Old-age Pensions Act becomes law

A world first, the Act gave a small means-tested pension to elderly people with few assets who were ‘of good moral character’; Chinese were specifically excluded. It was one of the major achievements of Richard Seddon’s Liberal government.

The Liberal reforms of the 1890s attracted international interest and seemed to symbolise New Zealand’s egalitarian ethos. The groundbreaking legislation of 1898 was based on the principle that the state had some responsibility for elderly citizens who were not able to provide for themselves. The Old-age Pensions Act was the first of its kind in the British Empire and marked the birth of social security in this country. 

Funded from general taxation, the amount on offer was small. Applicants had to meet certain criteria to qualify for a pension of at most £18 per year (equivalent to $3170 in 2014). Proof was required that the applicant was aged at least 65. Only those with an annual income of £34 (about $6000) or less and property valued at no more than £50 ($8800) received the full amount. Applicants had to have lived in New Zealand for the previous 25 years, and if not British subjects (including Māori) they needed to have been naturalised at least five years ago.

The reform was closely identified with Liberal Premier Richard Seddon, who had promoted the idea for several years against strenuous opposition. Seddon had lived on the West Coast since 1866 and had a longstanding concern for the welfare of ex-miners.

A more sinister aspect of the legislation was the exclusion of ‘Chinese or other Asiatics’. Like many in New Zealand’s mining communities, Seddon disliked the colony’s Chinese population. And while Māori were eligible for the pension, the need to provide evidence of their age and the difficulty of assessing their income from or the value of land held under customary title left many dependent on the discretionary judgement of a magistrate.

Even for the Pākehā population, the initial impact of the legislation was limited. In 1901, three years after the law was passed, only 37.5% of the people estimated to be eligible for it were collecting an old-age pension.

Image: Old-age pensions cartoon (Te Ara)