which earlier had loomed largely in the discussions, were removable. He also said that it had been discovered that the launching df the scheme was not going to involve anything like the financial cdmmitriielits reported as being necessary.