Veteran's Pension

Overview

Veteran's Pensions were introduced on 1 April 1990 and replaced the former War Veteran's Allowance, War Pension, War Service Pension and Economic Pension. A Veteran's Pension is not income-tested for qualified recipients aged 65 years or over, but is taxable. If a non-qualified spouse is receiving a Veteran's Pension along with their qualified spouse, this is, however, subject to an income test. Qualified recipients aged under 65 years who have no spouse included in their pension are subject to a personal earnings test only.

The rates of payment for a Veteran's Pension are the same as for New Zealand Superannuation. A policy change was introduced in 1992 that allowed veterans receiving New Zealand Superannuation to transfer to a Veteran's Pension.

Because widows of veterans are entitled to continue to receive a Veteran’s Pension, there are slightly more women than men receiving one. On 1 July 1999, the funding of the Veteran’s Pension was transferred from Vote: Work and Income to Vote: Veteran’s Affairs – Work and Income. In subsequent years, funding of Veteran’s Pensions has remained in Vote: Veterans Affairs. It is now in Vote: Veteran’s Affairs – Social Development.

To qualify for a Veteran's Pension, clients must be ex-service personnel who served in a war or emergency and:

• have reached the qualifying age for New Zealand Superannuation and receive a War Disablement Pension of at least 70%, or
• have not reached the qualifying age for New Zealand Superannuation and have a disability from any cause that means they are:
  • permanently unable to work, or
  • unable to work for a substantial period.

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Trends in the number of clients receiving a Veteran's Pension

The number of clients receiving a Veteran's Pension has increased since 2004 (see table 3.53). Over this period, the proportion of recipients who were aged 80 years or over has increased (from 56% to 64%), while the proportion aged 70-79 years has decreased (from 30% to 23%). This reflects the ageing of World War Two veterans and their spouses, who are the largest group of Veteran's Pension recipients.

Table 3.53 Trends in the ages of clients receiving a Veteran's Pension

Age of client at the end of June	Clients receiving a Veteran's Pension1
	2004 Number	2005 Number	2006 Number	2007 Number	2008 Number
Under 60 years	365	352	326	284	218
60-64 years	312	357	363	393	462
65-69 years	452	478	562	681	770
70-74 years	779	776	828	887	930
75-79 years	1,793	1,670	1,577	1,514	1,514
80 years or over	4,764	5,238	5,816	6,306	6,842
Unspecified	0	0	0	0	0
Total	8,465	8,871	9,472	10,065	10,736

Note

1. Numbers of clients recorded in SWIFTT as receiving a Veteran's Pension at the end of June.

Table 8.1 shows trends since 1990 in the number of clients receiving a Veteran's Pension.

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Trends in the proportion of people aged 65 years or over receiving a Veteran's Pension

Each year since 2004, less than 2% of all people aged 65 years or over in the New Zealand population have been receiving a Veteran's Pension at the end of June (see figure 3.15). Increases over this period in the proportion of people aged 80 years or over who are receiving a pension, and decreases in the proportion aged 75-79 years, largely reflect the ageing of World War Two veterans and their spouses or partners.

figure 3.15 Trends in the proportion of people aged 65 years or over receiving a Veteran's Pension, by age

Note

1. Proportion shows:
   1. numbers of clients in age group recorded in SWIFTT as receiving a Veteran's Pension at the end of June, divided by
   2. Statistics New Zealand final estimate of the resident population in age group at the end of June.

See table A3.12 for a summary of the SWIFTT data underlying figure 3.15

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Trends in Veteran's Pensions granted

The number of Veteran's Pensions granted has increased over the last three years (see table 3.54). This largely reflects the ageing of veterans and associated patterns in applications.

Over the last two years, the proportion of clients granted Veteran's Pensions who had transferred from another benefit, pension or district increased from 84% to 89% (see table 3.54). Pensions granted after a transfer frequently involved clients transferring from New Zealand Superannuation. The proportion of these clients who had not received a main benefit or pension in the previous four years decreased slightly over the same period (from 13% to 9%).

Table 3.54 Trends in the length of periods since clients granted a Veteran's Pension last received any pension or main benefit

Period since client last received any pension or main benefit	Veteran's Pensions granted1
	2003/2004 Number	2004/2005 Number	2005/2006 Number	2006/2007 Number	2007/2008 Number
None (clients transferring from another pension or district or from a main benefit)2	1,076	1,047	1,152	1,279	1,439
Under 6 months	3	7	18	5	5
6-12 months	2	2	2	2	1
12-18 months	5	5	2	1	2
18 months-2 years	4	4	7	4	2
2-4 years	7	10	14	10	17
Had not received a pension or main benefit in previous four years	159	168	172	179	151
Total	1,256	1,243	1,367	1,480	1,617

Notes

1. Numbers of successful applications for Veteran's Pensions recorded in SWIFTT in years ended June.
2. Includes only a minority of transfers of pensions between districts. Most transfers between districts are accomplished without cancelling and re-granting pensions.

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Trends in expenditure on Veteran's Pensions

Increases since 1995/1996 in annual expenditure on Veteran's Pensions (see table 3.55) reflect both increases in the number of people receiving a pension and changes in the rate of payment. Accelerating increases in Veteran's Pension expenditure over the last five years reflect both growth in numbers receiving these pensions and increased use of supplementary benefits (eg Disability Allowance) by recipients of these pensions.

Table 3.55 Trends in annual expenditure on Veteran's Pensions

Year ended June	Expenditure on Veteran's Pensions1,2,3 ($m)
1995/1996	59
1996/1997	64
1997/1998	70
1998/1999	72
1999/2000	73
2000/2001	77
2001/2002	83
2002/2003	87
2003/2004	94
2004/2005	103
2005/2006	112
2006/2007	124
2007/2008	139

Notes

1. Expenditure on Veteran's Pensions in years ended June, including expenditure on supplementary benefits provided to clients receiving a Veteran's Pension.
2. Expenditure shown is net of taxation, adjusted to payment periods based on a standard 30-day month and smoothed using a two-month moving average.
3. Expenditure data in this table differs from, and should not be cited as, MSD's official measure of expenditure on financial assistance provided to clients.

Relatively little seasonal variation is evident in monthly expenditure on Veteran's Pensions. Sharp increases in expenditure in April 2000 and April 2001 (see figure 3.16) reflect:

• a decision to increase the payment rate by more than the Consumers Price Index (CPI) (in 2000)
• a larger than usual adjustment to the payment rate reflecting a large CPI increase (in 2001).

figure 3.16 Trends in monthly expenditure on Veteran's Pensions

Notes

1. Monthly expenditure on Veteran's Pensions, including expenditure on supplementary benefits paid to clients receiving a Veteran's Pension.
2. Expenditure shown is net of taxation, adjusted to payment periods based on a standard 30-day month and smoothed using a two-month moving average.
3. Expenditure data in this graph differs from, and should not be cited as, MSD's official measure of expenditure on financial assistance provided to clients.

Table 8.2 shows trends since 1990 in expenditure on Veteran's Pensions and on supplementary benefits paid to clients receiving these pensions.¹

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¹In table 8.2, expenditure data from 1996 onwards reflects deductions for debts established and for clients receiving overseas pensions as well as Veteran's Pensions. These deductions are not reflected in the data shown in table 3.55and figure 3.16