The premier of Niue has told the islanders that their country is debt free and this is why pensions are getting a nearly ten percent lift.
Toke Talagi was speaking during Niue's constitution day celebrations last week, which marked 42 years of self government in free association with New Zealand.
The island is now debt free and can afford to increase fortnightly pensions from $US250 dollars to $US272 he said.
Public servants, the biggest single category of workers on Niue, have also been promised pay increases while their four-day work week will remain in place.
Mr Talagi said the population has grown to reach 1700, with expatriate Niueans returning home and building houses and accommodation units.
He said increased donations to churches and the number of residents who can afford overseas holidays are a sure sign of growing affluence.
New Zealand's total aid package to Niue in the 2015/2016 year is $US16.4 million dollars.