PENSIONS AND THE SOCIAL SECURITY ACT

Wanganui Chronicle, Volume 80, Issue 243, 14 October 1938, Page 6

PENSIONS AND THE SOCIAL SECURITY ACT

MB. ORMOND WILSON corrected Mr. E. B. Gordon, and Dr. McMillan corrected Mr. S. G. Smith when the National Party candidates asserted that old-age pensioners were to pay one shilling in the pound received as a tax on “other income” under the Social Security Act. The interpretative clause of the Act which has been cited by Mr. Savage and Mr. Nash reads as f ol 10WS : “ ‘lncome’ does not include any benefit received under this part of this Act. or any pension or allowance received under any Act repealed by this Act.” It is recognise*! that interpretative clauses in a statute should be no more than an interpretative clause, and it is bad draftsmanship to legislate through such interpretative clauses. The clauses which define the methods of payment do not exclude the taxation of pensions as “other income” and it is to the credit of Dr. McMillan that he has acknowledged to Mr. S. G. Smith his error when attempting to correct the National candidate for New Plymouth. The matter, however, bears an unhappy complexion, seeing that Mr. Savage and Mr. Nash have also asserted that the Act does not tax pensions. Which is right. Dr. McMillan or Messrs. Savage and Nash? Mi'. Ormond Wilson has doubtless been misled by the interpretative clause above cited. The matter should have been set at rest once and for all when the Bill was before the House of Representatives, for Mr. Maddox had raised the point in his report when he said, “It is presumed from the wording of the Prime Minister’s reference that exemptions of the kind mentioned above (female domestic servants, old-age pensions and relief workers) will no longer be made. . . .” The Minority Report of the Select Committee raised the same issue. It therefore was within the knowledge of both Mr. Savage and Mr. Nash that there was a definite belief that the beforementioned exemptions were to be taken away. The financial clause of the Statute defined income as to include “all income assessable under the Land and Income Tax -Act, 1923,” and as incomes from pensions are comprised in this definition they are liable for assessment under the Social Security Act, because a specific clause overrides a general clause. The Prime Minister has only himself to blame for laying himself under the suspicion of having, as the Americans term it, “put a fast one” over the pensioners.