Covenants - Part 4a - Covenant Theology and Dispensationalism

SERMON TOPIC: Covenants - Part 4a - Covenant Theology and Dispensationalism

Speaker: Gavin Paynter

Language: ENGLISH

Date: 9 August 2020


Sermon synopsis: There are 3 main Protestant views on covenantal frameworks for biblical interpretation:
1) Covenant Theology (17th century)
2) Dispensationalism (19th century)
3) New Covenant Theology (20th century)

Catholics have also recently developed a covenantal framework.
- Covenantal Theology (mid-20th century)

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There are 7 main covenants of God with man that most Christians recognise:

Edenic covenant

Adamic covenant

Noahic covenant

Abrahamic covenant

Mosaic covenant (Old Testament)

Davidic covenant

New covenant (New Testament)


There are 3 main Protestant views on covenantal frameworks for biblical interpretation:

Covenant Theology (17th century)

Dispensationalism (19th century)

New Covenant Theology (20th century)

Catholics have also recently developed a covenantal framework.

Covenantal Theology (mid-20th century)



What is called Covenant Theology stems from the Westminster Confession of Faith.

The Westminster Confession of Faith is a Reformed confession of faith. Drawn up by the 1646 Westminster Assembly … to be a confession of the Church of England, it became and remains the "subordinate standard" of doctrine in the Church of Scotland and has been influential within Presbyterian churches worldwide. It was modified and adopted by Congregationalists in England in the form of the Savoy Declaration (1658). *


Covenant theology views the history of God’s dealings with man under the framework of 2 or 3 “theological covenants”:





The Covenant of Redemption is the eternal agreement within the Godhead in which the Father appointed the Son to become incarnate, suffer, and die as a federal head of mankind to make an atonement for their sin. In return, the Father promised to raise Christ from the dead, glorify him, and give him a people. *


The Covenant of Works made between God and Adam who represented all mankind as a federal head. According to the Westminster Confession of Faith:

The first covenant made with man was a covenant of works, wherein life was promised to Adam, and in him to his posterity, upon condition of perfect and personal obedience. *


Upon Adam’s failure, God established the Covenant of Grace in the promised seed of Genesis 3:15.

Man by his fall having made himself incapable of life by that covenant, the Lord was pleased to make a second, commonly called the covenant of grace; wherein He freely offereth unto sinners life and salvation by Jesus Christ, requiring of them faith in Him, that they may be saved, and promising to give unto all those that are ordained unto life His Holy Spirit, to make them willing and able to believe. *


Jesus (Rom 5, 1 Cor 15:45) is contrasted with Adam as a covenant head (although these terms are not used) so Covenant Theology is not entirely without merit.

Rom 5:19 (ESV) For as by the one man’s disobedience the many were made sinners, so by the one man’s obedience the many will be made righteous.


However the name suggests that it was developed based on the many distinct covenants which God made with men (e.g., Abrahamic, Davidic, Mosaic, New).

But this is not the case. Nowhere does the Bible directly (or indirectly) mention a Covenant of Redemption between the Father and the Son. Lack of explicit biblical references gives no warrant to speak about such covenants.

The original Westminster Confession of Faith did not include this covenant either. *

The Covenant of Works equates to the Edenic covenant.

The Covenant of Grace is an umbrella covenant covering the Adamic, Noahic, Abrahamic, Mosaic, Davidic and New covenants.


The Covenant of Grace commences after the Fall and includes the Mosaic Covenant (Law). Speaking of “the time of the law” and being “under the gospel” the Westminster Confession of Faith states:

This covenant was differently administered in the time of the law, and in the time of the gospel... There are not therefore two covenants of grace, differing in substance, but one and the same, under various dispensations. *

But in the New Testament writings, the Mosaic Covenant is clearly regarded as a Covenant of Works.

Rom 10:5 (ESV) For Moses writes about the righteousness that is based on the law, that the person who does the commandments shall live by them.

In fact, the Mosaic Covenant is contrasted with grace.

John 1:17 (ESV) For the law was given through Moses; grace and truth came through Jesus Christ.

The Westminster Confession of Faith refers to the periods of the Law and Gospel as the “Old Testament” and “New Testament” but includes them in one covenant (of grace) - despite the fact that a testament is already a covenant.

This meta-covenant idea - covenants on top of covenants – is bot awkward and unbiblical.

The New Covenant is most often contrasted with the Old Covenant, particularly in the epistles of Paul and the Book of Hebrews.

This makes it difficult to believe that these two covenants were both simply sub-covenants of a Covenant of Grace.

Moreover the Old Covenant is said to be obsolete and replaced by the New Covenant.

Heb 8:13 (NIV) By calling this covenant "new," he has made the first one obsolete; and what is obsolete and outdated will soon disappear.

After John the Baptist, the proclamation of the Law was replaced by the preaching of the gospel.

Luke 16:16 (NASB) "The Law and the Prophets were proclaimed until John; since that time the gospel of the kingdom of God has been preached…”

The Law only functioned as our guardian until Christ came:

Gal 3:24-25 (ESV) So then, the law was our guardian until Christ came, in order that we might be justified by faith. But now that faith has come, we are no longer under a guardian

Christ is the end of the Law:

Rom 10:4 (ESV) For Christ is the end of the law for righteousness to everyone who believes. But the righteousness based on faith says …

The Law of Christ supersedes the Mosaic Law. Jesus said “Do not think that I have come to abolish the Law or the Prophets; I have not come to abolish them but to fulfil them.” (Matt 5:17, ESV) but then immediately follows with a discourse of the form “You have heard that it was said to those of old … But I say to you …”


There are variants within Covenant Theology.

The most well-known form of Covenant Theology is associated with Reformed and Presbyterian theologians (the Westminster Confession of Faith).

Another form called Baptist Covenant Theology (aka 1689 Federalism *) is associated with Reformed Baptists.

Methodists use a variation known as Wesleyan Covenant Theology.


Reformed orthodox theologians taught that the Covenant of Grace was primarily unilateral on the part of God, but also entailed conditions on the part of men. *

Wesleyan Covenant Theology emphasizes the fact that though God initiates a covenant with humanity, humans are given the free will to follow him, and “God is always the innocent party in cases where salvation is lost.” *

It is thus frequent for Methodist churches to conduct Covenant Renewal Services, so that Methodists can personally renew their covenant with the Creator. *


Because the OT and NT are part of the same covenant, OT practices are read forward into the NT. This leads to the practice of Paedo-baptism (baptising babies).

Covenant theologians argue that the Abrahamic Covenant is still in force, and that God’s covenantal promise “to be your God and the God of your descendants after you” still stands.

Baptism has replaced circumcision as the visible sign of entrance into the covenant and therefore may be administered to new believers but also to infants.

On this point, Baptist Covenant Theology disagrees.


In contrast, Dispensationalists believe in Credo-baptism (baptising believers).

Only those who are born again are members of the New Covenant and baptism is only for those who can understand and profess their faith.

Mark 16:16 (ESV) Whoever believes and is baptized will be saved…

While baptism is a covenant sign similar to circumcision, it is also notably different e.g. while circumcision was allowed for infants, unlike baptism - it was only for males.


In Covenant Theology, NT principles are read back into the OT. E.g., the filling of the Holy Spirit is applied equally to NT and OT believers.

But then why did Jesus say that after his ascension, he would send the Holy Spirit to live with believers?

And I will ask the Father, and he will give you another Helper, to be with you forever, even the Spirit of truth… he dwells with you and will be in you. *

In the OT, the Holy Spirit did not permanently indwell * believers but came upon temporarily for special enabling.

1 Sam 10:10 (NIV) When he and his servant arrived at Gibeah, a procession of prophets met him; the Spirit of God came powerfully upon him[Saul], and he joined in their prophesying.

Judg 6:34 (NIV) Then the Spirit of the LORD came on Gideon, and he blew a trumpet, summoning the Abiezrites to follow him.

Ezek 11:5 (ESV) And the Spirit of the LORD fell upon me, and he said to me, “Say, Thus says the LORD: So you think, O house of Israel. For I know the things that come into your mind.”


Dispensationalists believe that God’s dealings with men can be divided into discrete dispensations (various distinct ages to each of which God has allotted distinctive administrative principles).

A dispensation is defined as:

a political, social, or religious system prevailing at a particular time.

a distinctive arrangement or period in history that forms the framework through which God relates to mankind.

Each dispensation contains a recognizable pattern of how God worked with people then:

a responsibility

a failure

a judgment

grace to move on


Dispensationalists regard history as being divided into 7 dispensations.

1 INNOCENCE (Gen 1:1-3:7)

2 CONSCIENCE (Gen 3:8-8:22)

3 HUMAN GOVERNMENT (Gen 9:1-11:32)

4 PROMISE (Gen 12:1-Ex 19:25)

5 LAW (Ex 20:1-Acts 2:4)

6 GRACE (Acts 2:4-Rev 20:3)



The Millennium is referred to in dispensational terms.

Eph 1:10 (NKJV) that in the dispensation of the fullness of the times He might gather together in one all things in Christ, both which are in heaven and which are on earth—in Him.


The Greek word “oikonomia,” at times translated as “dispensation” in the KJV, is where we get the English word “economy” (an organized system; the management of the resources of a community, country, etc.; the disposition or regulation of the parts or functions of any organic whole).

The Vulgate uses the Latin “dispensatio” (to dispense, to distribute) to translate the Greek word. The English word “dispensation” is derived from this Latin word.

Paul uses the word "dispensation" in a slightly different sense when he writes about God's administration of the gospel of the grace of God in the present age.

Eph 3:2 (NKJV) if indeed you have heard of the dispensation of the grace of God which was given to me for you

(ESV) assuming that you have heard of the stewardship of God’s grace that was given to me for you


So “oikonomia” can also mean “stewardship” (the job of supervising, managing, or taking care of something).

Col 1:25 (KJV) Whereof I am made a minister, according to the dispensation of God which is given to me for you, to fulfil the word of God

(ESV) of which I became a minister according to the stewardship from God that was given to me for you, to make the word of God fully known

1 Cor 9:17 (KJV) For if I do this thing willingly, I have a reward: but if against my will, a dispensation of the gospel is committed unto me.

(ESV) For if I do this of my own will, I have a reward, but if not of my own will, I am still entrusted with a stewardship.

Hence in the dispensation of the Old Covenant, people were under the stewardship (managment) of the Law, whereas we are under the stewardship of Grace.

Consider how Jesus used the word “oikonomias” in the Parable of the Dishonest Manager (Steward) in Luke 16:

Luke 16:1-2 (NIV) Jesus told his disciples: “There was a rich man whose manager [oikonomon] was accused of wasting his possessions. So he called him in and asked him, ‘What is this I hear about you? Give an account of your management [oikonomias], because you cannot be manager [oikonomein] any longer.’”

Note what Jesus taught about stewardship:

There are 2 parties involved, one has authority to delegate responsibilities; the other has to carry them out.

Accountability and responsibility are required. At any point in time the steward can be called upon to explain how he has fulfilled his responsibilities.

A change can be made if unfaithfulness is found.


Oikonomia (the word which is at times translated dispensation) comes from the noun oikos (a house).

Oikonomia means a household or a stewardship... when you think of a dispensation you are talking about a management, a stewardship. Paul said he received the stewardship of the gospel. He called it the dispensation, or the administration or the management; and so it is just the word for a household or the management of a household. And the thought behind dispensationalism is that God manages His household differently through periods of time. *

In other words, in the first period of time God manages his household using “innocence”. Then when innocence is lost, he switches in the successive period to using “conscience." Later he doesn’t remove conscience but adds “human government,” and so on.

Not unlike what might happen in a regular household which you manage differently when you have no children, when your children are in school, or they have left the home, or when you have retired. Your budget and time are used slightly differently in each successive period.


The covenants of God reveal important differences between the progressive periods of administration (or dispensations).

Each dispensation has a corresponding covenant.

Each dispensation ends with a judgment. The judgement ends the dispensation, not necessarily the covenant.

Conditional covenants (like the Mosaic Covenant) are terminated when they are broken, but unconditional royal grants (like the Abrahamic and Davidic covenant are perpetual).


Primary covenant/s


Edenic covenant


Adamic covenant

Human Government

Noahic covenant


Abrahamic covenant

Law (Old)

Mosaic covenant (Old Testament)

Grace (New)

New Testament (fulfilment of Old Testament)

Kingdom (Millennial)

Davidic / Abrahamic covenant)


Judgement/s ended with


Judgement of Satan and Adam



Human Government

Tower of Babel


Slavery / 10 plagues

Law (Old)

Crucifixion / dispersion of Israel

New Testament (fulfilment of Old Testament)


Kingdom (Millennial)

Great White Throne judgement


Covenant theology: It is not aptly named as it uses 3 “theological covenants” which have scant Biblical support as an interpretive grid for Scripture. Even Michael Horton (a Covenant Theologian) admits, “These covenants are not always explicitly visible.” *


7 covenants which are explicitly referred to in Scripture are directly associated with the various dispensations.

God has a separate covenant with the Church and Israel.


Dispensationalists hold to a literal interpretation of the Bible as the best hermeneutic. The literal interpretation gives each word the meaning it would commonly have in everyday usage. *

So, for example, when the Bible speaks of “a thousand years” in Revelation 20, dispensationalists interpret it as a literal period of 1,000 years (the dispensation of the Kingdom) … *

Reasons why literalism is the best way to view Scripture:

Literal interpretation makes Scripture, and not the interpreter, the authority.

The purpose of language is to communicate. Words are vessels of meaning and normally we interpret words literally (making allowance, of course, for figures of speech, symbols, and types).

OT prophecies about Jesus (his birth, ministry, death, and resurrection) were fulfilled literally. There is no non-literal fulfilment of messianic prophecies in the New Testament.

In contrast Covenant Theology uses an interpretive process (typological hermeneutic).

It ignores the principles of authorial-intent or likely-audience-understanding and allows God to promise things then later fundamentally alter what those promises meant or could reasonably have been understood to mean when they were given. E.g.:

“Israel” changes its meaning.

David’s reign moves from earth (Jerusalem) to heaven.

1000 years becomes “a long time.”


Dispensationalism, however, holds that both the Old Testament and New Testament are interpreted using literal grammatical-historical interpretation. As a result, they reject the idea that the meaning of the Old Testament was hidden and that the New Testament can alter the straightforward meaning of the Old Testament. Their view of progressive revelation is that the New Testament contains new information which can build on the Old Testament but cannot change its meaning. *

In Dispensationalism, progressive revelation is the idea that in each dispensation God provided additional revelation about his program.

God administered these periods in accord with what he had revealed up to that point in time.

Men were held accountable only for what had been revealed at that stage.

We should not assume that people in the OT times saw what we can see now.

Therefore scripture must be understood in the context of each dispensation (taking into consideration: to whom the message was originally given, and how they would have understood it, in the light of God's revelation to that time).

Looking back, with the revelation that we have received, we often see pictures (or "types") of Christ, which the people, at that time, could not fully appreciate. *

NT revelation was not fully understood by OT believers.

1 Peter 1:10-12 (ESV) Concerning this salvation, the prophets who prophesied about the grace that was to be yours searched and inquired carefully, inquiring what person or time the Spirit of Christ in them was indicating when he predicted the sufferings of Christ and the subsequent glories. It was revealed to them that they were serving not themselves but you, in the things that have now been announced to you through those who preached the good news to you by the Holy Spirit sent from heaven, things into which angels long to look.

The “mystery of Christ” was not fully comprehended by OT believers.

Eph 3:4-5 (NIV) In reading this, then, you will be able to understand my insight into the mystery of Christ, which was not made known to people in other generations as it has now been revealed by the Spirit to God’s holy apostles and prophets.


Dispensationalism has become very popular with American evangelicalism, especially among:



Charismatic groups

Nondenominational churches *

Famous Dispensational Institutions:

Moody Bible Institute

Dallas Theological Seminary


19th century: J.N. Darby, C.I. Scofield, D.L. Moody

20th century: R.A. Torrey, Clarence Larkin, Lewis Sperry Chafer, Harry A. Ironside, Watchman Nee, Witness Lee, John Walvoord, Everett F. Harrison, A.T. Pierson, Henry Thiessen, J. Vernon McGee, Merrill Unger, Charles Feinberg, S. Lewis Johnson, J. Dwight Pentecost

Recent: Howard Hendricks, Charles Ryrie, Randall Price, Norman Geisler, Dave Hunt, Jerry Falwell Sr., Billy Graham, Charles Swindoll, Hal Lindsey, John Hagee, John MacArthur, Jack Van Impe, Joel Rosenberg, Thomas Ice


New Covenant Theology teaches that:

The person and work of Jesus Christ is the central focus of the Bible.

The promised everlasting covenant (Heb 13:20) established by Jesus (Luke 22:20) fulfils all preceding biblical covenants.

Old Testament Laws have been abrogated or cancelled with Jesus' crucifixion, and replaced with the Law of Christ of the New Covenant. *


It shares similarities with, and yet is distinct from, Dispensationalism and Covenant Theology. *

Agreement with Covenant Theology:

Uses typological hermeneutic.

National Israel was a type of the Church.

The Church is spiritual Israel.

The Kingdom of God (Davidic Covenant) is ultimately realized in the messianic reign of Jesus Christ in heaven with his saints (not in the Millennium).


Rejects the Covenant of Works and the Covenant of Redemption.

Rejects an umbrella Covenant of Grace.

Mosaic Covenant was a Covenant of Works.

The Old Covenant with the nation of Israel (the sign of which was the Sabbath) was temporary in terms of its purpose and duration (Heb 8:7-13), and was superseded by the New Covenant (Jer 31:31-33). *

Christian ethics are based on the Law of Christ, not the Moral Law (10 Commandments).

The Church was birthed at Pentecost not in the OT. *

Embraces Credo-Baptism (believers only), not Paedo-Baptism (infants).

Only in the New Covenant are believers permanently indwelt by the Spirit.


In Covenant Theology and New Covenant Theology, God had one plan of salvation since time began. Salvation is by grace through faith in Christ.

In Dispensational Theology, God also has one plan of salvation.

Dispensations are not paths to salvation, but manners in which God relates to man. **

The content of the faith would vary from dispensation to dispensation until it was fully revealed in Jesus’s atoning work on the Cross. *

OT believers were not saved by their sacrifices but by their faith in the sacrifice to come.

Rom 4:3-8 (NIV) What does Scripture say? “Abraham believed God, and it was credited to him as righteousness.” Now to the one who works, wages are not credited as a gift but as an obligation. However, to the one who does not work but trusts God who justifies the ungodly, their faith is credited as righteousness. 

David says the same thing when he speaks of the blessedness of the one to whom God credits righteousness apart from works: “Blessed are those whose transgressions are forgiven, whose sins are covered. Blessed is the one whose sin the Lord will never count against them.”


Unless otherwise stated, Scripture quotations are taken from:

THE HOLY BIBLE, NEW INTERNATIONAL VERSION®, NIV® Copyright © 1973, 1978, 1984, 2011 by Biblica, Inc.™ Used by permission. All rights reserved worldwide.

Other Scripture quotations taken from:

The Holy Bible, English Standard Version® (ESV®), copyright © 2001 by Crossway, a publishing ministry of Good News Publishers. Used by permission. All rights reserved.

The New American Standard Bible®, Copyright © 1960, 1962, 1963, 1968, 1971, 1972, 1973, 1975, 1977, 1995 by The Lockman Foundation. Used by permission.

The New King James Version. Copyright © 1982 by Thomas Nelson, Inc. Used by permission. All rights reserved.