What Are the Most Important Differences between Dispensationalism and Covenant Theology?

By Michael J. Vlach

For the past two centuries Dispensationalism and Covenant Theology have operated as theological rivals within Evangelicalism. Both have rich traditions and excellent theologians and defenders Much has been written about these two theological systems and for the most part the debates have been friendly. But what are the real issues that separate Dispensationalism and Covenant Theology?

Below is my perspective on the key differences between these camps. The issues involving these systems are many and complex and I cannot cover a lot of important areas, but below is a thumbnail summary of what I think are the most fundamental differences between these two systems of theology.

But first I offer some comments on what are not key differences. Significantly, the gospel is not a dividing issue between Dispensationalism and Covenant Theology. Both sides affirm that salvation can only be found in Jesus Christ alone through faith alone. This agreement on the gospel should be celebrated. Whatever differences exist between these systems the gospel is not one of them. Dispensationalists and Covenant Theologians are brothers in Christ.

Next, the issue of “dispensations” in my opinion is not a fundamental point of difference. This might surprise some since Dispensationalism is closely connected to the idea of dispensations. But Covenantalists and Dispensationalists both affirm that God has worked in different times and in different ways throughout history (although salvation has always been by grace through faith). Dispensationalists have often spent more energy on the issue of dispensations but this is not the most important factor in my estimation. The two camps may differ on the criteria of a dispensation or how many there are, but belief in dispensations is not the most crucial issue.

Also, the covenants of Covenant Theology are not what’s most important. Traditionally, three covenants have been affirmed in Covenant Theology—(1) Covenant of Redemption; (2) Covenant of Works; and (3) Covenant of Grace. Yet Covenantalists themselves have not agreed on these covenants, some rejecting one or two of these. Plus, they have not always agreed on what these covenants should be called. Also, some Dispensationalists have affirmed one or all three of these covenants while remaining dispensationalists. So I don’t believe the covenants of Covenant Theology are the main issues separating the two systems.

So if dispensations and the covenants of Covenant Theology are not at the heart of the differences between the two camps, what are the main differences? The answer, in my opinion, comes down to two matters—hermeneutics and storyline.

Hermeneutics

Hermeneutics deals with principles for Bible interpretation. Dispensationalists affirm a consistent historical-grammatical or literal hermeneutic applied to all areas of Scripture, including eschatology (end times) and Old Testament passages related to national Israel. This approach includes a literal understanding of passages concerning Israel’s land, the temple, Jerusalem, etc. Dispensationalism affirms that all details of the Old Testament prophecies, promises, and covenants must be fulfilled in the way the original inspired Bible authors intended. There are no non-literal or spiritual fulfillments of physical and national promises in the Bible. Nor does the New Testament reinterpret, transcend, transform, or spiritualize promises and prophecies in the Old Testament. With Dispensationalism, what you see is what you get in the Bible. There is no underlying typological trajectory or canonical progression that erases or transcends the Bible’s storyline or the significance of the details of the covenants and promises in the Bible. Historical-grammatical hermeneutics will discover types in the Bible, but the concept of typological interpretation that overrides the plain meaning of Bible texts is not accepted in Dispensationalism.

While areas like the Mosaic Law are shadows of greater New Covenant realities (see Heb. 10:1), Dispensationalists do not believe that everything in the Old Testament is a shadow. Matters associated with the covenants of promise including Israel, Israel’s land, the temple, Jerusalem, nations, restoration of creation, etc. are not shadows. Promises concerning these matters must be fulfilled as predicted. All of this occurs because of Jesus the Messiah who brings all God’s promises to fulfillment (2 Cor. 1:20).

Dispensationalists hold to “passage priority” in which the primary meaning of a passage is found in the passage at hand and not in other passages. Dispensationalists do not believe in the priority of one testament over the other (although the New is more complete), they just ask that the integrity of each passage in each testament be honored without overriding its meaning with other passages. The New Testament will offer newer revelation but it will not contradict or override the meaning of previous passages in the Old Testament. Dispensationalists, therefore, believe all Scripture harmonizes with other Scripture, but no Bible passage transforms, transcends, or reinterprets any other Scripture passage.

Covenantalists also affirm a historical-grammatical hermeneutic to many areas of Scripture, but they believe that typological and even spiritual hermeneutics need to be applied to some areas of scripture—particularly passages involving physical and national promises to national Israel in the Old Testament. These are often viewed as shadows that are transcended by greater New Testament realities (i.e. Jesus and the church).

The covenantal hermeneutic is closely linked to the concept of “New Testament priority” in which the New Testament is viewed as the lens for interpreting and even reinterpreting the Old Testament. This fits with the idea that the transition from the Old Testament to the New Testament is that of shadow to reality. Thus, physical and national promises in the Old Testament often are seen as shadows and types that are fulfilled in Jesus and the church. This approach can involve spiritualizing the Old Testament. As Kim Riddlebarger stated, “If the New Testament writers spiritualize Old Testament prophecies by applying them in a nonliteral sense, then the Old Testament passage must be seen in light of that New Testament interpretation, not vice versa.” (Kim Riddlebarger, A Case for Amillennialism, 37). Allegedly, once the concepts of “Israel” and “temple” find fulfillment in Jesus, one need not expect a literal fulfillment of these matters in the future.

In a nutshell, many of the differences between the two camps concern how literal we should be with physical and national promises and covenants in the Old Testament. Dispensationalists view these as realities that need to be fulfilled if they have not been already. Covenantalists often view these as shadows and types that are fulfilled in Jesus with no literal fulfillment of these matters being necessary.

Storyline

In addition to hermeneutics, the other major difference between Dispensationalism and Covenant Theology concerns the Bible’s storyline. The debates usually involve important matters such as the nature of Old Testament promises and covenants, the identity and role of Israel in God’s purposes, the identity and role of the church, and what was fulfilled with Jesus’ first coming and what remains to be fulfilled with Jesus’ second coming.

But when it comes down to it I think the two major storyline differences concern: (1) the nation Israel’s role in God’s purposes, and (2) whether there will be a mediatorial kingdom phase to God’s kingdom program on earth after this present age but before the Eternal State.

When it comes to Israel, Covenantalism perceives Jesus as the true Israel and that Old Testament promises to national Israel in the Old Testament are shadows that find fulfillment in Him. And when all believers, including Gentiles, become united with Christ, they join “Israel” as well. This means the concept of “Israel” expands to include Gentiles. Thus, the church in Jesus is the new/true Israel and the culmination of God’s plans for His people. There is no need for a restoration of national Israel since Jesus is “true Israel” and the church in Jesus is now Israel. Also, while acknowledging a “not yet” aspect to Jesus’ reign, Covenantalists tend to heavily emphasize first coming fulfillment of Old Testament promises and covenants. For most Covenantalists Jesus’ Davidic/Millennial reign and the reign of the saints is occurring from heaven now. So we are currently in Jesus’ messianic kingdom. Also, covenant promises from the Old Testament are mostly being fulfilled now. Thus, there is no need of a future earthly reign of Jesus since this age is the era of fulfillment and Jesus’ reign.

Dispensationalism, on the other hand, celebrates Jesus’ identity and role as the true Israelite, but this truth does not mean the non-significance of the nation Israel. God’s plans for Israel involve a role of service for the nation and the “true Israelite”—Jesus the Messiah. Jesus’ identity as the true Israelite means the restoration of the nation Israel as Isaiah 49:3-6 teaches. It has always been God’s plan for the nation Israel to fulfill a mission of service and leadership to the nations (Gen. 12:2-3; Deut. 4:5-6). Israel failed this mission in the Old Testament but under Jesus the Messiah, Israel will fulfill its destiny of leadership and service to the nations in a coming messianic kingdom over the nations (Isa. 2:2-4). Since nations exist in the coming messianic/millennial kingdom, there should be no surprise that Israel as a nation would have a role to the nations during this period—under Jesus the Messiah. Since national Israel is still significant, it is not the case that the church is the new Israel that supersedes or replaces national Israel in God’s purposes. The church is the instrument for gospel and kingdom proclamation in this age, but Israel will still have a role to the nations when Jesus returns. The church of this age will also participate in Jesus’ rule over the nations (Rev. 2:26-27; 3:21).

Unlike Covenantalists, Dispensationalists do not believe the concept of “Israel” expands to include Gentiles. Instead, the concept of the “people of God” expands to include believing Gentiles alongside believing Israelites. It is not God’s plan for all believers to become Israel, but for there to be diversity in the people of God as the people of God idea includes both Israelites and Gentiles without them losing their ethnic identities. Even in the Eternal State the people of God are referred to as “the nations” (Rev. 21:24, 26).

Also important to the Bible’s storyline, according to Dispensationalism, is the necessity of a coming earthly kingdom in which the Last Adam and Messiah will rule the earth successfully for the glory of God. A successful kingdom rule over the earth must occur. God tasked Adam and mankind to rule the earth successfully on His behalf in Genesis 1:26-28, but this kingdom mandate remains unfulfilled as of now, something the writer of Hebrews affirms in Hebrews 2:5-8. Thus, there must be a coming earthly kingdom of Jesus because there must be a successful reign of the Last Adam (Jesus) in the realm where the first Adam failed. Since this reign involves nations, the Messiah will use Israel as an instrument for His kingdom rule during this time. Thus a coming earthly kingdom reign of Jesus over the nations with Israel as an instrument of His rule is essential to the dispensational understanding of the Bible’s storyline.

Conclusion

Much more could be said on other important differences between Dispensationalism and Covenant Theology but the points mentioned above are at the heart of the differences. Dispensationalists and Covenantalists disagree on hermeneutics and the Bible’s storyline particularly relating to Israel’s role in God’s purposes and the necessity of a coming earthly kingdom of the Messiah.