THE New Zealand Herald AND DAILY SOUTHERN CROSS TUESDAY, AUGUST 15, 1939 SOCIAL SECURITY BENEFITS

New Zealand Herald, Volume LXXVI, Issue 23425, 15 August 1939, Page 8

THE New Zealand Herald AND DAILY SOUTHERN CROSS TUESDAY, AUGUST 15, 1939 SOCIAL SECURITY BENEFITS

One of the dangers discussed by the British actuary, Mr. G. H. Maddex, in endeavouring to estimate last year the cost of the Government's Social Security proposals, was that the "superannuation idea might become popular." There was a very real danger, according to Mr. Maddex, that there might be less hesitancy in claiming the new superannuation allowance or age benefit than in claiming the old age pension. The Act has now been in operation for about four and a-half months and the various pensions benefits, grouped under the heading of Social Security, have been in force throughout that period. Excluding entirely the possible cost of health services, which have still to be properly organised before they can come fully to charge, there is sufficient evidence already that preliminary estimates of the number of persons likely to claim-the benefits will be substantially exceeded. This was made clear even in the list of anticipated payments from the Social Security Fund, quoted in the House of Representatives a few days ago by the Minister of Industries and Commerce, the Hon. D. G. Sullivan. Indeed, Mr. Sullivan's figures showed, that the various pensions benefits are expected to cost £9,800,500 this year, an increase of £590,500 over the figure allowed by Mr. Maddex and adopted by Mr. Nash when he was drawing up the Government's original bill of costs. An advance of £710,000 is forecast in the case of age benefits alone, although savings are anticipated under various other headings. The figures relating to Social Security benefits paid in June, published in the latest monthly Abstract of Statistics, are fairly conclusive proof that the new estimates for the first year do not err on the side of pessimism. Under practically every classification the number of beneficiaries is steadily mounting and the total pensions bill of the country is rising in sympathy. In some respects the Social Security Act represents a consolidation of the various pensions laws previously in force in New Zealand, but alterations in the qualifications have doubtless resulted in recipients of one class of pension under the former legislation changing to a different class of benefit under the new Act. For instance, in the last few years many elderly people who could not qualify for an old age pension were in receipt of an invalidity pension; now, with the lowering of the qualifying age from 65 to 60 years, they are able to claim the age benefit. In spite of that it is possible to study the present figures in relation to the number of pensions recipients in 1938 and also to the estimate made by Mr. Nash last year of the number of persons who would benefit under the new Act. Such a comparison is as follows

Social In Force Pensioners Sec. June, 1038 Est. 1939 Ape Benefits .. 59,953 SO,OOO 81,943 Widows and _ "Widowed Mothers 4,982 14,000 8,52<i Invalids .. • • 10,033 11,700 10,609 Family Allowances 0,853 Orphans .. .. Miners . . . • 1,060 1,100 Unemployment .. Sickness .. .. Emorgen'cy 4 .. Not all the figures are comparable, instance, in 1938 widows' pensions were payable only to widowed mothers with dependent children. The Social Security Act widened the qualifications in this respect immeasurably and Mr. Nash's original estimate was that 9000 widows would be eligible for benefits, in addition to 5500 Widowed mothers. Now it appears that for statistical purposes both classes are grouped together and obviously a large number of widows previously excluded from the pension have not yet chosen to claim the Social Security benefit to which they may be entitled. Applicants for the orphans' benefit, too, have not come forward to the extent previously anticipated. The most significant fact emerging from the 'June figures, however, is that Social Security benefits are being paid to nearly 120,000 persons, exclusive of dependants. Last year Mr. Nash estimated that the total number of adults receiving payments under the scheme would be about 130,000, but in that figure he included more than 26,000 war pensioners, who are cared for under separate legislation. The number of war pensions in force last June was 24,142, so that for purposes of compai'ison it can be said that more than 140,000 adult New Zealanders are now pensioners of the State. The "superannuation idea," as Mr. Maddex feared, is becoming expensively popular j the people, in the accepted phraseology of the day, are becoming "pensions-minded." It cannot be claimed that this is an unexpected development. When pensions were financed out of ordinary revenue, many people preferred to fend for themselves rather than depend on the State; now that heavy contributions are required from all incomes toward the cost of social services those entitled to benefits are claiming them as something for which they and their families are paying. Nor must it be forgotten that there is a continued growth in the numbers of the aged population and a relatively much smaller growth in the numbers of younger people who may be classed as workers and producers. It is, in the main, this latter section of the community that has to shoulder the expense. A year ago, according to Mr. Maddex, 100 workers in New Zealand had to maintain 37 pensioners; in 10 years' time, 100 would have to maintain *l6 ; and in 40 years, every two workers would maintain one pensioner. On tho present figures it seems that this rate has been accelerated and, with production falling, the outlook for the future is far from hopeful*