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L'THIS DOCUMENT IS
OPE
OP HIS hRITAF IC M A J E S T Y 8 1
S E C R E T
COPY NO.
lkP.rliUil._5P3
7TH SEPTEJ.3ER 19^-Ui-.
y
WWc CA3IKST SOCIAL IITSURA^figB Memorandum'by the Minister of Reconstruction.
At their m e e t i n g on Lj.th July, 19kh,
the War
Cabinet considered proofs (W.P.(kh) 356 and 357) of
parts I and II' of t h e White Paper on Social Insurance;
and decided that publication should be deferred (W.M,(UU)
87th Conclusions, Minute 3 ) .
At their meeting o n 31st August the War Cabinet
agreed t h e t the W h i t e P a p e r should be published before
Parliament r e - a s s e n r o l e d , subject to such minor amendments
as might be agreed b e t v / e e n the Ministers concerned (V7.M. ( h k )
113th Conclusions).
The Prime Minister has now directed that copies of
the paper in its final form should be submitted to the War
Cabinet.
Final o r o o f s are circulated herewith.
kj
R i chmond T errace S. W. 1.
s
7TH SEPTEMBER
?
19U4
SOCIAL INSURANCE PART I
Presented by the Minister of Reconstruction to
by Command of His Majesty
1944
LONDON:
Parliament
HIS MAJESTVS STATIONERY
Price
d. n e t OFFICE Part
I sets out the G o v e r n m e n t s proposals for social insurance
(except for industrial injury) a n d for F a m i l y Allowances.
generally
P a r t II contains the G o v e r n m e n t s proposals for replacing the existing system
of W o r k m e n ' s Compensation by a new scheme of I n d u s t r i a l Injury
I n s u r a n c e a n d is being published separately ( C m d .
).
TABLE OF CONTENTS
Paras.
1-14
I—Introduction
H - T h e Government's. Proposals in Brief
HI
15-32
Universality and Classification
Why the Scheme is Universal
The New Classes
Register of Insured Persons
The Excepted Classes
Private Pensions Schemes ...
The Armed Forces and the Merchant Navy
Contributions
IV—Family Allowances ...
Object of the Scheme
Provision in Kind ...
Cash Allowance
To Whom Payable
'
Eligible Children
The Family Unit
Persons Abroad
Duplication of Allowances
Children in Institutions
...
33-49
33
34-36
37
38-42
43-44
45
46-49
50-59
50
5i
5
53
54-55
56
57
58
59
2
...
...
...
... ,
V—Orphan's Allowance
60
VI—Sickness and Unemployment Benefit
Rates
Contribution Conditions
Waiting Time
Duration of Benefit
The Need for a Limit on Benefit ...
Re-Qualifying Condition
Effect of Shortage of Contributions
Transitional Cases ...
VII—Training Allowance
...
61-70
61
62-63
64
65-66
67
68
69
70
...
71
VIII—Sickness Benefit for the Self-Employed
The Problem of Cost
The Problem of Control
The Government^ Proposals
Some Special Problems
72-78
74
75-70
77
73
IX—Dependant's Allowance
79-81
X—Retirement Pensions
The Problem
Rate of Pension
Increase of Pension : Postponement of Retirement
Joint Pension
Retirement Condition
Contribution Conditions
Non-Contributory Pensions
Sickness and Unemployment Benefit after Pensionable Age
X I - M a r r i e d Women
The Housewife
The Employed Married Woman
Insurance or Exemption ...
...
Special Conditions
Benefits
Qualifying Conditions
...
...
Other Benefits Considered
Anomalies Regulations
...
...
The Unmarried Mother
34532
-105
S2-S3
S4-86
87-89
90-93
94-96
97" 3
104
105
10
­
T0
&-i20
1 0 6
1 0 7
...
­
...
-.­
---
,
iob-111
2
112-11
1 1 6
--­
­-­
1I
7
1 1 8
r I
I
-
9
D
A
2
XII-Widows Benefits Contribution Conditions Conditions as to Earnings and Duplication of Benefits Transitional Classes Position of Widows in Relation to Retirement Pension XIII—Death Grant Rates Paras. 121-131 121-122 123 124 125-128 129-131 132-136 132-135 136 Industrial Assurance
137-142 XIV-Benefit While in Hospital
143-146 XV—Treatment of the Blind
XVI—Duplication of Benefits With other Social Insurance Benefits With War and Industrial Pensions XVII—Administration Minister of Social Insurance Local Offices Employment Exchanges '47-I5I
M7
i.lS-151
it
152-158 157 153 159-161 XVIII—National Assistance
XIX—Agency Arrangements for Paying Benefit Sickness Benefit Unemployment Benefit XX—The Finance of the Scheme Tripartite Scheme of Contribution National Health Service Cost of the Scheme ... Comparison with Cost of Existing Schemes Financial Adjustment with Local Authorities Estimate of Unemployment Assets of Existing Schemes XXI-—Transitional Problems
162-167 162-166 167 168-180 169 170 171-172 173-175 176 177 178-180 181-183 XXII-Legislation
1S4-1S5
XXIII-Conclusion
186
APPENDICES
I
II
Ill
Memorandum by the Government Actuary.
Approved Societies.
Miscellaneous Points in the Scheme.
SOCIAL INSURANCE
I-INTRODUCTION
i The first d u t y of G o v e r n m e n t is to p r o t e c t t h e c o u n t r y from e x t e r n a l
aggression. The n e x t a i m of n a t i o n a l policy m u s t be to secure the general
prosperity a n d h a p p i n e s s of the citizens. T o realise t h a t a i m two courses
of action must be followed. T h e first is to foster the g r o w t h of the n a t i o n a l
power to p r o d u c e a n d to earn, with its a c c o m p a n y i n g o p p o r t u n i t i e s for
"icreased well-being, leisure a n d recreation. T h e second is to p l a n for t h e
prevention of individual p o v e r t y resulting from those h a z a r d s of p e r s o n a l
fortune over which individuals h a v e little or n o c o n t r o l .
2. Neither of these courses of action c a n be effective alone. I n a c o m m u n i t y
whose earning p o w e r w a s seriously impaired b y its failure to use its p e o p l e
and resources effectively—that is to say, b y u n e m p l o y m e n t or inefficiency—
t would be impossible to avoid widespread i n d i v i d u a l p o v e r t y , w h a t e v e r
special measures were a d o p t e d . B u t it is also t r u e t h a t a n a t i o n with a
high power of p r o d u c t i o n would not h a v e solved its p r o b l e m if it included
any appreciable section of people who were in w a n t , w h e t h e r t h r o u g h loss
of individual earning p o w e r , d u e to ill-health, u n e m p l o y m e n t or old age, or
through inability t o p r o v i d e p r o p e r l y for their children.
O n l y w h e n this
problem is also solved h a s a c o m m u n i t y achieved genuine social security.
3. This latter question w a s , therefore, one of the first to which the G o v e r n ­
ment turned their m i n d s w h e n t h e y b e g a n to develop a p r o g r a m m e of p o s t - w a r
reconstruction. T h e r e were definite reasons w h y , t h o u g h not logically the first
item on the agenda, the question of social insurance engaged attention from
the outset. F o r one t h i n g , it h a d a p a r t i c u l a r urgency in the m i n d s of v e r y
large numbers of people w h o h a d before t h e w a r suffered directly or indirectly
from prolonged u n e m p l o y m e n t a n d its consequences. Again, the p r o b l e m s
involved were concrete, specific a n d wholly within the scope of domestic
policy; whereas the p r o b l e m of achieving full e m p l o y m e n t t u r n e d in p a r t
on the shape of the p o s t - w a r world a n d on other circumstances which could
not at that stage b e foreseen. L a s t l y , m u c h h a d a l r e a d y been d o n e ; t h e
task was, not to start afresh, b u t t o e x p a n d a n d i m p r o v e a system, of social
insurance already a t least as a d v a n c e d , in n e a r l y e v e r y respect, a s a n y in
the world.
4. As far b a c k a s J u n e , 1 9 4 1 , therefore, w h e n — s o far as could t h e n be
judged—the menace of h e a v y air a t t a c k a n d invasion h a d n o t y e t b e e n
lifted, the G o v e r n m e n t invited Sir William Beveridge to t a k e c h a r g e of a
comprehensive s u r v e y of existing schemes. I n N o v e m b e r , 1942, h e p r e s e n t e d
his Report on Social I n s u r a n c e a n d Allied Services ( C m d . 6404). T h i s w a s
an outline plan, covering " all citizens without u p p e r income limit . . . all­
embracing in scope of p e r s o n s a n d n e e d s . " It did n o t p u r p o r t to b e a com­
plete and final scheme, r e a d y for i m m e d i a t e translation into legislative form.
The detail had still to b e w o r k e d o u t . F u r t h e r , t h e p l a n w a s b a s e d o n three
assumptions; first the institution of a s c h e m e of c h i l d r e n ' s allowances, second
the framing of a c o m p r e h e n s i v e health service, a n d third t h e a v o i d a n c e of
mass unemployment. B u t t h e y were a s s u m p t i o n s onh/, a n d as the3' were not
an integral part of the p l a n , Sir William Beveridge, n a t u r a l l y a n d p r o p e r t y ,
did not attempt in his R e p o r t to w o r k out detailed proposals for i m p l e m e n t i n g
them.
:
5. The G o v e r n m e n t , while accepting these a s s u m p t i o n s a s necessary p r e ­
requisites to a n i m p r o v e d a n d c o m p r e h e n s i v e p l a n of social insurance, h a v e
Biad to examine t h e m closely in o r d e r to b e r e a s o n a b l y sure t h a t t h e y could
l i e realised in practice.
The G o v e r n m e n t ^ proposals for a national health service were a l r e a d y u n d e r
consideration and h a v e been published, as h a s their policy for m a i n t a i n i n g a
34532
A 3
high a n d stable level of e m p l o y m e n t a l t e r the w a r . Their plan for a scheme
of family allowances is included in this p a p e r .
O n the social insurance scheme itself the G o v e r n m e n t h a v e reviewed the
questions of policy which were raised b y the R e p o r t a n d on which the G o v e r n ­
m e n f s views as originally a n n o u n c e d were a n d could only be provisional.
Much time a n d labour h a v e also h a d to b e devoted to working out a n d fitting
together the details of the s c h e m e — a n d as this P a p e r a m p l y illustrates,
social insurance is essentially a mosaic of detail. I n the result the Goverr.
m e n t are now in a position to p u t forward their proposals for a new scheme
of social insurance. T h e r e are still some few points on which decisions h a v e
n o t y e t b e e n reached. On all t h e m a j o r features, however, firm proposals
c a n n o w be m a d e .
The Underlying Principles
6. Before the war, social studies h a d m a d e it plain t h a t in its more extreme
form p o v e r t y affected households of two k i n d s — t h o s e in which the bread­
w i n n e r w a s ill or out of w o r k or past w o r k i n g age, and those in which the
n u m b e r of children strained o v e r m u c h the available resources of the house­
hold. T h e G o v e r n m e n t therefore conclude t h a t there m u s t be b o t h an
increased rate of sickness a n d u n e m p l o y m e n t benefit a n d retirement pension,
a n d a system of family allowances which will contribute substantially to
the m a i n t e n a n c e of growing children. T h e cost of these family allowances
will h e m e t wholly from the proceeds of t a x a t i o n ; t h e y a r e t h u s outside the
b o u n d s of the scheme of social insurance p r o p e r l y so called. W i t h t h a t one
e x c e p t i o n , the G o v e r n m e n t h a v e a d h e r e d to the principle that freedom from
want m u s t be achieved in the first instance b y social i n s u r a n c e — t h a t benefits
m u s t be earned b y contributions. T h i s h a s long b e e n one of the essential
features of British social legislation, a n d the G o v e r n m e n t believe t h a t it
reflects t h e desires a n d the characteristics of our people.
The Srate's Share
7. B u t , even so, let it b e well r e m e m b e r e d t h a t the contributions from
insured persons a n d their emplo^/ers cover only p a r t of t h e g r o u n d . They
will not contribute directly to family allowances nor, of course, to National
\ s s i s t a n c e ; and their contribution to the National H e a l t h Service will be
relatively small. T h e b a l a n c e h a s to b e found from taxation. T o w a r d s the
whole cost of the services n a m e d 54 p e r cent, a t first a n d , t w e n t y y e a r s later,
64 p e r cent, will h a v e to come from t a x a t i o n ; and looking at the narrower
field of insurance only, 31 p e r cent, at the outset, rising in t w e n t y y e a r s to
50 p e r cent.
The Widened Scope of Social Insurance
8. T h e G o v e r n m e n t h a v e also decided t h a t the scope of social insurance
should b e extended in two different senses—the range and a m o u n t of benefits
p r o v i d e d a n d the n u m b e r of people included.
All the existing types of
benefit will be increased, in m o s t instances substantially, a n d t h e y will be
e x t e n d e d to include d e a t h g r a n t . T h e scheme as a whole will e m b r a c e , not
certain occupations a n d income g r o u p s , b u t the entire p o p u l a t i o n . Concrete
expression is t h u s given to the solidarity a n d u n i t y of the nation, which in
w a r h a v e been its b u l w a r k s against aggression a n d in peace will be its
g u a r a n t e e s of success in t h e fight against individual w a n t a n d mischance.
9. Certain o t h e r general principles h a v e been a d o p t e d in framing the
policy set out in the following pages.
T h e r e has been n o a t t e m p t to vary
contributions with t h e earnings of those who m a k e t h e m : b r o a d l y the
principle adopted h a s been t h a t of equal benefits for equal contributions. At
t h e same time contributors a n d beneficiaries h a v e been classified not
according to earnings b u t according to w a y of l i f e - i n t o six groups, differing
in respect of the benefits they need a n d the c o n t r i b u t i o n s they must m a k e to
receive them.
i o . T h e G o v e r n m e n t h a v e also a d o p t e d the principle t h a t the a d m i n i s t r a ­
tion of a single, c o m p r e h e n s i v e , universal s c h e m e of social insurance m u s t
be unified, a n d t h a t the various u n c o o r d i n a t e d sections of the system of t o ­
day m u s t be b r o u g h t within a single a d m i n i s t r a t i v e f r a m e w o r k .
II. Certain other considerations of a general k i n d h a v e been p r e s e n t to
itie mind of the G o v e r n m e n t in framing their pi-iicy. O n e is t h a t the stability
of a v a s t scheme of this k i n d d e p e n d s u p o n strict a d m i n i s t r a t i v e e c o n o m y in
every sense. I n d e e d , a n y l a x i t y in the organisation of the unified s y s t e m
or in the administration of benefits would t h r e a t e n the long-term c o n t i n u a n c e
of the scheme b y laying it o p e n to legitimate a n d d a m a g i n g public criticism.
But economical a d m i n i s t r a t i o n is not a m a t t e r for the G o v e r n m e n t a l o n e — i t
. requires the full co-operation of the public. Ail p a y into t h e fund; all m u s t
be its c u s t o d i a n s . I t is for the G o v e r n m e n t to organise the provision of benefits;
the citizen too h a s a p a r t to p l a y to see t h a t t h e y are not misused.
The Level of Benefit
12. I n fixing t h e r a t e s of benefit to b e p r o v i d e d u n d e r t h e scheme t h e
Government h a v e considered w h e t h e r it would be practicable to a d o p t a s u b ­
sistence basis for benefits. I n the d e b a t e s of F e b r u a r y , 1943, t h e y expressed
the p r e l i m i n a r y view t h a t it was not practicable a n d further e x a m i n a t i o n of
the question h a s confirmed this view.
In the first p l a c e , the definite linking of benefit to subsistence rates m i g h t
involve the frequent variation of benefit rates in a c c o r d a n c e with the cost of
living. It is t r u e t h a t it would be possible to ignore m i n o r fluctuations, b u t
the m a i n objection would r e m a i n .
I n the second p l a c e — a n d more i m p o r t a n t — s o c i a l i n s u r a n c e m u s t necessarily
deal in averages of need a n d r e q u i r e m e n t . I t c a n n o t a d a p t itself to the almost
infinite variety of individual conditions. C i r c u m s t a n c e s v a r y , n o t only between
places b u t between people, a n d the conception of relating individual p a y m e n t s
precisely to individual needs is not really capable of realisation in a n i n s u r a n c e
scheme, p a r t i c u l a r l y where t h a t scheme covers all classes of the c o m m u n i t y .
It is a n essential feature of a n i n s u r a n c e scheme t h a t e q u a l contributions
should provide e q u a l benefits within a class or g r o u p .
13. Benefits m u s t be paid for, a n d a high level of benefit m u s t m e a n a high
level of contribution.
T h e G o v e r n m e n t therefore conclude that the right
objective is a r a t e of benefit which p r o v i d e s a reasonable i n s u r a n c e a g a i n s t
want a n d at the s a m e time t a k e s a c c o u n t of the m a x i m u m contribution which
the great b o d y of c o n t r i b u t o r s can p r o p e r t y b e a s k e d t o b e a r . T h e r e still
remains the i n d i v i d u a l s o p p o r t u n i t y to achieve for himself in sickness, old age
and other conditions of difficulty a s t a n d a r d of comfort a n d a m e n i t y which
it is no p a r t of a c o m p u l s o r y scheme of social i n s u r a n c e to p r o v i d e . A n d in
reserve t h e r e m u s t r e m a i n a scheme of N a t i o n a l Assistance designed to fill t h e
inevitable g a p s left b y insurance a n d to s u p p l e m e n t it w h e r e a n e x a m i n a t i o n
of individual needs shows t h a t s u p p l e m e n t is n e c e s s a r y .
Contents of the Paper
14. T h e r e is one i m p o r t a n t m a t t e r included in the R e p o r t which is not dealt
with here—the p r o b l e m of industrial injury i n s u r a n c e , or w o r k m e n ' s coinpen­
sation. T h e G o v e r n m e n t s policy on this subject will b e set out in P a r t I I .
With t h a t exception the present P a p e r c o v e r s t h e whole field of social
insurance. It sets out a policy designed to b e c o m p l e t e a n d coherent in itself,
though b u t a single a n d limited instalment of the c o m p r e h e n s i v e series of
proposals needed to constitute a complete economic a n d social policy for t h e
period of reconstruction.
34532
A 4
o
o
I I - T H E G O V E R N M E N T S P R O P O S A L S IN B R I E F .
The following is a n outline of the main G o v e r n m e n t proposals. A fuller
exposition of e a c h topic is given in the p a r a g r a p h s mentioned after each
heading.
Universality and Classification ( p a r a g r a p h s 33-45)
15. There will b e a c o m p u l s o r y scheme of national insurance, unified ii
administration.
T h e scheme will include e v e r y b o d y . T h e population will be divided into
six classes—employees (Class I), the self-employed (Class I I ) , housewives
(Class I I I ) , a d u l t s w h o do not earn (Class IV), children (Class V), a n d people
over working a g e (Class V I ) . Those below working age will be provided
for b y family allowances; those of w o r k i n g age b y insurance benefits; and
those bc3'ond w o r k i n g age b y retirement pensions. T h e scheme will apply­
t o large categories n o t hitherto covered b y insurance, c.g. those living on
earnings g a i n e d otherwise t h a n b y salar3' or wages, or on earnings above
£420 a y e a r or on p r i v a t e income; a n d those employed in professions or indus­
tries hitherto specially excepted.
E a c h insured p e r s o n will p a y a single weekly contribution for all benefits
in the form of one s t a m p on a single d o c u m e n t .
Contributions ( p a r a g r a p h s 46-49)
16. T h e rates of weekly contribution for persons over age 18 (covering
for Class I t h e benefits u n d e r the Industrial I n j u r y Insurance Scheme a s well
as the Social I n s u r a n c e Scheme) will b e : —
Class I
Men
Women
...
Class
Class II
Clas
Classs IV
s. d.
6 11
s. d.
4 ­
s. d.
3 4
5
3
2 S
Insured
person
Employer
Total
s. d.
3 10
s. d.
3 1
3 0
2 5
5
('
F a m i l y Allowances ( p a r a g r a p h s 50-59)
17. Services in k i n d , including meals and milk a t schools, will b e ex­
tended; a n d a weekly cash allowance of 5s., derived from t a x a t i o n , will be
introduced.
F o r the p u r p o s e of family allowances the children to be t a k e n into account
are those below school-leaving age a n d those remaining at school a b o v e that
age, until 31st J u l y following their 16th b i r t h d a y .
Of such children the
first will n o t be c o u n t e d for a n allowance, although, where the p a r e n t is in
receipt of benefit, 5s. will then be a d d e d to the benefit in respect of t h a t child.
Orphan's Allowance ( p a r a g r a p h 60)
tS. F o r e v e r y child b o t h of whose p a r e n t s are dead, there will be a weekly
allowance of 12s., of which 5s. will come from taxation, a n d t h e b a l a n c e of
7s. from I n s u r a n c e F u n d s .
Sickness a n d U n e m p l o y m e n t Benefit ( p a r a g r a p h s 61-70)
19. T h e r e will b e a s t a n d a r d rate of benefit of 40s. a week for a married
couple a n d 24s. for a single m a n or w o m a n , with lower rates for those u n d e r 18.
B o t h benefits will b e limited in d u r a t i o n , b u t in different w a y s .
Sickness
benefit will end after three y e a r s of continuous disability a n d invalidity
benefit at the s t a n d a r d retirement pension rate be substituted.
Unemployment
benelit will end after 30 weeks or a s o m e w h a t longer period in the case of those
with a good e m p l o y m e n t record.
(Periods covered b y t r a i n i n g allowance
will not be t a k e n into a c c o u n t . ) After t h e end of either benefit, further contri­
buiions m u s t be paid before a n insured person c a n requalify for "benefit.
Benefit will be reduced w h e n the c o n t r i b u t o r s insurance record does not
comply with the prescribed c o n t r i b u t i o n conditions.
Training Allowance ( p a r a g r a p h 71)
20. Special allowances a t a higher r a t e will b e available to p e r s o n s u n d e r ­
going a course of a p p r o v e d training. T h e cost of training will b e m e t from
taxation, subject to a contribution from the Social I n s u r a n c e F u n d .
Sickness Benefit for the Self-Employed ( p a r a g r a p h s 72-78)
2 1 . P e o p l e working o n their own a c c o u n t will not receive sickness benefit
during the first 4 weeks of a n y period of illness.
Depcndnnt's Allowance ( p a r a g r a p h s 79-81)
22. An additional a l l o w a n c e — b u t only one—will b e p a i d to those on single
benefit (sickness, invalidity or u n e m p l o y m e n t ) w h o h a v e a n a d u l t d e p e n d a n t .
It will be 16s. a week (15s. w h e n a d d e d to invalidity benefit).
Retirement Pensions ( p a r a g r a p h s 82-105)
2 3 . T h e r e will be a s t a n d a r d rate of retirement pension of 35s. for a married
couple a n d 20s. for a single person.
P e n s i o n s will be p a i d only to those
who h a v e retired, a n d will b e reduced if m o r e t h a n 20s. weekly is e a r n e d d u r i n g
retirement. T h e m i n i m u m age of retirement will b e 65 for m e n a n d 60 for
women, b u t the joint pension will become p a y a b l e w h e n the h u s b a n d qualifies,
whatever the age of the wife, p r o v i d e d t h a t if she is u n d e r 60 she is not
gainfully occupied.
Pensions will depend u p o n contributions p a i d d u r i n g the w o r k i n g life ot
the applicant a n d will b e reduced w h e n the c o n t r i b u t i o n r e c o r d shows a
deficiency.
T h o s e w h o p o s t p o n e r e t i r e m e n t b e y o n d the age of 65 (or 60 for w o m e n )
will, w h e n t h e y do retire, get pensions increased b y 2s. a week (joint) a n d
i s . (single) for e a c h y e a r of work after pensionable a g e .
Special a r r a n g e m e n t s will b e m a d e covering p e r s o n s a l r e a d y pensioned
or insured when the scheme comes into o p e r a t i o n .
Slarried W o m e n ( p a r a g r a p h s 106-120)
24. T h e provisions to m e e t the needs of m a r r i e d w o m e n in t h e e v e n t of
the illness, u n e m p l o y m e n t , retirement or d e a t h of their h u s b a n d s are
described elsewhere.
F o r childbirth, the following benefits (which will also be m a d e a v a i l a b l e to
unmarried w o m e n in all i n s u r a n c e classes) will b e a v a i l a b l e : —
(i) a m a t e r n i t y grant of £4; a n d , in addition,
(ii) for gainfully occupied women, m a t e r n i t y benefit at the r a t e of 36s.
a week for 13 weeks, p r o v i d e d t h a t occupation is given u p for t h a t p e r i o d ; 01
(iii) for w o m e n not eligible for m a t e r n i t y benefit, a n a t t e n d a n t s allow­
ance of £ 1 a week for 4 w e e k s .
These benefits will be subject to certain qualifying conditions.
I n addition there will be special provisions enabling m a r r i e d w o m e n to insure
for a personal retirement pension of 20s. a week in lieu of their s h a r e in a joint"
IO retirement pension, and enabling e m p l o y e d m a r r i e d women e a r n i n g m o r e than
20s. a week to insure for: —
(i) sickness benefit (after the first 4 weeks if self-employed) at the rate
of 16s. a week; a n d
(ii) u n e m p l o y m e n t benefit at the r a t e of 20s. a w e e k .
If the w o m a n is living a p a r t from her h u s b a n d a n d can get n o s u p p o r t from
h i m , these benefits will b e a t the rate of 24s. a week.
Widows ( p a r a g r a p h s 121-131)
2 5 . T h e m a i n provision for widows will b e : —
(i) A benefit of 36s. a week (with 5s. a d d e d for the first child, if the
widow h a s one) for the first 13 weeks of w i d o w h o o d . This will be payable
to w o m e n widowed u n d e r 60 a n d to those widowed over t h a t age whos-­
h u s b a n d s h a d n o t qualified for retirement pensions. It will, for the first
13 weeks, t a k e the place of the benefits described below.
(ii) If there is a d e p e n d e n t child, a g u a r d i a n ' s benefit of 24s. a week
(with 5s. a d d e d for the first or only child).
(iii) A w i d o w ' s pension of 20s. a week to widows w h o a r e 50 or over at
t h e time w h e n the h u s b a n d dies or when t h e children cease to be d e p e n d e n t ,
p r o v i d e d t h a t a t least ten y e a r s h a v e elapsed since the m a r r i a g e .
These benefits will be a t a reduced rate w h e n the h u s b a n d ' s contribution
record shows a deficiency a n d will t e r m i n a t e on r e m a r r i a g e ; g u a r d i a n ' s benefit
a n d w i d o w ' s pension will be reduced for s u b s t a n t i a l e a r n i n g s .
T h e r e will be special provisions for women w h o are a l r e a d y receiving widows'
pensions a n d for women w h o a t the start of the new scheme are married to
m e n a l r e a d y insured for w i d o w s ' pensions.
D e a t h G r a n t ( p a r a g r a p h s 132-136)
26. D e a t h g r a n t will b e paid at the following rates according to the age
a t which the d e a t h o c c u r s : —
I
U n d e r 3 y e a r s of age ...
...
...
...
...
...
...
6
between 3 a n d 6
...
...
...
...
...
...
. . . 10
between 6 a n d 18
...
...
...
...
...
...
... 15
over 18 ...
...
...
...
...
...
20
F o r p e r s o n s over 65 a t the beginning of the scheme, n o g r a n t will be
paid, a n d for persons then between 55 a n d 6 5 , the g r a n t will be £ 1 0 . No
grant will be p a i d in respect of a child d y i n g below t h e a g e of 10 w h o was
b o r n before the beginning of the scheme.
2 7 . Summary of main Benefit Rates
Singl
Singlee ma
man
n or woma
woman
n ..
....
Marrie
Married
d ma
man
n wit
with
h gainfull
gainfullyy
occupied
occupied wife
wife..
Marrie
Married
d ma
man
n wit
with
h wif
wifee no
nott gain
gain-­
fully
fully occupied..
occupied....
Married
Married woma
woman
n gainfull
gainfullyy occu
occu-­
pied
pied
Dependant
Dependant 's allowanc
allowancee wher
wheree
payablee
payabl
Sickness
Benefit
Invalidity
Benefit
Unemployment
Benefit
Retirement
Pension
s. d.
s. d.
s. d.
s. d.
20 0
24
0
20 0
40
0
35
0
40
0
35
16
0
16 0
20
0
20 0
16
0
15 0
16 0
0
These weekly rates arc increased b y 5s. where the beneficiary h a s a single
dependent child, or, if he h a s more t h a n one such child, b y 5s. in respect of the
first child.
T h e scheme also m a k e s provision for m a t e r n i t y , widowhood a n d d e a t h
(See p a r a g r a p h s 24 to 26 above.)
Benefit while in Hospital ( p a r a g r a p h s 137-142)
28. T h e following benefits will be reduced h y 10s. a week d u r i n g m a i n t e n ­
ance in hospital after the first 28 d a y s of such m a i n t e n a n c e : — s i c k n e s s a n d
invalidity benefit, m a t e r n i t y benefit, w i d o w ' s benefit, g u a r d i a n ' s benefit,
widow's pension a n d retirement pension.
Duplication of Benefits ( p a r a g r a p h s 147-151)
29. N o t more t h a n one social i n s u r a n c e benefit or pension will be p a y a b l e
to an individual at a n y one time. W h e n a w a r or industrial pensioner
becomes eligible for a social i n s u r a n c e benefit, there will b e some a d j u s t m e n t
in the benefit p a y a b l e .
Administration ( p a r a g r a p h s 152-158)
30. A Ministry of Social I n s u r a n c e will b e set u p which will b e responsible
for the whole of social i n s u r a n c e . T h e a d m i n i s t r a t i o n of assistance will be
kept separate from the administration of i n s u r a n c e , t h o u g h the Minister of
Social I n s u r a n c e will b e responsible to P a r l i a m e n t for b o t h .
National Assistance ( p a r a g r a p h s 159-161)
3 1 . T h e present responsibilities of public assistance authorities for the p a y ­
ment of assistance in cash will be transferred entirely to the Assistance B o a r d .
Approved Societies ( p a r a g r a p h s 162-166)
32. T h e G o v e r n m e n t h a v e come t o t h e conclusion t h a t it is n o t practicable
to retain A p p r o v e d Societies either a s i n d e p e n d e n t financial units or as agents
in the administration of t h e scheme.
HI-UNIVERSALITY
AND
CLASSIFICATION
Why the Scheme is Universal
3 3 . T o extend the range of social i n s u r a n c e , as n o w p r o p o s e d , from a
single, h o m o g e n e o u s group of e m p l o y e d w a g e a n d s a l a r y earners, to t h e
entire p o p u l a t i o n of all ages, a n d all o c c u p a t i o n s or n o n e , is a c h a n g e ' o f
very great scope a n d consequence. T h e reasons of principle for m a k i n g it
have a l r e a d y been referred to in the I n t r o d u c t i o n to this P a p e r . T h e y a r e ,
briefly, t h a t in a m a t t e r so f u n d a m e n t a l it is right for all citizens t o s t a n d i n
together, without exclusions based u p o n difference of status, function or
wealth. Secondly, t h a t there are m a n y p e o p l e at p r e s e n t outside the scope
of national insurance whose need of its benefits is a t least as g r e a t a s t h a t
of m a n y of the i n s u r e d p o p u l a t i o n . T h i r d l y , t h a t without universality it is
not possible a d e q u a t e l y to m a i n t a i n t h e cover needed d u r i n g v a r i o u s n o r m a l
changes from insurance class to class.
The N e w Classes
34. Universality of application m e a n s t h a t in a d d i t i o n to t h e classes at
present insured there will b e b r o u g h t into the scheme v a r i o u s sections
of the population which h a v e not h i t h e r t o , except possibly a s v o l u n t a r y
contributors, been covered b y G o v e r n m e n t schemes of social i n s u r a n c e . T h e r e
are, as instances, first, people with incomes o v e r the present insurable limit;
second, those w h o are substantially free from a risk for which social
insurance provides, e.g. the public s e r v a n t in relation to u n e m p l o y m e n t ;
third, those w h o are exposed to a risk but are a l r e a d y protected against ii
u n d e r the terms of their existing e m p l o y m e n t , c.g. the police in relation to
sickness a n d old a g e ; a n d fourth, those w h o are exposed to risks but are
n o t at present insured against t h e m , e.g. the i n d e p e n d e n t trader. W i t h the
introduction of a universal scheme t h e special a r r a n g e m e n t s in t h e present
u n e m p l o y m e n t insurance s c h e m e for b a n k i n g a n d i n s u r a n c e a n d for agricu]
t u r e will come to a n e n d .
3 5 . T h e application of the principle of universality m u s t inevitably lengthen
t h e task of w o r k i n g out a n d bringing into operation the n e w scheme of social
i n s u r a n c e . T h a t task would in a n y e v e n t h a v e been considerable, o n account
of the other changes p r o p o s e d . B u t its complexity is m u c h increased b y
e x t e n d i n g it b e y o n d a single class. T o b r i n g a universal scheme into opera­
tion will therefore t a k e a n a p p r e c i a b l e t i m e .
B u t t h e G o v e r n m e n t are
satisfied t h a t the a d v a n t a g e s of such a scheme a r e so g r e a t t h a t t h e time
needed to bring it into o p e r a t i o n is well justified.
3 6 . T h e scheme, since it is universal, m u s t t a k e a c c o u n t of t h e different
w a y s of life a n d r e q u i r e m e n t s of different sections of the c o m m u n i t y . F o r this
p u r p o s e it is p r o p o s e d to a d o p t the m e t h o d of classification r e c o m m e n d e d in
the R e p o r t , as follows: —
Class I : E m p l o y e e s .
Class I I : O t h e r s gainfully occupied.
Class I I I : H o u s e w i v e s .
Class I V : O t h e r p e r s o n s of w o r k i n g age not gainfully occupied.
Class V : Children below w o r k i n g a g e .
Class V I : P e r s o n s retired a n d a b o v e working a g e .
Register of Insured Persons
3 7 . U n d e r t h e n e w scheme it will be necessary t o o b t a i n a n d classify
information a b o u t the whole p o p u l a t i o n so as to enable every p e r s o n to be
placed in his or her a p p r o p r i a t e insurance class. After t h a t it will b e necessary
to compile a n d m a i n t a i n one or m o r e central registers, in which the insurance
record a n d s t a t u s of e v e r y insured person will b e entered a n d kept u p to
date.
T h e register will b e a n essential feature of t h e scheme for several
r e a s o n s , first t o record classification a n d transfer b e t w e e n classes, second to
facilitate enforcement of t h e p a y m e n t of contributions, a n d third so t h a t the
record of a n y insured p e r s o n in relation to contributions a n d benefits can
b e ascertained w h e n n e c e s s a r y . T h e t a s k of organisation involved in com­
piling a n d m a i n t a i n i n g the register is obviously one of the first m a g n i t u d e ,
b u t it is an u n a v o i d a b l e step a n d one which m u s t ultimately p r o m o t e efficiency
and economy.
The Excepted Classes
38. Reference h a s been m a d e ( p a r a g r a p h 34) to the absorption into the
scheme of those n o t h i t h e r t o in social i n s u r a n c e . A m o n g these a r e those
sections of the p o p u l a t i o n w h o are in e m p l o y m e n t a n d therefore within the
n e w Class I (employees) b u t h a v e hitherto been specially excepted.
The
civil service, police a n d some local g o v e r n m e n t a n d r a i l w a y employees
are e x a m p l e s . T h e y h a v e been excepted because t h e y are a d e q u a t e l y protected
against sickness a n d old age b y their conditions of service, a n d a r e substantially
free from t h e risk of u n e m p l o y m e n t . B u t it is a n essential p a r t of the principle
of universality n o w a d o p t e d t h a t , n o t w i t h s t a n d i n g t h e i r privileged position
i n these respects, t h e y should p a y t h e s a m e c o n t r i b u t i o n s a s other employed
persons.
A
i
3 9 . T h e adjustment of their conditions of service should not, a s r e g a r d s
p a y d u r i n g sickness, p r e s e n t serious difficulties.
A s r e g a r d s retirement
pensions, the position is difficult.
T h e age of retirement in these g r o u p s
varies, b u t it is c o m m o n l y less t h a n 65 a n d m u c h less in the case of t h e police.
T h e n e w scheme, on t h e other h a n d , contemplates a w o r k i n g life u p to age
65, with i n d u c e m e n t s in the form of a higher pension to c o n t i n u e work
b e y o n d 65 a n d with training a n d rehabilitation for those w h o m i g h t otherwise
h a v e to g i v e u p work p r e m a t u r e l y .
40. T h e simplest course, from m a n y points of view, would be to p a y b o t h
retirement p e n s i o n s — t h e occupational (derived from the special schemes in
force for p a r t i c u l a r groups) a n d the c o n t r i b u t o r y (derived from t h e Social
I n s u r a n c e F u n d ) . B u t with the rate of c o n t r i b u t o r y pension n o w p r o p o s e d ,
the d o u b l e pension would a m o u n t to very nearly a s m u c h a s t h e p r e v i o u s
earnings of lower p a i d w o r k e r s — a n d t h a t without t a k i n g a c c o u n t of a n y
l u m p s u m p a y a b l e on r e t i r e m e n t .
4 1 . T h e r e is also the question whether u n e m p l o y m e n t benefit should b e
available after r e t i r e m e n t to those, e.g. police, w h o as a m a t t e r of system
retire on pension before r e a c h i n g the s t a n d a r d retirement age.
42. Discussions will h a v e to t a k e place with representatives of the v a r i o u s
g r o u p s concerned a b o u t t h e a d j u s t m e n t s necessary, p a r t i c u l a r l y those arising
from t h e inclusion i n t h e general insurance scheme of p e r s o n s covered b y
existing pensions schemes.
Private Pensions Schemes
4 3 . T h e r e are m a n y p r i v a t e s u p e r a n n u a t i o n schemes o p e r a t e d b y industrial
firms a n d business houses. I t m a y b e t h a t as a result of the n e w c o m p u l s o r y
social i n s u r a n c e scheme some e m p l o y e r s a n d employees will wish t o review
their o w n s c h e m e s .
4 4 . B y section 27 of the W i d o w s ' , O r p h a n s ' a n d Old Age C o n t r i b u t o r y
P e n s i o n s Act, 1925 (re-enacted in section 28 of the consolidating A c t of
1936) it w a s m a d e easier to modify existing schemes when t h e benefits t h e y
p r o v i d e d b e c a m e duplicated b y the new s t a t u t o r y pensions. These provisions
were designed p r i n c i p a l l y to m e e t those cases w h e r e the m a n a g i n g b o d y could
not modify the scheme or could do so only at the cost of u n d u e d e l a y o r
e x p e n s e . B r o a d l y , t h e y authorised such modifications as m i g h t b e t h o u g h t
necessary subject to reference to the Chief R e g i s t r a r of F r i e n d l y Societies a n d
to s u c h c o n d i t i o n s as h e m i g h t impose. T h e relation of the n e w s y s t e m t o
p r i v a t e schemes m i g h t equally b e regulated by provisions on t h e s e lines.
The Armed Forces a n d the Merchant N a v y
4 5 . U n d e r t h e existing schemes there are special c o n t r i b u t i o n a r r a n g e m e n t s
for t h e A r m e d F o r c e s of t h e C r o w n w h i c h secure rights t o the benefits of t h e
schemes o n r e t u r n t o civil life. F o r the M e r c h a n t N a v y t h e r e a r e also
special a r r a n g e m e n t s a d j u s t e d to t h e conditions of e m p l o y m e n t .
These
special a r r a n g e m e n t s , w i t h a n y necessary modifications, will be continued
u n d e r the n e w s c h e m e .
Contributions
4 6 . T h e n e w i n s u r a n c e Classes h a v e b e e n set out in p a r a g r a p h 36.
T h e c o n t r i b u t i n g Classes will b e Classes I, I I a n d I V . M e m b e r s of these
Classes will p a y c o n t r i b u t i o n s related to the benefits p r o v i d e d for t h e i r paxti­
cular Class a n d for Classes I I I a n d V I . The benefits will be sickness benefit,
invalidity benefit, u n e m p l o y m e n t benefit, r e t i r e m e n t pensions, benefits for
widows a n d d e a t h g r a n t ; a n d certain special benefits for m o t h e r s . U n e m ­
p l o y m e n t benefit will b e restricted t o p e r s o n s i n Class I (employees) and
sickness benefit a n d invalidity benefit to persons in Classes I a n d I I (others
gainfully occupied). F o r p e r s o n s in Class I I sickness benefit will b e p a y a b l e
o n l y after the first four weeks of incapacity for w o r k . P r o v i s i o n will be
m a d e for Class V (children below w o r k i n g age) b y family allowances, a n d
for Class VI (persons retired a n d a b o v e w o r k i n g age) by retirement pensions.
4 7 . E a c h insured p w s o n will p a y a single weekly contribution for all
t h e benefits to which h e is entitled, in the form of o n e s t a m p on a single docu­
m e n t . T h e s t a m p will also include, in t h e case of e m p l o y e d p e r s o n s , the
contribution for insurance against industrial injury. T h i s unification of con­
tributions in o n e s t a m p is in itself a n i m p o r t a n t step which will b e a conveni­
ence to all concerned a n d will diminish t h e b u r d e n of a d m i n i s t r a t i o n .
4 8 . T h e a m o u n t of the contribution (including for Class I t h e benefits
u n d e r t h e I n d u s t r i a l I n j u r y I n s u r a n c e Scheme as well as the Social I n s u r a n c e
Scheme) will v a r y with the i n d i v i d u a l ^ class a n d sex. T h e following table
s h o w s the different r a t e s of c o n t r i b u t i o n : —
Class I
Clas
Classs II
Clas
Classs IV
s. d.
s. d.
s. d.
3 1
2 1
6 11
4 6
4
2
2
9
3
2
2 5
1 7
5 5
3 7
3
2
6
3
2 8
1 10
Insured
person
Employer
Total
s. d.
s. d.
3 10
2 5
3
2
MEN—
Aged 18 and over
Aged 16-i 8
4
2
WOMEN—
Aged 18 and over
Aged 16-18
0
0
4 9 . E v e r y week in the y e a r m u s t b e accounted for either b y contributions
or b y excusals or e x e m p t i o n s granted in special circumstances (see A p p e n d i x
I I I , p a r a g r a p h s 5 a n d 6)
IV-FAMILY
ALLOWANCES
Object of the Scheme
50. T h e following p r o p o s a l s a r e b a s e d upon two principles, first t h a t
n o t h i n g s h o u l d be d o n e to r e m o v e from p a r e n t s t h e responsibility of m a i n t a i n ­
ing their children, a n d second t h a t it is in t h e national interest for t h e S t a t e
t o h e l p p a r e n t s to discharge t h a t responsibility p r o p e r l y . T h e s c h e m e h e r e
set out is n o t i n t e n d e d to provide full m a i n t e n a n c e for each child. I t ia
r a t h e r a general contribution to the needs of families with children.
Provisioa in Kind
5 1 . T h e p u r p o s e of such a scheme c a n best b e attained if a s u b s t a n t i a l
p a r t of the benefit is given in k i n d . T h e school meals a n d milk services will
therefore b e so e x t e n d e d a s to m a k e t h e m a v a i l a b l e to p u p i l s in p r i m a r y a n d
s e c o n d a r y schools in receipt of g r a n t from the Ministry of E d u c a t i o n or the
Scottish E d u c a t i o n D e p a r t m e n t . T h e s e benefits in k i n d will be free of cost
t o the p a r e n t s a n d will" b e available for all the children in a family a t t e n d i n g
school, including the first. T h e cost to public funds will b e l a r g e . I t is
estimated t h a t when t h e service h a s reached its full d e v e l o p m e n t t h e cost of
supplying meals a n d milk t o children at school will be of t h e o r d e r of £60
million a y e a r . T h i s figure does n o t fall far s h o r t of t h e total cost of the
c a s h allowances described in t h e succeeding p a r a g r a p h . T h e s e c a s h
allowances will at the beginning of the scheme involve e x p e n d i t u r e w h i c h .
17
including £xz million a s the cost of p a y i n g allowances for
the p a r e n t is o n benefit, is estimated a t £69 million. T h e
takes n o a c c o u n t of t h e provision which m a y be m a d e
school age, for which no estimate of cost can a t p r e s e n t b e
the first child w h e n
figure of £60 million
for children u n d e r
given.
Cash Allowance
52. A flat r a t e cash allowance of 5s. will b e p a y a b l e for e a c h child after
the first. This will b e p a i d , n o t o u t of c o n t r i b u t i o n s , b u t out of general
t a x a t i o n . T h e first child is e x c l u d e d because it is reasonable to a s s u m e t h a t
one child a t a n y rate c a n b e m a i n t a i n e d from family earnings. B u t when the
h e a d of the family is o n benefit a n allowance of 5s. a week will be p a y a b l e o u t
of die Social I n s u r a n c e F u n d for the first child.
T o w h o m payable
53. I n t h e a b s e n c e of special circumstances (such as divorce or s e p a r a t i o n )
the o r d e r for the p a y m e n t of t h e allowance will b e m a d e o u t in f a v o u r of t h e
father a s the n o r m a l e c o n o m i c h e a d of the h o u s e h o l d . B u t it is r e g a r d e d a s
n a t u r a l a n d a p p r o p r i a t e t h a t the m o t h e r should c a s h the order a n d it will
b e d r a w n in such a w a y as t o entitle h e r also to d o s o .
Eligible C h i l d r e n
54. F o r the p a y m e n t of family allowances, " children " will b e t a k e n to
m e a n those below the u p p e r age-limit for c o m p u l s o r y school a t t e n d a n c e a n d
those a b o v e t h a t age-limit w h o are still at school full-time, o r are a p p r e n t i c e s ,
u p to t h e 31st J u l y after their 16th b i r t h d a y . A b o v e t h o s e ages a child will
not b e reckoned a m e m b e r of the family.
T h u s , if there are four children in a family a g e d 17, 13, 11 a n d 9, n o
a c c o u n t will be t a k e n of the child a g e d 17 a n d t h e r e r e m a i n , therefore, t h r e e
qualified children, for w h o m two allowances will b e p a y a b l e . W h e n t h e
child aged 13 leaves school, or after t h e 31st J u l y following his 16th b i r t h d a y
(if he is then still a', school), t h e n u m b e r of qualified children will be r e d u c e d
to two, a n d only one allowance will be p a y a b l e .
55. T h e 31st J u l y after the 16th b i r t h d a y is a m o r e c o n v e n i e n t limiting d a t e
t h a n the b i r t h d a y itself, because it fits in b e t t e r with t h e school-leaving
a r r a n g e m e n t s . If a child continues a t school beyond this d a t e a n y cash allow­
ance should be b y w a y of educational g r a n t on t h e basis of ascertained h e e d .
T h e c o n t r i b u t i o n s which u n d e r the i n s u r a n c e scheme would n o r m a l l y b e
p a y a b l e from age 16 w o u l d t h e n be excused (i.e. d e e m e d to h a v e b e e n p a i d )
so long a s education c o n t i n u e s .
The Family Unit
56. T h e exclusion of one child in each family m a k e s it i m p o r t a n t t o define
t h e g r o u p of children w h o a r e to b e regarded a s a family unit. F o r this
p u r p o s e t h e unit will in general b e t h e family b y blood ( a n d n o t , for e x a m p l e ,
the household), i n c l u d i n g step-children a n d legally a d o p t e d children.
Nor­
mally, n o question of s t o p p i n g t h e allowance will arise if, for e x a m p l e , a child
goes t o live for t h e t i m e being with some other relative. B u t if the p r e ­
s u m p t i o n t h a t t h e p a r e n t is t h e m a i n t a i n e r is upset, a r r a n g e m e n t s will h a v e
t o b e m a d e to r e c k o n the child as a m e m b e r of t h e familv of t h e " e r s o i i
actually m a i n t a i n i n g it.
Persons abroad
57. T h e b r o a d object of t h e s c h e m e is to assist p a r e n t s b o r n a n d living in
this c o u n t r y , b u t it s h o u l d also e x t e n d to t h e families, living in this c o u n t r y ,
of British s u b j e c t s b o r n outside this c o u n t r y , o r for t h e t i m e being living
outside it. I t will b e necessary to frame a residence test for t h i s p u r p o s e .
Aliens will b e eligible only if their s t a y h a s been long e n o u g h t o justify their
being regarded as regular m e m b e r s of this c o m m u n i t y .
Children living
a b r o a d will not be eligible for allowances, t h o u g h short t e m p o r a r y absences
(e.g. o n holiday) will b e i g n o r e d . *
Duplication of Allowances
5 8 . T h e r e will be no duplication with allowances p a y a b l e u n d e r othe
schemes.
Children in Institutions
59. T h e scheme is essentially o n e for the benefit of t h e family. W h e n a
child is in a n institution n o allowance u n d e r the s c h e m e will b e p a i d to the
authorities of the institution.
W h e r e , as a result of a judicial order or
similar circumstances (e.g. where a local a u t h o r i t y h a s a s s u m e d p a r e n t a l rights),
the child is n o longer in the care of the p a r e n t s , p a y m e n t of allowance t o them
will cease. Otherwise it is p r o p o s e d t h a t the allowance should c o n t i n u e to be
p a i d t o the p a r e n t s while a child is in a n institution, even t h o u g h under the
new H e a l t h Service n o c h a r g e will fall u p o n p a r e n t s for t h e m a i n t e n a n c e and
t r e a t m e n t of children in h o s p i t a l .
V-ORPHAN'S
ALLOWANCE
6 0 . Special allowances will b e p a i d for o r p h a n children, b o t h of whose
p a r e n t s are d e a d . These will b e at the r a t e of 12s. a week a n d the first child
will n o t , a s in the family allowance scheme, be excluded. Of this a m o u n t ,
7s. will be an insurance benefit p a y a b l e from the Social I n s u r a n c e F u n d ,
w i t h o u t a n y qualifying condition. T h e b a l a n c e of 5s. will b e p r o v i d e d out of
general t a x a t i o n . T h e weekly allowance of 12s. will be paid in o n e s u m .
VI-SICKNESS
AND
UNEMPLOYMENT
BENEFIT
Rates
6 1 . T h e s t a n d a r d rates of sickness a n d u n e m p l o y m e n t benefit will b e 403.
a week for a married couple, a n d 24s. a week for a single p e r s o n . F o r insured
m a r r i e d w o m e n there will b e lower rates (see p a r a g r a p h 116 (ii) ). F o r boys
or girls aged 16 or 17 the r a t e will b e 15s.
Contribution Conditions
6 2 . At p r e s e n t t h e contribution conditions which a c l a i m a n t m u s t satisfy
in o r d e r to qualify for benefit are q u i t e different in National H e a l t h I n s u r a n c e
a n d U n e m p l o y m e n t I n s u r a n c e . I n H e a l t h I n s u r a n c e all c o n t r i b u t o r s h a v e
the s a m e benefit y e a r , n a m e l y t h e c a l e n d a r y e a r from J a n u a r y t o December,
a n d their right t o benefit d e p e n d s on contributions p a i d in the contribution
y e a r which e n d e d in the p r e v i o u s J u l y . I n U n e m p l o y m e n t I n s u r a n c e each
claimant h a s his own benefit y e a r , w h i c h begins when he m a k e s a successful
claim. I n H e a l t h I n s u r a n c e , title to sickness benefit at the full s t a n d a r d rate
does not arise until 104 a c t u a l c o n t r i b u t i o n s h a v e b e e n p a i d ; benefit at a
lower rate is p a y a b l e after p a y m e n t of 26, b u t less t h a n 104, c o n t r i b u t i o n s . I n
either case the rate of benefit is subject t o reduction if less t h a n 50 contribu­
tions h a v e been p a i d or excused i n the last c o m p l e t e c o n t r i b u t i o n y e a r before
the c u r r e n t benefit y e a r .
(Contributions are excused where the contributor
is sick, or u n e m p l o y e d a n d available for work.) U n e m p l o y m e n t I n s u r a n c e
requires 30 contributions actually paid in the period of t w o y e a r s before the
claim to benefit. H a v i n g once satisfied this condition, the c o n t r i b u t o r begins
a benefit y e a r .
63. T h e c o n t r i b u t i o n conditions for sickness benefit a n d u n e m p l o y m e n t
benefit will b e b r o u g h t into line, so that a c o n t r i b u t o r entitled to benefit of
cither kind will be entitled also, so iar as c o n t r i b u t i o n s are c o n c e r n e d , to
benefit of the other k i n d . F o r this p u r p o s e , the new conditions will be on
the model of the present H e a l t h I n s u r a n c e condition.,. T h u s t h e r e will be
a fixed benefit y e a r , in which a c o n t r i b u t o r will be entitled t o benefit of
either k i n d a t the s t a n d a r d r a t e if h e has h a d : —
(i) 26 c o n t r i b u t i o n s actually p a i d ; a n d
(ii) 50 c o n t r i b u t i o n s , paid or excused, in the last complete contribution
y e a r before the beginning of the benefit y e a r .
Waiting T i m e
64. F o r sickness a n d u n e m p l o y m e n t benefits there will b e a waiting t i m e
of three d a y s , i.e. benefit will be p a y a b l e only from the fourth d a y . W h e r e
however, the sickness or u n e m p l o y m e n t has lasted for a t least four weeks,
benefit for the first three d a y s will then b e c o m e p a y a b l e .
Duration of Benefit
65. Sickness Benefit.—To
a c o n t r i b u t o r w h o h a s 156 c o n t r i b u t i o n s actually
paid, sickness benefit will b e p a i d for the first t h r e e y e a r s of a n y c o n t i n u o u s
period of sickness. F o r this p u r p o s e , illnesses s e p a r a t e d b y less t h a n t h r e e
m o n t h s will b e treated a s a c o n t i n u o u s period of sickness. If t h e c o n t r i b u t o r
has e x h a u s t e d all the sickness benefit d u e to h i m , h e will, so long a s he
remains i n c a p a b l e of w o r k , receive invalidity benefit a t t h e s a m e rate a s the
retirement pension, viz. 35s. (joint) or 20s. (single) (the rate for m a r r i e d
women will be lower-—see p a r a g r a p h 116 (ii)). W h e r e the c o n t r i b u t o r h a s less
t h a n 156 actual contributions (but a t least 26) h e will b e allowed sickness
benefit for one y e a r o n l y , instead of three y e a r s . A t the end of t h a t y e a r there
will be n o invalidity benefit.
66. Unemployment
Benefit.—Unemployment
benefit will b e p a i d u p to a
limit of 30 weeks in a c o n t i n u o u s p e r i o d together with a d d i t i o n a l d a y s w h e r e
the c o n t r i b u t o r h a s a good record of e m p l o y m e n t in recent y e a r s . S e p a r a t e
periods of benefit will, for this p u r p o s e , b e t r e a t e d as c o n t i n u o u s if t h e y a r e
separated b y less t h a n t h r e e m o n t h s .
The Need for a Limit o n Benefit
67. T h e R e p o r t r e c o m m e n d e d t h a t b o t h sickness a n d u n e m p l o y m e n t b e n e ­
fits should b e unlimited in d u r a t i o n , subject, in the case of sickness, to special
b e h a v i o u r conditions, a n d , in t h e case of u n e m p l o y m e n t benefit, to t h e require­
ment of a t t e n d a n c e at a work o r training centre after a limited p e r i o d of u n ­
e m p l o y m e n t . A s alread3' a n n o u n c e d in P a r l i a m e n t , the G o v e r n m e n t c a n n o t
accept this r e c o m m e n d a t i o n : t h e j ' t h i n k it reasonable a n d p r u d e n t t h a t
both sickness a n d u n e m p l o y m e n t benefits should h a v e some limit a t t a c h e d to
them. As r e g a r d s sickness benefit, the G o v e r n m e n t recognise t h e need for
more generous provision for l o n g - t e r m illness t h a n is m a d e in t h e p r e s e n t
insurance scheme, b u t t h e y feel t h a t sickness benefit of unlimited d u r a t i o n
would b e psychologically unwise a n d would t e n d to e n c o u r a g e t h o s e subject
to r e c u r r e n t p e r i o d s of sickness to l a p s e into c h r o n i c invalidity. A s r e g a r d s
u n e m p l o y m e n t benefit, t h e y agree t h a t t r a i n i n g schemes are of t h e u t m o s t
i m p o r t a n c e in p r e v e n t i n g u n e m p l o y m e n t a n d in securing fluidity of l a b o u r ,
and t h a t c l a i m a n t s u n r e a s o n a b l y refusing to u n d e r g o a course of t r a i n i n g
should b e disqualified from receiving benefit. T h e y are satisfied, h o w e v e r ,
that a r e q u i r e m e n t to u n d e r g o t r a i n i n g after a certain period of u n e m p l o y m e n t
would n o t constitute a n effective safeguard against possible a b u s e of benefit.
34532
A 5
Re-Qualifying Condition
68. At present, when a contributor e x h a u s t s the u n e m p l o y m e n t benefit
d u e to h i m , lie c a n n o t qualify for benefit again until, besides satisfying the
other conditions, he lias p a i d 10 contributions since h e e x h a u s t e d his benefit.
This re-qualifying condition will b e applied in the new s c h e m e , n o t only to
u n e m p l o y m e n t benefit, b u t also to sickness benefit w h e r e the c o n t r i b u t o r has
exhausted his right to that benefit (see p a r a g r a p h 65 a b o v e ) . T h a t is to sa;
he will be entitled only to invalidity benefit until he has p a i d 10 further
contributions.
Effect of Shortage of C o n t r i b u t i o n s
69. T h e p r e s e n t H e a l t h I n s u r a n c e scheme provides benefit at a reducer
rate where a c o n t r i b u t o r has less t h a n 50 contributions, paid or excused, in ?
contribution vear. T h e U n e m p l o y m e n t I n s u r a n c e scheme h a s no such arrange
m e n t . I t gives an unemployed m a n either benefit at t h e full rate or none at
all. I n the new scheme, a shortage of contributions will involve scaling clown
of b o t h sickness benefit a n d u n e m p l o y m e n t benefit, according to the n u m b e r
of contributions deficient.
Transitional Cases
70. It is the G o v e r n m e n t s intention that as far a s p r a c t i c a b l e the new
rates a n d conditions for sickness, invalidity a n d u n e m p l o y m e n t benefits
should be applied as soon a s the)' come into operation to p e r s o n s w h o are
then receiving sickness, disablement or u n e m p l o y m e n t benefit u n d e r the
present schemes.
VII-TRAINING
ALLOWANCE
7 1 . W h e n a n u n e m p l o y e d person t a k e s a course of a p p r o v e d training or
industrial rehabilitation, h e will receive a training allowance at a higher rate
t h a n u n e m p l o y m e n t benefit. This training allowance will not r e d u c e the total
n u m b e r of d a y s of u n e m p l o y m e n t benefit due to h i m . It will continue for
a n y t h i n g u p to four weeks .after the e n d of the course, so a s to cover a n y
short interval between the course a n d a new j o b . P e o p l e w h o , after training,
are transferred to jobs a w a y from h o m e will receive a settling-in allowance for
the first few weeks.
T r a i n i n g schemes with training allowances will b e available to
persons (including widows) in Classes I , I I , I I I a n d I V .
suitable
T r a i n i n g allowances will not form p a r t of the Social I n s u r a n c e scheme, but
will be p a i d , in t h e first instance, out of the proceeds of t a x a t i o n u n d e r the
a r r a n g e m e n t s for p r o m o t i n g e m p l o y m e n t sponsored b y the Ministry of L a b o u r .
Since the contingent liability on the Social I n s u r a n c e F u n d for persons who
would otherwise b e a charge on the F u n d will be reduced t h r o u g h the training
scheme, an a n n u a l contribution not exceeding / 5 0 o , o o o will b e m a d e b y the
F u n d to the E x c h e q u e r t o w a r d s the cost of training.
VIII-SICKNESS BENEFIT FOR THE
SELF-EMPLOYED
72. T h e provision of sickness benefit for persons working on their own
account (i.e. Class II) creates a difficult p r o b l e m . T h e Class will be a v e r y
m i x e d one. I t will include rich a n d p o o r alike; a t one e n d of the Class
will be the largest employer of labour, the financier, the leader at the B a r
or the best-selling a u t h o r ; at the other the small shop-keeper, the window­
cleaner a n d the h a w k e r .
M a n y of the poorer m e m b e r s of this Class will
be as m u c h — i f not m o r e — d e p e n d e n t on good health for their e a r n i n g s a s
are the m e m b e r s of Class I, a n d accordingly as m u c h in need of benefit
for all periods of sickness, short or long.
Moreover, the Class will include
certain categories w h o are fully insured against sickness u n d e r t h e existing
scheme—share-fishermen, o u t w o r k e r s , small contractors for service, a n d
v o l u n t a r y c o n t r i b u t o r s who are self-employed. Again, t h o u g h the n e w scheme
/ ill m a k e it unnecessary to c o n t i n u e the existing provisions for v o l u n t a r y
insurance, m e n a n d women will still transfer from e m p l o y m e n t to w o r k on
their o w n a c c o u n t - f r o m Class I to Class I I . T h e r e will indeed b e others
who do not m a k e a clean-cut transfer from one Class to t h e o t h e r , b u t w h o ,
in each y e a r , d o a certain a m o u n t of w o r k in each Class, a n d contribute
accordingly.
7 3 . I t is e s t i m a t e d that there will be a b o u t two a n d a half million persons
in Class I I a n d n o d o u b t the g r e a t m a j o r i t y of t h e m will be in a n economic
position little if a n y different from that of the m a j o r i t y in Class I.
The
conclusion m i g h t seem obvious, t h a t all m e m b e r s of Class I I should be
given the right to sickness benefit from the onset of illness. B u t there are
at least two formidable difficulties in the w a y - t h e cost to t h e insured person,
and the v e r y real administrative difficulty of effective control over t h e p a y m e n t
of benefit.
The Problem of Cost
74. T h e c o n t r i b u t i o n that is r e q u i r e d for persons in Class I I is h i g h — 4 s . 2d.
for m e n , 3s. 6d. for w o m e n - a n d , since t h e r e is n o " e m p l o y e r " to b e a r a
share of it as in Class I, it falls wholly on the c o n t r i b u t o r . If sickness benefit
were m a d e p a y a b l e from the onset of illness instead of after the first four weeks,
as is p r o p o s e d , the Class I I c o n t r i b u t i o n would h a v e to be increased b y
another 3d. a week.
The Problem of Control
75. T h e m o r e serious difficulty, in the G o v e r n m e n t s view, is to secure
effective control over the p a y m e n t of benefit.
An inefficient s t a n d a r d of
a d m i n i s t r a t i o n m i g h t seriousl3' prejudice the success of t h e whole s c h e m e . T h i s
p r o b l e m of control is particularly difficult when it relates to benefit p a y a b l e
for short p e r i o d s to people w o r k i n g on their own account, often in their own
h o m e . M a n y people in these c i r c u m s t a n c e s could often carry- on w i t h their w o r k
and c o n t i n u e to e s r n their m e a n s of livelihood even t h o u g h sick a n d confined
t o their r o o m s . T h e fact must b e faced t h a t the Class I I person, h a v i n g elected
to work on his o w n account, will be in a n entirely different position from the
employed p e r s o n .
I t is impossible to a s s u m e t h a t m e d i c a l certification, n o
m a t t e r h o w efficient, will be able to overcome all the difficulties of a d m i n i s t r a ­
tion.
76. Sir William Beveridge was impressed b y the formidable n a t u r e of these
difficulties, of which h e rated the difficulty of control as the m o r e serious.
While fully recognizing the need of m a n y in the Class for full cover against
sickness, he c o n c l u d e d t h a t t h e y ought to t a r r y the risk of their m i n o r
illnesses a n d p r o p o s e d t h a t t h e y should get benefit only " if, a n d to the e x t e n t
that, t h e disability lasts m o r e t h a n 13 w e e k s . " H e w a s a w a r e t h a t certain
persons (share-fishermen, etc.), w h o at p r e s e n t get benefit from t h e beginning
of an illness, would b e worse off to the e x t e n t t h a t t h e y would get n o t h i n g
for the first 13 w e e k s ; b u t pointed out t h a t for p r o l o n g e d illness t h e y
would get altogether better provision t h a n at p r e s e n t .
T h e R e p o r t also
proposed t h a t contributions s h o u l d not be excused d u r i n g the first 13 weeks of
illness.
3453-J
A 6
The Governments Proposals
7 7 . T h e G o v e r n m e n t share the views expressed in the R e p o r t a b o u t the
difficulties of framing a national scheme for providing sickness benefit for
p e r s o n s in this Class; a n d t h e y agree t h a t it would b e w r o n g t o p a y benefit
from t h e beginning of a n illness. After reviewing the whole m a t t e r v e r y
carefully, h o w e v e r , they feel t h a t to p a y benefit only after the first thirteen
weeks, even t h o u g h it m a y b e justifiable on g r o u n d s of p r u d e n t administratio
a n d s o u n d insurance principles, does not go far enough to meet t h e a c k n o w ­
ledged need for b e t t e r cover on the p a r t of m a n y people in this Class. T h e y ,
therefore, think it right, while remaining fully a w a r e of t h e risk of abuse
involved, to p a y benefit to Class I I c o n t r i b u t o r s after four, instead of
thirteen, weeks, a n d t o excuse p a y m e n t of c o n t r i b u t i o n s d u r i n g those four
weeks. This rule will a p p l y to each period of sickness h o w e v e r short the'
interval separating a n y two periods.
Some Special Problems
7 8 . E v e n so there are certain m i n o r difficulties, a l r e a d y alluded to, which
will call for further c o n s i d e r a t i o n : —
(i) T h e r e is the difficulty of t h e existing v o l u n t a r y c o n t r i b u t o r , entitled
to benefit from the onset of illness. If h e falls into Class I t h e r e will be
no difficulty; if into Class I I he will be d e p r i v e d of cover for t h e first four
weeks of illness. If he falls into Class I V , he will lose altogether the right
to c o n t i n u e his cover against illness. T h i s seems to t h e G o v e r n m e n t to
b e inevitable; t h o u g h it m a j ' b e possible, d u r i n g t h e necessary transitional
p e r i o d , t o preserve in respect of p a s t c o n t r i b u t i o n s some right t o benefit
t o p e r s o n s falling into Class I I a n d Class I V .
(ii) Special provisions will b e necessary t o govern the position of persons
w h o pass p e r m a n e n t l y from Class I to Class I I , or vice versa, a n d also
of those w h o alternate between t h e two Classes.
(iii) T h e problem of the outworkers, small c o n t r a c t o r s for service a n d
share-fishermen (other t h a n those w h o , being employees, will fall into
Class I) is one of special difficulty.
T h e y will lose n o t o n l y cover for
the first four weeks of illness, b u t also, being in Class I I , t h e benefit of
the " e m p l o y e r ' s " share of the contribution, which most of t h e m enjoy
at present. T h e G o v e r n m e n t d o n o t d o u b t t h a t these g r o u p s should b e
included in Class I I ; t h e y obviously cannot be p u t in Class I, whose, m e m ­
b e r s a r e insured against u n e m p l o y m e n t , since u n e m p l o y m e n t benefit can­
not be paid to those who are in a position t o d e t e r m i n e the extent a n d
incidence of t h e i r own u n e m p l o y m e n t . I t is impossible to say w h a t will b e
t h e size of t h e p r o b l e m presented b y these special classes when t h e scheme
comes into o p e r a t i o n ; the n u m b e r of o u t w o r k e r s , for instance, will u n ­
d o u b t e d l y b e r e d u c e d b y the compulsory exemption of those m a r r i e d w o m e n
w h o d o not e a r n m o r e t h a n 20s. a week. I n a n y event, the p e o p l e in these
special classes, in spite of contrast in certain respects between their p r e s e n t
a n d future positions, will b e getting, like other contributors in Class I I , full
v a l u e for their money," and the question w h e t h e r , a n d if so h o w , a n y further
cover can b e p r o v i d e d for t h e m m u s t await further examination in t h e light
of t h e circumstances prevailing n e a r e r t h e d a t e w h e n the new scheme is
introduced.
IX-DEPENDANTS
ALLOWANCE
79. If a n y o n e entitled to sickness, invalidity, or u n e m p l o y m e n t benefit h a s
a n a d u l t d e p e n d a n t , h e will be p a i d a d e p e n d a n t s allowance, p r o v i d e d t h a t
h e is n o t entitled to joint benefit for himself a n d his wife a n d t h a t the
d e p e n d a n t belongs to one of the classes for w h o m t h e present U n e m p l o y m e n t
Insurance scheme p r o v i d e s d e p e n d a n f s benefit.
( T h e allowance will b e
payable only in respect of o n e d e p e n d a n t at a time.)
80. T h u s , a m a n or w o m a n will be able to c o u n t as a d e p e n d a n t a n invalid
father or widowed m o t h e r , or a d u l t sister or d a u g h t e r (subject to conditions
about residence, m a i n t e n a n c e , etc.), or a h o u s e k e e p e r , whether resident or
non-resident, who looks after his or her d e p e n d e n t children. In a d d i t i o n , a
.'oman whose h u s b a n d is a n invalid a n d d e p e n d e n t on her will be able to
count him a s a d e p e n d a n t . B u t a m a n w h o h a s a w o m a n living w i t h h i m
as his wife, or h a s living with h i m a person not related to him w h o k e e p s
house for h i m , will not be able to c o u n t h e r a s a d e p e n d a n t unless h e h a s
dependent children a n d she looks after t h e m .
T h e r a t e of the allowance
will be 16s. except w h e n t h e c o n t r i b u t o r is d r a w i n g invalidity benefit.
Then
\t will be 15s.
8 1 . If there were a registration of d e p e n d a n t s , as t h e R e p o r t suggests, it
is doubtful w h e t h e r , even if an a c c u r a t e a n d complete registration at the start
of the scheme were achieved, it would be possible to k e e p the register u p to
date. P e r s o n s in w o r k might well fail to notify s u b s e q u e n t c h a n g e s , i.e. w h e n
persons originally registered as d e p e n d a n t s ceased to b e d e p e n d e n t or w h e n
persons not p r e v i o u s l y registered later b e c a m e d e p e n d a n t s . So, when claims
to benefit were m a d e , the register could n o t b e t a k e n a s decisive one w a y or
the other, a n d there would b e scarcely a n y a d v a n t a g e in compiling it.
X - R E T I R E M E N T PENSIONS The Problem 82. T h e p r e v e n t i o n of w a n t in old age is an objective of policy b y w h i c h the
Government set g r e a t store. B u t it involves a p r o b l e m w i t h certain special
features, arising o u t of the fall in the b i r t h - r a t e a n d the c o n s e q u e n t rise i n
the p r o p o r t i o n of elderly people in t h e c o m m u n i t y . T h e G o v e r n m e n t A c t u a r y
has estimated t h a t in the t w e n t y y e a r s from 1945 to 1965 t h e p o p u l a t i o n of
pensioners o v e r working age will grow from a b o u t 3,400,000 to 5,300,000, a n
increase of a b o u t 1,900,000, w h e r e a s t h e n u m b e r of c o n t r i b u t o r s will b e p r a c ­
tically s t a t i o n a r y at a b o u t 21,000,000. I n t h e n e x t ten y e a r s , from 1965 t o
1975, t h e r e will be a further increase of a b o u t 800,000 in the pensioner p o p u l a ­
tion, while the contributing p o p u l a t i o n will fall b y over 1,000,000. R a t h e r less
than o n e half of t h e increase in the n u m b e r of p e n s i o n e r s in t h e first t w e n t y
years is due to the g r a d u a l inclusion of t h e n e w classes who h a v e to serve a
qualifying period. T h e result of these c h a n g e s is t h a t , w h e r e a s in 1945 it is
estimated t h a t there will be 16 p e n s i o n e r s t o every 100 c o n t r i b u t o r s , there will,
by 1975, be a b o u t 31 pensioners to e v e r y 100 c o n t r i b u t o r s .
83. T h i s is the position a s e s t i m a t e d o n t h e a s s u m p t i o n that t h e fertility a n d
death rates of the i m m e d i a t e p r e - w a r y e a r s will c o n t i n u e after t h e w a r . A .
substantial i m p r o v e m e n t in longevity w o u l d m a t e r i a l l y a d d to t h e n u m b e r of
pensioners, t h u s increasing still further the p r o p o r t i o n of pensioners t o con­
iributors. A n y rise which m i g h t occur in t h e fertility r a t e would at once a d d
to the cost of c h i l d r e n ' s benefits, b u t it would enlarge t h e w o r k i n g p o p u l a t i o n
only after a n interval, a n d could n o t m a k e a n y a p p r e c i a b l e difference t o t h e
ratio of pensioners to c o n t r i b u t o r s in the y e a r s u n d e r r e v i e w .
Rate of Pension
84. T h e p r o p o s a l in the R e p o r t w a s t h a t the r a t e of pension to be p a y a b l e
twenty y e a r s from the start of the scheme w o u l d b e fixed now, at 40s. (joint)
and 24s. (single), a n d that c o n t r i b u t i o n s should b e p a y a b l e from the s t a r t
on the basis of this ultimate r a t e . T h e rate of pension w a s , however, t o start
at 25s. (joint) a n d 14s. (single) a n d , for p e r s o n s insured u n d e r the existing
34532
A 7
scheme, would rise b y increments of i s . 6d. (joint) a n d i s . (single) every
second y e a r until the full rate w a s reached at the end of t w e n t y y e a r s . (For
persons coming into pensions insurance at the start of the new scheme, the
rate of pension w a s to van,' according to the y e a r in which retirement took
place, a n d once granted w a s to b e fixed.)
85. T h e G o v e r n m e n t h a v e a l r e a d y a n n o u n c e d t h a t they c a n n o t accept thes'­
proposals (even t h o u g h from the t a x p a y e r s point of view they h a v e attrac­
tions because of the p o s t p o n e m e n t of the m a i n weight of e x p e n d i t u r e ) , and
t h a t , in their view, it is preferable t h a t the new s t a n d a r d rate of pension, at
w h a t e v e r rate it m a y b e fixed, should b e p a y a b l e from the time the new
scheme comes into effect.
86. T h e G o v e r n m e n t recognise the general desire of the c o u n t r y t h a t proper
provision should b e m a d e for old age, a n d t h e y share it. B u t the steady
prospective increase over a period of y e a r s in the proportion of pensioners to
people of working age m a k e s it of particular i m p o r t a n c e to t a k e a p r u d e n t
view. I n the result, tire G o v e r n m e n t find themselves u n a b l e to a d o p t
p e r m a n e n t r a t e s of 40s. joint a n d 24s. single a n d propose r a t e s of 35s. joint
a n d 20s. single to t a k e effect from the c o m m e n c e m e n t of t h e n e w scheme.
Pensionable age will b e 65 for m e n a n d 60 for w o m e n .
I n c r e a s e of P e n s i o n : P o s t p o n e m e n t of R e t i r e m e n t
87. A c o n t r i b u t o r need not, of course, retire on reaching pensionable age.
I n d e e d , one of the results of the growth in t h e proportion of elderly people is
t h a t it m a y well become a m a t t e r of vital i m p o r t a n c e to k e e p u p t h e national
income b y encouraging the c o n t i n u a n c e of p r o d u c t i v e work b y those who h a v e
reached pensionable age. I n t h e w a r elderly people h a v e t u r n e d t o a n d
served the c o u n t r y well, in m a n y active capacities, paid a n d v o l u n t a r y . I n
p e a c e , t h e r e m a y b e a similar call upon their readiness a n d ability t o p l a y a
constructive p a r t in t h e n a t i o n a l effort.
8 8 . T h e G o v e r n m e n t therefore propose t h a t if a n y o n e w h o h a s reached
p e n s i o n a b l e age continues t o w o r k beyond t h a t age, a n d retires a n d claims
his pension at a later age, t h e r a t e of pension will be increased b y 2s. a week
(joint) a n d i s . a week (single) for each y e a r of work after p e n s i o n a b l e age.
89. If a c o n t r i b u t o r who h a s o n c e d r a w n a retirement pension a g a i n becomes
employed h e will b e e x e m p t from p a y m e n t of contributions, t h o u g h his
e m p l o y e r will h a v e t o p a y t h e e m p l o y e e s share. This m e a n s t h a t he will not
be able to e a r n a h i g h e r pension b y s u b s e q u e n t contributions.
Joint Pension
90. T h e joint pension of 35s. will b e p a y a b l e on the h u s b a n d ' s retirement,
p r o v i d e d t h a t his wife is living with him or is wholly or m a i n l y m a i n t a i n e d by
h i m , a n d , if i m d e r pensionable age, is n o t gainfully o c c u p i e d . T h e joint
pension will n o r m a l l y be p a i d t o t h e h u s b a n d b u t , w h e r e t h e wife is of
pensionable a g e a n d m a k e s application for s e p a r a t e p a y m e n t , a pension of 15s.
will b e p a i d t o h e r a n d the h u s b a n d ' s pension will b e reduced to t h e single
r a t e of 20s. I t is felt t h a t such a division is justified on the g r o u n d t h a t the
pension is m a i n l y provided from the h u s b a n d ' s contributions a n d it would be
inequitable t o p a y h i m a lower rate t h a n t h a t which t h e s c h e m e provides for
a single p e r s o n .
q i . W h e r e a wife of pensionable age
is not wholly or m a i n l y m a i n t a i n e d b y
on the h u s b a n d ' s application. Pension
rate of 203., a n d , if application is m a d e
paid to her.,
is living apart from her h u e b a n d and
h i m joint pension will n o t b e payable
will be p a y a b l e to the h u s b a n d at the
b y the wife, a pension of 15s. will be
g2. If a wife u n d e r pensionable age is gainfully occupied o r is living a p a r t
from her h u s b a n d a n d is no^ wholly or mainly m a i n t a i n e d b y h i m , a single­
pension of 20s. will b e p a y a b l e to the h u s b a n d , a n d no pension will b e
payable to the wife from his insurance.
9 3 . W h e r e a wife h a s been insured in her own right she will b e entitled,
in retirement on or after age 60, to pension at the single r a t e for w h i c h h e r
contribution record qualifies her, w h a t e v e r her h u s b a n d ' s age a n d earnings.
He also will be entitled, subject to his c o n t r i b u t i o n record, to single pension
on retirement at or after pensionable age. W h e n a m a n has retired on pension,
his wife, if she is entitled to pension in right of her own c o n t r i b u t i o n s , c a n
lake either t h a t pension, or the s h a r e of the joint pension t o which she is
entitled o n her h u s b a n d ' s record, whichever is the m o r e f a v o u r a b l e .
Retirement Condition
9 4 . T o qualify for pension a c o n t r i b u t o r m u s t not o n l y b e of p e n s i o n a b l e
age a n d satisfy the c o n t r i b u t i o n conditions; he m u s t also h a v e retired from
work. W h e n a c o n t r i b u t o r m a k e s application for a pension, either on a t t a i n i n g
pensionable age or later, he must m a k e a declaration t h a t he intends to retire
from work. T h e d a t e o n w h i c h h e intends to retire will n o r m a l l y be the d a t e
from which pension will be a w a r d e d . T h i s d o e s not m e a n , however, t h a t
he m a y not work a f t e r w a r d s ; h e m a y d o so w h e n e v e r he likes, b u t his pension
will be reduced for each week in which he h a s s u b s t a n t i a l e a r n i n g s . E a r n i n g s
u p to 20s. will be ignored, a n d the a m o u n t of earnings in excess of this figure
will be deducted from the w e e k ' s pension based on his i n s u r a n c e ( w h e t h e r it is
being paid jointly or s e p a r a t e l y ) . A wife's earnings will also b e t a k e n into
account if a joint pension of 35s. is being p a i d to t h e h u s b a n d or if she is
drawing a separate pension in respect of his i n s u r a n c e , b u t the h u s b a n d ' s
share of a joint pension (or his pension, if s e p a r a t e pensions are b e i n g p a i d )
will not be reduced on a c c o u n t of his wife's e a r n i n g s . E a c h week, w h e n
d r a w i n g his pension at the P o s t Office, the pensioner will h a v e to declare
whether h e (and, if necessary, his wife) h a s earned m o r e t h a n 20s. in t h e
previous week. If h e h a s not, his pension will be p a i d in full b y the P o s t
Office; if h e h a s , a n d so c a n n o t sign the d e c l a r a t i o n , the P o s t Office will n o t
pay a n d the pensioner will report the a m o u n t of the earnings to t h e local Social
I n s u r a n c e Office, w h e r e the necessary a d j u s t m e n t to his w e e k ' s pension will
be m a d e .
9 5 . I t must b e accepted t h a t there is a risk of a b u s e in such a p l a n a n d
obviously in Class I I (the self-emplo\'ed) it is v e r y difficult to ascertain p r e ­
cisely either the fact of retirement or the a m o u n t of earnings e x c e p t at t h e
cost of investigations and inquisitions w h i c h w o u l d be r e g a r d e d as b e y o n d all
reason.
96. It will not b e necessary to adjust the pension week b y week in all cases
where the pensioner is earning. If he obtains regular e m p l o y m e n t at a wage
exceeding 20s. a week b u t n o t exceeding 55s. (where a joint pension is
payable) or 40s. (where a single pension is p a y a b l e ) it will be possible t o a w a r d
a pension a t the a p p r o p r i a t e reduced r a t e ; he will then b e required to declare
each week w h e t h e r there has been a n y c h a n g e in his e a r n i n g s .
(Contribution Conditions
97. P r i m a r i l y the rates of retirement pension a r e designed for c o n t r i b u t o r s
who p a y the new rates of c o n t r i b u t i o n from their 16th b i r t h d a y till t h e i r
60th (women) or 65th ( m e n ) .
On this basis no c o n t r i b u t o r could
claim a pension until forty-four y e a r s after the start of the s c h e m e ; b u t
34532A S
pensions at the new rate will be p a i d from the c o m m e n c e m e n t of the scheme.
F o r the p u r p o s e of considering how the new s c h e m e will be applied, con­
tributors c a n be divided into the following g r o u p s : —
A. Those w h o are less t h a n 16 w h e n t h e new scheme comes into operation.
B . Those w h o are insured under the present scheme a n d h a v e reached
pensionable a g e .
C. Those w h o are insured u n d e r the present scheme but h a v e not reachc
pensionable a g e .
D . Those w h o , though over age 16, are not insured u n d e r the present
scheme b u t become contributors u n d e r the new o n e .
Group A
9S.—(i) Initial Qualifying
Contributions.—The
G o v e r n m e n t think it right-,
in order to emphasise the contributory n a t u r e of a n insurance benefit free from
a needs test, to require the p a y m e n t of a m i n i m u m of 156 a c t u a l contributions
as a n initial qualifying condition.
(ii) Yearly Average of Contributions
paid or excused.—Title
to pension will
b e determined b y the record of contributions over t h e whole w o r k i n g life
a n d a yearly a v e r a g e of 50 contributions paid or excused will be required
to qualif5' for the full rate of pension. This entails the m a i n t e n a n c e of a life
record of contributions for t h e whole insured p o p u l a t i o n , a task which obviously
raises formidable administrative p r o b l e m s , but, so far as c a n be foreseen,
n o n e that c a n n o t b e overcome. T h e r e q u i r e m e n t of a y e a r l y average of
50 contributions seems to the G o v e r n m e n t to give e n o u g h m a r g i n , especially
in view of the fact t h a t a contribution at Class I, I I or I V rate (all of which
include a pension contribution) is p a y a b l e for every week in the y e a r except
in so far a s excusai is granted, a n d , strictly speaking, t h e r e should b e no
m a r g i n at all.
As the y e a r l y average will normally be based on the n u m b e r of contributions
p a i d or excused from age 16 to 65 (60 for w o m e n ) , divided b y the n u m b e r
of contribution y e a r s in t h a t period, the divisor (in this group) will b e 4 9 for
a m a n a n d 44 for a w o m a n .
99. Reduction
of Pension:
deficient
contribution
record.—As
pensions
insurance e x t e n d s to the whole b o d y of insured persons irrespective of class,
an insured person on attaining pension age should as a rule h a v e a complete
contribution record for the purposes of (ii) of the preceding p a r a g r a p h . In
a minority of cases, however, the record will be deficient, e.g. a m a n in
Class I I or^ Class I V m a y for some p a r t of his w o r k i n g life h a v e obtained
exemption from liability to contribute because of low income or a m a n m a y
come from a b r o a d a n d begin to contribute at an age over 16. W h e r e the
average yearly n u m b e r of contributions t h r o u g h o u t a. c o n t r i b u t o r s working
life is less t h a n 50, the r a t e of pension will be reduced. T h e following table
illustrates the a r r a n g e m e n t s provisionally suggested:
Rate
Average annual number
e rcuse i
- *** "
COntri
h
of
n
S i
e r c u s e c L
50 or more
45 and less than 50
40 .. . ,,
45
...
of pension
payable
' ^ d.
­
. d.
/ s.
£
1 15. o
1 n 6
1 8 0
s
...
...
...
1 0 0
iS o
16 o
Group B
i o o . T h o s e in this g r o u p will generally be in receipt of, or entitled to claim,
an old age pension of i o s . a week; b u t a few will not h a v e fulfilled the
conditions. E x i s t i n g old a g e pensioners w h o h a v e retired will h a v e their
pensions of i o s . c o n v e r t e d into retirement pensions at the full basic r a t e s (see
o a r a g r a p h 86); if later they d o any w o r k , their earnings will not reduce their
ension below i o s . a week. If a n old age pensioner has not y e t retired, he
will continue fo d r a w his i o s . a week until he decides to retire, w h e n h e
will get a retirement pension a t the basic r a t e .
Group C
i o i . T h o s e in this g r o u p will not be a b l e to claim a n old age pension of
i o s . a week on reaching pensionable age, b u t having reached t h a t age they
will b e eligible for retirement pensions when they decide to retire from w o r k .
The rates of pension a n d the retirement conditions, including p o s t p o n e m e n t
of retirement, will be t h e s a m e for t h e m as for g r o u p A . T h e c o n t r i b u t i o n
conditions ( p a r a g r a p h 98) will, however, be modified a s follows: —
(i) T h e y m u s t h a v e been insured at least 5 y e a r s .
(ii) T h e y m u s t h a v e paid 104, not 156, actual c o n t r i b u t i o n s .
conditions a p p l y in the existing scheme.)
(These two
(iii) T h e y must h a v e a yearly a v e r a g e of at least 50 c o n t r i b u t i o n s p a i d or
excused. I t will, however, be impossible to a p p l y this condition o v e r t h e
whole w o r k i n g life, as t h e complete c o n t r i b u t i o n record m a y not b e available
and i n s u r a n c e did n o t necessarily r u n from the 16th b i r t h d a y . T h e test
under the p e r m a n e n t scheme will, therefore, be modified for this g r o u p b y
m a k i n g it a p p l y retrospectively to a p e r i o d n o t exceeding 10 y e a r s before
the s t a r t of the new scheme, a n d giving a n a p p r o p r i a t e credit for i n s u r a n c e
a n d c o n t r i b u t i o n s in t h a t period. T h i s credit will e n s u r e that t h e position
of p e r s o n s w h o h a v e a good record of c o n t r i b u t i o n s u p to the s t a r t of t h e
new scheme will be fully safeguarded.
If the a v e r a g e on t h i s modified
basis falls below 50 the r a t e of p e n s i o n will b e r e d u c e d a s s h o w n in
p a r a g r a p h 99.
Group D
102. T h o s e in this g r o u p will b e r e q u i r e d t o c o n t r i b u t e for 10 y e a r s before
becoming eligible for retirement pensions. Otherwise, all t h e conditions w h i c h
apply to g r o u p A will a p p l y to this g r o u p e x c e p t t h a t t h e a v e r a g e n u m b e r of
contributions p a i d or excused will b e calculated, n o t over t h e whole w o r k i n g
life, b u t over t h e period from the d a t e of the c o m m e n c e m e n t of the n e w scheme
to the d a t e w h e n t h e c o n t r i b u t o r reaches pensionable a g e or c o m p l e t e s 10
years i n s u r a n c e , whichever is later.
103. P e r s o n s in this g r o u p who a r e within 10 y e a r s of p e n s i o n a b l e a g e w h e n
the scheme c o m m e n c e s will o b v i o u s l y b e in a special position, since
they will n o t b e able t o fulfil the n e c e s s a r y conditions until some time after
reaching p e n s i o n a b l e a g e . F o r those w h o r e m a i n i n e m p l o y m e n t until the
10 years period h a s been completed, t h e c o n t r i b u t i o n s p a i d in respect of t h a t
e m p l o y m e n t -will c o u n t t o w a r d s satisfying the c o n t r i b u t i o n conditions for
pension. Those w h o retire before the end of the 10 y e a r s will b e given an
option: t h e y m a y either continue to p a y c o n t r i b u t i o n s a t t h e Class I V r a t e ,
after r e a c h i n g pensionable age, in order to q u a l i t y for retirement p e n s i o n ; 01
they m a y claim a refund with interest oi the pension element of their s h a r e oi
contributions which t h e y h a v e p a i d , a n d forgo a n y right t o p e n s i o n .
Non-Contributory Pensions
104. N o n c o n t r i b u t o r y pensions of 10s. a week a r e a t present p a y a b l e to
persons of 70 whose yearly m e a n s (after certain deductions) do not exceed
£26 5s. od. If tire y e a r l y m e a n s exceed this figure, the pension is r e d u c e d
o n a sliding scale. I n the c h a n g e d conditions created b y the new scheme there
is n o case for retaining these n o n - c o n t r i b u t o r y pensions for persons u n d e r the
age of 70 at its inception. Existing pensioners will receive the new rate o '
pension, subject t o an a p p r o p r i a t e l y adjusted m e a n s scale. Those aged 70
a n d over w h e n t h e scheme takes effect, who are n o t pensioners at that d a t e
(e.g. owing to excess of means), will remain eligible for, and will be entitled to
receive, a n y pension for which they m a y from time to time be qualified
(e.g. t h r o u g h reduction of m e a n s ) .
Sickness a n d U n e m p l o y m e n t Benefit after Pensionable Age
105. W h e r e a person in Class I who h a s reached pensionable age r e m a i n s at
work a n d then falls sick or becomes u n e m p l o y e d , sickness or u n e m p l o y m e n t
benefit will not be p a y a b l e at the normal rate, b u t a t a rate equivalent to the
retirement pension which would h a v e been p a y a b l e if he h a d retired when he
b e c a m e sick or u n e m p l o y e d . T h e s a m e will a p p l y to a person in Class I I
who falls sick.
X I - M A R R I E D WOMEN
The Housewife
106. T h e last census showed that seven m a r r i e d w o m e n out of eight were
not in gainful occupation. Their p r i m a r y need is, therefore, s u p p o r t w h e n
their h u s b a n d s ' earnings are interrupted b y sickness or loss of e m p l o y m e n t ;
and there are special needs in connection with m a t e r n i t y . T h e G o v e r n m e n t
p r o p o s e to cover these needs a n d to relate the benefits substantially lo the h u s ­
b a n d ' s position in insurance.
The E m p l o y e d Married Woman
107. I n a minority of cases a w o m a n re-enters or remains in e m p l o y m e n t
after h e r m a r r i a g e . H e r position is then, in m a n y respects, a special o n e .
F o r one thing, if h e r e m p l o y m e n t is interrupted she still h a s her h u s b a n d ' s
earnings to m a i n t a i n t h e h o m e . Again, experience of health a n d u n e m p l o y ­
ment insurance h a s shown t h a t there are special difficulties a t t a c h i n g to t h e
insurance of married w o m e n . I t is h a r d to b e sure w h e t h e r she is really in die
field of e m p l o y m e n t , a n d experience of this difficulty led to the i n t r o d u c ­
tion of the Anomalies Regulations as a safeguard in respect of u n e m p l o y ­
ment benefit. E x p e r i e n c e h a s also shown that there is in a n y event a higher
incidence of sickness a m o n g married women, a n d this, t a k e n in conjunction
with the further fact t h a t t h e y h a v e not the same inducement as single w o m e n
to get b a c k to work after a period of sickness, m a d e it necessary to i n t r o d u c e
a lower rate of sickness benefit for married w o m e n . F o r these reasons a
possible course would be to exclude married women altogether from insur­
ance. T h e G o v e r n m e n t do not propose to t a k e this course; in some p a r t s of
the c o u n t r y a considerable proportion of married w o m e n engage in emplo3'­
m e n t a n d h a v e been in the habit of p a y i n g contributions and receiving benefits
in t h e i r own right.
Insurance or Exemption
108. On m a r r i a g e a w o m a n insured
to choose w h e t h e r to b e insured in h e r
priate from time to time (i.e. Class I,
on h e r h u s b a n d ' s insurance. In order,
before her marriage will be required
own right in w h a t e v e r Class is a p p r o ­
II or IV), or to be exempt and rely
however, to confine insurance against
n
sickness a n d u n e m p l o y m e n t to those whose e m p l o y m e n t is more t h a n casual,
married women earning- 20s. a week or less will be compulsoriiy e x e m p t i r o m
insurance in Class 1 or Class I I .
109. I n view of the special position ol married women a s stated in p a r a ­
g r a p h 107, t h e gainfully occupied married w o m a n who r e m a i n s m i n s u r a n c e
will receive sickness benefit, a n d (Class I only) u n e m p l o y m e n t benefit, a t a
rate lower t h a n t h e s t a n d a r d r a t e . A n d in this p a r t i c u l a r case there m u s t
be a d e p a r t u r e i r o m the p r i n c i p l e otherwise a d o p t e d , in t h a t sickness benefit
for insured m a r r i e d w o m e n will b e a t a lower r a t e d i a n u n e m p l o y m e n t benelit.
n o . I t is not, h o w e v e r , p r o p o s e d t h a t the w o m a n w h o chooses o n m a r r i a g e
to be insured in hen own right should always s t a r t a fresh i n s u r a n c e life. S u b ­
ject t o the special conditions referred to in p a r a g r a p h s 112 to 114 she will
retain h e r pre-rnarriage record.
i n . T h e reason for allowing a married w o m a n to insure in Class I V is 10
permit her to qualify for p e n s i o n in h e r own right. T h e r e w o u l d b e a strong
ease for this where, for e x a m p l e , a w o m a n m a r r i e d a m a n w h o h a d recently
come from a b r o a d a n d could n o t build u p sufficient c o n t r i b u t i o n s to enable
him to qualify for m o r e t h a n a small pension.
Special Conditions
112. T w o special c o n d i t i o n s will be imposed. F i r s t , i n order to retain
her right to p a y Class IV c o n t r i b u t i o n s a n d , if gainfully occupied, h e r quaii­
fication for sickness or u n e m p l o y m e n t benefit, a m a r r i e d w o m a n m u s t h a v e
at least 4 5 c o n t r i b u t i o n s p a i d or excused in each c o n t r i b u t i o n y e a r . Second,
a m a r r i e d w o m a n will not be e n t i d e d to a pension b y virtue of her o w n insur­
ance unless t h e total n u m b e r of contributions p a i d or excused in a n y Class
since her marriage represents n o t less t h a n one h a h of t h e n u m b e r of weeks
since m a r r i a g e .
113. If a m a r r i e d w o m a n w h o h a s d r o p p e d out of insurance re-enters gainful
occupation a n d chooses to b e i n s u r e d again, she c a n requalify for sickness and
u n e m p l o y m e n t benefit b y 52 weeks of i n s u r a n c e a n d the p a y m e n t of 26
contributions. T h i s will also restore to her the right t o continue i n s u r a n c e
for retirement pension b y p a y m e n t of Class I V c o n t r i b u t i o n s if she ceases
gainful occupation.
114. A w o m a n w h o is a l r e a d y m a r r i e d a n d insured on the d a y t h e scheme
comes into o p e r a t i o n will b e able to choose i n s u r a n c e o r e x e m p t i o n , b u t a
married w o m a n w h o w a s n o t insured i m m e d i a t e l y before the s t a r t of the
scheme will b e able t o enter insurance only if she takes u p gainful o c c u p a t i o n .
If she ceases gainful o c c u p a t i o n after a substantial period of i n s u r a n c e she
will b e allowed to i n s u r e i n Class I V to p r e s e r v e h e r pension rights.
-
115. These conditions m a y seem elaborate, a n d in some respects restrictive,
but if a m a r r i e d w o m a n is to b e allowed to choose the course which suits her
better it is necessary in the interests of insured persons generally to ensure
that she is not given a second c h a n c e to enter insurance e x c e p t on strict con­
ditions. T h e conditions h e r e set out are n o m o r e than necessary to secure
this end a n d are not in themselves u n r e a s o n a b l e .
Benefits
116. T h e benefits which will b e available to, o r in respect of, married
women are as follows : —
(i) Sickness
and Unemployment.—For
those w h o a r e n o t insured in
their own right t h e r e will be n o benefit w h e n the w o m a n herself is
sick or u n e m p l o y e d , b u t w h e n h e r h u s b a n d is o n benefit it will b e p a i d a t
the r a t e of 40s. i n s t e a d of 24s., subject t o his c o n t r i b u t i o n record a n d to
t h e further conditions t h a t the wife is living with h i m or m a i n t a i n e d b y
h i m a n d that she is not earning more t h a n 20s. a week.
(ii) F o r those w h o a r e insured in dieir own right a n d themselves qualify
for sickness or u n e m p l o y m e n t benefit, benefits will be p a y a b l e subject to their
o w n contribution records, a t the following r a t e s : sickness a n d invalidity,
16s.; u n e m p l o y m e n t , 20s.
(iii) Maternity
Grant.—There
will be a m a t e r n i t y grant of £4 for al
w o m e n , whether gainfully occupied or n o t .
(iv) Maternity Benefit.—There
will b e a m a t e r n i t y benefit at the r a t e of
36s. a week for 13 weeks (covering a period before a n d after confinement)
p a y a b l e to all gainfully occupied married women, whether they are insured
in their own right or h a v e chosen to be e x e m p t .
(v) Attendant's
Allowance.—For
those who are not eligible for m a t e r n i t y
benefit, there will be an a t t e n d a n t s allowance at the rate of £1 a week for
four weeks. I t s object is to assist in p r o v i d i n g domestic h e l p immediately
after childbirth.
(vi) Benefit for wife not maintained,
by husband.—When
a w o m a n is
living a p a r t from her h u s b a n d a n d can obtain n o financial assistance from
h i m , benefits will be p a y a b l e to her, in respect of h e r own contributions, as
if she were single.
(vii) Retirement
and Widowhood.—The
benefits p r o v i d e d for married
w o m e n are described in the sections of the P a p e r dealing with these subjects.
Qualifying Conditions
117. (i) Maternity
Grant will be available to all married w o m e n a n d the
qualifying conditions will b e that the h u s b a n d or the wife should—
(a) a t some t i m e h a v e paid 26 actual contributions, a n d
(6) h a v e 26 or more contributions or excusals in t h e relevant contribution
year.
(ii) Maternity Benefit will be available to all married women who are gain­
fully occupied, w h e t h e r or not t h e y are exempt from insurance. I t will be
conditional u p o n t h e w o m a n giving up for the time h e r gainful occupation.
T h e o t h e r qualifying conditions will be as follows: —
Married w o m e n w h o are in insurance must h a v e h a d 26 weeks of gainful
occupation, for which contributions were paid, in the twelve m o n t h s before
t h e beginning of benefit, and a substantial part of the b a l a n c e of t h a t twelve
m o n t h s must be covered by evidence of incapacity or inability to get
e m p l o y m e n t . W o m e n in Class I who are exempt from p a y i n g contributions
will qualify b y c o n t r i b u t i o n s p a i d by t h e employer. An e x e m p t person in
Class I I has n o e m p l o y e r a n d in her case the first condition will be satisfied
iby evidence of ga'nful occupation.
(iii) Attendant's
allowance;
those for m a t e r n i t y g r a n t .
the qualifying conditions will be t h e s a m e as
Other Benefits Considered
118. T h e G o v e r n m e n t h a v e
p a y a b l e to women on marriage;
s e p a r a t i o n benefit (akin to the
w h e r e , t h r o u g h n o fault of h e r
is entitled from h e r h u s b a n d .
considered whether t h e r e should be a grant
a n d also whether there should be a t e m p o r a r y
benefit p r o v i d e d on t h e d e a t h of a h u s b a n d )
o w n , a wife loses m a i n t e n a n c e to which she
O n the first, it h a s been calculated, to give a n e x a m p l e , t h a t a g r a n t at the
r a t e of £1 for e v e r y 4 0 a c t u a l contributions before m a r r i a g e , with a m a x i m u m
9/1
of £10, would require a n extra 3d. a week in the c o n t r i b u t i o n s of all w o m e n
in Classes I a n d I I . T h e G o v e r n m e n t d o not consider the benefit a t t r a c t i v e
enough to justify this e x t r a c h a r g e .
O n the second, the G o v e r n m e n t feel t h a t t h e question whether loss of
m a i n t e n a n c e is the fault o£ the wife is not one which should be d e t e r m i n e d
b y a Department responsible for a d m i n i s t e r i n g t h e social insurance scheme.
The wife must seek o t h e r remedies o p e n to her to secure maintenance.
Anomalies Regulations
119. Reference has been m a d e in p a r a g r a p h 107 to the Anomalies
Regulations. T h e mischief at which they were aimed is, in the G o v e r n m e n t s
view, a real o n e ; b u t Ihey d o not feel t h a t special R e g u l a t i o n s of this k i n d ,
which deal with a n abuse prevalent in a p a r t i c u l a r class yet n o t peculiar t o it,
should be a feature oi a universal system oi social i n s u r a n c e . I t is therefore
proposed to abolish the Married W o m e n A n o m a l i e s R e g u l a t i o n s a n d instead
to h a v e general regulations intended to exclude from u n e m p l o y m e n t benefit
those w h o are n o t really available for e m p l o y m e n t , single people as well as
married, a n d m e n as well as w o m e n .
T h e Unmarried Mother
120. Maternity grant, m a t e r n i t y benefit a n d a t t e n d a n t s allowance will b e
available to single w o m e n on the same t e r m s a s for married, except that title
will rest on the w o m a i t s own i n s u r a n c e .
XII.-WIDOWS
Benefits 121. T h e provision for w i d o w h o o d m a d e u n d e r the existing s c h e m e ( a p a r t
from allowances for d e p e n d e n t children) is a pension of i o s . a week. This
pension is p a y a o l e t h r o u g h o u t widowhood, h o w e v e r y o u n g a w o m a n m a y
be when she is left a widow a n d w h e t h e r or not she h a s d e p e n d e n t children.
T h e G o v e r n m e n t feel t h a t this provision does n o t properly meet t h e v a r y i n g
n e e d s of widowhood at different ages a n d in differing c i r c u m s t a n c e s a n d
t h a t it m u s t be revised so as t o : —
(i) provide t e m p o r a r y weekly p a y m e n t s a t a relatively high r a t e to h e l p
a widow in the period of economic r e a d j u s t m e n t which will n o r m a l l y follow
her h u s b a n d ' s d e a t h ( b u t see p a r a g r a p h 122 (i));
(ii) m a k e special provision for the widow if she h a s d e p e n d e n t c h i l d r e n ;
(iii) give a pension equal to retirement pension to a w i d o w who h a s
b e e n m a r r i e d or h a d the c a r e of h e r children for a long t i m e a n d w h o a t
t h e time of h e r h u s b a n d ' s d e a t h , or when her youngest child ceases to b e
d e p e n d e n t o n her, h a s reached a n age a t which she m a y find it h a r d
to t a k e u p p a i d work again.
At t h e same t i m e , the G o v e r n m e n t feel t h a t , a l t h o u g h accruing rights u n d e r
existing schemes need n o t be p r e s e r v e d in all cases, it would n o t b e fair to
disregard t h e m in t h e case of w o m e n m a r r i e d , a t t h e s t a r t of t h e n e w scheme,
to m e n insured for w i d o w s ' pensions u n d e r t h e existing scheme. The main
i n d u c e m e n t to the m a n y t h o u s a n d s of v o l u n t a r y c o n t r i b u t o r s w h o entered the
scheme w a s the provision which it held out for w i d o w h o o d (see p a r a g r a p h 126).
122. T h e G o v e r n m e n t accordingly p r o p o s e t o i n t r o d u c e t h e following
benefits: —
(i) Widow's Benefit of 36s. a w e e k p a y a b l e for t h e first thirteen weeks of
widowhood to w o m e n widowed before age 60, a n d to w o m e n widowed
after that age wnose husbands had not qualified for retirement pension..
If the widow of a m a n in Class I o r Class I I h a s no child within the
qualifying age a n d is unfit for w o r k w h e n her right to w i d o w ' s benefit ceases,
she will while u n d e r pensionable age be entitled to sickness benefit of 24s.
a week (or, after three y e a r s of incapacity, invalidity benefit of 20s.) so long
as her illness lasts.
(ii) Guardian's Benefit of 24s. a week, p a y a b l e so long as the widow has
in h e r family at least one child within the qualifying a g e for family
allowances.
(iii) Widow's
Pension of 20s. a week, p a y a b l e to a widow w h o is aged
50 or over when widowed or when she ceases to be entitled to g u a r d i a n ' s
benefit, provided in cither case that she was married a t least 10 y e a r s before.
T h i s pension will cease when replaced b y a retirement pension.
T h e s e benefits will terminate on r e m a r r i a g e .
C o n t r i b u t i o n conditions.
123. T h e contribution conditions to b e satisfied b y the h u s b a n d for p a y m e n t
of w i d o w ' s benefit, g u a r d i a n ' s benefit a n d w i d o w ' s pension will be on the
s a m e lines as for retirement pension (see p a r a g r a p h 98).
Conditions a s to earnings a n d duplication of benefits.
124. Guardian'.; benefit a n d w i d o w ' s pension will be reduced where earnings
exceed 20s. weekly; a sliding scale o n the same lines as for retirement pension
(see p a r a g r a p h 94) will be applied.
Sickness or u n e m p l o y m e n t benefit, or training allowance (which will be
available to widows in a p p r o p r i a t e cases) will not be paid together with
w i d o w ' s benefit, g u a r d i a n ' s benefit or w i d o w ' s pension.
Transitional Classes
125. W i d o w pensioners whose h u s b a n d s died before the new scheme
starts:-—
(i) If the widow has n o child of the qualifying age for family allowance,
she will k e e p her pension of 10s. a week. If, how ever, she h a s already
reached the age of 60 at t h e start of the new scheme, she will, subject to
retirement, h a v e h e r 10s. pension replaced b y a retirement pension of 20s.
a week.
r
(ii) If the widow has a child of the qualifying age, she will get guardian'.?
benefit. W h e n g u a r d i a n ' s benefit ceases she will h a v e her pension of 10s.
a week restored to her, unless, being t h e n over 50, she is entitled t o widow's
pension of 20s. a week.
126. W o m e n a l r e a d y m a r r i e d at start of uew scheme to m e n insured u n d e r
existing scheme. W o m e n in this c a t e g o r y who become widows will be eligible
for t h e benefits of the new scheme, i.e. w i d o w ' s benefit, g u a r d i a n ' s benefit,
a n d the w i d o w ' s pension of 20s. a week, if t h e y h a v e the qualifications for
those benefits set out in p a r a g r a p h 122 a n d if the contribution conditions set
out below are satisfied. If, however, t h e y h a v e not those qualifications b u t
the c o n t r i b u t i o n conditions are satisfied, t h e y will b e eligible for a pension of
10s. a week, i.e. the equivalent of the w i d o w ' s pension to which t h e y would
h a v e been entitled u n d e r the existing s c h e m e .
T h e contribution conditions to be satisfied b y t h e h u s b a n d in a case of this
kind will b e : —
(i) Initial qualifying
contributions.
A m i n i m u m of 104 actual contribu­
tions paid since t h e h u s b a n d last b e c a m e insured.
(ii) Yearly average of contributions
paid or excused.
A y e a r l y average
of 50 contributions p a i d or excused will b e required, b u t credit will be
given for insurance prior to the start of t h e new scheme, o n the same
lines as for retirement pension (see p a r a g r a p h 101 (iii)). If the average
is below 50, the rate of pension will be r e d u c e d .
A pension of 10s. a week p a i d to a widow u n d e r the a r r a n g e m e n t s
described in this or the preceding p a r a g r a p h will not be reducible on account
of earnings; a n d if she is d r a w i n g g u a r d i a n ' s benefit or w i d o w ' s pension of
20s. a week in place of the 10s. pension, t h a t benefit or pension will not
be reducible below 10s. a week on account of e a r n i n g s .
127. W o m e n m a r r i e d after new scheme s t a r t s to m e n insured u n d e r existing
scheme. T h e contribution conditions will b e : —
(i) Initial qualifying
contributions.
A m i n i m u m of 156 actual contribu­
tions p a i d since the h u s b a n d last became insured;
(ii) Yearly average of contributions
paid or excused.
A y e a r l y average
of 50 contributions p a i d or excused will b e r e q u i r e d , credit being given for
past i n s u r a n c e on the lines referred to in the last preceding p a r a g r a p h .
If these conditions are satisfied, w i d o w ' s benefit, g u a r d i a n ' s benefit, or
\vidow's pension of 20s. a week will be p a y a b l e to a widow otherwise
qualified.
128. W i d o w s of m e n w h o become insured a t the start of the new scheme.
The c o n t r i b u t i o n conditions will be the same as in the preceding p a r a g r a p h
except that the average will b e calculated over the period from t h e start cf
the new scheme to the d a t e of d e a t h .
If these conditions are fulfilled, widow's benefit, g u a r d i a n ' s benefit or
widow's pension of 20s. a week will be p a y a b l e to a widow otherwise
qualified.
Position of W i d o w s in Relation to R e t i r e m e n t Pension
129. If a widow on reaching the age of 60 was entitled to either widow's
benefit, g u a r d i a n ' s benefit or a wido\v's pension (other t h a n a 10s. pension
p a y a b l e u n d e r the existing scheme or the transitional a r r a n g e m e n t s ) she will,
when her title to t h a t benefit or pension ceases (otherwise t h a n b y remarriage),
become entitled to a retirement pension based on her h u s b a n d ' s insurance.
130. A w o m a n over 60 at the d e a t h of h e r h u s b a n d will then or on cessa­
tion (otherwise t h a n b y remarriage) of her right to w i d c w ' s or g u a r d i a n ' s
benefit be entitled to a retirement pension based on h e r h u s b a n d ' s insurance.
131. T h e r e r e m a i n s the case of t h e w o m a n widowed u n d e r 60 who on
reaching t h a t age was not entitled to a n y of the widowhood benefits. F o r
contributions relating to retirement pension, she m a y rely upon her own
record t h r o u g h o u t , or on her h u s b a n d ' s record u p to the d a t e of his d e a t h ,
and h e r o w n record thereafter, or on her own p r e - m a m ? g e record, her
h u s b a n d ' s record d u r i n g m a r r i a g e , a n d her own record thereafter. (Where
the widow h a s b e e n married more t h a n once, t h e relevant record will b e t h a t
of her last h u s b a n d . ) These a r r a n g e m e n t s will also a p p l y to a w o m a n who
between the start of t h e new scheme and h e r 60th b i r t h d a y qualifies for
a 10s. pension u n d e r the transitional a r r a n g e m e n t s , b u t h e r retirement pension
will not b e reducible, on account either of e a r n i n g s or deficient contributions,
below 1 os.
A widow w h o a t the start of t h e new scheme is in receipt of a 10s. pension
under the existing scheme m u s t rely on her o w n contribution record through­
out, b u t if she is then between 50 a n d 60, a n d will n o t h a v e completed
10 years insurance when she reaches 60, her title to retirement pension will
be based on her record from e n t r y into i n s u r a n c e u p to h e r 6otlt b i r t h d a y .
H e r pension will not in a n y event be reduced below 10s,
XIII—DEATH GRANT Rates 132. T h e G o v e r n m e n t propose to i n t r o d u c e a d e a t h g r a n t as follows: —
£
F o r those dying below 3 y e a r s of age
6
F o r those d y i n g between 3 a n d 6 ...
...
10
. F o r those d y i n g between 6 a n d 18 ...
...
...
15
F o r those d y i n g over 18
...
...
...
... 20
133. As a transitional a r r a n g e m e n t persons between the ages of 55 a n d 65
at the beginning of the scheme will be eligible for a g r a n t of only £10.
The
age limit of 60 proposed in the R e p o r t would m e a n t h a t a n u m b e r of m e n over
t h a t age would c o n t r i b u t e without a n y possibility of grant being p a i d .
134. T h e G o v e r n m e n t further propose t h a t the g r a n t should not be available
for children d y i n g below the age of 10 unless t h e y were b o r n after the begin­
ning of the s c h e m e . Otherwise the total a m o u n t insured on the d e a t h of a
child m i g h t b e a b o v e t h e limit fixed b y law.
135. C o n t r i b u t i o n conditions will b e such a s to m a k e it easy for persons
to keep in benefit; they will be limited to those needed t o establish t h a t the
deceased was in c u r r e n t insurance or w a s t h e wife or child of a n insured
p e r s o n , or w a s a pensioner.
Industrial Assurance
136. T h e introduction of a d e a t h g r a n t as p a r t of t h e Social I n s u r a n c e
s c h e m e m a k e s it desirable to review such questions as i n s u r a n c e for indirect
expenses connected with funerals a n d these are being reserved for s e p a r a t e
examination.
X I V - B E N E F I T W H I L E IN H O S P I T A L
137. U n d e r the new National H e a l t h Service, t r e a t m e n t in hospital will be
available without c h a r g e to a n y m e m b e r of the c o m m u n i t y . This m e a n s that
o r d i n a r y m a i n t e n a n c e — f o o d , fuel a n d light, b e d d i n g a n d t h e v a r i o u s necessary
persoi-al services which can b e distinguished from strict medical t r e a t m e n t —
will aiso be p r o v i d e d free of cost. Social insurance benefits, however, are also
designed to m a k e substantial provision for o r d i n a r y m a i n t e n a n c e . I t therefore
seems reasonable t h a t benefit should b e adjusted when the recipient is in
hospital.
138. T h e G o v e r n m e n t propose t h a t the rate of benefit d u r i n g m a i n t e n a n c e in
hospital should be 10s. a week less t h a n the s t a n d a r d r a t e ( o r d i n a r y sick­
ness benefit, instead of b e i n g at the rate of 40s. for a m a r r i e d couple
or 24s. for a single person, would b e c o m e 30s. for a couple or 14s. for
a single p e r s o n ) . E x c e p t in the case of joint retirement p e n s i o n , t h e r e d u c e d
r a t e will be p a i d only when the person entitled lo benefit is himself (or herself)
in hospital, a n d not w h e n his (or her) d e p e n d a n t is in hospital. If, while
a m a n is on sickness or u n e m p l o y m e n t benefit, his wife goes into hospital, the
s t a n d a r d r a t e of benefit will be p a i d .
139. T h i s special r a t e of benefit will t a k e effect after the 28th d a y in hospital.
P a y m e n t of benefit at the s t a n d a r d r a t e for the first 28 d a y s is p r o p o s e d in
view of the additional expense usually incurred o n going into hospital, a n d
of the need in m a n y cases for m a k i n g t e m p o r a r y domestic a r r a n g e m e n t s . As
sickness benefit will not be p a i d to a person in Class I I until t h e illness has
lasted for four weeks, t h e 28 d a y s will, in his case, be reckoned from t h e end
of the fourth week of illness or from the d a t e of going into hospital, whichever
is the later.
In calculating the 28 d a y s , periods in hospital s e p a r a t e d b y a short interval
(still to b e fixed) will b e treated as c o n t i n u o u s .
140. T h e special rate will be a p p l i e d to the following benefits: sickness a n d
invalidity benefit, m a t e r n i t y benefit, w i d o w ' s benefit, g u a r d i a n ' s benefit,
w i d o w ' s pension and retirement p e n s i o n .
1 4 1 . Since family allowances are intended to be a general contribution to the
needs of families with children, no reduction will be m a d e in family allow­
ances while a child is in hospital; n o r will a 5s. family allowance b e paid to
the authorities of a n y hospital (or other institution) in which a child is being
maintained.
142. T h e r e . a r e special considerations affecting old persons w h o a r e being
m a i n t a i n e d in institutions or h o m e s for reasons other t h a n sickness.
The
a r r a n g e m e n t s for them a r e u n d e r consideration.
X V - T R E A T M E N T OF T H E B L I N D
143. U n d e r the proposed insurance scheme most blind p e r s o n s will h a v e
been insured before the onset of blindness a n d they will therefore on the usual
conditions b e c o m e entitled to sickness or invalidity benefit if their blindness
prevents t h e m from w o r k i n g , a n d to retirement pensions a t the a p p r o p r i a t e
age.
144. T h e Disabled P e r s o n s ( E m p l o y m e n t ) Act, 1944, which will be b r o u g h t
into operation at the a p p r o p r i a t e stage in the transition from w a r to peace
conditions, is designed to facilitate the e m p l o y m e n t of disabled persons gener­
ally (including the blind), a n d will m e a n t h a t fewer blind people will h a v e to
rely on insurance benefit or assistance. E m p l o y e r s will be required to e m p l o y
a q u o t a of disabled p e r s o n s u n d e r o r d i n a r y conditions, some classes of c m p l o y ­
ment will b e reserved for the disabled, a n d workshops will be established u n d e r
the control of the Ministry of L a b o u r a n d N a t i o n a l Service to p r o v i d e e m p l o y ­
ment u n d e r sheltered conditions for those w h o are so severely disabled that
they could n o t otherwise get e m p l o y m e n t . T h e Ministry of L a b o u r can m a k e
p a y m e n t s t o a n y v o l u n t a r y association or local a u t h o r i t y or a n y specially
established c o m p a n y for expenses incurred b y them in p r o v i d i n g , u n d e r
a r r a n g e m e n t s m a d e with the Minister, special facilities for the e m p l o y m e n t of
disabled p e r s o n s .
145. I n t h e s e n e w circumstances the G o v e r n m e n t p r o p o s e t h a t the respon­
sibility for cash p a y m e n t s to the blind, other t h a n i n s u r a n c e benefits a n d
r e m u n e r a t i o n for e m p l o y m e n t , should rest on the central D e p a r t m e n t respon­
sible for administering N a t i o n a l Assistance; t h a t the general responsibility for
other special welfare services for the blind should r e m a i n w i t h the local
authorities; a n d t h a t the system of p a y i n g n o n - c o n t r i b u t o r y pensions to the
blind should b e b r o u g h t to a n e n d . P e r s o n s who h a v e blind pensions when
the n e w scheme starts will k e e p these; a n d the r a t e of pension m a y b e increased
for t h e m as for other n o n - c o n t r i b u t o r y pensioners. (See p a r a g r a p h 104.)
146. T h e s e a r r a n g e m e n t s are in line with the proposals in the R e p o r t , which
recommended in addition a special system of partial i n c a p a c i t y allowances.
Apart from t h e difficulty of assessing the degree of i n c a p a c i t y of people only
partially disabled b y blindness, the G o v e r n m e n t see n o need to institute a
special s y s t e m of allowances for p a r t i a l i n c a p a c i t y . A blind person w h o is
wholly i n c a p a b l e of work will n o r m a l l y b e entitled to sickness or invalidity
benefit; if h e is only partially incapable he will get sheltered e m p l o y m e n t ; and
if his benefit in the one case, o r his e a r n i n g s in the other, are not sufficient for
his n e e d s , h e will be able to get additional help in t h e form of N a t i o n a l
Assistance.
X V I — D U P L I C A T I O N OF B E N E F I T S
With other Social Insurance Benefits
147. Not m o r e t h a n one social insurance benefit or pension will be p a y a b l e
to an individual at a n y one time. W h e r e there is title, to more t h a n o n e , the
larger will be paid, e.g. m a t e r n i t y benefit instead of sickness benefit.
On
the other h a n d , a g r a n t or allowance will b e p a y a b l e in addition to benefit,
e.g.- m a t e r n i t y g r a n t as well as m a t e r n i t y benefit.
With War and Industrial Pensions
148. It is difficult to d e t e r m i n e in what circumstances a n d within what
limits those receiving w a r or industrial pensions or allowances should be
allowed to d r a w social insurance benefits for which t h e y m a y qualify.
149. T h e G o v e r n m e n t consider that some a d j u s t m e n t will be necessary where
the same person is eligible both for a w a r or industrial pension or allow­
ance and for a n insurance benefit, b u t at this stage it is not practicable to
p r o p o u n d a solution for all the different t y p e s of case that m a y arise.
150. T h e case for a d j u s t m e n t is strongest in relation to d e p e n d a n t s ' benefits.
A pension given to a w a r or industrial pensioner m a y be given for a variety
of reasons, including deprivation of personal c a p a c i t y for e n j o y m e n t of a full
life; the position of his d e p e n d a n t s who h a v e sustained no i m p a i r m e n t is
different a n d , if he is d r a w i n g a larger pension because of tiieir existence, other
benefits to which he m a y also be entitled need not also include a s u p p l e m e n t
in respect of t h e m . T o some extent, the same a r g u m e n t holds a s regards
a w o m a n w h o , although widowed by w a r or industrial accident, is not
herself disabled.
F u r t h e r , it does not follow t h a t a n y solution which is
accepted for the pensioner himself in regard to short-term benefits should
necessarily be applied to the long-term benefits.
1 5 1 . Adjustment m a y also be required in those m o r e specialised cases when
illness, for instance, occurring in later life, c a n clearly b e a t t r i b u t e d in whole
or in p a r t to a n earlier w a r or industrial injury for which a pension is being
paid.
*
XVII—ADMINISTRATION
Minister of Social I n s u r a n c e
152. T h e G o v e r n m e n t h a v e a n n o u n c e d their intention of consolidating the
administration of a c o m p r e h e n s i v e insurance scheme in one o r g a n i s a t i o n . T h e y
reserved the question w h e t h e r the organisation should be a n e w Ministry
or a n a d m i n i s t r a t i v e B o a r d .
B u t t h e y are satisfied t h a t the most effec­
tive a n d the quickest w a y to b r i n g the scheme as a whole into final legislative
form, a n d to secure its s m o o t h r u n n i n g d u r i n g t h e difficult transitional period,
will b e to a p p o i n t a t this stage a Minister of Social I n s u r a n c e . T h i s Minister
wiii be responsible for the legislative a n d o t h e r p r e l i m i n a r y w o r k in l a u n c h i n g
the n e w insurance s c h e m e ; a n d , as it is essential t h a t h e should in this task
h a v e freely a t his disposal the resources a n d assistance of staffs experienced
in the organisation a n d administration of n a t i o n a l insurance, the G o v e r n m e n t
propose to transfer to the new Minister responsibility for the existing schemes
of social insurance. This transfer will not d i s t u r b the existing a r r a n g e m e n t s
for p a y m e n t of benefit u n d e r these schemes, which will c o n t i n u e until the
new s c h e m e is operating.
153. T h e organisation outlined a b o v e is framed to meet the position at
the beginning of t h e new scheme. W h e n the scheme is in o p e r a t i o n , a n d
a d m i n i s t r a t i v e policy clearly defined a n d established, the position will b e
reviewed. At t h a t stage it m a y well b e found t h a t some other form of a d m i n i s ­
trative organisation is more suitable or t h a t some r e a r r a n g e m e n t of central
m a c h i n e r y m a y b e desirable.
154. Responsibility for t h e b r i n g i n g into o p e r a t i o n a n d a d m i n i s t r a t i o n of
the F a m i l y Allowances s c h e m e will also be assigned to t h e Minister of Social
Insurance.
( 155- T h e present w o r k of t h e Assistance B o a r d is closely associated with the
pensions a n d u n e m p l o y m e n t insurance schemes, responsibility for which will
be transferred to the n e w Minister, a n d the G o v e r n m e n t propose t h a t Minis­
terial responsibility for the B o a r d ' s w o r k s h o u l d be placed on h i m .
156. T h e question w h e t h e r it is desirable t o establish a Social I n s u r a n c e
S t a t u t o r y C o m m i t t e e o n the lines of t h e present U n e m p l o y m e n t I n s u r a n c e
S t a t u t o r y C o m m i t t e e m u s t b e reserved for decision when the p l a n of t h e
new organisation is n e a r e r finality.
Local Offices
157. U n d e r t h e n e w s c h e m e a wide n e t w o r k of local offices will b e
established a t which t h e p u b l i c m a y lodge claims, seek information 01
guidance, a n d o b t a i n p a y m e n t of certain benefits. Sickness benefit will be
p a y a b l e , according to the c l a i m a n t s choice, either b y postal draft or in cash
a t the local office to a d e p u t y a p p o i n t e d b y h i m , b u t where in t h e c i r c u m ­
stances of his case n e i t h e r of t h e s e m e t h o d s is a p p r o p r i a t e it will be p a i d in
cash at his h o m e . F o r some benefits it will b e more convenient for p a y m e n t
to be m a d e t h r o u g h t h e a g e n c y of other D e p a r t m e n t s , e.g., t h e P o s t Office
for pensions a n d the E m p l o y m e n t E x c h a n g e s for u n e m p l o y m e n t benefit.
Employment Exchanges
158. T h e R e p o r t p r o p o s e d t h a t the t a s k of p l a c i n g people in w o r k should
either b e transferred from the Ministry of L a b o u r a n d N a t i o n a l Service t o a
Ministry of Social Security or a t a n y r a t e b e c o n d u c t e d a t t h e local Security
Offices. I n the G o v e r n m e n t s v i e w neither of these suggestions would be right.
U n e m p l o y m e n t benefit is designed m e r e l y to fill a t e m p o r a r y g a p in w a g e ­
earning e m p l o y m e n t . T h e latter should r e p r e s e n t the insured p e r s o n ' s n o r m a l
condition. T h e e m p l o y m e n t service fulfils two functions: it helps the worker
to secure suitable e m p l o y m e n t a n d it enables i n d u s t r y to obtain l a b o u r a s
quickly a s possible. T h e r e m u s t be a close c o n n e c t i o n between p a y i n g u n e m ­
ployment benefit a n d placing p e o p l e in work, b u t t o m a k e t h e organisation
of the latter d e p e n d e n t o n t h a t of the former w o u l d b e to p u t the e m p h a s i s
in the w r o n g place. T h e e m p l o y m e n t service s h o u l d r e m a i n in the E m p l o y ­
ment E x c h a n g e s a n d u n d e r the Ministry of L a b o u r .
XVIII—NATIONAL
ASSISTANCE
159. I t h a s b e e n stated t h a t w h e n t h e n e w i n s u r a n c e scheme is in operation
there will b e in reserve t h e N a t i o n a l Assistance scheme to meet t h e require­
ments of t h e specialty necessitous case. T h e G o v e r n m e n t propose t h a t t h e
scope of National Assistance ( n o w confined b r o a d l y to p e r s o n s in receipt of old
age pensions, w i d o w pensioners w i t h children a n d able-bodied persons n o r m a l l y
employed in insurable occupations) should be e x t e n d e d to include
financial
assistance to all o n proof of n e e d ; a n d t h a t t h e a d m i n i s t r a t i o n of N a t i o n a l
Assistance should b e centralised in one D e p a r t m e n t .
160. Detailed p r o p o s a l s for b r i n g i n g to a n e n d t h e p r e s e n t system of public
assistance a r e being w o r k e d o u t a n d will include a n y necessary a d j u s t m e n t s
of the existing p r o v i s i o n s relating to t h e " disregard " of certain t y p e s of
resources. It suffices h e r e to s a y t h a t t h e health functions of t h e public
assistance a u t h o r i t i e s will be merged in the new N a t i o n a l Health Service;
t h a t t h e c a r e a n d m a i n t e n a n c e of o r p h a n e d a n d deserted children will remain
within the sphere of local g o v e r n m e n t , a s will the provision of a c c o m m o d a ­
tion for such old persons as need it. O n the other h a n d , the d u t y will be
placed on t h e Assistance B o a r d of m a k i n g suitable provision for t h o s e , other
t h a n the sick, t h e y o u n g a n d t h e old, for w h o m assistance in c a s h is no'
a p p r o p r i a t e . T h e B o a r d will also be given t h e functions of the C u s t o m s a n u
Excise D e p a r t m e n t in respect of n o n - c o n t r i b u t o r y p e n s i o n s , so far a s t h e y
continue.
161. T h e G o v e r n m e n t consider that u l t i m a t e responsibility for b o t h ihsur­
a n c e a n d assistance should rest u p o n a single Minister; b u t in a c t u a l a d m i n i s ­
tration t h e y a t t a c h g r e a : i m p o r t a n c e to t h e preservation of the distinction
between i n s u r a n c e a n d assistance, a n d it is p r o p o s e d to retain in t h e final
a r r a n g e m e n t s s e p a r a t e a d m i n i s t r a t i o n for Social I n s u r a n c e a n d N a t i o n a l Assist­
a n c e . It is true t h a t insurance benefit arises a s of right a n d that assistance is
available o n l y subject to proof of need a n d e x a m i n a t i o n of m e a n s a n d that
this is an i m p o r t a n t distinction in itself, b u t t h e G o v e r n m e n t d o u b t whether,
if b o t h a r e dealt with b y the s a m e staff, t h e distinction would be sufficiently
preserved. A n y o v e r l a p p i n g of inspections o r visits o r duplication of staffs
c a n be avoided b y p r o v i d i n g for a g e n c y a r r a n g e m e n t s between D e p a r t m e n t s
a s at present, e.g., a m a n w h o n o w e x h a u s t s his right to u n e m p l o y m e n t
benefit a n d h a s t o h a v e recourse to assistance, d r a w s the actual p a y m e n t s ,
after his case h a s b e e n e x a m i n e d a n d assessed by the officers of t h e Assistance
B o a r d , in the s a m e w a y as he would h a v e d r a w n u n e m p l o y m e n t benefit.
XIX-AGENCY
A R R A N G E M E N T S FOR P A Y I N G
BENEFIT
Sickness Benefit
162. T h e G o v e r n m e n t fully recognise t h e value of the services r e n d e r e d by
A p p r o v e d Societies in t h e d e v e l o p m e n t of the N a t i o n a l H e a l t h I n s u r a n c e
scheme, a n d they h a v e given t h e most careful a n d s y m p a t h e t i c consideration
to the possibility of retaining the services of the Societies in s o m e form in
the a d m i n i s t r a t i o n of the n e w "scheme.
T h e y h a v e n o t overlooked the considerations t h a t if v o l u n t a r y a n d State
i n s u r a n c e were administered b y the s a m e b o d y it would h e l p the development
of v o l u n t a r y insurance a n d possibly secure some d i m i n u t i o n in administrative
costs.
163. O n t h e question of the c o n t i n u a n c e of Societies a s i n d e p e n d e n t financial
units n o t h i n g h a s emerged t o modify t h e views t e n t a t i v e l y expressed b y the
G o v e r n m e n t in t h e d e b a t e s i n 1943, t h a t there is n o place for s u c h bodies
in a unified i n s u r a n c e scheme p r o v i d i n g e q u a l benefits for uniform compulsory
contributions.
164. O n the question of t h e e m p l o y m e n t of Societies as agents, t h e Govern­
ment h a v e e x a m i n e d closely the alternatives of retaining t h e m either as
responsible a g e n t s t a k i n g decisions a n d authorising p a y m e n t s , or simply as
p a y i n g a g e n t s acting on directions from t h e Central A u t h o r i t y , b u t have
found each of t h e alternatives open t o weighty objections. C e r t a i n proposals
(involving substantial modifications of t h e existing structure of Societies)
m a d e b y organisations of A p p r o v e d Societies, h a v e been given v e r y careful
consideration, b u t the G o v e r n m e n t c a n n o t find in t h e m a n y satisfactory
solution of t h e m a j o r difficulties which a r e inherent in a n y project for indirect
administration.
2
165. In t h e result, therefore, t h e y h a v e been reluctantly forced t o the
conclusion t h a t it is not practicable to retain A p p r o v e d Societies a s a g e n t s
on a n y basis, a n d t h a t the only s o u n d course is t o administer benefits solely
through the Social I n s u r a n c e "Department. I n view of the i m p o r t a n c e of
the matter, it h a s been t h o u g h t desirable to set out in detail the considerations
which h a v e led t h e G o v e r n m e n t to this conclusion, a n d these a r e given in
Vppendix I I , together with a s u m m a r y of the a l t e r n a t i v e proposals m a d e in
the R e p o r t a n d of the w i d e r proposals s u b m i t t e d o n behalf of t h e A p p r o v e d
Societies.
166. T h e Social I n s u r a n c e D e p a r t m e n t will work largely t h r o u g h local
offices a n d will thus m a i n t a i n close c o n t a c t with the insured p o p u l a t i o n . T h e
G o v e r n m e n t a r e satisfied t h a t , with the n u m b e r of persons w h o h a v e had
practical experience in administering the existing health a n d u n e m p l o y m e n t
insurance schemes a n d other social services, the D e p a r t m e n t will be able to
obtain an a d e q u a t e staff of officers of the right t y p e a n d suitable qualifica­
tions to w h o m the necessary m e a s u r e of responsibility c a n be e n t r u s t e d , a n d
so to p r o v i d e a service t h a t will be efficient a n d in accord with t h e n e e d s a n d
convenience of insured persons.
U n e m p l o y m e n t Benefit
167. T h e G o v e r n m e n t h a v e at t h e s a m e time decided t h a t the p a y m e n t of
State u n e m p l o y m e n t benefit t h r o u g h T r a d e U n i o n s in a c c o r d a n c e with Sec­
tion 6 8 of the U n e m p l o y m e n t I n s u r a n c e Act, 1935, c a n n o t a n y l o n g e r b e
justified a n d t h e y p r o p o s e t o abolish t h a t a r r a n g e m e n t . Nor, in abolishing
the special s c h e m e s of U n e m p l o y m e n t I n s u r a n c e for t h e b a n k i n g a n d insur­
ance industries, d o the G o v e r n m e n t p r o p o s e t h a t the organisations which h a v e
administered those schemes should act a s agents for the p a y m e n t of u n e m ­
p l o y m e n t benefit.
X X . - T H E FINANCE OF T H E SCHEME
168. T h e finance of t h e scheme is explained fully in a M e m o r a n d u m b y t h e
G o v e r n m e n t A c t u a r y which forms A p p e n d i x I to this P a p e r . T h e M e m o ­
r a n d u m gives in detail the c o n t r i b u t i o n s to be p a i d for the v a r i o u s Classes
a n d shows h o w they h a v e been arrived a t . I t also contains a series of tables
showing the estimated cost of the scheme a t different dates, a n d t h e distribution
of the load a s between the c o n t r i b u t o r a n d the general t a x p a y e r . T h e Memo­
r a n d u m is o n e w h i c h r e q u i r e s s t u d y as a whole b u t there a r e certain o u t s t a n d i n g
features w h i c h should be m e n t i o n e d h e r e .
Tripartite Scheme of Contribution
169. T h e m e t h o d of financing the scheme b y contributions from t h e b e n e ­
ficiaries, their e m p l o y e r s (where t h e y h a v e one) a n d the E x c h e q u e r , which h a s
been a n essential feature of British Social I n s u r a n c e , is being c o n t i n u e d .
F o r t h e m a i n benefits (except u n e m p l o y m e n t benefit) five-sixths of t h e
necessary c o n t r i b u t i o n will b e derived from t h e insured person a n d h i s e m p l o y e r
(if h e h a s one) a n d o n e - s i x t h from the E x c h e q u e r . F o r u n e m p l o y m e n t benefit
the c o n t r i b u t i o n will c o n t i n u e to b e shared e q u a l l y between t h e e m p l o y e d
person, his e m p l o y e r a n d the E x c h e q u e r .
I n a d d i t i o n t h e E x c h e q u e r b e a r s the cost of a d m i t t i n g t h e existing p o p u l a t i o n
of all ages t o t h e s a m e benefits a s are given to those w h o e n t e r a t a g e 16
and p a y c o n t r i b u t i o n s t h r o u g h o u t their w o r k i n g lives.
National Health Service
170. T o w a r d s the cost of the N a t i o n a l H e a l t h Service insured m e n a n d
women will c o n t r i b u t e i o d . a n d 8d. a week respectively. Of this t h e e m p l o y e r
(where there is one) p a y s r i d . T h i s figure of l i d . represents a p p r o x i m a t e l y
t h e a m o u n t which the e m p l o y e r a t present c o n t r i b u t e s towards the cost of
medical benefit a n d has been a d o p t e d for that reason.
Cost of the Scheme
171. T h e following T a b l e shows the estimated income a n d e x p e n d i t u r e of
t h e new scheme a t t e n - y e a r l y intervals. T h e y e a r 1945 h a s been t a k e n fo^
convenience of comparison a n d it h a s been a s s u m e d for this p u r p o s e t h a .
stabilised p o s t - w a r conditions will a p p l y in t h a t y e a r . I t will be a p p r e c i a t e d
t h a t the scheme c a n n o t in fact be in operation in t h a t y e a r ; nor could the
assumed stabilisation b y then h a v e been realised.
Social
Estimated
Insurance
and Allied Services
(in £ millions).
Totall expenditur
Tota
expendituree ..
....
1955
1965
1973
374
69
59
148
428
73
60
170
500
70
56
170
542
67
52
170
650
731
796
831
283
280
275
239
15
352
15
436
306
15
357
650
73
796
831
Income
Receipts
Receipts fro
from
m contribution
contributionss of insure
insured
d
persons
persons an
and
d employers
employers..
Interest
Interest on existin
existingg fund
fundss
Balance
Balance of expenditure
expenditure,, t o be met fro
from
m
Excheque
Exchequerr (o
(orr loca
locall rates)
rates)..
Totall incom
Tota
incomee
1945-1975
'945
Expendit.tr:
Expendit
.tr:
Socia
Sociall insuranc
insurancee benefit
benefitss
National
National assistanc
assistancee
Family
Family allowance
allowancess
Health
Healt
h servic
servicee
Estimated
Budget,
1
172. T h e estimated e x p e n d i t u r e on retirement pensions, which is included
u n d e r t h e h e a d i n g " Social insurance benefits " in the T a b l e is as follows: —
£ millions
£ millions
1945
169
1965
272
1955
203
1975
324
I t will b e seen t h a t from 1955 o n w a r d s t h e c o n t i n u o u s increase in the rate
of total e x p e n d i t u r e is m o r e t h a n accounted for b y t h e growth in pension
charges.
Comparison with Cost of Existing Schemes
173. F o r p u r p o s e s of c o m p a r i s o n t h e a p p r o x i m a t e cost of the existing social
insurance schemes a n d allied services m a y be p u t a t a b o u t £411 imliions in
1945.
This would b e the position on t h e basis t h a t stabilised post-war
conditions applied in t h a t y e a r . I t is estimated t h a t if the new scheme were in
force in t h a t y e a r the total cost w o u l d b e £650 millions.
T h e e x t r a cost of t h e new s c h e m e would therefore b e a b o u t £240 millions
a n d this would b e a t t r i b u t a b l e in m o r e or less e q u a l shares to the increase in
t h e pension rates, the raising of t h e r a t e s of o t h e r i n s u r a n c e benefits, the new
scheme of family allowances a n d the enlarged N a t i o n a l H e a l t h Service.
174. If the existing schemes were in operation in 1945 it is estimated that
the charge t o b e met b y t a x a t i o n o r local r a t e s w o u l d be £278 irrillions. If
t h e new scheme were in operation in t h a t y e a r it is estimated t h a t the charge
t o be so met would be £352 millions. Thus a t the outset the increased cost of
the n e w scheme to the E x c h e q u e r a n d local r a t e s is estimated a t £74 millions.
It is n o t possible a t the present time to allocate this increase of £74 millions
between the E x c h e q u e r a n d local rates.
175. T h e estimates given in t h e G o v e r n m e n t A c t u a r y ' s M e m o r a n d u m d o
not t a k e a n y account of the G o v e r n m e n t s p r o p o s a l s u n d e r t h e scheme of
Family Allowances to increase substantially the benefits given in k i n d to
( hildren. These proposals, as stated in p a r a g r a p h 51 of this P a p e r , are estimated
ultimately to i n v o l v e e x p e n d i t u r e of the order of £60 millions a y e a r in the
provision of meals a n d milk for children at school. T h i s is exclusive of t h e
provision for children u n d e r school age, for which n o estimate can a t present
be given. N o r d o the estimates in the G o v e r n m e n t A c t u a r y ' s M e m o r a n d u m
take account of the proposals referred to in p a r a g r a p h 71 of this P a p e r for
training allowances to u n e m p l o y e d people w h o t a k e courses of a p p r o v e d
training. As stated in t h a t p a r a g r a p h , the cost of these allowances will b e
met from the proceeds of t a x a t i o n a n d although an a n n u a l c o n t r i b u t i o n from
the Social I n s u r a n c e F u n d of a n a m o u n t not exceeding £500,000 will be m a d e ,
this is n o index of the prospective cost of the training scheme t o p u b l i c funds.
Financial A d j u s t m e n t with Local Authorities
176. T h e introduction of the new scheme will involve a financial a d j u s t m e n t
between the E x c h e q u e r a n d local r a t e s o n a c c o u n t of a n u m b e r of services,
particularly the N a t i o n a l H e a l t h Sen-ice a n d P u b l i c Assistance, a n d also the
school meals a n d milk service. U n t i l this a d j u s t m e n t h a s been worked out
after discussion with iocal authorities, it is not possible to m a k e a n allocation
of the charges failing respectively o n taxes a n d on local rates.
E s t i m a t e of U n e m p l o y m e n t
177. It wall be seen from p a r a g r a p h 8 of the G o v e r n m e n t A c t u a r y ' s Memo­
r a n d u m t h a t t h e G o v e r n m e n t h a v e instructed h i m t o a s s u m e , for the p u r p o s e
of framing his financial estimates, a notional figure of 8J p e r cent, of insured
persons out of w o r k . T h i s needs e x p l a n a t i o n .
It does not m e a n t h a t the
G o v e r n m e n t expect t h a t y e a r in y e a r out this will b e the p e r c e n t a g e figure of
u n e m p l o y m e n t ; they h o p e it will be lower. B u t in framing estimates, a s s u m p ­
tions h a v e necessarily to b e m a d e a n d in m a k i n g the calculations for a scheme
of such m a g n i t u d e it w a s t h o u g h t a m a t t e r of financial p r u d e n c e to assume
a figure of 8 1 p e r c e n t .
Assets of E x i s t i n g S c h e m e s
178. T h e inclusion in the estimated i n c o m e of t h e n e w s c h e m e (see
Table V I i n t h e M e m o r a n d u m b y t h e G o v e r n m e n t A c t u a r y ) of a s u m of
£15 millions o n a c c o u n t of interest on existing funds is based o n t h e setting
free of s u m s a m o u n t i n g t o some £550 millions which, a t t h e s t a r t of t h e n e w
scheme, will be s t a n d i n g to the credit of the existing N a t i o n a l H e a l t h I n s u r a n c e
funds, pensions accounts, a n d u n e m p l o y m e n t fund. Of this a m o u n t , a p p r o x i ­
mately £245 millions represent m o n e y s in t h e N a t i o n a l H e a l t h I n s u r a n c e funds
consisting chiefly of t h e assets of A p p r o v e d Societies.
179. U n d e r the G o v e r n m e n t s p r o p o s a l s social i n s u r a n c e will no longer
b e administered t h r o u g h a n u m b e r of i n d e p e n d e n t financial entities a n d it will
be unnecessary therefore t o a c c u m u l a t e actuarial reserves for a n y p a r t of t h e
scheme. T h e funds w h i c h s t a n d to t h e credit of A p p r o v e d Societies consist
mainly of the reserves, a c c u m u l a t e d over a long p e r i o d , w h i c h w o u l d h a v e
been required u n d e r t h e existing s y s t e m to e n a b l e the i n d i v i d u a l societies to
meet in future their s t a t u t o r y liabilities to t h e i r p r e s e n t m e m b e r s ; t h o u g h t o a
minor e x t e n t also t h e y c o m p r i s e surplus funds which w o u l d in d u e course
h a v e b e c o m e a v a i l a b l e for the p r o v i s i o n of a d d i t i o n a l benefits o v e r a limited
period.
i 8 o . I n view of the substantial increase in t h e rates a n d scope of benefits
u n d e r the new scheme, a n d h a v i n g regard to the fact t h a t persons of all ages
a t the outset will p a y the s a m e contributions for these extended benefits as
future e n t r a n t s at age 16 (involving a substantial liability on the fund, which
will fall on the E x c h e q u e r ) , the G o v e r n m e n t p r o p o s e t h a t the whole of the
s u m s standing to the credit of the existing funds should be m e r g e d in t h e
n e w fund from which the social insurance benefits will be p r o v i d e d in future.
X X I - T R A N S I T I O N A L PROBLEMS
181. Various transitional p r o b l e m s affecting c o n t r i b u t o r s a n d beneficiaries
will inevitably arise on the introduction of a comprehensive i n s u r a n c e scheme.
182. T h e transitional a r r a n g e m e n t s for retirement pensions a n d w i d o w ' s
benefits are set out in this P a p e r . T h e r e will, however, be a n u m b e r of others
a n d in view of their complexity their solution will h a v e to wait until the
scheme has t a k e n final form. I t is not a t the m o m e n t possible t o say more
t h a n that in the p r e p a r a t i o n of a nation-wide scheme of social insurance, which
m u s t of necessity u n d e r g o m a n y c h a n g e s in its d e v e l o p m e n t , it w o u l d b e
n e i t h e r practicable n o r desirable to lay d o w n a h a r d a n d fast rule t h a t all
a c c r u i n g rights must b e safeguarded on e a c h occasion of c h a n g e . T h i s would
p r o d u c e so m a n y transitional provisions as to m a k e c h a n g e almost impossible.
183. It will also b e necessary at a later stage to w o r k out in detail the
a r r a n g e m e n t s for transferring functions from the existing agencies which it is
n o t proposed to utilise in the new scheme, a n d for winding t h e m u p .
XXII-LEGISLATION
184. As a first step the G o v e r n m e n t propose to introduce legislation a t the
earliest possible m o m e n t to set up a Ministry of Social I n s u r a n c e a n d to
transfer to that Ministry responsibility for t h e existing social insurance
schemes. T h e next step will be a Bill dealing with family allowances, b u t it
is intended that the c o m i n g into operation of the scheme should be deferred
till after the w a r .
185. T h e Bill to i m p l e m e n t the scheme of c o m p r e h e n s i v e social insurance
will inevitably be a m e a s u r e of great length a n d c o m p l e x i t y .
Subject, of
course, to the discussion b y P a r l i a m e n t of the proposals set out in this
P a p e r , it is intended to press on with the p r e p a r a t i o n of the Bill a n d to
i n t r o d u c e it as soon as possible.
XXIII-CONCLUSION
186. I n conclusion the G o v e r n m e n t wish to place on record their gratitude
to Sir William Beveridge for the g r e a t w o r k which h e did in p r e p a r i n g his
c o m p r e h e n s i v e a n d i m a g i n a t i v e R e p o r t . Their m a i n tribute is the e m o o d i ­
m e n t of so m u c h of his p l a n in the proposals set out in this W h i t e Paper—­
p r o p o s a l s which will, in t h e i r belief, afford a n a d e q u a t e basis of social insur­
a n c e for m a n y y e a r s t o c o m e .
T h e y r o u n d off a n o t a b l e c h a p t e r in the history of British social insurance,
w h i c h since its beginning thirty-three y e a r s ago in t h e National I n s u r a n c e Act
of 1911 has grown steadily in scope a n d t h o r o u g h n e s s . W h e n the scheme
here outlined, with such a d j u s t m e n t s as p a r l i a m e n t a r y d e b a t e a n d public dis­
cussion m a y suggest, is given the force of law, provision will h a v e been
m a d e against every one of t h e m a i n a t t a c k s which economic ill-fortune can
l a u n c h against individual well-being a n d peace of m i n d .
Social insurance
is b u t a m e a n s to achieving positive effort a n d a b u n d a n t living. Y e t it is
a necessary m e a n s . W h e n the new scheme is in operation it will be for the
n a t i o n to r e s p o n d b y a fresh o u t b u r s t of t h a t creative energy which has
m a r k e d the greatest periods of o u r history a n d is vitally necessary in the
years now before us.
APPENDIX I Memorandum by the Government Actuary on the Finance of the G o v e r n m e n t s Proposals In this m e m o r a n d u m t h e v a l u e of the social i n s u r a n c e benefits is expressed
in t e r m s of c o n t r i b u t i o n s , a n d e s t i m a t e s are given of t h e e x p e n d i t u r e and
income in a series of future y e a r s , u n d e r the G o v e r n m e n t s proposals in P a r t I
of the W h i t e P a p e r on Social I n s u r a n c e .
Summary o f t h e P r o p o s a l s
i . F o r convenience of reference the cash benefits p a y a b l e u n d e r t h e G o v e r n ­
m e n t s p r o p o s a l s to or in respect of a person aged 18 or o v e r (referred to h e r c ­
inafter a s an adult) insured as a c o n t r i b u t o r in Class I, i.e., a person n o r m a l l y
w o r k i n g for a n employer, a r e s u m m a r i s e d below.
Sickness, Invalidity and Unemployment Benefits and Retirement Pensions
T h e weekly r a t e s of benefit a r e : —
Singl
Singlee ma
man
n or woma
woman
n
Married
Married ma
man
n wit
with
h gainfull
gainfullyy occu
occu-- V
pied
pied wif
wifee
J
Married
Married ma
man
n wit
with
h wif
wifee no
nott gainfull
gainfullyy
occupie
occupied
d
Marrie
Married
d woman
woman,, gainfull
gainfullyy occupied..
occupied....
Dependantss
Dependant
allowance
allowance,,
wher
wheree
payabl
payablee
Sickness
Penelit
Invalidity
Benefit
s. d.
s. d.
24
0
20
0
0
35
0
40
16 0
16 0
16
15
0
0
UnemployRetirement
ment
Benefit
Pension
s. d.
s. d.
24 0
20
6
40
0
35
0
20 0
16 0
20
0
T h e a b o v e r a t e s a r e increased b y 5s. w h e r e the beneficiary h a s a single
d e p e n d e n t child, or, if he h a s more t h a n one such child, b y 5s. in respect of
the first child.
F o r sick p e r s o n s w h o are m a i n t a i n e d in hospital the o r d i n a r y r a t e of benefit
or pension is subject to a reduction of i o s . a week c o m m e n c i n g after 28 d a y s
of residence.
Sickness benefit is p a y a b l e for n o t m o r e t h a n 3 y e a r s of " l i n k e d - u p "
sickness, a n d w h e n e x h a u s t e d is followed by invalidity benefit.
Unemploy­
m e n t benefit is p a y a b l e for n o t m o r e t h a n 30 weeks of " l i n k e d - u p " u n e m ­
p l o y m e n t (subject to t h e provision r e g a r d i n g additional d a y s for p e r s o n s with
a good record) a n d w h e n e x h a u s t e d m a y b e followed b y p a y m e n t s u n d e r
national assistance. Spells of sickness or of u n e m p l o y m e n t are " l i n k e d - u p "
if s e p a r a t e d b y less t h a n 3 m o n t h s .
R e t i r e m e n t pension is p a y a b l e at age 65 (men) or 60 (women) or later, on
cessation of w o r k . D e f e r m e n t of pension, a n d p a y m e n t of further i n s u r a n c e
contributions after the p e n s i o n a b l e age, entitles the pensioner to a n increase of
i s . a week (2s. in a joint pension) for e a c h further y e a r ' s c o n t r i b u t i o n s p a i d .
Benefits t o W i d o w s
(i) Widow's benefit a t 36s. a week (with the addition of 5s. if she h a s o n e
or m o r e d e p e n d e n t children) for the first 13 weeks of w i d o w h o o d ; followed
either b y
(ii) Guardian's
benefit a t 24s. a week (plus 5s. for the first child) if, a n d for
so long a s , she h a s d e p e n d e n t children, a n d ividow's pension a t 20s. a week
on termination of g u a r d i a n ' s benefit if she is t h e n o v e r 50 a n d not less t h a n
10 y e a r s h a v e elapsed since m a r r i a g e ; or b y
(iii) Widow's pension at 20s. a week if (having n o d e p e n d e n t children) she­
was over 50 a t widowhood a n d h a d been married for not less t h a n 10 years.
Maternity Benefits
(i) Maternity
grant of £.\ to all married women a n d to other w o m e n wht
are c o n t r i b u t o r s in a n y Class.
(ii) Maternity
benefit at 36s. a week for 13 weeks t o gainfully occupied
women, w h e t h e r p a y i n g contributions or e x e m p t .
(iii) Attendants
allowance at 20s. a week for 4 weeks to m a r r i e d women
w h o are n o t gainfully occupied a n d to other women w h o are contributors
in Class I V .
Death Grant
(i) On d e a t h of a n a d u l t , w h e t h e r a contributor, wife or d e p e n d a n t : a
p a y m e n t of £20.
(ii) On d e a t h of a d e p e n d a n t or c o n t r i b u t o r u n d e r age i S : if u n d e r 3 years,
£6; between 3 a n d 6, £10; between 6 a n d i S , £ 1 5 .
Title to benefit or pension at t h e full rate d e p e n d s i n m o s t cases on the
satisfaction of certain contribution qualifications b y the person on whose
insurance t h e p a y m e n t arises. F u r t h e r , in t h e early y e a r s of t h e scheme,
pension a n d w i d o w s ' benefits a n d grants on d e a t h will b e subject to special
conditions u n d e r transitional a r r a n g e m e n t s .
2. P e r s o n s falling into Class I I , viz., those following a gainful occupation
b u t not working for an employer, a r c insured for the same benefits as Class I
except t h a t (i) they are not eligible for u n e m p l o y m e n t benefit a n d (ii) they
receive sickness benefit only from the fifth week of illness, with modifications
in the case of residence in hospital. P e r s o n s of w o r k i n g a g e (other than
m a r r i e d w o m e n ) w h o are not gainfully occupied are compulsorily insured in
Class IV b u t are not eligible for sickness a n d u n e m p l o y m e n t benefits.
3. F o r m i n g p a r t of t h e G o v e r n m e n t s proposals, b u t not a m o n g t h e social
insurance benefits, are the universal schemes for a national h e a l t h service,
family allowances a n d national assistance. T h e h e a l t h service does not
include a n y benefits by way of cash p a y m e n t s a n d is relevant to this memor­
a n d u m only in t h a t (i) a contribution t o w a r d s the cost of the service is to b e
p a r t of the social insurance contribution, and (ii) its total cost falls to be
b r o u g h t within an3' b u d g e t covering the expenditure u n d e r the v a r i o u s h e a d s
of social i n s u r a n c e a n d allied services. Similarly, such a s t a t e m e n t should
include the cost of t h e family allowances—at t h e rate of 5s. a week for every
child u n d e r age 15 (or u p t o 31st J u l y following age 16 if the child is at
school) except the first such child in a famih/—and the cost of n a t i o n a l assist­
ance p a y m e n t s , which s u p p l e m e n t social insurance benefits, or t a k e their
place where they a r e n o t p a y a b l e , according to the individual n e e d s of the
recipient.
4. T h e estimates included in this m e m o r a n d u m
new scheme for industrial injury i n s u r a n c e which
present w o r k m e n ' s compensation s c h e m e . T h i s
ateiy, except t h a t t h e requisite contribution for
included w i t h the social insurance contribution in
d o not cover t h e proposed
is to t a k e the place of the
is being dealt with separ­
employed persons will be
a single s t a m p .
5. Contributions, a t the rate for t h e a p p r o p r i a t e Class, are p a y a b l e com­
pulsorily b y all persons (except m a r r i e d women) aged between 16 a n d the
m i n i m u m pensionable age of 60 (women) o r 65 (men) a n d b y persons over the
pensionable age w h o continue at w o r k . P a y m e n t of c o n t r i b u t i o n s is e x c u s e d
(i.e., for certain p u r p o s e s they count for benefit a s if p a i d ) to full-time
students, to u n p a i d apprentices a n d to p e r s o n s w h o a r e u n e m p l o y e d (if in
Class I) or sick (if in Class I or I I ) or in receipt of t h e weekly m a t e r n i t y
benefit (if a w o m a n in Class I o r I I ) or w i d o w ' s or g u a r d i a n ' s benefit (if a
widow in Class I V ) .
E x e m p t i o n from p a y m e n t of c o n t r i b u t i o n s m a y b e
laimed b y p e r s o n s in Class I I o r I V whose total i n c o m e is less t h a n £75
a y e a r b u t t h e u n p a i d c o n t r i b u t i o n s a r e not excused, i.e., t h e y a r e not
deemed to h a v e been paid in assessing rights t o benefit. Special options as
to p a y m e n t of contributions a n d special conditions a s to c o m p u l s o r y e x e m p t i o n
in certain c i r c u m s t a n c e s a p p l y to m a r r i e d w o m e n o n l y .
T h e a p p r o p r i a t e rates of contribution for t h e several Classes a r e set o u t
below, their basis being described in the following p a r a g r a p h s : —
W e e k l y Rates of Contribution for Social Insurance and Health Service
Class I
Cla-s
Cla-s II
Clas
Classs IV
s. d.
s. d.
s. d.
2 10
1 iii
6
4
5
3
4
2
3
4
2
9
2
2
2
1
5
3.
1
3
6
5
2
8
Insured
Person
Employer
Total
s. d.
s. d.
3
MEN
Aged 18 and over ...
Between 16 and 18
2
7
34
WOMEN
Aged 18 and over ...
Between 16 and 18
1 10
1 11
3
6
5
2
1 10
It is t o be n o t e d t h a t , w h e n t h e contributions to be charged u n d e r t h e
separate scheme for industrial injury i n s u r a n c e , v i z . , 6 d . for m e n a n d 4 d .
for w o m e n a g e d 18 a n d over, are a d d e d , the t o t a l rates of c o n t r i b u t i o n for
a d u l t s in Class I will b e 6s. n d . for m e n a n d 5s. 3d. for w o m e n , of w h i c h
the i n s u r e d p e r s o n ' s share will be 3s. i o d . for m e n a n d 3s. for w o m e n .
In
die case of c o n t r i b u t o r s u n d e r t h e age of 18 t h e c o n t r i b u t i o n s for i n d u s t r i a l
injury i n s u r a n c e a r e 3 d . for b o y s a n d 2 d . for girls, shared e q u a l l y b e t w e e n
the i n s u r e d person a n d t h e employer; t h e total rates of c o n t r i b u t i o n for
these p e r s o n s will t h u s be 4s. 6d. a n d 3s. 7d., of which t h e i n s u r e d p e r s o n ' 3
share will be 2s. 5d. for b o y s a n d 2s. for girls.
ACTUARIAL B A S I S OF THE ESTIMATES
6. I n the estimates w h i c h follow I h a v e m a d e use of t h e m o s t recent p r e ­
w a r d a t a relating t o m o r t a l i t y , m a r r i a g e a n d o t h e r vital statistics, a n d h a v e
assumed t h e m a i n t e n a n c e , after t h e w a r , of fertility rates and d e a t h r a t e s a t
the i m m e d i a t e p r e - w a r level. I h a v e not allowed for a n increase in longevity
in t h e f u t u r e — w h i c h m i g h t substantially affect t h e cost of p e n s i o n s i n later
y e a r s — o r for a c h a n g e in t h e fertility r a t e (either u p w a r d or d o w n w a r d )
which would affect t h e cost of family allowances a t once a n d , in d u e course,
the o t h e r items of e x p e n d i t u r e as well as t h e contribution r e c e i p t s .
It
is not to be u n d e r s t o o d from this t h a t in m y considered view stabilisation
at p r e - w a r levels r e p r e s e n t s t h e m o s t p r o b a b l e t r e n d o v e r the p e r i o d t o w h i c h
the estimates relate b u t t h a t , for t h e p a r t i c u l a r p u r p o s e of t h e s e estimates
and in view of t h e uncertainties d u e to t h e w a r , it h a s been t h o u g h t b e t t e r
to a d o p t the a s s u m p t i o n indicated r a t h e r t h a n to allow for
conjectural
modifications of recent experience or to p r e p a r e estimates o n a l t e r n a t i v e
bases, either of which courses would a p p e a r i n a p p r o p r i a t e at t h e p r e s e n t t i m e .
7. As regards sickness benefits I h a v e a s s u m e d that sickness claims* will be
at rates averaging I2£ per cent, a b o v e those a d o p t e d in the p r e s e n t national
health insurance scheme, h a v i n g deemed it essential, in view of the funda­
mental changes from the existing scheme, to provide for a n a p p r e c i a b l y higher
claim rate t h a n diat prevailing h i t h e r t o . T w o factors should be m e n t i o n e d :
first, there h a s been a considerable increase of sickness claims of short dura­
tion d u r i n g the course of the w a r a n d , secondly, the scale of benefits proposed
(including d e p e n d a n t s ' allowances) is substantially higher t h a n the exist­
ing benefits of the national health insurance scheme. While I h a v e t a k e n the
favourable view that the c u r r e n t h e a v y sickness is a result of war-time diffi­
culties a n d will gradually pass a w a y , I have t h o u g h t it right to m a k e some
allowance for the second factor mentioned. T h e addition I h a v e m a d e to
the sickness rates d e d u c e d from t h e experience of the past, u n d e r materially
different conditions, is, however, of m o d e r a t e a m o u n t a n d if it is not to be'
exceeded a high s t a n d a r d of medical certification will b e essential, as well
as t h e active co-operation of the insured persons themselves, s u p p o r t e d by
a d e q u a t e a r r a n g e m e n t s for m e d c a l referees a n d sick visiting.
;
8. In fixing the contribution for u n e m p l o y m e n t benefit, a n d assessing the
corresponding e x p e n d i t u r e , I h a v e a s s u m e d t h a t , on a v e r a g e , 8£ p e r cent,
of insured persons will b e out of work a t a n y time, i.e., a n over-all rate
of u n e m p l o y m e n t a m o n g the p o p u l a t i o n in Class I corresponding to i o per
cent, for the occupations covered by the present general scheme of u n e m p l o y ­
m e n t insurance. T h i s notional basis h a s been a d o p t e d on the instructions
of the G o v e r n m e n t .
T h e proportion of the u n e m p l o y e d w h o will qualify for benefit is affected b y
the m a x i m u m limit of 30 weeks of linked-up benefit (modified b y t h e addi­
tional period allowed to persons with a good contribution record in the
preceding five years) a n d must d e p e n d on the composition of the register as
r e g a r d s incidence a n d d u r a t i o n of u n e m p l o y m e n t u n d e r t h e a s s u m e d con­
ditions. I h a v e a d o p t e d the following proportions, viz., 721- p e r cent, entitled
to benefit a n d 20 per cent, g r a n t e d assistance, the b a l a n c e of 7 ^ p e r cent,
comprising persons w h o are disentitled to benefit or h a v e e x h a u s t e d benefit
rights a n d do not or c a n n o t claim assistance.
9. W h e r e the element of c o m p o u n d interest enters into a calculation, as in
the rates of contribution, a rate of 3 per cent, per a n n u m h a s b e e n a s s u m e d .
T h e general lines a d o p t e d in the assessment of the rates of contribution,
a n d the actuarial bases of the estimates, are the same as those followed in t h e
p r e p a r a t i o n of financial estimates in connection with t h e p r o p o s a l s of Sir
William B e v e r i d g e ' s R e p o r t on Social I n s u r a n c e a n d Allied Services, which
involved similar actuarial considerations; a fuller account of these is given in
A p p e n d i x A to t h a t R e p o r t ( C m d . 6404).
RATES
OF
CONTRIBUTION
10. On the bases indicated in the preceding p a r a g r a p h s I h a v e estimated the
v a l u e of t h e social i n s u r a n c e benefits in terms of the weekly contribution
which would be required d u r i n g t h e whole of his w o r k i n g lifetime in order
to p r o v i d e , for an e n t r a n t at the age of 16, the full cost of the benefits to
which he a n d his d e p e n d a n t s will b e c o m e entitled: this h a s been t e r m e d the
* I t should be noted t h a t u n d e r t h e G o v e r n m e n t proposals, as u n d e r t h e existing
n a t i o n a l health insurance scheme, sickness a n d i n v a l i d i t y benefits a r e n o t p a v a b l e d u r i n g
periods of i n c a p a c i t y due t o i n d u s t r i a l i n j u r y or disease'. T h e r a t e s of sickness used in
c o m p u t i n g t h e cost of sickness a n d i n v a l i d i t y benefits h a v e due regard to t h i s fart.
In
assessing t h e loss of c o n t r i b u t i o n s d u r i n g sickness, however, t h e sickness r a t e s h a v e been
a p p r o p r i a t e l y increased t o allow for t h e fact t h a t t h e p a y m e n t of c o n t r i b u t i o n s is excused
d u r i n g a n y period of t o t a l i n c a p a c i t y , including t h a t due t o i n d u s t r i a l i n j u r v or disease.
full actuarial contribution. T h e contribution t h u s assessed h a s been t h o u g h t
in the past t o represent a fair basis for d e t e r m i n i n g — s u b j e c t to a n y relief
which m a y b e afforded b y the E x c h e q u e r — t h e joint rates of c o n t r i b u t i o n to
be charged to the insured a n d their employers.
I n t h e case of long-term benefits (pensions, sickness, e t c . ; t h e c o n t r i b u t i o n s
proposed to b e charged represent five-sixths of the full a c t u a r i a l contributions,
he State t h u s assuming liability for the remaining one-sixth. T h i s d o e s not,
however, represent the full liability of the E x c h e q u e r for such benefits since,
owing to a flat rate of contribution being charged for persons of all ages a t
the outset, there is a deficiency in the case of persons not previously insured
(mainly in Classes I I a n d IV) a n d to a less e x t e n t — o w i n g to the a c c u m u l a t i o n
of some reserves in the p a s t — i n the case of persons now insured for h e a l t h a n d
pensions i n s u r a n c e , which will fall ultimately to be m e t b y t h e S t a t e .
In
addition, t h e E x c h e q u e r a s s u m e s liability for the cost of raising existing
pensions to the new rates. T h e m e t h o d b y which t h e S t a t e will meet its
liabilities u n d e r these heads is discussed in p a r a g r a p h 30 below.
11. A brief s t a t e m e n t is necessary of t h e general basis on which t h e cost
of t h e v a r i o u s benefits h a s been allocated between m e n a n d w o m e n
respectively in the determination of the r a t e s of contribution.
As regards retirement pensions, the w o m e n ' s contribution is assessed a t t h e
sum which, if p a i d b y all w o m e n u p to pension age, would m e e t t h e cost
of the pensions to which w o m e n become entitled at or after age 60, w h e t h e r
as the wives or widows of insured m e n or on their own i n s u r a n c e as single
or m a r r i e d w o m e n or widows. I n this calculation account is t a k e n of t h e
fact t h a t a wife's pension is 15s. a n d n o t 20s., unless she is entitled to
pension on h e r own i n s u r a n c e , a n d of the p o s t p o n e m e n t of g r a n t of pension
after age 60 w h e r e the wife is not a t least 5 y e a r s y o u n g e r t h a n h e r h u s b a n d .
T h e m a n p a y s for his o w n pension a n d for t h a t p o r t i o n of pensions t o
wives (and widows over age 60) which is left u n p r o v i d e d for because most
women on m a r r i a g e cease t o p a y c o n t r i b u t i o n s .
T h e whole cost of w i d o w s ' a n d g u a r d i a n s ' benefits up to age 60 (including
the allowance in respect of the first child in a family) a n d the c o n t r i b u t o r y
portion of o r p h a n s ' allowances (see p a r a g r a p h 21 below) is placed u p o n the
men's c o n t r i b u t i o n s .
In the case of u n e m p l o y m e n t benefit t h e relative contributions of m e n a n d
women h a v e been assessed b y a p p o r t i o n i n g the total cost of u n e m p l o y m e n t
benefit, including d e p e n d a n t s ' allowances, in p r o p o r t i o n to t h e a v e r a g e
rates of benefit (plus allowances) for a d u l t s of each sex.
F o r m e n this
means t a k i n g into account t h e a v e r a g e v a l u e of the s u p p l e m e n t s for wives,
adult d e p e n d a n t s , a n d the first child in a family; for w o m e n it involves only
the value of t h e s u p p l e m e n t s for a d u l t d e p e n d a n t s of i n s u r e d w o m e n , the
average a m o u n t of which is v e r y small.
T h e c o n t r i b u t i o n s for sickness a n d invalidity benefits a r e r e l a t e d to the
value of the benefits to contributors of e a c h sex respectivelv, including as in
the case of u n e m p l o y m e n t benefit the allowances for wives a n d other
dependants.
The cost of the weeklv m a t e r n i t y benefit to gainfully occupied w o m e n
has been placed u p o n the contributions of w o m e n in Classes I a n d I I , whilst
expenditure on the other m a t e r n i t y benefits, i.e., t h e l u m p s u m grant a n d
the a t t e n d a n t s allowance, is s h a r e d equally between m e n a n d w o m e n con­
tributors.
In the case of the d e a t h g r a n t the contribution charged to w o m e n is
related to the cost of the benefit for a n i n d i v i d u a l person, w h e r e a s the m a n ' s
contribution includes also the a m o u n t necessary in respect of the g r a n t s p a y ­
able on t h e d e a t h of d e p e n d a n t s , w h e t h e r a d u l t s or children.
As already indicated, the rates of contribution h a v e been determined
separately for each sex; but it is impracticable to assess and c h a r g e a separate
contribution for each c a t e g o r y of c o n t r i b u t o r a c c o r d i n g to m a r i t a l s t a t u s . I t
m a y b e r e m a r k e d , however, t h a t , as a result of the process of averaging, a
w o m a n w h o docs not m a r r y p a y s a n a p p r e c i a b l y lower c o n t r i b u t i o n for her
pension, a n d in total, t h a n w o u l d be necessary if this g r o u p could be con­
sidered in isolation a n d not as a p a r t of t h e aggregate of w o m e n con­
tributors.
12. T h e results of these calculations are given in the following s t a t e m e n t
(Table I ) , column ( i ) of which shows, for a person in Class I , the a m o u n t
of t h e contribution p a y a b l e from age 18 on the assumption that for y o u n g
persons under t h a t age the contributions will be fixed a t two-thirds of the
a d u l t r a t e s . I n c o l u m n s (2) t o (4) t h e contribution is s u b d i v i d e d i n t o the
s h a r e s due from the insured person, the employer a n d t h e E x c h e q u e r on the
basis that (i) the E x c h e q u e r meets one-third of the cost of u n e m p l o y m e n t
benefit a n d one-sixth of the cost of o t h e r benefits (excepting d e a t h g r a n t ) and
(ii) the balance of the contributions is s h a r e d equally between insured person
a n d employer, except for m a t e r n i t y g r a n t a n d a t t e n d a n t s allowance (but not
the m a t e r n i t y benefit for gainfully occupied women) and d e a t h g r a n t , which
are charged to the insured p e r s o n .
Table I—Rates of Contribution required for Social Insurance Benefits for an
Adult in Class I
(in pence per week)
Contribution from
Full
Ful l
Actuarial
Contribution
Contributio
n
Insured
Person
Employer
(1)
(2)
(3)
28-S
6-3
12-0
2-6
12-0
-'- 7
i -o (i/Oth)
28-7
14-7
9-6
6-1
9-6
6-1
9-5 (1/3rd)
2-5 (i/6th)
-2
i-o
MEN
Retirement
Retiremen t pension
pensionss
Widows
Widows''
an
and
d
g u a r d i a n ss''
benefits
benefit s
U n e m p l o y m e n t benefit
benefi t
Sickness
Sicknes s
an
and
d
invalidity
invalidit y
benefits
benefit s
M a t e r n i t y gran
grantt
Death grant...
Cost
Cos t of a d m i n i s t r a t i oon
n
T o t a l fo
forr
benefits
benefit s
socia
sociall
Balance
Balanc e n o t
provided
provide d for
for,,
formin
forming
g part
of E x c h e q u e r
contribution
t o schem
schemee
I
(4)
t
- 8 (1 /6th)
-2 (1/6th)
4*2
1-8
1-6.
i-5
1-1*
S5-7
34*7
31-9
IQ- if
26-8
19:1
II
-2
6-3
11 -1
6-4
4-5 (i/6th)
0-4 (i/ rd)
4-y
z ' 0 (T/6th)
-7 (i/6th)
1 -5
1-1* i-8
insuranc
insurancee
WOMEN
R e t i r e m e n t pension
pensionss
U n e m p l o y m e n t benefi
benefitt
Sicknes
Sicknesss
an
and
d
invalidit
invalidity
y
benefits
benefit s
M a t e r n i t y g r a nntt an
and
d benefi
benefitt
(includin
(including
g
attendants
allowance
allowance))
Death grant...
Cost
Cos t of administratio
administration
n
T o t a l fo
forr
benefits
benefit s
socia
sociall
11-7
4-3
1-1
4-2
4-S
- * 7
3
1-1
i-6
insuranc
insurancee
67-2
2 -S
-7-7
i-f 7t
* E x c h e q u e r share t a k e n a t one-third of t h e cost of a d m i n i s t r a t i o n for unemployment
benefit and one-sixth for other benefits.
-f On average t h e E x c h e q u e r p r o p o r t i o n is a b o u t 22 p e r cent, of t h e full contribution.
4
13. T h e contributions for persons in Class I are based on the results in
columns (2) a n d (3) of T a b l e I r o u n d e d to the next higher p e n n y , a n d those
for p e r s o n s in Classes I I a n d IV h a v e been assessed on similar linos, allowing
for the differences in respect of those Classes, viz., (i) the absence of u n e m ­
p l o y m c n t benefit a n d the exclusion of the first 4 weeks from sickness benefit in
Class I I , (ii) the absence of both sickness a n d u n e m p l o y m e n t benefits in
Class I V , a n d (hi) the necessarily differing conditions governing excusal of
contributions. I n all three Classes t h e . r a t e s of contribution p r o p o s e d to be
charged a r e to include a p a y m e n t t o w a r d s t h e cost of the national health
service, which h a s been fixed a t i o d . a week for m e n a n d 8 d . for w o m e n , with
a reduced p a y m e n t of 6 d . for y o u n g p e r s o n s u n d e r age 18. T h e m a k e - u p
of the contributions is as follows (Table I I ) : —
Table I I — R a t e s of Contribution for Adults in Classes I , I I and I V
(in pence p e r week)
Class I
Men
Class IV
Class II
Women
Me
Menn
Women
Me
Menn
Women
2 -S
4
39-3
33-7
29-5
23-7
6-5
i-5
IO-O
8-o
IO-O
8-o
33-4
34-2
26-3
49-3
49- 3
.11-77
.11-
39-5
39- 5
3i-7
3i- 7
s. d.
s. d.
s. d.
s. d.
s . (1
(1..
s. d .
s. d .
3
2 10
2 10
2 3
3 ('
3 4
s. d .
2 8
Insured
Person
Employer
Insured
Person
E m -
ploycr Forr s o c i a l
Fo
insurance
insuranc e
benefit
benefitss
Toward
Towardss
healt
healthh serser -­
vice
vic e
34-7
31-9
-7-7
Tota
Totall contri -­
butio
butionn rere -­
quire
quiredd
R a t e s of concon -­
tribution
tributio n
proposed
propose d
43-2
7
*
6s. 5d.
5s. i d .
T h e insured p e r s o n ' s s h a r e of the contribution in Class I is qd. greater
t h a n the e m p l o y e e s share (7d. for women) p a r t l y on a c c o u n t of the differences
a p p e a r i n g in T a b l e I , b u t m a i n h / because t h e b u l k of the p a y m e n t t o w a r d s
the h e a l t h service falls u p o n the person himself, the e m p l o y e r p a y i n g a s u m
a p p r o x i m a t e l y e q u a l to h i s contribution t o w a r d s the medical t r e a t m e n t of his
employee u n d e r the existing national health i n s u r a n c e scheme.
14. I t m a y be noted t h a t t h e principal rates of c o n t r i b u t i o n , viz.. 6s. 3 d .
a week for m e n a n d 5s. i d . a week for women in Class I , are l a . i d . a n d l i d .
respectively less t h a n t h e corresponding c o n t r i b u t i o n s proposed in the
Beveridge R e p o r t . *
T h e reduction in contributions is the net effect of a
n u m b e r of factors, the most i m p o r t a n t of which are set out below, t h e saving
or addition s h o w n in each case incoqoorating the effect of p a y m e n t of t h e
adult rate of contribution (and where a p p r o p r i a t e t h e adult rate of benefit)
from age 18 instead of a g e 2 1 : —
(i) the t r e a t m e n t of w o r k m c n ' s c o m p e n s a t i o n in a s e p a r a t e s c h e m e —
saving (in the social insurance contribution) a b o u t 3d. for m e n a n d 2d. for
w o m e n , including cost of a d m i n i s t r a t i o n ;
* W h e n t h e s e p a r a t e contributions for industrial injury insurance a r e a d d e d (see p a r a ­
graph 5) t h e t o t a l r a t e s of c o n t r i b u t i o n s are 7d. less, for each sex, t h a n t h o s e p r o p p e d in
the Beveridge R e p o r t .
(ii) the fixing of the retirement pension contribution b y reference to a
pension of 20s. single or 35s. joint (immediately) instead of 24s. single or
405. joint (ultimately)—saving about 5 i d . for m e n a n d 4 d . for w o m e n ;
(iii) the limitation of u n e m p l o y m e n t benefit to a m a x i m u m d u r a t i o n of
30 weeks (apart from a d d e d days)—saving a b o u t 7d. for men a n d 4 ^ d . for
women, b u t placing a substantial liability on the E x c h e q u e r for u n e m p l o y ­
ment assistance;
(iv) the reduction of sickness benefit (a) to t h e invalidity r a t e in cases
of long-term sickness a n d (b) by 105. where the person has been in hospital
for 28 d a y s — c o m b i n e d saving of a b o u t i d . for both m e n a n d w o m e n ;
(v) the omission of the cash g r a n t on marriage of an insured w o m a n a n d
the substitution of an a t t e n d a n t s allowance on confinement a n d certain
minor concessions in regard to married w o m c n ' s insurance—net saving
a b o u t £d. for w o m e n ;
(vi) the grant of pensions to certain widows over age 5 0 — a d d i n g a b o u t
i j d . for m e n ;
(vii) the transference to a contributory basis of the allowances p a y a b l e
in respect of the first child where the p a r e n t is in receipt of a social insur­
ance benefit—adding a b o u t 2d. for m e n a n d i d . for women.
CLASSIFICATION
OF
POPULATION
15. The population of Great Britain at the present time is estimated to be
a b o u t 47J million persons, a n d this figure h a s been t a k e n for practical p u r p o s e s
as the population at the c o m m e n c e m e n t of the new scheme. Assuming the
restoration u n d e r peace-time conditions of a distribution b y occupational
s t a t u s corresponding in general to the p r e - w a r position, the classification of
this total for the p u r p o s e of the scheme is as follows:—
Table III—Classification
of
Population
N u m b e r s in t h o u s a n d s
Class
Clas s
Men
I
II
!1I
!1I
IV
V
VI
Employe
Employed
d person
personss
Other
Otherss gainfull
gainfully
y occupie
occupied
d
Housewives
Housewives,, includin
including
g thos
thosee gainfull
gainfully
y occupie
occupied
d
Othe
Otherr person
personss of workin
working
g ag
agee
Childre
Children
n unde
underr 15
15,, o r 15-1
15-166 a t schoo
schooll
Person
Personss abov
abovee workin
working
g ag
agee wh
whoo h a v e retire
retired
d ..
....
Women
Total
1,000
5.150
1,200
4.75o
45o
9.650
1.250
4.95o
3,600
18,100
2,600
9/'5o
2,250
10,100
4,800
22,850
24,650
47.500
13.35"
2,150
This allocation is b a s e d on the occupational distribution at the C e n s u s of
1931, with allowance for estimated changes therein u p to the b e g i n n i n g of
t h e war. It includes in Classes I a n d I I those persons above p e n s i o n a b l e age
w h o are assumed to b e still working. Blind a n d crippled persons a n d chronic
invalids, if u n d e r pensionable age, are included in Class I V . T h e n u m b e r
of children in Class V assumes a m i n i m u m school-leaving age of 1 5 .
ESTIMATED
EXPENDITURE
16. In T a b l e IV which follows, a n estimate is given of the a n n u a l e x p e n d i t u r e
at ten-yearly intervals on the various social insurance benefits and the allied
services which are comprised in the G o v e r n m e n t s proposals. F o r convenience
o£ comparison with p r e v i o u s estimates the y e a r 1945 is taken as the first
y e a r in which the social insurance scheme will be in full operation except for
persons newly b r o u g h t into insurance. I t is evident, at this d a t e , t h a t t h e
scheme c a n n o t be b r o u g h t into effect in time for this a s s u m p t i o n to be realised,
but the general a p p r o p r i a t e n e s s of the tables in this m e m o r a n d u m is not t h e r e b y
materially affected e x c e p t for two points. T h e cost for the actual first y e a r
-"ill be slightly greater t h a n t h a t shown for 1945, m a i n l y because the n a t u r a l
i n c r e a s e in the aged p o p u l a t i o n results in a heavier pensions charge in each
succeeding y e a r ; 1955, 1965 a n d 1975 would s o m e w h a t u n d e r s t a t e the cost
for the n t h , 21st a n d 31st y e a r s , for the s a m e r e a s o n . F u r t h e r , with t h e
introduction of the s c h e m e in a later y e a r t h a n 1944, t h e cost in 1955 will be
appreciably less t h a n t h a t s h o w n , because n e w classes b r o u g h t in a t t h e outset
will not qualify for pension benefits for 10 y e a r s .
1 o Subject to these reservations the figures in the table give a broad p i c t u r e
of the cost of the scheme s t a r t i n g with the first lull y e a r ' s e x p e n d i t u r e a n d for
the 10th, 20th a n d 30th y e a r s thereafter.
T a b l e I V — E s t i m a t e d E x p e n d i t u r e : 1945-1975
(in £ m i l ! i o n s )
Social Insurance Benefits
R e t i r e m e n t pensions
Widows' a n d guardians' benefits
U n e m p l o y m e n t benefit ...
Sickness and invalidity benefits
M a t e r n i t y grant and benefits ...
Death grant
Cost of a d m i n i s t r a t i o n ...
Total
National
Assistance
Assistance pensions
U n e m p l o y m e n t assistance
O t h e r assistance ...
Cost of a d m i n i s t r a t i o n ...
Total
Family Allowances
Allowances
Cost of administration
... Total
Health Service
Total Expenditure
1945
1955
19^5
1975
169
34
S7
""55
9
4
16
203
41
S7
66
272
4
S5
68
S
S
7
16
11
324
36 80 &5 7
'4 16 374
428
500
542
37
41
6
4
6
4
39
21
6
4
37
20
6
4
69
73
70
57
5S
54 59
148
60
170
56
170
52 170 650
73i
796
S31
Q
16
5
Q
17. F r o m 1955 o n w a r d s t h e continuous increase in t h e r a t e of total e x p e n d i ­
ture—from £731 millions in 1955 to ^831 millions in 1975—is m o r e t h a n
accounted for b y t h e g r o w i n g cost of retirement pensions, viz., from £203
millions to £324 millions. I n the first t e n y e a r s the g r o w t h of e x p e n d i t u r e is
affected b y a n u m b e r of special factors which influence the cost of w i d o w s '
and g u a r d i a n s ' benefits, sickness a n d invalidity benefits a n d the health service.
T h e pensions cost in 1945 is not precisely c o m p a r a b l e with later y e a r s because
it does not include a n y pensions for persons b r o u g h t into i n s u r a n c e for the
first time (mainly in Classes I I a n d IV) since these do not qualify for pensions
until t h e y h a v e been insured for 10 y e a r s , or for p e r s o n s in Class V I a t the
outset who h a d not b e e n g r a n t e d pensions u n d e r the existing schemes. A p a r t
from this, the rising cost of pensions is m a i n l y d u e to the n a t u r a l increase in
the p o p u l a t i o n of p e n s i o n a b l e age, which will grow steadily t h r o u g h o u t t h e
30 y e a r s .
T h e increase in the cost of widows' a n d g u a r d i a n s ' benefits and sickness and
invalidity benefits between the first a n d the eleventh y e a r is also d u e mainly
to the fact t h a t , owing to the qualifying condition for these benefits, the full
cost does not m a t u r e i m m e d i a t e l y . Similarly the continuing growth in the cost
of the d e a t h g r a n t over the whole period is m a i n l y the result of the exclusion
from this benefit of persons over 65 a t the outset a n d of the p a y m e n t of reduced
g r a n t in respect of those then aged between 55 a n d 6 5 .
Again, the inclusion of a lower figure for the health service in 1945 t h a n
r
later y e a r s results from the fact that it will be impracticable to b r i n g all the
various services fully into operation in the first few years of the scheme.
18. Retirement
pensions.—The
estimates m a k e allowance for postponement
of retirement, a n d consequent increase in rate of pension. T h u s in Class I the
broad a s s u m p t i o n is t h a t 50 p e r cent, of m e n a n d women will give u p work
i m m e d i a t e l y on reaching pensionable age, t h a t a further 25 p e r cent, will ret!
in the course of the ensuing five y e a r s , a n d t h a t the balance of 25 p e r cent,
will h a v e ceased work d u r i n g the n e x t five years, i.e., b y age 75 (men) or
70 (women). T h e net effect of the retirement condition on the expenditure,
i.e., the difference between the pension p a y m e n t s saved by postponement
a n d the s u m of the sickness a n d u n e m p l o y m e n t benefits p a y a b l e d u r i n g the
period of p o s t p o n e m e n t a n d the higher p a y m e n t s becoming due o n retirement,
is estimated to be a saving of expenditure somewhat exceeding £10 millions
a y e a r at the outset, rising to between £15 millions a n d £20 millions in twenty
y e a r s ' time.
As regards p e r s o n s over pensionable age at the outset, allowance is made
for bringing u p to the new pension rates those c o n t r i b u t o r y pensioners who
accept the retirement condition as p r o v i d e d b y the proposals. T h e correspond­
ing cost of increasing the pension of non-contributory pensioners is included
in the cost of assistance pensions.
19. Unemployment
benefit and assistance.—Only
72J p e r cent, of the un­
emplo3'ed, on t h e a s s u m e d average rate of 8k per cent, u n e m p l o y m e n t , are
included in the cost of benefit. A further 20 per cent, are assumed to receive
assistance on the scales at present in force, the cost of which falls upon the
E x c h e q u e r . T h e item of u n e m p l o y m e n t assistance includes also a small sum
for s u p p l e m e n t a t i o n to meet special needs of persons on u n e m p l o y m e n t benefit.
As r e g a r d s the cost for the first 3'ear, it should b e b o r n e in m i n d that the
estimates assume stabilised post-war conditions, a n d m a k e no allowance for
d i s t u r b a n c e resulting from w a r conditions o r on demobilisation.
T h e cost of u n e m p l o y m e n t benefit and of assistance will be reduced as a
result of the s e p a r a t e scheme providing, at the cost of the E x c h e q u e r , training
allowances (in lieu of benefit) to unemplo3-ed persons u n d e r g o i n g approved
t r a i n i n g . O n t h e o t h e r h a n d the social insurance fund is to b e liable for
a pa3 ment to the E x c h e q u e r not exceeding £500,000 a year in respect of
this relief. T h e n e t effect on the fund is likely to be small a n d h a s been
ignored in the p r e s e n t estimates.
It will depend o n the n u m b e r of
unemplo3 ed persons w h o are able to take a d v a n t a g e of the scheme a n d the
p r o p o r t i o n of their periods of training d u r i n g which t h e y would otherwise
h a v e received u n e m p l o y m e n t benefit.
-
7
20. National assistance.—Under
this head is included not only unemplo3'­
m e n t assistance, a s a l r e a d y m e n t i o n e d , a n d assistance t o meet t h e needs of
o t h e r persons u n d e r pensionable age, b u t also assistance pensions. These
comprise (i) pensions a t r a t e s v a r y i n g from the present 10s. a week (or less)
u p to the new full r a t e s of pension, on a n appropriately modified means
scale, to existing n o n - c o n t r i b u t o r y old age pensioners, (ii) supplementa­
tion to existing pensioners, a n d future pensioners from Class I , I I or IV,
and (iii) pensions according to need t o persons in Class I I or I V who are
unable to qualify for retirement pensions or, h a v i n g small incomes, n a v e
elected to be e x e m p t from contributions.
2 1 . Family allowances.—The
cost of the 5s. benefit for the first child in
family, where p a y a b l e , is included with the related benefit, i.e., w i d o w s ' a n d
g u a r d i a n s ' , u n e m p l o y m e n t , or sickness a n d invalidity' benefits—as is d o n e in
the calculation of the rates of contribution given in p a r a g r a p h 12 a b o v e . T h e
for the second a n d s u b s e q u e n t children in e a c h family constitutes, with 53.
a head for orphaned children, the cost s h o w n for family allowances. T h e
balance of the o r p h a n ' s 12s. benefit, i.e., 7s. a week, which is t o be p r o v i d e d
from social insurance funds, is included in the contribution a n d the cost for
widows' a n d g u a r d i a n s ' benefits.
F o r the purpose of the present estimates, the m i n i m u m school-leaving a g e
t a k e n as 15 a t the outset (with allowance for children r e m a i n i n g at school
^iter t h a t age until 31st J u l y following their 16th b i r t h d a y ; a n d 16 for the
other y e a r s , on the a s s u m p t i o n t h a t b y 1955 it will h a v e been possible t o raise
the school-leaving age to the full extent (viz., to age 16) p r o p o s e d in t h e
Education Bill n o w before P a r l i a m e n t . !
As indicated in T a b l e I V , I estimate the cost of these allowances to be
£57 millions in 1945*. T h e i r cost in later y e a r s will d e p e n d increasingly u p o n
the future trend of the fertility rate, i.e., upon the n u m b e r of b i r t h s p e r m a r r i e d
woman a t each a g e . If the fertility rate after t h e w a r is stabilised a t a b o u t
the p r e - w a r level, the n u m b e r of eligible children will decrease. T h e figures
of e x p e n d i t u r e o n family allowances h a v e been c o m p u t e d o n t h e a s s u m p t i o n
that fertility rates in the future will be the s a m e as in recent p r e - w a r y e a r s ,
and accordingly show a d r o p to £50 millions in 1975. T h e small increase of
expenditure between 1945 a n d 1955 is the net result of this factor a n d of t h e
effect of the assumed increase in the school-leaving age.
22. Health service.—In
t h e W h i t e P a p e r o n a N a t i o n a l H e a l t h Service
(Cmd. 6502) a r o u g h estimate of £148 millions is given for the a n n u a l cost of
the scheme for G r e a t Britain soon after the outset; this figure h a s therefore
been a d o p t e d for 1945 in the present m e m o r a n d u m . As indicated in the W h i t e
Paper, however, t h e cost is likeh/ to grow for some y e a r s as the services
which are proposed come into fuller operation, a n d a r o u n d figure of £170
millions h a s been taken as a reasonable allowance for 1955 o n w a r d s , after
consultation with t h e Ministry of H e a l t h a n d t h e D e p a r t m e n t of Flealth for
Scotland.
T h e p a y m e n t t o w a r d s the cost of the health service included in t h e social
insurance contribution, viz., i o d . (men) a n d 8d. (women), with 6 d . for y o u n g ,
persons u n d e r 18, will, it is estimated, p r o d u c e a b o u t £39 millions a y e a r a t
the outset, falling to a b o u t £36 millions in thirty y e a r s ' time. T h u s t h e cost
of these services m e t from t a x e s (or rates) will rise from £109 millions in 1945
to £134 millions in 1975.
23. Expenses of administration.—A
total of £22 millions h a s b e e n included
under this head, of which £16 millions relates to insurance benefits.
These
figures h a v e been assessed b r o a d l y by reference t o the cost of a d m i n i s t e r i n g
the existing schemes, taking into account t h e p r o b a b l e effect of t h e c h a n g e s ,
e.g., the increased c o m p l e x i t y of some of t h e benefits, the larger n u m b e r s
involved, a n d the economies which m a y be expected to result from unification.
COMPARISON WITH E X I S T I N G
SYSTEM
24. It is possible t o c o m p a r e in b r o a d g r o u p s the e x p e n d i t u r e u n d e r t h e
Government proposals with t h a t which would be incurred u n d e r the existing
analogous schemes, a n d this h a s been done for t h e y e a r 1945 in T a b l e V.
* In a d d i t i o n , the c o s t of t h e 5s. benefit for t h e first child, w h e r e p a y a b l e , a m o u n t s t o
^12 millions in 1945.
t T h e Bill received t h e R o y a l A s s e n t o n 3rd August, 1944.
Table V — C o m p a r a t i v e S t a t e m e n t of E s t i m a t e d E x p e n d i t u r e in 1945
(assuming stabilisation under p o s t - w a r conditions)
Under Present Social Insurance
Schemes and Allied Services
Under Government Proposals
£ millions
( millions
PENSION
BENEFITS
Contributory pensions :
Age and widows' over 60
W i d o w s ' u n d e r 60
Non-contributory pensions
S u p p l e m e n t a r y pensions ' 177
R e t i r e m e n t pensions ...
...
W i d o w s ' a n d guardians'benefits
Assistance pensions ...
...
169"!
34 i-240
37 J UNEMPLOYMENT
Unemployment benefit ...
U n e m p l o y m e n t assistance
SICKNESS (including Maternity)
N a t i o n a l health insurance :
Sickness
and
disablement
benefits
Maternity benefit
87
U n e m p l o y m e n t benefit
U n e m p l o y m e n t assistance
22/
30
Sickness a n d invalidity benefits
M a t e r n i t y g r a n t a n d benefits
55\
9J
/
C H I L D R E N ^ BENEFITS
F a m i l y allowances
Allowances for second and subseq u e n t children p a y a b l e under
a b o v e schemes...
...
...
57
N a t i o n a l assistance (apart from
assistance pensions and u n ­
e m p l o y m e n t assistance)
...
6
Death grant
...
4
...
22
Comprehensive national scheme
148
OTHER ASSISTANCE
Public assistance
O T H E R CASH B E N E F I T S
...
...
ADMINISTRATION
Cost for above services ...
18
Cost for a b o v e services
H E A L T H SERVICES
Included in national h e a l t h insurance
Others, m e t from public f u n d s . . .
Total
20
\
80
60
411
Total
650
Note.—The
figures for childrqn's benefits, b o t h under existing schemes and
under t h e G o v e r n m e n t proposals, relate to allowances for second a n d subsequent
children. Similar allowances for the first child are included w i t h t h e pension,
u n e m p l o y m e n t or sickness benefit with which t h e y are associated.
1
25. I n interpreting the figures it m u s t be borne in m i n d t h a t the populations
insured u n d e r the existing a n d the proposed schemes are different; the nature
a n d grouping of the benefits h a s c h a n g e d in various respects; a n d the extent
to which p a r t i c u l a r needs a r e m e t from State a n d p r i v a t e resources, from
insurance a n d assistance, or from local a n d national funds, has c h a n g e d . The
inferences to be d r a w n m u s t be qualified accordingly.
T h e r e is the further reservation t h a t the s t a t e m e n t h a s h a d to be prepared
on the footing t h a t stabilised p o s t - w a r conditions will a p p l y d u r i n g t h e year.
F o r various reasons the e x p e n d i t u r e u n d e r t h e present schemes in 1945 will be
affected b y abnormalities d u e to t h e war a n d the actual o u t t u r n for certain
items will differ materially from the figures given. B u t as b o t h sets of figures
h a v e been b a s e d on t h e s a m e a s s u m p t i o n s , t h e y give a valid comparison of
the schemes.
26. T h e s t a t e m e n t shows t h a t in t h e aggregate the services b r o u g h t within the
scheme will cost a b o u t 60 p e r cent, more t h a n t h e c o m p a r a b l e existing services
met from public funds.
Very b r o a d l y the increase, of a b o u t £240 millions, can
be a t t r i b u t e d in m o r e or less equal p a r t s t o :
(i) the increase in the rates of pension, b o t h c o n t r i b u t o r y a n d non-con­
tributory;
(ii) the raising of the rates of insurance benefit d u r i n g u n e m p l o y m e n t a n d
sickness (including the introduction of wives' allowances n o t previously
g r a n t e d in the latter) a n d the e x p a n s i o n of m a t e r n i t y benefits;
(iii) the introduction of universal family allowances, a s c o m p a r e d with the
allowances for children a n d o r p h a n s now included in u n e m p l o y m e n t benefits
a n d w i d o w s ' pensions; a n d
(
(iv) t h e e n l a r g e m e n t of the existing n a t i o n a l health i n s u r a n c e medical
service a n d t h e health services p r o v i d e d b y local authorities into a c o m p r e ­
hensive n a t i o n a l health service covering t h e whole p o p u l a t i o n .
27. As c o m p a r e d with the initial cost of the p l a n p r o p o s e d in t h e Beveridge
Report, viz., £697 millions for 1945, the p r o p o s a l s s h o w a saving of £47 millions.
.This is due m a i n l y to (i) the omission of industrial disability benefits (including
, dministration), which are to be dealt with s e p a r a t e l y (£17 millions); (ii) the
allowance for non-emergence of the full cost of the health service a t the outset
(£22 millions); (iii) a n e t saving on family allowances ( a b o u t £40 millions); a n d
(iv) a n e t reduction in the cost of u n e m p l o y m e n t a n d sickness benefits a n d
related assistance ( a b o u t £10 millions); against which m u s t be set (v) the e x t r a
cost of enlarged retirement pensions a n d w i d o w s ' benefits ( a b o u t £45 millions
including £8 millions for the effect of the new scale of s u p p l e m e n t a r y pensions
introduced s u b s e q u e n t to the submission of the Beveridge R e p o r t ) .
C O S T TO THE E X C H E Q U E R
28. T h e income available to meet the cost of t h e p r o p o s e d s c h e m e s consists
of the receipts from t h e contributions p a y a b l e b y p e r s o n s ( a n d their employers)
insured in Classes I, I I a n d I V , together with interest from the existing social
insurance funds, assuming these to b e retained as a reserve for t h e benefit of
the n e w s c h e m e ; the b a l a n c e of e x p e n d i t u r e h a s to b e m e t from general
taxation or from local rates. I n T a b l e V I which follows I h a v e s u m m a r i s e d
the e s t i m a t e d e x p e n d i t u r e as s h o w n in T a b l e I V a n d t h e income from each
source in the form of a b u d g e t covering the social i n s u r a n c e scheme a n d allied
services: Table VI—Social Insurance and Allied Services Budget: 1945-1975
(in £ millions)
Estimated
Expenditure
Socia
Sociall insuranc
insurancee benefit
benefitss
N a t i o n a l assistance..
assistance....
F a m i l y allowances..
allowances....
H e a l t h servic
servicee
...
.. .
T o t a l e x p e n d i t u rree
Estimated
Income
Receipts
Receipt s fro
from
m contribution
contributionss of insure
insured
d person
personss
a n d employers.
employers.*
*
I n t e r e s t o n existin
existing
g f u n d s . ....
Balance
Balanc e of e x p e n d i t u r ee,, t o b e m e t fro
from
m E x -­
chequer
cheque r (o
(orr loca
locall rates)
rates)..
T o t a l incom
incomee
1945
' 1955
1965
1975
374
69
59
148
428
73
60
170
500
70
56
170
542
67
52
170
650
73i
796
831
283
280
2 75
259
15
352 ^
15
436
15
506
15
557
650
73r
796
831
* I n t h i s t a b l e , a n d t h r o u g h o u t t h e m e m o r a n d u m , receipts from c o n t r i b u t i o n s r e l a t e
to t h e c o n t r i b u t i o n s for social insurance benefits a n d h e a l t h service a n d d o n o t include
the c o n t r i b u t i o n s for i n d u s t r i a l injury i n s u r a n c e ; t h e r e l a t e d e x p e n d i t u r e a n d S t a t e g r a n t
are similarly o m i t t e d .
29- In the a b o v e s t a t e m e n t the receipts from contributions are b a s e d on the
rates set out in p a r a g r a p h 5 a b o v e , allowing for the estimated loss due to
n o n - p a y m e n t of contributions (i) b y persons whose contributions are excused
during sickness, u n e m p l o y m e n t , etc., as provided for in the scheme, (ii) b y
m a r r i e d women w h o , though gainfully occupied, elect to b e e x e m p t from con­
tributions, or are compuisorily e x e m p t on the g r o u n d of low earnings,
(iii) b y persons in Classes I I a n d IV who exercise the option not ' i
contribute owing to their income being below a certain figure. In the case
of Class I the contributions include t h e e m p l o y e r s ' s h a r e , which accounts
for a b o u t 40 p e r cent, of the total s u m yielded b y all contributions.
30. As indicated in p a r a g r a p h 10 a b o v e , the rates of contribution proposed
represent, for benefits other t h a n u n e m p l o y m e n t benefit a n d d e a t h g r a n t (to
which special considerations a p p l y ) , five-sixths of the actuarial c o n t r i b u t e
for the benefits in q u e s t i o n . These c o n t r i b u t i o n s are in effect insurance p r e ­
m i u m s a n d in the case of a p r i v a t e scheme, or in a national scheme involving
(as does the existing national health insurance scheme) the m a i n t e n a n c e of a
n u m b e r of i n d e p e n d e n t financial units, it would b e necessary to a c c u m u l a t e the
contributions in a fund from which emerging e x p e n d i t u r e would be m e t as it
arose. U n d e r the G o v e r n m e n t p r o p o s a l s all b r a n c h e s of social insurance are
to be administered as a unified scheme, a n d t h e E x c h e q u e r g r a n t will take
the form of meeting the balance of all e x p e n d i t u r e as it falls d u e , in so far as it
is not met b y the c u r r e n t proceeds from contributions. I t will, therefore, be
unnecessary to m a i n t a i n a c c u m u l a t i v e funds either for the scheme as a whole
or for a n y p a r t s of it. I t follows t h a t the invested assets of the existing
schemes, in p a r t built u p (in the case of health insurance) to provide actuarial
reserves a n d in p a r t (as in u n e m p l o y m e n t a n d pensions) as a result of the
special conditions of the war, a r e set free b y t h e supersession of the existing
s y s t e m a n d m a y b e regarded as available for utilisation in the most suitable
m a n n e r for the s u p p o r t of the n e w scheme.
I n view of the greatly increased b u r d e n s p l a c e d u p o n the E x c h e q u e r b y the
enlargement of the benefits of existing insured persons, it would seem equitable
t h a t the E x c h e q u e r should h a v e the a d v a n t a g e of the existing funds a n d the
G o v e r n m e n t h a v e decided t h a t they shall be utilised in this m a n n e r . I h a v e
accordingly a s s u m e d t h a t the interest thereon is to b e set against e x p e n d i t u r e
in arriving at the cost of the scheme to the E x c h e q u e r .
31. T h e allowance of £15 millions for interest o n funds, as shown in T a b l e V I ,
assumes the retention for this p u r p o s e of £550 millions from the assets of the
existing health, pensions a n d u n e m p l o y m e n t insurance systems, a n d h a s regard
to the average interest yielded on the securities held. At 31st D e c e m b e r , 1943,
the total invested assets of t h e health insurance system, held p a r t l y b y the
a p p r o v e d societies a n d p a r t l y b y the central d e p a r t m e n t s or the N a t i o n a l Debt
Commissioners, a m o u n t e d to a b o u t £245 millions. At 31st March, 1944, the
balances in the u n e m p l o y m e n t fund a m o u n t e d to £252 millions a n d those in the
pensions accounts t o £76 millions. All these balances, a m o u n t i n g n o w to a
total of over £575 millions, will continue to grow so long a s t h e a b n o r m a l
conditions of the w a r r e m a i n ; thereafter the position, m o r e especially as regards
t h e u n e m p l o y m e n t fund, will d e p e n d largely o n the steps t a k e n to deal with
post-war demobilisation a n d u n e m p l o y m e n t .
Bea ring in m i n d t h a t these assets will be s u p p l e m e n t e d b y v e r y considerable
p a y m e n t s which will become d u e from the Service d e p a r t m e n t s to the u n e m ­
ployment fund on general d e m o b i l i s a t i o n ^ I h a v e reached the conclusion t h a t ,
* D u r i n g service in t h e Forces, t h e o r d i n a r y weekly u n e m p l o y m e n t c o n t r i b u t i o n s a r e
not payable, an a p p r o p r i a t e c a p i t a l s u m being paid by t h e d e p a r t m e n t s o n a man'i
discharge.
after allowing for the retention of a substantial reserve to meet the possible
strain of p o s t - w a r a d j u s t m e n t , the assets set free will be of the o r d e r ol £550
millions, p r o d u c i n g a n a n n u a l income of £15 millions.
3 2 . I t will be seen from T a b l e VI t h a t the b a l a n c e of e x p e n d i t u r e to be m e t
from t a x a t i o n or rates, as t h u s assessed, a m o u n t s to £352 millions in 1945,
increasing steadily t h r o u g h o u t t h e thirty years to reach a figure of £557 millions
- ".e., practically 60 p e r cent, greater) in 1975. T h e E x c h e q u e r charge a t the
outset u n d e r the G o v e r n m e n t p r o p o s a l s is c o m p a r e d with t h e corresponding
charge u n d e r the existing schemes in p a r a g r a p h 3 3 , a n d the growth of the
charge in relation to the total e x p e n d i t u r e u n d e r the proposals is e x a m i n e d
further in p a r a g r a p h s 35 a n d 36.
3 3 . A c o m p a r i s o n of the sources of the income required u n d e r the existing
ind p r o p o s e d schemes is given for 1945 in Table V I I which follows: —
T a b l e V I I — C o m p a r a t i v e Statement of E s t i m a t e d I n c o m e in 1945
(assuming stabilisation u n d e r post-war conditions)
Under
Present
Social
I n s u r a n c e Schemes and
Allied Services
I
Millions
Receipts
Receipt s from
fro m c o n t r i b u t i o n s of
insure
insuredd person s a n d e m p l o y e r s
I n t e r e s t o n existing
existin g funds
fund s
E x p e n d i t u r e t o b e m e t fro
from
m
E x c h e q u e r (or
(o r loca
locall rates
rates))
Percentages
Under
Government
Proposals
£
Percentages
Millions
136
3-
283
44
15
3
15
2
278
65
352
54
429*
100
650
1
100
* This figure is £18 millions g r e a t e r t h a n the corresponding e x p e n d i t u r e , viz. /411
millions, given in T a b l e V . This is d u e p a r t l y t o the occurrence of small excesses of income
which r e m a i n in t h e c o n t r i b u t o r y pensions a n d h e a l t h insurance schemes as now financed
b u t m a i n l y t o t h e c h a n g e s in t h e financial position of t h e u n e m p l o y m e n t scheme, due first
to interest o n t h e s u b s t a n t i a l balances which have been built u p in t h e fund as a result of
t h e war, a n d secondly t o t h e fact t h a t t h e existing u n e m p l o y m e n t c o n t r i b u t i o n is based
on a higher r a t e of u n e m p l o y m e n t t h a n h a s been assumed for t h e p o s t - w a r period.
T h e c h a r g e on the E x c h e q u e r a n d local rates a t the outset is t h u s £74 millions
m o r e t h a n the e s t i m a t e d charge which would h a v e b e e n incurred if the existing
system h a d r e m a i n e d in force in 1945 (subject to the limitations indicated in
p a r a g r a p h 25 above) whilst contributions of insured p e r s o n s a n d employers
provide a n e x t r a £147 millions.
3 4 . As r e g a r d s the s h a r e to b e b o r n e b y local authorities, u n d e r the existing
schemes local a u t h o r i t y e x p e n d i t u r e arises o n p u b l i c assistance a n d health
services. T h e a m o u n t included for t h e m in the estimates is £75 millions a
y e a r o u t of the total of £278 millions to b e m e t from national a n d local
t a x a t i o n , a s will b e seen from T a b l e V.
U n d e r t h e G o v e r n m e n t proposals local authorities will meet p a r t of the cost
of the n a t i o n a l health service (as explained in C m d . 6502). P u b l i c assistance
will be transferred to n a t i o n a l assistance, a n d on this transfer a financial adjust ­
ment will, it is u n d e r s t o o d , b e negotiated with local authorities. I t is esti­
m a t e d t h a t , of t h e £352 millions falling to b e m e t from national a n d local
taxation in 1945, £53 millions will fall to b e met from rates ( a n d general
E x c h e q u e r c o n t r i b u t i o n s to local revenues) in respect of local authorities'
e x p e n d i t u r e on health services. F i n a n c i a l a d j u s t m e n t s between the E x c h e q u e r
a n d the local authorities consequent on the transfer of public assistance h a v e
y e t t o be d e t e r m i n e d . T h u s the allocation of the b a l a n c e of e x p e n d i t u r e shown
in Table VI for 1945 a n d later y e a r s c a n n o t be indicated at the p r e s e n t time.
35. It will be observed that at the outset the E x c h e q u e r c h a r g e - t h o u g h
m u c h increased in a m o u n t - f o r m s a smaller p r o p o r t i o n t h a n before of the
total income required to provide all the services (54 p e r cent, against 65 per
c e n t . ) . T h e E x c h e q u e r proportion increases greatly with t i m e , however; by
1965, as m a y be d e d u c e d from T a b l e V I , it will h a v e grown to 64 p e r ce
o n a m u c h larger b u d g e t , a n d in 30 y e a r s ' time fully two-thirds of all e x p e n a i ­
ture will be met from national a n d local t a x a t i o n , less t h a n one-third coming
from social i n s u r a n c e contributions.
36. T a k i n g social insurance benefits alone, the E x c h e q u e r s h a r e will be­
nearly one-third at the outset, growing to one-half in 1965, with a further
increase to a b o u t 55 per cent, when the scheme has been in force for thiri
y e a r s . T h e p r o p o r t i o n of the cost met b y the E x c h e q u e r in the case of social
insurance benefits t h u s very greatly exceeds the p r o p o r t i o n of the actuarial
contribution allocated to the E x c h e q u e r , viz. a b o u t 22 p e r cent, taking all
benefits together (see T a b l e I in p a r a g r a p h 12). T h e r e are two m a i n reasons
for this. First, in addition to this direct subsidy to all contributors there is
a further s u b s i d y d u e to admitting the existing population of all ages for the
o r d i n a r y benefits at the same rate of contribution a s is charged to new entrants
a t age 16. Secondly, the liability t h u s u n d e r t a k e n by the State is not extin­
guished o v e r a fixed period of years a s would be t h e case if a series of deficiency
p a y m e n t s were m a d e to an a c c u m u l a t i v e fund.
T h e State will in fact discharge its liabilities, as regards both the proportion
of the contributions which it u n d e r t a k e s to meet a n d the strain of admitting
the existing p o p u l a t i o n a t the flat rate of contribution, b y m a k i n g good the
excess of e x p e n d i t u r e over income from contributions as it emerges y e a r b y
y e a r . T h e result is a charge on t h e t a x p a y e r which will increase for a con­
siderable p e r i o d , a s the e x p e n d i t u r e on pensions gradually m a t u r e s , a n d will
last in p e r p e t u i t y — t h i s b u r d e n being attributable m a i n l y to the proportion of
the contributions u n d e r t a k e n by the E x c h e q u e r a n d to the s u b s t a n t i a l increase
m a d e in pensions provision and, to a less extent, to the increases in sickness
benefits.
CONCLUSION
37. T h e estimates in this m e m o r a n d u m are necessarily based on peace-time
conditions which h a v e perforce been related to those obtaining before the
beginning of the w a r . Clearly it is impracticable a t the present time to attempt
to m e a s u r e with a n y precision the changes which m a y occur in t h e social
constitution of the population as it is now, or was immediately before the
war, a n d a s it will be after the i m m e d i a t e disturbances d u e to the w a r have
p a s s e d a w a y . F u r t h e r , the war is not yet finished a n d it is impossible to
assess the extent of future casualties.
Many of these changes will, no d o u b t , h a v e direct or indirect consequences
which m a y m a t e r i a l l y affect the realisation of the estimates. As instances,
reference m a y b e m a d e to (i) the future level of u n e m p l o y m e n t a n d the propor­
tions of the unemplo5--ed w h o will be entitled to u n e m p l o y m e n t benefit a n d to
national assistance respectively, these factors being f u n d a m e n t a l elements in
the financial s t r u c t u r e of the scheme; (ii) the future level of sickness, in respect
of which conditions will differ radically from those u n d e r which t h e available
sickness tables h a v e b e e n compiled; a n d (iii) t h e effect on the cost of pensions
of m a k i n g the g r a n t of pension d e p e n d e n t on retirement from work, as to which
n o p a s t experience u n d e r c o m p a r a b l e conditions is available.
I n the circumstances, h a v i n g regard to the f u n d a m e n t a l n a t u r e of the changes
from the v a r i o u s schemes of social insurance now existing for contributory
pensions, n a t i o n a l health i n s u r a n c e a n d u n e m p l o y m e n t i n s u r a n c e — t h e past
experience of which h a s h a d to be used, with modifications, a s the basis of
the n e w estimates—it will be a p p r e c i a t e d t h a t the a c t u a l e x p e r i e n c e w h e n the
new s c h e m e h a s been b r o u g h t fully i n t o o p e r a t i o n m a y p r o v e to differ m a t e r i a l l y
from the a s s u m p t i o n s m a d e .
T h e w o r k i n g of the s c h e m e in all its aspects
will clearly h a v e to be tested b y periodical a c t u a r i a l investigations. T h e s e will
fi-vc r e g a r d p r i m a r i l y to long-term t r e n d s a s affecting the financial e q u i l i b r i u m
i.. the v a r i o u s p a r t s of the s c h e m e , the c o n t i n u e d s u i t a b i l i t y of t h e r a t e s of
contribution p r e s c r i b e d , a n d the g r o w t h in the c h a r g e falling u p o n the
Exchequer.
I n the light of these reviews t h e G o v e r n m e n t will be in a position
to t a k e e a r l y a c t i o n , b y modifications in the r a t e s of c o n t r i b u t i o n , or otherwise,
in o r d e r to m a i n t a i n the financial b a l a n c e of t h e s c h e m e .
G. S. W .
EPPS.
Government Actuary's Department,
L o n d o n , S.W.I.
June, 1944.
APPEiNDIX II
A P P R O V E D SOCIETIES
1. A r r a n g e m e n t s for t h e e m p l o y m e n t of A p p r o v e d Societies a s a g e n t s for p a y i n g
benefit u n d e r a unified scheme of social insurance m i g h t t a k e one of t w o f o r m s : —
(i) T h e Society m i g h t be a responsible a g e n t t a k i n g decisions, a u t h o r i s i n g p a y ­
m e n t s a n d m a k i n g provision for sickness visitation, subject o n l y t o general super­
vision a n d a u d i t .
(ii) T h e Society m i g h t be merely a p a y i n g a g e n t a c t i n g on directions from t h e
central a u t h o r i t y .
T h e agency proposals in t h e R e p o r t c o n t e m p l a t e d a s y s t e m on t h e lines of .(i).
2. T h e R e p o r t suggested t h a t t h e conditions for such a system should i n c l u d e : —
(i) T h a t t h e Society gave a s u b s t a n t i a l sickness benefit from its o w n resources,
i.e. from t h e v o l u n t a r y contributions of i t s m e m b e r s .
(ii) T h a t it h a d a n efficient system for visiting i t s m e m b e r s wherever t h e y
might be.
(iii) T h a t i t w a s effectively self-governing.
(iv) T h a t i t d i d n o t work for profit a n d was n o t associated w i t h a n y b o d y working
for profit.
(v) T h a t it w a s registered tinder t h e F r e n d l y Soceties Acts or t h e T r a d e Union
Acts or, if n o t registered, t h a t i t conformed s u b s t a n t i a l l y t o t h e r e q u i r e m e n t s for
registration.
Societies satisfying t h e conditions proposed would cover only a limited p a r t of t h e
field.
Societies associated with t h e I n d u s t r i a l Assurance Companies a n d Collecting
Societies would b e ineligible u n d e r conditions (i) a n d (iv). Condition (i) would also
exclude a n u m b e r of o t h e r A p p r o v e d Societies which m a k e no provision for v o l u n t a r y
sickness benefit. I n fact, t h e o n l y bodies which would b e eligible a s a g e n t s would
be certain Friendly Societies a n d T r a d e Unions whose aggregate membership would be
unlikely t o cover more t h a n between one q u a r t e r a n d one third of t h e total n u m b e r
"f persons who will b e insured for sickness benefit u n d e r t h e new scheme. F o r t h e
remainder provision would have t o b e m a d e b y t h e C e n t r a l D e p a r t m e n t .
3. In favour of such a n a r r a n g e m e n t i t m a y b e said t h a t w i t h i n t h e limited field
which i t would cover—
(i) I t would c o n t i n u e those features of personal c o n t a c t a n d friendly relationship
which a r e associated w i t h t h e a d m i n i s t r a t i o n of bene tits b y certain types of Approved
Societies.
(ii) I t would enable p r i v a t e benefit t o be a d m i n i s t e r e d in association w i t h S t a t e
benefit of similar character, possibly w i t h some e c o n o m y in t h e r u n n i n g costs of t h e
p r i v a t e sides of Societies.
(iii) I t would help t o m a i n t a i n the a d m i n i s t r a t i o n of benefits o n a local a n d self­
governing basis.
(iv) I t would avoid t h e displacement of a n u m b e r of Approved Societies' officials
a n d would enable t h e m t o c o n t i n u e w i t h the work in which they h a d become
experienced.
4. T h e main a r g u m e n t s cii;ai)ist m a y be summarised t h u s : —
(i) Societies satisfying the conditions proposed would be unlikely to cover m o r o
t h a n , a t most, one third o f the population insured for sickness benefit.
(ii) T h e condition t h a t t h e Society should give a s u b s t a n t i a l benefit from its
own resources (essential a s an incentive t o careful administration) might be expected
t o give rise t o difficulties i n practice. F e w Societies give s u b s t a n t i a l sickness benefits
on t h e p r i v a t e side for more t h a n a limited period of sickness; t h u s Societies would
frequently be paying S t a t e sickness benefit for prolonged illnesses where v o l u n t a r y
benefit h a d become small in a m o u n t or h a d ceased altogether, a n d in such cases
t h e incentive t o review t h e claims w i t h d u e care would be m u c h reduced.
(iii) I t is difficult t o see how a Society with a scattered m e m b e r s h i p could m a i n t a i n
personal c o n t a c t w i t h its m e m b e r s .
5. If t h e a l t e r n a t i v e p l a n were a d o p t e d of allowing Societies t o b e mere p a y i n g
a g e n t s , w i t h o u t being responsible for controlling claims, t h e r e would be n o case for
retaining t h e conditions set o u t in p a r a g r a p h 2 above, or for excluding a n y particular
t y p e of Society.
6. T h e one substantial a r g u m e n t t h a t can be advanced in favour oi such an arrange­
m e n t is t h a t i t would enable t h e Central D e p a r t m e n t t o m a k e i m m e d i a t e use of t h e
extensive organisation of agents a n d officials, which covers practically t h e entire
c o u n t r y . T h i s would ensure t h e c o n t i n u a n c e , on a m u c h wider scale t h a n would be
possible u n d e r t h e m o r e restricted agency a r r a n g e m e n t , of t h e m e t h o d of p a y i n g
sickness benefit to which people h a v e become a c c u s t o m e d .
7. Against t h e a r r a n g e m e n t t h e principal a r g u m e n t is t h a t on general grounds of
policy i t is undesirable t o e n t r u s t t h e disbursement of S t a t e funds on a large scale t o
agencies which have no direct responsibility for a d m i n i s t r a t i o n , a n d whose officers are
neither t h e servants of t h e G o v e r n m e n t n o r u n d e r direct Government control. T h e
a d o p t i o n of an agency a r r a n g e m e n t would also p e r p e t u a t e t h e undesirable overlapping
of t e r r i t o r y between local agents of different bodies w i t h resulting duplication a n d
w a s t e of effort.
8. Under either a l t e r n a t i v e there would b e a dual system of a d m i n i s t r a t i o n , since
it would be necessary for t h e Central D e p a r t m e n t t o m a i n t a i n local offices t o administer
(i) t h e benefits, o t h e r t h a n sickness benefit, of insured persons generally a n d (ii) t h e
sickness benefits of those who did n o t choose t o join an A p p r o v e d Society. T h e r e
would be a very large m e a s u r e of duplication in t h e work of compiling a n d m a i n t a i n ­
ing t h e c o n t r i b u t i o n records of insured persons and o t h e r d a t a relating t o their
insurance.
9. T h e G o v e r n m e n t h a v e h a d a n o p p o r t u n i t y of receiving t h e considered
views of t h e Approved Societies t h r o u g h d e p u t a t i o n s representing m o s t types of
Society. T h e first of these d e p u t a t i o n s w a s a joint one, from t h e N a t i o n a l Conference
of F r i e n d l y Societies a n d o t h e r bodies representative of A p p r o v e d
Societies,
including t h e N a t i o n a l Conference of I n d u s t r i a l A p p r o v e d Societies. T h e total
n u m b e r of insured persons covered b y t h e constituent Societies of these organisa­
tions a m o u n t s t o a p p r o x i m a t e l y i S millions, a b o u t 85 p e r cent, of t h e t o t a l insured
population.
T h e second d e p u t a t i o n w a s from t h e N a t i o n a l Federation of Employees'
Approved Societies, t h e c o n s t i t u e n t Societies of which h a v e a
membership
of some 300,000. These d e p u t a t i o n s did n o t accept t h e a r g u m e n t s for t h e abolition
of A p p r o v e d Societies, b u t as an a l t e r n a t i v e t o t h e retention of Societies a s independent
financial units, t h e y b o t h s u b m i t t e d detailed proposals under which t h e Societies would
a c t as responsible a g e n t s t a k i n g decisions a n d authorising p a y m e n t s , b u t w i t h o u t
t h e limitations a n d safeguards r e c o m m e n d e d i n t h e R e p o r t .
10. Summarised, t h e proposals of t h e N a t i o n a l Conference of Friendly Societies,
a n d of t h e bodies associated w i t h t h e m in t h e d e p u t a t i o n , are on t h e following l i n e s : —
(i) " Approved Agencies " should be established. A n y b o d y consisting of n o t
less t h a n 5,000 m e m b e r s should be a p p r o v e d p r o v i d e d : —
(a) T h e b o d y h a d efficiently a d m i n i s t e r e d a scheme of sickness benefit (on a
v o l u n t a r y basis o r under a S t a t e compulsory scheme) for n o t less t h a n t w e n t y ­
five years.
(b) T h e affairs of t h e b o d y were subject to effective self-government b y its
members.
(The Approved Agencies would b e in effect t h e larger of t h e existing Friendly
Societies a n d t h e I n d u s t r i a l Approved Societies, t h o u g h t h e smaller ones would be
allowed t o combine, on t h e S t a t e side only, in order t o reach t h e m i n i m u m qualifying
members liip.)
(ii) E v e r y insured person should h a v e complete freedom of choice of A p p r o v e d
Agency w i t h t h e right t o transfer a t recognised periods. If a person did n o t
( :xercise his choice he would be assigned to an A p p r o v e d Agency b y t h e Minister.
(iii) T h e principal functions of an Approved Agency would b e : —
(a) T o receive S t a t e c o n t r i b u t i o n cards from i t s m e m b e r s a n d record, in surh
m a n n e r as t h e Minister might d e t e r m i n e , p a y m e n t s m a d e b y its m e m b e r s .
(b) T o a u t h o r i s e a n d pay all claims m a d e b y i t s m e m b e r s for n o t only sickness
benefit, b u t industrial disability benefit, m a t e r n i t y benefit, m a t e r n i t y g r a n t , widows'
benefit, d e p e n d a n t ' s allowance, m a r r i a g e g r a n t and funeral g r a n t .
(c) T o a d m i n i s t e r an effective system of sickness visitation a m o n g its m e m b e r s .
(d) T o s u b m i t i t s a c c o u n t s in respect of p a y m e n t s m a d e on behalf of t h e State
to G o v e r n m e n t A u d i t o r s .
(e) Generally t o c o m p l y with a n y Regulation m a d e by t h e a p p r o p r i a t e Minister
affecting A p p r o v e d Agencies.
(iv) A Central R e g i s t r y (or a n u m b e r of R e g i o n a l Registries) of insured persons
should be established u n d e r t h e supervision a n d control of t h e Minister which would
serve a s a Clearing House b y m e a n s of which all t h e insurance d a t a relating t o a n y
particular individual would b e m a d e available t o t h e various organisations responsible
for t h e a d m i n i s t r a t i o n of t h e several t y p e s of social insurance benefits.
(v) A p p r o v e d Agencies should be r e m u n e r a t e d on a per capita basis.
(vi) If t h e Minister were satisfied t h a t an Approved Agency w a s n o t c o m p l y i n g
w i t h t h e conditions u n d e r which it became " a p p r o v e d , " t h e Minister would h a v e
power t o withdra%v a p p r o v a l , subject to t h e r i g h t of t h e b o d y t o a p p e a l t o an
independent Tribunal.
I I . These proposals of t h e N a t i o n a l Conference, which h a v e a m u c h wider scope
than t h e agency a r r a n g e m e n t s proposed in t h e R e p o r t , h a v e been e x a m i n e d w i t h t h e
greatest care b u t h a v e b e e n found t o b e open t o w e i g h t y objections, viz. : —
(i) T h e Agencies would h a v e n o direct financial incentive to a d m i n i s t e r social
insurance benefits carefully. T h i s incentive to efficient a d m i n i s t r a t i o n is one t o which
the G o v e r n m e n t a t t a c h t h e u t m o s t i m p o r t a n c e . Provision is m a d e in t h e proposals
for supervisory m e a s u r e s such as G o v e r n m e n t inspection a n d a u d i t , b u t these a r e
n o r m a l features of a n y scheme involving e x p e n d i t u r e of public funds; t h e y are
subsidiary t o , and in no w a y a s u b s t i t u t e for, t h e safeguard of direct financial
responsibility.
(ii) T h e proposed system would place upon t h e Approved Agencies t h e d u t y
of forwarding to t h e Central R e g i s t r y all t h e insurance d a t a required for t h e purpose
of claims for benefit (e.g. u n e m p l o y m e n t benefit) which t h e Agencies t h e m s e l v e s
would not a d m i n i s t e r . This would involve a great deal of d u p l i c a t i o n in t h e compila­
tion a n d m a i n t e n a n c e of records a n d a cumbersome i n t e r c h a n g e of detailed informa­
tion between t h e Approved Agencies, t h e Centra! R e g i s t r y a n d t h e organisations
responsible for t h e a d m i n i s t r a t i o n of social insurance benefits o t h e r t h a n those
administered b y t h e Agencies.
(iii) T h e free right of transfer would i n e v i t a b l y lead t o undesirable competition
b e t w e e n Agencies.
(iv) T h e proposal t h a t a Central D e p a r t m e n t should a r b i t r a r i l y assign a person
who does n o t exercise his choice t o a particular agency is full of difficulties. I t
involves a n i n v i d i o u s jurisdiction a n d opens up t h e possibility of u n b e c o m i n g
disputes.
12. T h e N a t i o n a l F e d e r a t i o n of E m p l o y e e s ' A p p r o v e d Societies a r e a t one with
the N a t i o n a l Conference of F r i e n d l y Societies in urging t h a t ali insured persons should
receive their benefits t h r o u g h A p p r o v e d Agencies b u t they feel t h a t t h e difficulty of
ensuring financial responsibility in t h e absence of financial a u t o n o m y m i g h t b e m e t
more a d e q u a t e l y . T h e v p r o p o s e : —
(i) T o m a k e t h e existing representative Associations of A p p r o v e d Societies t h e
units for t h e a d m i n i s t r a t i o n of benefits on an a g e n c y basis, t h e individual Societies
being conducted a s b r a n c h e s of t h e Associations;
(ii) T o set u p a S t a t u t o r y Committee consisting of a representative of each Associa­
tion and representatives of t h e G o v e r n m e n t with an independent Chairman a p p o i n t e d
b y the Minister.
T h e functions of this S t a t u t o r y Committee would include the investigation of
excessive sickness claims, t h e co-ordination of a r r a n g e m e n t s for sick visiting, t h e
investigation of cases of alleged m a l a d m i n i s t r a t i o n , a n d t h e co-ordination of a d m i n i s t r a ­
tive procedure.
T h e underlying basis of this suggestion is t h a t the presence, in such aggregations, of
individual Societies giving substantial v o l u n t a r y sickness benefits would ensu
economical a d m i n i s t r a t i o n t h r o u g h o u t the whole unit. There seems little substance
in this a r g u m e n t a n d in a n y event t h e largest of t h e various aggregations proposed
would n o t include a n y constituent Society providing a v o l u n t a r y sickness benefit.
APPENDIX
III
MISCELLANEOUS POINTS IN T H E SCHEME
;. This Appendix sets o u t t h e G o v e r n m e n t s proposals on a n u m b e r of miscellaneous
m a t t e r s , mostly connected w i t h m a c h i n e r y o r procedure.
I t does n o t p u r p o r t t o be e x h a u s t i v e . I t would be impracticable to e n u m e r a t e in
a P a p e r of t h i s character all t h e p o i n t s of detail requiring settlement in the p r e p a r a ­
tion of a comprehensive scheme of social insurance. T h e items mentioned a r e included,
p a r t l y as being of sufficient i m p o r t a n c e in themselves t o justify m e n t i o n , a n d p a r t l y
b y w a y of illustration of t h e various problems t h a t arise.
CONTRIBUTIONS,
EXCUSALS,
EXEMPTIONS,
ETC.
2. T h e following is a b r o a d outline of t h e proposed a r r a n g e m e n t s for p a y m e n t of
contributions.
3. Weekly C o n t r i b u t i o n . — T h e r e will be a single weekly contribution for all pur­
poses for each person, t h o u g h t h e a m o u n t will depend upon sex a n d classification,
with lower rates for persons u n d e r age 18.
T h e rates of contribution a r e set o u t in p a r a g r a p h 48 of the P a p e r . T h e m e t h o d of
p a y m e n t will normally be b y purchase of t h e a p p r o p r i a t e s t a m p t o be affixed t o the
insurance card.
T h e p a y m e n t of c o n t r i b u t i o n s due will be enforceable b y legal
proceedings.
E v e r y week in t h e year should be accounted for either b y contributions o r b y t h e
e x e m p t i o n s or excusais referred t o below, which m a y be g r a n t e d in special circum­
stances.
4. Contribution R e c o r d . — A person's contribution record, i.e. t h e n u m b e r of
Class I, I I or IV s t a m p s and excusals, will d e t e r m i n e his right t o t h e v a r i o u s benefits
to be provided u n d e r t h e scheme for each insurance Class. T h e position of a married
woman unless she is separately insured will b e governed b y h e r h u s b a n d ' s c o n t r i b u t i o n
record.
5. E x c u s a l s . — C o n t r i b u t i o n s will b e " e x c u s e d , " i.e. will be deemed to h a v e been paid for t h e purpose of certain contribution conditions, as follows: — Excusal from
Class
I contributions
Grounds
Certified sickness, m a t e r n i t y a n d unem­
ployment.
Class II c o n t r i b u t i o n s
Certified sickness a n d m a t e r n i t y .
Class IV contributions
Receipt of widow's or g u a r d i a n ' s benefit or
widow's pension (other t h a n t h e 10s.
widow's
pension
payable u n d e r
the
existing
scheme
or
the
transitional
arrangements); full-time educational in­
struction of s t u d e n t s a n d others, sub­
ject to certain conditions; a n d unpaid
apprenticeship.
All c o n t r i b u t i o n s
R e c e i p t of training allowance.
6. E x e m p t i o n s . — I t is proposed t o e x e m p t persons in certain circumstances from
p a y m e n t of c o n t r i b u t i o n s . C o n t r i b u t i o n s in such cases will n o t be exacted from the
e x e m p t person although if he h a s an employer t h e e m p l o y e e s share of t h e contribution
will be p a y a b l e . E x c e p t in t h e case of m a t e r n i t y benefit, c o n t r i b u t i o n s from which
persons are e x e m p t e d will n o t be deemed to h a v e been paid for the purpose of satis­
fying the c o n t r i b u t i o n tests. (The rights of e x e m p t persons u n d e r t h e N a t i o n a l H e a l t h
Service will n o t be affected b y t h e fact t h a t t h e y are e x e m p t from t h e p a y m e n t of
social insurance contributions.)
The circumstances in which e x e m p t i o n will be g r a n t e d a r e a s follows: —
(i) Exemption, on account of low income [Class II and Class IV).
Persons falling into Class I I o r Class IV whose t o t a l income is below /75 a y e a r
will b e p e r m i t t e d t o claim e x e m p t i o n .
T h e R e p o r t suggests t h a t here there m i g h t b e the a l t e r n a t i v e s of total e x e m p ­
tion or e x e m p t i o n from t h e p a y m e n t of c o n t r i b u t i o n s o t h e r t h a n the p a r t allocated
towards t h e cost of medical services. T h e G o v e r n m e n t d o u b t w h e t h e r t h e p r o p o s a l
t o sub-divide persons e x e m p t on grounds of low income into those w h o c a n a n d those
ho c a n n o t p a y t h e p r o p o r t i o n of t h e weekly c o n t r i b u t i o n in respect of medical
services is a d m i n i s t r a t i v e l y practicable o r desirable a n d t h i n k it b e t t e r t h a t t o t a l
exemption should b e g r a n t e d in all such cases.
after having accepted
retire­
(ii) Persons over pension age who take up employment
ment
pension.
Persons in these circumstances will, as u n d e r t h e present schemes, b e e x e m p t
from p a y m e n t of c o n t r i b u t i o n s .
'iii) Widows in receipt of guardians
benefit or widow's
pension.
Widows entitled to guarclian's benefit will, if gainfully occupied, have t h e option
of being e x e m p t from p a y m e n t of Class I or Class I I c o n t r i b u t i o n s . (If n o t gainfully
occupied, t h e y will, as a l r e a d y explained, b e excused p a y m e n t of Class I V contri­
butions.)
Similar t r e a t m e n t will be accorded to t h o s e w h o are entitled to w i d o w ' s pension
(other t h a n t h e ros. pension p a y a b l e under t h e existing scheme o r t h e t r a n s i t i o n a l
arrangements). I t is n o t t h o u g h t t h a t there a r e sufficient g r o u n d s for allowing e x e m p ­
tion to gainfully occupied widows w i t h o u t d e p e n d e n t children w h o are in receipt of t h e
short-term w i d o w ' s benefit.
(iv) Gainfully occupied married
women.
The question of e x e m p t i o n , w h e t h e r o p t i o n a l or c o m p u l s o r y , for such w o m e n is
dealt with in p a r a g r a p h s 108-111 of t h e P a p e r .
(v) Insured persons in prison.
N o formal g r a n t of e x e m p t i o n will b e given b u t evidence of d e t e n t i o n will b e
accepted a s explanation of non-compliance d u r i n g t h e relevant period. I t will b e
open to t h e insured person to arrange for c o n t r i b u t i o n s t o b e p a i d on his behalf
at the Class IV r a t e .
7. Change of I n s u r a n c e Class.—The insurance card will show t h e normal i n s u r a n c e
Class for contribution purposes. Many people will remain in t h e same insurance Class
during their whole working life, or for very s u b s t a n t i a l periods. Change of o c c u p a t i o n
involving c h a n g e of insurance Class m a y , however, t a k e place frequently. T h e holder
of a Class I insurance c a r d n o r m a l l y emplo3 ed u n d e r c o n t r a c t of service m a y from
time to t i m e t a k e u p work o n his o w n a c c o u n t a n d so find himself in a n o c c u p a t i o n
where a Class I I s t a m p is a p p r o p r i a t e ; or he m a y give u p w o r k for a week or t w o
and fall i n t o Class I V . Similarly a m a n engaged in business o n h i s o w n a c c o u n t
holding a Class I I insurance card m a y engage from time to time in e m p l o y m e n t u n d e r
contract of service a n d d u r i n g these periods will fall i n t o Class I .
For each insurance week a c o n t r i b u t i o n a p p r o p r i a t e to t h e insurance class into which
the c o n t r i b u t o r falls in t h a t week will b e p a y a b l e w h a t e v e r t h e class of insurance
card held.
S. Liability to Contribute in more t h a n O n e Class in One W e e k .
Cases will arise
where p a r t of a week is s p e n t on w o r k which does n o t correspond t o t h e i n s u r a n c e
card held, e.g., where a m a n does t h r e e d a y s of e m p l o y m e n t u n d e r a c o n t r a c t of
service a n d t h r e e days of work on his own a c c o u n t .
Subject to t h e exceptions m e n t i o n e d in t h e following p a r a g r a p h , a n y i n s u r a b l e
employment u n d e r c o n t r a c t of service on a n y d a y of t h e week will carry a Class I
stamp a n d n o o t h e r s t a m p will be d u e in t h a t week. T o facilitate t h i s a r r a n g e m e n t ,
the liability of a person t o p a y a Class I I or Class I V c o n t r i b u t i o n will n o t arise i n
each week u n t i l t h e end of t h a t week, b u t for Class I t h e present principle t h a t t h e
first employer in t h e week is liable, for t h e c o n t r i b u t i o n will c o n t i n u e .
9. Subsidiary or Inconsiderable E m p l o y m e n t s . U n d e r existing law persons engaged
in an e m p l o y m e n t specified b y Special Order as being o r d i n a r i l y a d o p t e d a s subsidiary
employment a n d n o t a s t h e principal m e a n s of livelihood a r e excepted from all t h e
social insurance schemes, a n d persons employed only to a n e x t e n t which is r e g a r d e d
as inconsiderable are excepted from t h e u n e m p l o y m e n t insurance scheme.
The
Government propose t o a p p l y these exceptions in t h e new scheme. I n t h e rules for
stamping in Class I, n o a c c o u n t will b e taken of work which is for t h e above reasons
excepted. Similarly, t h e question w h e t h e r t h e c o n t r i b u t i o n should b e a t t h e Class I I
or Class IV r a t e will depend on whether, in t h e p a r t i c u l a r case, t h e e m p l o y m e n t o r
occupation is s u b s t a n t i a l enough t o b r i n g t h e person w i t h i n t h e " gainfully occupied
class.
r
i o . Family E m p l o y m e n t s .
Persons engaged in family e m p l o y m e n t (i.o., employ­
m e n t of one member of a family b y a n o t h e r forming p a r t of t h e same household)
who strictly fall u n d e r Class I. will be excluded from t h a t Class a n d will fall into
Class I I .
T h e exclusion from insurance of a married' woman employed b y her
h u s b a n d , which a p p e a r s in the existing scheme, will be c o n t i n u e d . In view of the
provision which the new scheme proposes for married women on their h u s b a n d s '
insurance, t h e exclusion will extend t o married women who are associated in cmploy­
m e n t with their h u s b a n d s , whether as p a r t n e r s , employers, or employees.
I I . Method of P a y m e n t .
P a y m e n t will normally be m a d e by affixing the a p p
priate s t a m p each week to the insurance card, b u t in suitable cases the use of h i ^ i
value stamps covering a n u m b e r of weeks m a y be authorised. Consideration will be
given to a l t e r n a t i v e m e t h o d s of p a y m e n t of c o n t r i b u t i o n s to meet exceptional cir­
cumstances, e.g., b y remittances supported b y schedules, and possibly in Classes II
and IV b y means of cheque, money order, e t c .
Contributions a t the Class I r a t e will in no circumstances be payable otherwise than
for weeks in which there h a s been bona fide e m p l o y m e n t in respect of which such
contributions are a p p r o p r i a t e (including weeks of paid holiday).
12. P a y m e n t of Qualifying Contributions.
Title to benefit will n o t arise until a
n u m b e r of initial qualifying contributions h a v e been actually paid.
T h e right to p a y such initial qualifying c o n t r i b u t i o n s d u r i n g sickness or unemploy­
m e n t is a feature of t h e existing H e a l t h a n d Pensions schemes; b u t u n d e r the
U n e m p l o y m e n t I n s u r a n c e scheme contributions cannot be paid a t present for weeks
of u n e m p l o y m e n t .
Since t h e main object of the initial qualifying contribution conditions for benefit
is to restrict t h e benefits payable in any Class t o persons who h a v e established a
s t a t u s in t h a t Class, there is considerable objection to allowing p a y m e n t of qualifying
c o n t r i b u t i o n s during sickness or u n e m p l o y m e n t and it is n o t proposed to p e r m i t it.
13. Fractional Contributions. Consideration has been given t o a suggestion in the
R e p o r t t h a t a reduced contribution should be provided for a short period of employ­
m e n t , e.g., two or t h r e e days. T h i s would involve as a m i n i m u m the use of half­
r a t e s t a m p s , excusals for " half weeks " a n d p r o b a b l y half-size s t a m p s .
I t is considered t h a t t h e practical objections are so great t h a t n o provision should
be m a d e for t h e p a y m e n t of fractional c o n t r i b u t i o n s . Many of these cases will be
covered b y the subsidiary or inconsiderable e m p l o y m e n t s provisions.
14. E m p l o y m e n t by Several E m p l o y e r s . Provision has been m a d e in t h e existing
Health and Pensions schemes for t h e a p p r o v a l of agreements by
employers t o pay
c o n t r i b u t i o n s in r o t a t i o n . F o r m a l agreements are rare b u t informal a r r a n g e m e n t s
are frequently m a d e . T h e existing facilities for formal agreements will be available
under t h e new scheme.
15. Distribution of J o i n t Contribution between Employers a n d E m p l o y e e s where
Wasjcs are low. T h e position of low wage earners u p to age 18 will be m e t by
t h e lower contribution d u e . In t h e case of persons aged 18 and over e a r n i n g wages
a t a r a t e below 30s. a week the G o v e r n m e n t propose t h a t t h e joint contribution
(including the industrial injury contribution) should be distributed as follows: —
M e n : E m p ! o y e e ' s share 2s 6d. E m p l o y e e s share 4s. 5d. W o m e n : E m p l o y r e ' s share 2s. od. E m p l o y e e s share 3s. 5d. T h e G o v e r n m e n t do n o t feel justified in m a k i n g a n y redistribution of the contribution
in cases where the employee receives b o a r d and lodging together with a small money
p a y m e n t or has o t h e r sources of r e m u n e r a t i o n from his occupation (e.g. a w a i t e r who
relies p a r t l y on tips).
PROCEDURE FOR THE DETERMINATION OF QUESTIONS
AND
APPEALS
16. T h e G o v e r n m e n t propose t h e following a r r a n g e m e n t s : —
(i) Liability
to contribute.
Disputes on liability t o c o n t r i b u t e . Class or r a t e of
contribution, e t c . , will be determined b y the Minister, who will h a v e t h e right to
s u b m i t t h e question for decision to t h e H i g h Court. * A p a r t y aggrieved b y a decision
of the Minister will h a v e a r i g h t of appeal to t h e H i g h Court* on questions of law.
(ii) Unemployment
benefit.
Decisions will be t a k e n in t h e first instance by
I n s u r a n c e Officers. An appeal will lie to a local t r i b u n a l c o n s t i t u t e d on t h e lines
of t h e existing Courts of Referees u n d e r t h e U n e m p l o y m e n t Insurance A c t s . Appeals
from t h e local t r i b u n a l s will lie to an U m p i r e a p p o i n t e d b y the Crown, and his
decision will be final.
(iii) Sickness,
invalidity
and maternity
benefits and maternity
grant,
including
attendant's
allowance.
Decisions will be t a k e n in t h e first instance b y I n s u r a n c e
Officers b u t , in view of t h e medical issues which may arise, t h e appeal a r r a n g e m e n t s
outlined above for u n e m p l o y m e n t benefit will need to be modified to m a k e t h e m suit­
able for a p p e a l s on questions relating to the benefits dealt with under this heading.
Provision will be m a d e , as a t present, for enabling references t o be m a d e to t h e H i g h
C o u r t ' on questions of law arising in the course of appeals.
(iv) Pensions and widow's and guardian's benefit.
Claims for pension a n d w i d o w ' s
/ nd g u a r d i a n ' s benefit will be decided by t h e Minister subject to appeal t o the
Umpire, whose decision will be final. T h e existing right of reference t o the H i g h
Court* on questions of law arising in the course of appeals will be retained.
POSITION OK P E R S O N S
LEAVING OR COMING TO GREAT
BRITAIN
Reciprocal A r r a n g e m e n t s with O t h e r Countries
17. U n d e r the legislation governing t h e p r e s e n t schemes certain powers are given
'to make reciprocal a r r a n g e m e n t s where similar schemes a r e in operation.
I t is only
in H e a l t h I n s u r a n c e t h a t t h e power e x t e n d s b e y o n d t h e British C o m m o n w e a l t h .
18. T h e position of N o r t h e r n Ireland is exceptional. In H e a l t h I n s u r a n c e , the
same legislation applies t o t h e whole United K i n g d o m of Great Britain a n d N o r t h e r n
Ireland. As regards C o n t r i b u t o r y Pensions a n d U n e m p l o y m e n t Insurance, reciprocal
arrangements h a v e been m a d e between t h e t w o countries, enabling persons in one
country t o r e t a i n their rights when they go to reside in the o t h e r c o u n t r y . T h u s ,
over the whole field of t h e e x i s t i n g schemes of social insurance in G r e a t Britain a n d
Northern I r e l a n d there is, in effect, complete integration. T h e G o v e r n m e n t of
Northern Ireland having a l r e a d y a n n o u n c e d t h a t t h e y intend t o i n t r o d u c e a scheme
of social insurance s u b s t a n t i a l l y corresponding t o the n e w scheme in G r e a t B r i t a i n ,
it will be possible to m a i n t a i n t h i s position.
19. Reciprocal a r r a n g e m e n t s h a v e been m a d e w i t h the Isle of Man and E i r e , e n a b l i n g
persons in one c o u n t r y to retain t h e i r Health I n s u r a n c e rights when they go t o reside
in the o t h e r c o u n t r y . Reciprocal a r r a n g e m e n t s h a v e also been m a d e w i t h t h e Isle of
Man as regards C o n t r i b u t o r y Pensions.
20. T h e institution of a comprehensive scheme of social insurance will call for a
review of t h e reciprocal a r r a n g e m e n t s referred to in t h e preceding p a r a g r a p h .
The
present a r r a n g e m e n t s will, so far a s possible, be c o n t i n u e d , b u t it m u s t be recognised
that the c o n t e m p l a t e d i m p r o v e m e n t of benefits m a y seriously complicate t h e position.
21. T h e G o v e r n m e n t propose to include in t h e new legislation enabling powers w i t h
respect t o reciprocal a r r a n g e m e n t s .
These powers will n o t be confined lo m a k i n g
arrangements only where t h e o t h e r c o u n t r y provides benefits corresponding to all t h e
benefits of t h e British scheme, b u t will p e r m i t limited a r r a n g e m e n t s also, e.g. for
sickness o r u n e m p l o y m e n t benefit or r e t i r e m e n t pensions or for a c o m b i n a t i o n of
two or more of the benefits.
T h e possibility of f u r t h e r provisions g o v e r n i n g t h e
insurance position of those who m i g r a t e t o o t h e r p a r t s of the British C o m m o n w e a l t h
will be e x a m i n e d , b u t a gocd deal t u r n s on t h e n a t u r e of the v a r i o u s social i n s u r a n c e
schemes t h a t are being o r m a y b e developed.
Persons Leaving Great Britain T e m p o r a r i l y or P e r m a n e n t l y
22. I t is clear t h a t m a n y people will leave this c o u n t r y in circumstances which
reciprocal a r r a n g e m e n t s would n o t cover, a n d provision m u s t be m a d e t o enable such
persons t o m a i n t a i n , so far as possible, their insurance rights while a b r o a d .
23. U n d e r the peace-time provisions of the existing schemes liability of persons
abroad t o compulsory insurance was confined b r o a d l y to t h e insurance a g a i n s t
unemployment of persons w h o were engaged on some p a r t i c u l a r work a n d were in
the e m p l o y m e n t of British employers.
V o l u n t a r y insurance for health a n d pensions
purposes was a v a i l a b l e t o qualified persons who were abroad t e m p o r a r i l y , or, for
pensions insurance, to persons resident p e r m a n e n t l y in o t h e r p a r t s of t h e B r i t i s h
Commonwealth.
W i d e r emergency provisions h a v e b e e n introduced t o m e e t t h e
war situation.
24. U n e m p l o y m e n t insurance benefits are n o t p a y a b l e outside t h e U n i t e d K i n g d o m .
Health insurance benefits a r e n o t normally p a y a b l e outside the U n i t e d K i n g d o m , b u t
(apart from t h e a b o v e - m e n t i o n e d reciprocal a r r a n g e m e n t s ) m a y be paid, subject
to certain conditions a n d t o some e x t e n t a t t h e discretion of the a u t h o r i t y a d m i n i s t e r ­
ing benefit, to persons t e m p o r a r i l y a b r o a d . C o n t r i b u t o r y pensions are n o t p a y a b l e
unless t h e pensioner is in t h e U n i t e d K i n g d o m or in some o t h e r p a r t of the British
Commonwealth.
25- I n order t h a t any accruing right:" u n d e r the Britis!' sell) me may be- available
under the usual conditions when the person concerned returns to this c o u n t r y , the
G o v e r n m e n t propose to make the following provision for persons going abroad to
countries with which reciprocal a r r a n g e m e n t s arc not in force.
26. Persons employed
under contract of service.
Liability to insurance in Class I
will arise where—
(i) the employee is sent a b r o a d for the e m p l o y m e n t ; a n d
(ii) t h e employer is resident or has his principal place of business in the U n i t " !
K i n g d o m ; and
(iii) t h e e m p l o y m e n t is such t h a t it would have been e m p l o y m e n t in Class 1
if it had been in the United K i n g d o m .
Liability will c o n t i n u e if the employee changes his employer while a b r o a d , pro­
viried t h a t conditions (ii) and (iii) are satisfied. I t is proposed t h a t a reduced Class I
contribution should be p a y a b l e in such cases in view of the fact t h a t t h e employee
will n o t be in a position to o b t a i n certain of the benefits while a b r o a d .
27. Persons who go abroad
in other circumstances.
H e r e it is necessary t o di.
tinguish between t e m p o r a r y absences a b r o a d a n d absences of a p e r m a n e n t o r semi­
p e r m a n e n t c h a r a c t e r wjiich m a y extend u p t o pension age. In the latter case it seems
practicable to provide for the m a i n t e n a n c e of pension rights only. Title to continue
insurance contributions will be on t h e following lines: —
P a y m e n t of Class I V c o n t r i b u t i o n s will be permissible, b u t if the absence does
n o t e x t e n d b e y o n d t h i r t e e n weeks a n d t h e person was before going a b r o a d in
Class I or Class" I I , p a y m e n t of Class I I c o n t r i b u t i o n s will b e p e r m i t t e d . T h i s will
enable every person going abroad to m a i n t a i n his pensions cover, a n d where the
absence is short it will allow existing rights t o sickness benefit to be maintained
as far as possible.
Consideration is being given to t h e m e t h o d s of p a y m e n t of c o n t r i b u t i o n s in such
cases and to t h e question of allowing p a y m e n t of a limited n u m b e r of contributions
on return to this c o u n t r y .
28. Benefits abroad.
The G o v e r n m e n t intend generally to follow existing practice
u n d e r t h e various schemes, t h o u g h it will be appreciated t h a t the retirement condition
in relation to old age pensions, a n d t h e reduction of g u a r d i a n ' s benefit, widow's
pension and r e t i r e m e n t pension t o t a k e a c c o u n t of earnings, introduce serious com­
plications.
Persons coming t o Great B r i t a i n
29. Persons taking
up employment
under contract
of service will be compulsorilv
insured in Class I during t h e whole of t h e e m p l o y m e n t .
30. Persons from abroad engaged in busiiiess on their ozvn account
or in some
gainful occupati07i
excepted
from Class I will fall into Class I I . I n order t o meet
t h e case of professional or business men who come to this c o u n t r y for a comparatively
short t i m e and t o provide a m a r g i n of time for classification in o t h e r cases, it is
proposed t h a t t h e test for requiring Class I I contributions should b e t h a t they
h a v e become " ordinarilv r e s i d e n t , " a n d t h a t for this purpose a person should be
deemed to be " ordinarily resident " in Great Britain if he has been residing here
for over six m o n t h s , e x c e p t where residence is only for t h e p u r p o s e of a t t e n d i n g a
course of education o r s t u d y .
31. Persons who come to Great Britain and do not take up any definite
occupation
will become liable to i n s u r a n c e in Class I V from t h e d a t e of becoming " ordinarily
r e s i d e n t , " defined as a b o v e .
LONDON
PRINTED AND PUBLISHED BY HIS MAjESTY'3 STATIONERY OFFICE
To be purchased directly from H.M. STATIONERY OFFICE at the following addressta:
York House. Kingsway, London, W.C.2 ; 13a Castle Street, Edinburgh 2 ;
39-41 King Street, Manchester 2; 1 St. Andrew's Crescent, Cardiff;
So Chichcster Street, Belfast;
cr through any bookseller
1944
P r i c e d. n e t
(3*333)
Wt.
—
iso, 131 gallty, 33 paged
50
9/44 D.L. G. 344
f) P ? n err"- ­
k
rv
* ,
41
w
SOCIAL
INSURANCE
P A R T II
WORKMEN^
COMPENSATION
Proposals for an Industrial Injury Insurance Scheme Presented by the Minister of Reconstruction to Parliament
by Command of His Majesty
, 1944
LONDON: HIS MAJESTVS STATIONERY
NET
Cmd.
OFFICE
P a r t I c o n t a i n s t h e G o v e r n m e n t s p r o p o s a l s for
social i n s u r a n c e g e n e r a l l y (except for i n d u s t r i a l
injury) a n d for F a m i l y a l l o w a n c e s a n d h a s b e e n
p u b l i s h e d s e p a r a t e l y (Cmd.
)
*
CONTENTS
Paragraph
Foreword
I.
The Present System
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1-13
II,— Proposals In the Report on Social Insurance and Allied Services
Views on present system
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Supersession recommended ...
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v Possibility of complete unification with social insurance
Grounds for special benefits ...
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A r g u m e n t s for pooling risks and c o n t r i b u t o r y system
Special l e v y oh employers in h a z a r d o u s industries
Scheme of benefits
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Settlement of claims ...
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scheme
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14
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15
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16
. . . 17-18 ...
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20
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21
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22
'.—The G o v e r n m e n t s Views
General conclusions ...
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L i m i t a t i o n of special r a t e s of benefit to long t e r m cases
Relation of industrial pension t o earnings ...
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Provision in fatal cases
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Special levy on employers in hazardous industries
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... 23-25 ... 26-27 . . . 28-29 ...
30
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31
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IV.— Government Proposals for Industrial Injury Insurance Scheme
Scope of Scheme
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Finance...
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General a d m i n i s t r a t i o n
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Procedure for s e t t l e m e n t of claims ...
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Benefits...
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I n d u s t r i a l injury allowance
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Industrial pension ...
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F a m i l y allowances ...
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Maintenance in hospital a n d t r e a t m e n t allowance
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Allowance for c o n s t a n t a t t e n d a n c e
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Women
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Juveniles
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Minor injuries
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F a t a l cases . . .
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Cost
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Overlapping of benefits with o t h e r schemes
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Medical t r e a t m e n t a n d rehabilitation
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P r e v e n t i o n of accidents
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Application t o p a s t cases
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Alternative remedies ...
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V.—Summary of Main Features of Government Scheme
Appendix
A. Comparison of rates of injury allowance a n d of 100per cent disablement
pension proposed for adults under t h e G o v e r n m e n t Scheme, w i t h t h e r a t e s for
t o t a l incapacity under t h e existing Acts a n d u n d e r t h e Bevcridge P l a n
B. Comparison of benefits in fatal cases u n d e r t h e G o v e r n m e n t Scheme w i t h ­
the benefits in s u c h cases u n d e r t h e existing Acts a n d t h e Beveridge P l a n . . .
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
53
INDUSTRIAL INJURY INSURANCE
FOREWORD
F o r nearly half a c e n t u r y t h e compensation of w o r k m e n for i n d u s t r i a l i n j u r y
has been a liability, imposed b y law, u p o n their employer. U n d e r t h e existing
system, it has been open to t h e employer, a n d in some cases o b l i g a t o r y on
I. .n, to insure himself against this liability; while it has been for t h e w o r k m a n t o
make his claim a n d t o t a k e steps to enforce it, if challenged, in t h e Courts of
Law. I n e v i t a b l y c o m p e n s a t i o n has t h u s become a d i s p u t a b l e issue b e t w e e n t h e
two parties or their r e p r e s e n t a t i v e s . T h e result has n a t u r a l l y been a g r o w t h in
legal complexity a n d t h e emergence of certain u n s a t i s f a c t o r y features; for
example, t h e p r a c t i c e of p a y i n g , in full discharge of liability for w h a t m a y p r o v e
( D be a p e r m a n e n t o r l o n g c o n t i n u e d loss of earnings, a l u m p s u m which t h e
employer m a y offer for t h e s a k e of simplicity a n d finality, a n d t h e w o r k m a n
may accept for the s a m e reason.
Henceforward, t h e G o v e r n m e n t , as p a r t of their extension a n d recasting of
the social insurance s y s t e m , propose t h a t provision for d i s a b l e m e n t or loss of life
from i n d u s t r i a l injury^ shall become a social service, a d m i n i s t e r e d as a s e p a r a t e
scheme b u t under t h e Minister of Social I n s u r a n c e . Benefits a t special r a t e s will
be p a i d from a s e p a r a t e i n s u r a n c e fund, t o which t h e employer, w o r k m a n a n d
the E x c h e q u e r will b e c o n t r i b u t o r s . T h i s m e a n s a f u n d a m e n t a l c h a n g e in t h e
method of providing against w h a t m a y be one of t h e m o s t grievous forms of
personal misfortune: it involves also a great simplification of w h a t h a s b e c o m e
a very complicated a n d e l a b o r a t e s y s t e m .
U n d e r t h e present s y s t e m , benefits are related t o t h e e s t i m a t e d loss of e a r n i n g
capacity. U n d e r t h e G o v e r n m e n t ' s plan benefits will b e p a i d a t flat r a t e s ,
with s u p p l e m e n t s for fannTy responsibilities. In t h e earlier weeks, w h i l e t h e
w o r k m a n is i n c a p a c i t a t e d for w o r k , there will be injury allowances a t uniform
rates. Afterwards, if disablement is prolonged, t h e r e will be i n d u s t r i a l pensions
based, n o t o n loss of e a r n i n g c a p a c i t y , b u t u p o n t h e e x t e n t t o which t h e work­
man has suffered d i s a b l e m e n t b y the injury, b y c o m p a r i s o n w i t h a n o r m a l h e a l t h y
person of t h e same a g e a n d sex. T h e pension will n o t be affected b y a n y s u b s e ­
quent e a r n i n g s of t h e w o r k m a n , a n d (except in some cases of m i n o r disability-)
will n o t be replaced b y a l u m p s u m p a y m e n t . T h e r e will be pensions for widows,
parents a n d certain o t h e r d e p e n d a n t s of those w h o h a v e died a s t h e r e s u l t of
industrial i n j u r y .
This s y s t e m is in m a n y respects like t h a t which is t h e basis of w a r p e n s i o n s
schemes. I t t h u s recognises a certain similarity between t h e position of t h e
soldier w o u n d e d in b a t t l e a n d t h a t of t h e m a n injured in t h e course of h i s
productive work for t h e c o m m u n i t y . N e i t h e r is liable t o h a v e his pension
reduced on account of w h a t he m a y e a r n after t h e i n j u r y ; each is c o m p e n s a t e d
not for loss of earning c a p a c i t y b u t for w h a t e v e r h e h a s lost in h e a l t h , s t r e n g t h
and t h e power to enjoy life.
The n e w p l a n will a v o i d t h e m a i n weaknesses a n d difficulties of t h e existing
system. T h e G o v e r n m e n t believe t h a t it will r e m o v e w o r k m e n ' s c o m p e n s a t i o n
from t h e a t m o s p h e r e of c o n t r o v e r s y a n d conflict w i t h w h i c h it h a s been
surrounded a n d will establish it for t h e future o n a h a p p i e r a n d s o u n d e r founda­
tion. I t is their i n t e n t i o n , if t h e scheme c o m m e n d s itself t o P a r l i a m e n t , t o
introduce a n d pass t h e necessary legislation as soon as practicable w i t h a view
to bringing it into operation a t t h e s a m e time as t h e general scheme of social
insurance.
I.-THE
PRESENT
SYSTEM
i. T h e present s y s t e m of W o r k m e n ' s Compensation was first established in
1897 a n d was t h u s t h e pioneer system of social security in this c o u n t r y .
Based
on t h e liability of the individual employer u n d e r legislation which, where neces­
sary, is i n t e r p r e t e d a n d enforced b y the Courts, it s t a n d s in almost every respect
in s h a r p c o n t r a s t to t h e later schemes of social insurance, ft was revolutionary
in the sense t h a t it broke a w a y from t h e principle t h a t a n employer could only
be m a d e liable to a w o r k m a n for injury d u e to his default or the default
persons in responsible positions u n d e r him, but it was nevertheless largely
influenced by t h e C o m m o n L a w idea of personal responsibility, as well as by
the prevailing views a s to the limits of S t a t e interference.
2. Before t h e Act of rSqj there was no legal right to c o m p e n s a t i o n for an
i n d u s t r i a l i n j u r y except in t h e limited n u m b e r of cases where, at Common
Law, or u n d e r e n a c t m e n t s modifying t h e C o m m o n Law, the e m p l o y e r could b /
held liable on proof of negligence on his part to pay d a m a g e s to the w o r k m a n or
his d e p e n d a n t s . This liability was extended b y the E m p l o y e r s ' Liability Act
of 1SS0, which excluded the defence of c o m m o n e m p l o y m e n t in cases of personal
injury due to defective work, plant or m a c h i n e r y or to negligence on the
part of persons t o whom t h e employer had delegated responsibility. Tins
Act proved ineffective,and between 1880 and 1897 various unsuccessful a t t e m p t s ,
of which the most notable was Mr. Asquith's E m p l o y e r s ' Liability Bill of 1893,
were m a d e to enlarge still further t h e circumstances in which t h e employer
could be held responsible on t h e basis of negligence. It was, however, impos­
sible in this w a y to cover the g r e a t n u m b e r of accidents for which n o blame
could r e a s o n a b l y be a t t a c h e d to the employer or persons in responsible posi­
tions u n d e r h i m , a n d it was e v e n t u a l l y recognised t h a t the p r o p e r line of pro­
gress would be by w a y of an industrial c o m p e n s a t i o n scheme u n d e r which
c o m p e n s a t i o n would be provided at t h e e m p l o y e e s expense for all ordinary
injuries s u s t a i n e d by w o r k m e n in the course of their e m p l o y m e n t . T h e Act of
1897 proceeded on "these lines. It imposed a liability on the e m p l o y e r t o pay
c o m p e n s a t i o n to a w o r k m a n injured by accident arising out of a n d in the
course of his e m p l o y m e n t , or to his d e p e n d a n t s if t h e accident resulted in
d e a t h , w h e t h e r or n o t there h a d been negligence on t h e p a r t of t h e employer
or a n y o n e employed by him. N o r was negligence on the p a r t of t h e injured
w o r k m a n himself a b a r to t h e recovery of compensation.
3. T h e Act placed no obligation on the employer to insure against this
liability—it w a s left to his good sense to d o so should t h e b u r d e n be likelv to
impose too severe a strain on his financial resources. In the d e b a t e s which
preceded the passing of the A c t it was suggested t h a t the liability should be
placed on a t r a d e insurance fund or funds instead of on the individual employer;
b u t this suggestion was opposed on various grounds, the m a i n criticism being
t h a t it would involve more S t a t e interference t h a n this c o u n t r y would tolerate.
4. T h e Act did n o t deprive t h e w o r k m a n of his rights a t C o m m o n L a w or
u n d e r the E m p l o y e r s ' Liability Act for injuries caused t h r o u g h negligence, but
it included provisions against t h e recovery of damages in addition t o workmen's
c o m p e n s a t i o n . It required t h e w o r k m a n t o choose between accepting the
c o m p e n s a t i o n provided by t h e A c t a n d t h e r e m e d y at c o m m o n law or under
t h e E m p l o y e r s ' Liability Act, b u t it provided t h a t if a w o r k m a n failed in an
action against his employer for d a m a g e s he could o b t a i n from t h e Court an
a w a r d of compensation.
5 . T h e Act was limited originally t o certain d a n g e r o u s e m p l o y m e n t s , but in
1906 it was e x t e n d e d to cover all persons working u n d e r a c o n t r a c t of service
or a p p r e n t i c e s h i p , w i t h a few exceptions, of which t h e most i m p o r t a n t was the
n o n - m a n u a l worker earning m o r e t h a n £250 (since raised t o £420) a year.
C ,te Act of 1906 also provided for d e a t h or d i s a b l e m e n t caused b y scheduled
industrial diseases.
6. The a m o u n t of c o m p e n s a t i o n was fixed, not on t h e C o m m o n L a w principle
of indemnity for injury d u e t o t h e fault of a n o t h e r , but on t h e principle of a
division of loss between t h e e m p l o y e r a n d the w o r k m a n ; it was related, subject
to m a x i m a , t o t h e average earnings of the w o r k m a n a n d it took no account of his
family responsibilities. T h e Act did n o t give c o m p e n s a t i o n for a n injury as
sul ^, or for t h e disability resulting therefrom, b u t o n l y for loss of earning c a p a ­
city; h did not m a k e good the whole loss, b u t was i n t e n d e d t o provide a s u b ­
stantial measure of relief to t h e injured w o r k m a n or his d e p e n d a n t s .
7. The Acts h a v e been a m e n d e d a n d enlarged from t i m e t o t i m e a n d o n e or
two i m p o r t a n t modifications h a v e been m a d e in their basic principles, n o t a b l y
K The introduction of c o m p u l s o r y i n s u r a n c e in t h e coal m i n i n g i n d u s t r y u n d e r
the W o r k m e n ' s C o m p e n s a t i o n (Coalmines) Act, 1934,* a n d b y the recent w a r ­
time Acts,f which, by increasing t h e weekly c o m p e n s a t i o n by m e a n s of flat r a t e
allowances related t o family responsibilities, h a v e m a d e a s u b s t a n t i a l breach
in the principle of c o m p e n s a t i o n based on loss of wage-earning c a p a c i t y .
Other­
wise t h e m a i n features of t h e s y s t e m i n t r o d u c e d in 1897 h a v e r e m a i n e d u n ­
altercd.
8. (i) T h e benefit u n d e r the A c t s in cases of t o t a l i n c a p a c i t y was originally a
weekly p a y m e n t not exceeding 50 per cent, of t h e a v e r a g e weekly e a r n i n g s of
the w o r k m a n in t h e e m p l o y m e n t in which he was e n g a g e d before the accident,
subject t o a m a x i m u m of £1 per week. T h e W a r Addition Acts of 1917 a n d
1919J g a v e a t e m p o r a r y increase of 75 per cent, in t h e weekly benefit for t o t a l
incapacity, b u t these Acts were repealed b y the Act of 1923.5 T h a t Act raised
the m a x i m u m from £1 to 30s. but the p r o p o r t i o n of e a r n i n g s was left at 50 p e r
cent., save t h a t for w o r k m e n e a r n i n g less t h a n 50s. a week the p r o p o r t i o n w a s
fixed on a scale v a r y i n g from 50 per cent, t o 75 per cent.
(ii) During the present w a r t h e weekly c o m p e n s a t i o n h a s been increased b y
the addition of flat r a t e allowances u n d e r t h e A c t s m e n t i o n e d in p a r a g r a p h 7
above. T h e effect of these allowances is t o bring the m a x i m u m for total in­
capacity in t h e case of t h e single m a n u p to 35s. a week d u r i n g t h e first t h i r t e e n
weeks, a n d 40s. thereafter, a n d in t h e case of the m a r r i e d m a n u p t o 40s. d u r i n g
the first thirteen weeks, a n d 50s. thereafter. A m a n w i t h children also gets a n
allowance of 5s. a week in respect of each child u n d e r 15 y e a r s of age, or u p to
the 31st J u l y n e x t following the 16th b i r t h d a y if still a t school. T h e weekly
payment, including s u p p l e m e n t a r y allowances o t h e r t h a n children's allowances,
may not, except for some workers earning less t h a n 50s. weekly, exceed t w o ­
thirds of t h e pre-accident earnings, a n d , if children's allowances are paj^able,
may not exceed seven-eighths.
(iii) In cases of partial i n c a p a c i t y t h e c o m p e n s a t i o n is a p r o p o r t i o n of t h e
difference between t h e pre-accident a v e r a g e w e e k l y e a r n i n g s a n d w h a t t h e
workman is e a r n i n g or is able t o earn in s o m e s u i t a b l e e m p l o y m e n t or business
after the a c c i d e n t ; a n d t h e s u p p l e m e n t a r y allowances are p a y a b l e in t h e p r o ­
portion which t h e weekly p a y m e n t for p a r t i a l i n c a p a c i t y b e a r s t o t h e weekly
payment t o which t h e w o r k m a n would be e n t i t l e d if t o t a l l y disabled.
9. Where t h e weekly p a y m e n t s h a v e been c o n t i n u e d for n o t less t h a n six
months, the e m p l o y e r has the right, on application t o the C o u n t y Court (in
* 24 and 25 Geo. 5. C23.
f The W o r k m e n ' s Compensation ( S u p p l e m e n t a r y Allowances) Act 1040 (3 a n d 4 Gco. 6,
C47) and the W o r k m e n ' s Compensation ( T e m p o r a r y Increases) Act, 1943 (6 and 7 Geo ft
C49).
t 7 & 8 Geo. 5, C42 a n d 9 & 10 Geo 5, CS3.
ii The W o r k m e n ' s Compensation Act 1923 (13 & 14 Geo. 5, C42).
Scotland, t h e Sheriff C o u r t ) , to have his liability redeemed b y p a y m e n t of
l u m p s u m ; a n d he m a y , a t a n y t i m e agree with t h e w o r k m a n t o redeem it by a
l u m p sum p a y m e n t , subject to c e r t a i n safeguards afforded by registration of
t h e agreement in the Court.
10. (i) In fatal cases, c o m p e n s a t i o n t a k e s t h e form of a l u m p sum the amount
of which d e p e n d s on (a) t h e w o r k m a n ' s earnings, a n d (b) the m e m b e r s of his
family who were d e p e n d e n t on h i m a t t h e t i m e of his d e a t h a n d the extent-of
their dependency. T h e m a x i m u m where only a d u l t d e p e n d a n t s are left is £^..0.
W h e r e the w o r k m a n leaves children u n d e r the age of 15 in addition t o a n adult
d e p e n d a n t , a n additional s u m is p a y a b l e a n d t h e aggregate m a x i m u m is £700.
(ii) The c o m p e n s a t i o n in fatal cases is n o t paid direct t o t h e d e p e n d a n t s but
m u s t be paid into t h e C o u n t y Court (or in Scotland, t h e Sheriff Court) to be
dealt with in such m a n n e r as t h e Court t h i n k s best for t h e i r benefit.
(iii) W h e r e no d e p e n d a n t s are left, r e a s o n a b l e expenses of medical a t t e n d a n c e
a n d burial are p a y a b l e u p t o a m a x i m u m of £15.
11. It was originally c o n t e m p l a t e d t h a t d i s p u t e s would generally be settled
b v informal a r b i t r a t i o n by a C o m m i t t e e r e p r e s e n t a t i v e of t h e employer and
his w o r k m e n , or b y an a r b i t r a t o r agreed on b y the p a r t i e s , or by t h e County
Court J u d g e (in Scotland, t h e Sheriff), a form of procedure which was described
b y the A t t o r n e y - G e n e r a l a t the t i m e a s " s o m e t h i n g in the n a t u r e of a domestic
forum which should settle m a t t e r s in a c h e a p a n d expeditious m a n n e r . "
E x c e p t in the C u m b e r l a n d a n d D u r h a m coalfields, where representative
c o m m i t t e e s h a v e been set up, this i n t e n t i o n h a s not been realised. Disputes
a r e generally settled, subject t o a p p e a l on q u e s t i o n s of law. to the Court of
Appeal (in Scotland, t h e Court of Session) a n d t h e H o u s e of L o r d s , by
a r b i t r a t i o n in t h e C o u n t y C o u r t ; a n d this a r b i t r a t i o n has developed into a
regular legal proceeding.
12. T h e e m p l o y e r h a s a right, when a w o r k m a n first claims compensation,
a n d s u b s e q u e n t l y within prescribed l i m i t s , t o h a v e h i m e x a m i n e d by a doctor
a p p o i n t e d a n d paid b y t h e employer. D i s p u t e s on t h e question whether a
w o r k m a n is fit for e m p l o y m e n t a n d , if so, t o w h a t e x t e n t his incapacity is due
t o the injury are settled either b y a reference t h r o u g h the C o u n t y Court to a
Medical Referee a p p o i n t e d by t h e H o m e Office, whose certificate is conclusive,
or b y a r b i t r a t i o n .
13. T h r o u g h o u t t h e period since t h e last war, t h e p r e s e n t s\-stem h a s been
severely criticised on various g r o u n d s a n d t h e G o v e r n m e n t h a v e set u p , from
t i m e to t i m e , d e p a r t m e n t a l c o m m i t t e e s to r e p o r t on t h e working of t h e Acts.
T h e most i m p o r t a n t of these was t h e H o l m a n Gregory C o m m i t t e e which
reported in 1920 a n d r e c o m m e n d e d a n u m b e r of far-reaching alterations, many
of which h a v e n o t , however, been a d o p t e d . In D e c e m b e r , 1938, a Roval
Commission was a p p o i n t e d t o e x a m i n e t h e law of w o r k m e n ' s compensation
a n d t h e relation of t h e s y s t e m t o o t h e r s t a t u t o r y schemes for giving benefits
or assistance t o i n c a p a c i t a t e d or u n e m p l o y e d w o r k m e n . I t was also directed
t o advise, in relation to w o r k m e n ' s c o m p e n s a t i o n , w h e t h e r a n y alteration is
desirable in the present position in regard t o t h e civil liability of t h e employer
t o p a y c o m p e n s a t i o n or d a m a g e s in respect of injuries d u e t o employment,
i n d e p e n d e n t l y of the W o r k m e n ' s Compensation Acts. The proceedings of the
R o y a l Commission were s u s p e n d e d in 1940 owing to t h e war. T h e Commission
h a d by t h e n t a k e n a large a m o u n t of evidence, b u t had m a d e no R e p o r t . When
Sir William Beveridge was invited in 1941 to c o n d u c t a comprehensive inquiry
into Social I n s u r a n c e a n d Allied Services, w o r k m e n ' s c o m p e n s a t i o n was expressly
included within t h e scope of t h a t inquiry.
II.—PROPOSALS
IN T H E R E P O R T O N SOCIAL
A N D ALLIED SERVICES
INSURANCE
14. Sir William Beveridge's R e p o r t * recognises t h a t t h e existing s y s t e m
of w o r k m e n ' s compensation h a s conferred great benefits in t h e p a s t . I t h a s
enabled t h e w o r k m a n in t h e great m a j o r i t y of cases t o get his c o m p e n s a t i o n
without a n y serious difficulty a n d w i t h o u t unreasonable d e l a y ; a n d , a s t h e
Rrtoort points o u t , t h e r e a r e o t h e r s u b s t a n t i a l a d v a n t a g e s which m a y be
cLuned for it. O n t h e o t h e r h a n d , t h e R e p o r t draws a t t e n t i o n t o a n u m b e r
of serious d i s a d v a n t a g e s in t h e present s y s t e m . I t refers to t h e formal, c o n ­
tentious, a n d costly m e t h o d for s e t t l e m e n t of d i s p u t e s ; t h e difficulties of t h e
workman w h o is n o t assisted b y a t r a d e union or a p p r o v e d society in p r o s e c u t i n g
a claim; t h e possibility of i m p r o p e r pressure on him t o reduce his claim or
to take u p work for which h e is n o t fit; t h e w a n t of complete security for p a y ­
( ant of c o m p e n s a t i o n ; t h e difficulties of d e m a r c a t i o n between industrial a n d
non-industrial cases; t h e unsatisfactory provision m a d e by l u m p s u m settle­
ments; t h e high costs of a d m i n i s t r a t i o n over p a r t s of t h e field; t h e i n a p p r o ­
priafeness of t h e s y s t e m in cases of industrial diseases which develop over a
long period or are of a recurrent n a t u r e ; a n d t h e absence of a n y provision for
medical a n d post-medical rehabilitation of t h e injured w o r k m a n .
15. T h e R e p o r t r e c o m m e n d s t h a t t h e existing s y s t e m , which it considers
" was based on a w r o n g principle a n d h a s been d o m i n a t e d b y a w r o n g o u t l o o k , "
should be superseded, a n d t h a t provision for industrial disability should be
made as p a r t of a unified scheme of social i n s u r a n c e of a c o n t r i b u t o r y c h a r a c t e r
—the benefits being paid o u t of a c e n t r a l fund which would be m a i n t a i n e d b y
contributions p a y a b l e by t h e e m p l o y e r s a n d w o r k m e n a n d t h e S t a t e , a n d
would be a d m i n i s t e r e d by a Ministry of Social Security.
16. Dealing with t h e possibility of c o m p l e t e unification with t h e social
insurance scheme the R e p o r t says t h a t , " if t h e m a t t e r were being con­
sidered in a clear field, it might well he a r g u e d t h a t t h e general principle of
a flat r a t e of c o m p e n s a t i o n for i n t e r r u p t i o n of earnings a d o p t e d for all o t h e r
forms of i n t e r r u p t i o n , should be applied also w i t h o u t reserve o r qualification
to the results of i n d u s t r i a l accident a n d disease, leaving t h o s e w h o felt t h e need
for greater s e c u r i t y t o provide by voluntar\- i n s u r a n c e a n addition t o t h e Hat
rate subsistence g u a r a n t e e d b y t h e S t a t e . " As t h e R e p o r t observes, " if a
workman loses a leg in a n accident, h i s needs a r e t h e s a m e w h e t h e r t h e accident
occurred in a factory o r in t h e s t r e e t ; if h e is killed, t h e needs of his w i d o w
and o t h e r d e p e n d a n t s a r e t h e s a m e , h o w e v e r t h e d e a t h o c c u r r e d . "
17. Nevertheless, t h e R e p o r t recognises t h a t , a p a r t from historical r e a s o n s ,
there are s t r o n g g r o u n d s for m a k i n g a distinction in t h e m a t t e r of benefits
between industrial a n d o t h e r forms of disability. These g r o u n d s a r e first, t h a t
" many industries vital t o t h e c o m m u n i t y a r e also specially d a n g e r o u s a n d i t
is essential t h a t m e n should e n t e r t h e m a n d desirable therefore t h a t t h e y s h o u l d
be able t o d o s o with t h e a s s u r a n c e of special provision a g a i n s t t h e i r risks . . .
for themselves a n d their families " ; secondly, t h a t " a m a n disabled d u r i n g t h e
course of his e m p l o y m e n t h a s been disabled while w o r k i n g u n d e r o r d e r s " ;
thirdly, t h a t " only if special provision is m a d e for t h e results of i n d u s t r i a l
accident a n d disease irrespective of negligence, would it a p p e a r possible—as
on grounds of e q u i t y a n d for t h e a v o i d a n c e of c o n t r o v e r s y it is d e s i r a b l e — t o
limit the e m p l o y e e s liability a t C o m m o n L a w t o t h e results of a c t i o n s for which
he is responsible m o r a l l y a n d in fact, n o t s i m p l y b y v i r t u e of s o m e principle
of legal liability."
* Cmd. 6404.
T h e main passages in t h e R e p o r t dealing with w o r k m e n ' s c o m p e n s a t i o n
are paragraphs Nos. 77-105, 25S-264, 280-291, 323, 331-336, 353, 360, 366, 393-395 a n d
401 and A p p e n d i x A (Memorandum by t h e G o v e r n m e n t Actuary) p a r a s . 30 a n d 30-4G
and Appendix K (Administrative Costs of Various F o r m s of Insurance).
IO
18. T h e R e p o r t concludes that " on b a l a n c e the reasons for distinguishir
between industrial accident a n d disease a n d o t h e r causes of injury, a t least
where d e a t h occurs or disability is prolonged, outweigh tlte reasons o n the other
side in favour of complete uniformity."
It accordingly proposes certain
i m p o r t a n t d e p a r t u r e s in respect of benefits (see p a r a g r a p h 21 below) from the
principles of t h e general social i n s u r a n c e s c h e m e .
19. (i) On the question h o w the necessary funds should be o b t a i n e d the
R e p o r t accepts the principle of the pooling of risks, which it recognises r n
accord with t h e general t r e n d of public opinion. It refers to t h e evidence
given by the Mineworkers' f e d e r a t i o n before the R o y a l Commission on YVork­
m e n ' s Compensation in favour of the c o n t r i b u t i o n s being paid only by employers,
b u t a t a fixed flat r a t e applicable equally to till industries, b u t points out
" t h a t t h e pooling of a risk between industries m a k e s it difficult or im­
possible to m a i n t a i n t h a t t h e cost should be b o r n e by e m p l o y e r s only.
n
so far as industries d e p e n d upon one a n o t h e r , b o t h employers a n d e m p l o y e s
in each i n d u s t r y d e p e n d upon all o t h e r industries. T h e r e is no reason w h y the
e m p l o y e r of a b a n k clerk or of a d o m e s t i c s e r v a n t , r a t h e r t h a n the clerk or
t h e d o m e s t i c s e r v a n t himself, should c o n t r i b u t e t o the cost of accidents in
mines a n d in ships. In so far as t h e r e is c o m m u n i t y of interest between dif­
ferent industries m a k i n g it fair t h a t till industries should s h a r e equally in
providing for a risk which affects t h e m unequally, this c o m m u n i t y of interest
applies t o the e m p l o y e e s as well as t o t h e e m p l o y e r s . "
r
(ii) O t h e r a r g u m e n t s a d v a n c e d in t h e R e p o r t against confining t h e cost to
t h e employer a r e : —
(a) " If employers are t o bear t h e whole cost it is h a r d to justify taking
t h e a d m i n i s t r a t i o n Out of their h a n d s ; it is h a r d , therefore, t o give t o the
responsible Organisations of w o r k m e n the c h a n c e of t a k i n g a p a r t , not
in litigation, but in co-operative t r e a t m e n t of industrial disability " ;
(b) " it is undesirable t h a t while most forms of i n t e r r u p t i o n of earnings
are m e t by benefit to which the insured persons, with o t h e r s , h a v e contributed
a n d out of a fund in whose stability a n d economical a d m i n i s t r a t i o n thev
are directly i n t e r e s t e d t h e r e should be o n e form of i n t e r r u p t i o n for which
t h e funds are p r o v i d e d wholly b y s o m e o n e else. Such an arrangement
will lead t o c o n s t a n t pressure t o push u p t h e c o m p e n s a t i o n for that
p a r t i c u l a r m i s f o r t u n e , t h o u g h it needs in reality n o m o r e t h a n o t h e r forms
of m i s f o r t u n e . "
20. (i) While accepting b r o a d l y t h e principle of pooling i n d u s t r i a l disability
risks in t h e s a m e w a y as health a n d u n e m p l o y m e n t risks, t h e R e p o r t claims
t h a t " t h e r e is a good social reason for t a k i n g a different line, in p a r t a t least,
a b o u t t h e d a n g e r s of i n d u s t r i a l accident ancl disease. T h o u g h a high risk of
a c c i d e n t s is inevitable in mining, shipping a n d s o m e o t h e r i n d u s t r i e s , it does
n o t follow t h a t all accidents a r e i n e v i t a b l e ; t h e n u m b e r a n d s e v e r i t y of accidents
can be diminished or increased b y g r e a t e r or less care o n t h e p a r t of those
w h o m a n a g e i n d u s t r y . " T h e R e p o r t therefore proposes a n o t h e r important
d e p a r t u r e from t h e principles of t h e security- s c h e m e ; n a m e l y , t h a t t h e funds
required for benefits in industrial cases should be derived (a) in p a r t only—
a s t o a b o u t t w o - t h i r d s — f r o m c o n t r i b u t i o n s b y e m p l o y e r s , workers a n d the
S t a t e , in t h e s a m e p r o p o r t i o n s as for health insurance (five-twelfths each from
employers a n d w o r k m e n a n d one-sixth from t h e S t a t e ) , a n d (b) in p a r t — a s to
a b o u t one-third—from a special levy on e m p l o y e r s engaged in industries
scheduled as h a z a r d o u s , t h a t is, as h a v i n g m a t e r i a l l y more t h a n t h e n o r m a l risk
of accident or disease in i n d u s t r y as a whole. T h e effect would be t h a t the
whole liability in t h e n o n - h a z a r d o u s industries a n d p a r t of t h e liability in the
h a z a r d o u s industries would b e pooled a n d t h e b a l a n c e , a m o u n t i n g t o two-thirds
of t h e excess cost in t h e h a z a r d o u s i n d u s t r i e s , would be m e t by t h e special levy
on t h o s e industries.
(ii) T h e R e p o r t proposes t h a i t h e r e should be set u p , at least in e v e r y
industry scheduled as h a z a r d o u s , a s t a t u t o r y association of employers a n d
employees which, besides concerning itself with m a t t e r s such as safety a n d
measures for re-habilitation a n d r e - e m p l o y m e n t within t h e i n d u s t r y , would
be responsible for collecting from individual employers t h e i r q u o t a s of t h e
special levy required in the i n d u s t r y in a c c o r d a n c e with a scheme to be pre­
pared by the association a n d a p p r o v e d b y t h e Minister. A l t h o u g h the asso­
- a t i o n s would consist of r e p r e s e n t a t i v e s of b o t h sides in t h e i n d u s t r y , it could
^e p r o v i d e d in m a t t e r s t h a t might be regarded as solely t h e concern of t h e
employer " t h a t the decision should rest with the e m p l o y e e s side a l o n e ; t h i s
power would m a k e it possible for t h e e m p l o y e r s in each scheduled i n d u s t r y
as a b o d y , subject t o a p p r o v a l by t h e Ministry of Social Security, t o a d o p t
w h a t e v e r s y s t e m of levy, by individual merit r a t i n g or otherwise, t h e y t h o u g h t
, most c o n d u c i v e to the p r e v e n t i o n of a c c i d e n t s or disease a n d the c o n s e q u e n t
r e d u c t i o n of t h e l e v y . "
;
21. T h e scheme of benefits a n d the r a t e s provisionally proposed in t h e R e p o r t
are set o u t below. T h e R e p o r t a s s u m e s t h a t t h e r e will be a S t a t e s c h e m e of
family allowances applicable t o all children in a family except t h e first.
(*/) During the first t h i r t e e n weeks of i n c a p a c i t y for w o r k t h e o r d i n a r y
security benefit would be p a y a b l e , i.e. 24s. for a single a d u l t m a n or
w o m a n w i t h o u t d e p e n d a n t s or a married m a n with gainfully occupied
wife, a n d 40s. for a married m a n whose wife is n o t gainfully o c c u p i e d ;
there would be reduced r a t e s for single persons u n d e r 21 y e a r s (20s. if
aged 18-20 a n d 15s. if aged 16-17 years). A child's allowance would be
p a y a b l e for the first child a n d , in t h e case of the single w o r k m a n , a
d e p e n d a n t allowance of l b s . for o n e a d u l t d e p e n d a n t living with h i m
a n d n o t gainfully occupied.
Following existing law, benefit would n o t be p a y a b l e for t h e first t h r e e
d a y s of disablement unless t h e i n c a p a c i t y lasts for four weeks or m o r e .
(b) After t h e first t h i r t e e n weeks of i n c a p a c i t y for w o r k , a n industrial p e n ­
sion would be paid equivalent t o t w o - t h i r d s of full-time e a r n i n g s , b u t n o t less
t h a n t h e security benefit as u n d e r (a), n o r m o r e t h a n £ 3 weekly.
(c) F o r persons partially disabled t h e pension would be p r o p o r t i o n a t e t o t h e
loss of e a r n i n g power.
(d) L u m p - s u m p a y m e n t s for industrial disability would be restricted t o
cases in which the Security Office is satisfied on special g r o u n d s t h a t s u c h
p a y m e n t is in the w o r k m a n ' s interest.
(e) I n fatal cases a single p a y m e n t described as a n i n d u s t r i a l g r a n t , t h e
a m o u n t of which would be prescribed b y R e g u l a t i o n s , would be p a i d
in respect of the widow a n d of o t h e r d e p e n d e n t p e r s o n s . This g r a n t
would be in addition t o funeral g r a n t , widow's a n d g u a r d i a n benefits, b u t
these benefits would be t a k e n into a c c o u n t in fixing t h e a m o u n t .
(/) E n t i t l e m e n t t o benefit would n o t b e conditional u p o n
record, as u n d e r the general scheme of social insurance.
contribution
22. T h e R e p o r t further p r o p o s e s —
(a) t h a t claims should be dealt w i t h b y a d m i n i s t r a t i v e r a t h e r t h a n legal
procedure, w i t h a right of a p p e a l to special local t r i b u n a l s ;
(b) t h a t medical t r e a t m e n t should be p r o v i d e d a s p a r t of the X a t i o n a
Medical Service; and
(c) t h a t post-hospital r e h a b i l i t a t i o n should be provided as p a r t of t h e general
service t o be organised for this p u r p o s e b y t h e Ministry of L a b o u r a n d
N a t i o n a l Service.
III.—THE G O V E R N M E N T S
VIEWS
23. (i) T h e G o v e r n m e n t endorse generally the criticisms of t h e existing
system m a d e in the Report. In particular, they consider it to be too corn­
plicated a n d to allow t o o m u c h scope for contention between the w o r k m a n
(or his t r a d e union) a n d the e m p l o y e r (or t h e insurance c o m p a n y or m u t u a l
association w i t h which he is i n s u r e d ) ; it t h u s t e n d s to r e t a r d t h e work­
m a n ' s r e c o v e r y a n d to prejudice good relations between him a n d his employeT h e cases in which actual legal proceedings a r e t a k e n form only a small fractio..
of the total n u m b e r , b u t even so they n u m b e r some t h o u s a n d s a n n u a l l y , a n d in
addition there are n u m e r o u s cases which a r e settled, b y l u m p s u m p a y m e n t s
o r o t h e r w i s e , w i t h o u t legal p r o c e e d i n g s but only after considerable negotiation.
Moreover, in t h e event of a d i s p u t e t h e w o r k m a n is a p t to feel t h a t h e is placed
on an u n e q u a l footing w i t h the employer or his insurers, a n d t o suspect t h a t
t h e opposition to his claim is not based on m e r i t s b u t is a c t u a t e d b y motives
of financial interest.
(ii) The G o v e r n m e n t consider it essential to provide t h a t in future claims
should be m a d e on an independent a u t h o r i t y a n d settled b y a procedure less
liable to give rise to friction. This, however, involves a c o m p l e t e c h a n g e of
system. So long as the liability to pay c o m p e n s a t i o n is t h e liability of the
employer it is difficult to justify t a k i n g the a d m i n i s t r a t i o n o u t of his h a n d s , or
t o s u b s t i t u t e for litigation less formal, c o n t e n t i o u s , a n d costly m e t h o d s for the
s e t t l e m e n t of doubtful cases.
(iii) T h e principle of placing t h e liability on t h e individual e m p l o y e r h a s had
o t h e r u n f o r t u n a t e consequences. F o r e x a m p l e , the employer generally pro­
t e c t s himself by insurance, and the p r e m i u m s or levies arc fixed a c c o r d i n g to the
risks of t h e p a r t i c u l a r i n d u s t r y o r class of e m p l o y m e n t , so t h a t b r o a d l y speaking
each i n d u s t r y carries its own risks. The result is t h a t t h e heaviest liability
falls on t h e h a z a r d o u s e m p l o y m e n t s , which include certain i m p o r t a n t industries
such as mining a n d shipping, which have t o face foreign c o m p e t i t i o n . It is
s o m e t i m e s claimed t h a t the imposition of t h e liability on t h e individual em­
ployer c o n d u c e s t o safet\ by giving a direct financial incentive t o e m p l o y e r s to
a d o p t g r e a t e r p r e c a u t i o n s ; but as p o i n t e d o u t later ( p a r a g r a p h 31 (ii)) it would
n o t a p p e a r t h a t it h a s , in fact, m a d e a n y m a t e r i a l c o n t r i b u t i o n in this direction.
On the o t h e r h a n d , the principle of pooling risks recognises a c o m m u n i t y of
interest between different industries. It is a principle which has found accep­
t a n c e in o t h e r fields, s u c h as u n e m p l o y m e n t insurance, a n d w h i c h will he
widely e x t e n d e d u n d e r t h e new- scheme of social insurance. T h e G o v e r n m e n t
consider t h a t it shotdd also be a d o p t e d for i n s u r a n c e a g a i n s t i n d u s t r i a l acci­
d e n t a n d disease.
-
(iv) T h e general conclusion reached by t h e G o v e r n m e n t is t h a t t h e time
h a s come when t h e present s y s t e m should be replaced b y a new scheme, the
general s t r u c t u r e of which should be based on t h e a c c e p t e d principles of
social i n s u r a n c e .
(v) T h e G o v e r n m e n t h a v e considered t h e possibility of including cases of
i n d u s t r i a l accident or disease in t h e general scheme of social insurance on the
s a m e t e r m s as disability arising from o t h e r causes a n d s u p e r i m p o s i n g on t h a t
scheme a liability on the' individual e m p l o y e r to provide a d d i t i o n a l benefits in
a c c o r d a n c e generally with t h e provisions of t h e existing sj'stem. Such an
a r r a n g e m e n t , however, b y p e r p e t u a t i n g t h e principle of t h e liability of the
individual employer for t h e p u r p o s e of t h e s u p p l e m e n t a r y benefits, would
retain t h e defects of t h e existing system. Moreover, t h e w o r k m a n would have
t o m a k e his case concurrently to t w o s e p a r a t e authorities u n d e r widely differing
procedures. In t h e view of t h e G o v e r n m e n t it would be difficult, if n o t impossi­
ble, to co-ordinate satisfactorily the two systems.
24- (i) Proceeding on t h e basis t h a t t h e new scheme should be founded on
social insurance principles, t h e G o v e r n m e n t agree with t h e proposals in t h e
Report t h a t the new s c h e m e should be c o m p r e h e n s i v e in s c o p e — t h a t is, t h a t
broadly speaking it s h o u l d a p p l y to all p e r s o n s working u n d e r a c o n t r a c t of
service including n o n - m a n u a l w o r k e r s w i t h o u t a n y income limit; t h a t t h e cost
should be borne by a c e n t r a l fund m a i n t a i n e d by c o n t r i b u t i o n s from e m p l o y e r s
and w o r k m e n , with a c o n t r i b u t i o n from t h e E x c h e q u e r ; t h a t claims should be
dealt with by a d m i n i s t r a t i v e r a t h e r t h a n legal p r o c e d u r e ; a n d t h a t t h e responsi­
1 ity for the general a d m i n i s t r a t i o n a n d supervision of t h e working of t h e
scheme should rest on t h e a u t h o r i t y responsible for the general s c h e m e of
social insurance.
(ii) T h e G o v e r n m e n t recognise t h a t t h e r e is a s t r o n g case for providing special
benefits for industrial casualties, both on historical a n d on o t h e r g r o u n d s . I n
the industries where m o s t of t h e industrial accidents o c c u r w o r k m e n are exposed
( j) far g r e a t e r risks t h a n citizens in t h e o r d i n a r y walks of life. In coal mining,
for e x a m p l e , in every y e a r one w o r k m a n out of every six engaged in t h e i n d u s t r y
meets with an accident. T h e G o v e r n m e n t t h i n k it reasonable therefore t o
make special provision for i n d u s t r i a l casualties, b o t h in disablement a n d in fatal
cases. F u r t h e r , t h e y agree t h a t benefits should n o t b e conditional o n p a y m e n t
of a m i n i m u m n u m b e r of c o n t r i b u t i o n s .
(iii) T h e G o v e r n m e n t also c o n c u r in t h e r e c o m m e n d a t i o n s t h a t t h e p r a c t i c e
of c o m m u t i n g weekly p a y m e n t s for l u m p s u m s should cease, a n d t h a t provision
for medical t r e a t m e n t a n d p o s t - h o s p i t a l r e h a b i l i t a t i o n of i n d u s t r i a l disability
cases should be dealt w i t h a s p a r t of t h e n a t i o n a l schemes for these p u r p o s e s .
25. T h e G o v e r n m e n t , however, for t h e reasons given in t h e following p a r a ­
graphs, are u n a b l e to a c c e p t certain of t h e m a i n proposals of t h e R e p o r t . Some
of these involve w h a t a p p e a r t o the G o v e r n m e n t t o b e u n w a r r a n t e d d e p a r t u r e s
from the generally a c c e p t e d principles of social i n s u r a n c e . Others w o u l d r e t a i n
features of the existing s y s t e m which h a v e p r o v e d unsatisfactory in practice
and h a v e given rise t o m u c h c o m p l a i n t , or w o u l d i n t r o d u c e fresh difficulties
which it should be a n a i m of t h e new scheme t o avoid. T h e proposals w h i c h
the G o v e r n m e n t do n o t accept a r e —
1
(a) t h e limitation of special r a t e s of benefit for i n d u s t r i a l disability to c a s e s
of more t h a n t h i r t e e n weeks d u r a t i o n ;
(b) t h e proposal t o r e l a t e i n d u s t r i a l pensions for long t e r m disability t o t h e
earnings of t h e w o r k m a n before t h e a c c i d e n t in cases of t o t a l i n c a p a c i t y ,
and t o his e a r n i n g s b o t h before a n d after t h e accident in cases of p a r t i a l
incapacity;
(c) t h e provision p r o p o s e d for d e p e n d a n t s i n fatal cases, n o t b y w a y of
pension, b u t b y a single p a y m e n t t e r m e d " i n d u s t r i a l g r a n t " ; a n d
id) t h e imposition of a special levy u p o n e m p l o y e r s in certain i n d u s t r i e s t o
be scheduled a s h a z a r d o u s .
L i m i t a t i o n of s p e c i a l r a t e s of b e n e f i t t o l o n g t e r m c a s e s .
26. (i) T h e G o v e r n m e n t d o n o t t h i n k it r i g h t to l i m i t special provision for cases
of i n d u s t r i a l disability t o cases where disability c o n t i n u e s be3'ond a specified
period. A s the R e p o r t p o i n t s o u t , cases w h i c h last longer t h a n t h i r t e e n w e e k s
constitute n o t m o r e t h a n 10 p e r cent, of t h e t o t a l . Moreover, the single w o r k ­
man w i t h o u t d e p e n d a n t s h a s , in fact, n o r m a l l y b e e n receiving u n d e r existing
legislation 35s. w e e k l y d u r i n g t h e first 13 weeks, a n d t h e G o v e r n m e n t t h i n k it
would be u n r e a s o n a b l e , p a r t i c u l a r l y u n d e r a c o n t r i b u t o r y scheme, t o r e q u i r e
him to a c c e p t a lower r a t e s u c h as t h a t of 24s. m e n t i o n e d i n t h e R e p o r t .
(ii) One of the special a d v a n t a g e s claimed in t h e R e p o r t in s u p p o r t of p a r t i a l
unification with t h e social i n s u r a n c e s c h e m e is t h a t , u n d e r t h e a r r a n g e m e n t
for giving o r d i n a r y disability benefit for the first 13 weeks, there would as ;
rule be n o need to decide w h e t h e r the accident or disease arose o u t of a n d in the
course of e m p l o y m e n t . T h e r e would, however, be a n u m b e r of cases where, in
view of the possibility t h a t the w o r k m a n would be disabled for more t h a n
13 weeks, it would be necessary to ascertain t h e cause a t a n early s t a g e , a n d in
a n y e v e n t , a s t h e Report a d m i t s , it would be essential t h a t t h e Social i n s u r a n c e
A u t h o r i t y should record a n d a n a l y s e all its experience. In the great majority
of cases, no d i s p u t e arises as to the origin of the injury, a n d t h e Government
think t h a t the a d v a n t a g e claimed in the R e p o r t on this g r o u n d for unificat! 1
of rates during an initial period can be exaggerated.
27. T h e G o v e r n m e n t agree w i t h t h e proposal t h a t t h e r e should be a n initial
period d u r i n g which a t e m p o r a r y allowance would be p a y a b l e , b u t in t h e i r view
this allowance o u g h t t o be at a higher r a t e t h a n t h a t proposed for non-industrial
disability . T h i s allowance should b e replaced, if t h e d i s a b l e m e n t is likely it­
be p e r m a n e n t or prolonged, b y an i n d u s t r i a l pension, b u t t h e G o v e r n m e n t dv,
not favour an a r r a n g e m e n t b y which the d a t e of transfer from temporary'
allowance t o pension would be d e t e r m i n e d entirely w i t h o u t reference t o the
condition of t h e w o r k m a n or his prospects of recovery. Moreover, if a hard
a n d fast line were d r a w n a t t h e end of t h e t h i r t e e n t h week for transferring cases
from allowance to pension, it would be difficult to provide for the case mentioned
b u t n o t dealt, w i t h in the Report, of a w o r k m a n w h o h a s p a r t i a l l y recovered
before t h e end of t h a t period a n d is fit for some e m p l o y m e n t . A m o r e flexible
s y s t e m is required u n d e r which a pension can be a w a r d e d a t a d a t e appropriate
t o t h e circumstances of t h e individual case.
-
R e l a t i o n of i n d u s t r i a l p e n s i o n s t o e a r n i n g s .
28. (i) T h e proposal to relate pensions t o earnings c o n t r a v e n e s a principle to
which the G o v e r n m e n t a t t a c h i m p o r t a n c e , a n d which is otherwise adopted
generally in the R e p o r t , n a m e l y t h a t t h e r e should be differentiation in benefits
only according to family responsibilities, a n d t h a t subject t o provision for
such responsibilities, t h e r e should be uniform flat rates of benefit in r e t u r n for
uniform flat r a t e s of c o n t r i b u t i o n . F u r t h e r , t h e assessment of workmen's
compensation by reference to earnings has given rise, as i n d i c a t e d below, to
serious difficulties a n d objections.
(ii) T h e calculation of t h e average weekly earnings over a period before
t h e accident h a s been repeatedly' criticised on t h e g r o u n d t h a t the earnings
so d e t e r m i n e d do not necessarily r e p r e s e n t t h e n o r m a l earning c a p a c i t y of the
w o r k m a n ; in t i m e s of full e m p l o y m e n t a n d o v e r t i m e , as a t p r e s e n t , t h e y go
b e y o n d , a n d in times of t r a d e depression t h e y fall below, his n o r m a l earning
c a p a c i t y . It is urged t h a t it is h a r d on a w o r k m a n w h o m e e t s w i t h an accident
when his earnings are relatively low t h a t he should be penalised b y receiving
correspondingly low c o m p e n s a t i o n , a n d t h a t t h e sense of h a r d s h i p is accentuated
if he sees t h a t a n o t h e r w o r k m a n in t h e s a m e e m p l o y m e n t , w h o has suffered
an i n j u r y similar t o his own, b u t a t a t i m e of good t r a d e , is receiving com­
p e n s a t i o n a t a higher r a t e .
(iii) A l t e r n a t i v e m e t h o d s for calculating earnings h a v e been p u t forward,
the u n d e r l y i n g idea being to base t h e c o m p e n s a t i o n on a h y p o t h e t i c a l figure
representing w h a t t h e w o r k m a n m i g h t be expected t o e a r n u n d e r n o r m a l con­
d i t i o n s . Such a p r o c e d u r e would, however, i n t r o d u c e a g r e a t e l e m e n t of guess­
w o r k , a n d would be likely to result in m o r e frequent d i s p u t e s . Discussions
with r e p r e s e n t a t i v e s of the e m p l o y e r s a n d w o r k m e n h a v e n o t disclosed any
satisfactory solution of this p r o b l e m .
(iv) A n o t h e r possibility which h a s been e x a m i n e d is t h a t of fixing compen­
sation b y reference n o t to a c t u a l earnings b u t to t h e s t a n d a r d r a t e of remunera­
tion applicable to t h e e m p l o y m e n t . T h e r e a r e , however, m a n y i n d u s t r i e s and
e m p l o y m e n t s in which t h e r e is n o s t a n d a r d r a t e ; a n d in o t h e r s the standard
rate is not applicable t o all classes of w o r k m e n e m p l o y e d in t h e i n d u s t r y , o r
varies in different d i s t r i c t s , a n d t h e G o v e r n m e n t a r e advised t h a t such a m e t h o d
would give rise to even g r e a t e r difficulties t h a n t h e p r e s e n t s y s t e m .
(v) F u r t h e r , t h e assessment of the weekly p a y m e n t in cases of p a r t i a l
incapacity on t h e basis of a p r o p o r t i o n of t h e difference between t h e pre­
accident e a r n i n g s of t h e w o r k m a n a n d w h a t h e is e a r n i n g or is able t o e a r n
in s o m e s u i t a b l e e m p l o y m e n t or business after t h e accident, h a s given rise t o
nuch d i s p u t e a n d has often h a d most u n f o r t u n a t e results. In m a n y cases
the w o r k m a n has felt t h a t t h e w o r k offered t o him w a s n o t s u i t a b l e for his
c a p a c i t y or would o t h e r w i s e be prejudicial t o his c o m p l e t e recovery, o r he has
felt aggrieved because, t h o u g h his c o m p e n s a t i o n h a s been reduced, n o w o r k of
the kind for which he is fitted h a s , in fact, been available. O r again, he h a s
been r e l u c t a n t t o r e s u m e his old e m p l o y m e n t o r u n d e r t a k e n e w e m p l o y m e n t
ifrom fear t h a t his c o m p e n s a t i o n would be reduced a n d t h a t , if he failed t o
m a k e good owing t o his disability, he would find it difficult, if n o t impossible,
to get his c o m p e n s a t i o n restored t o its previous level. In such cases t h e p s y c h o ­
logical effect is t o d e l a y t h e recovery of t h e w o r k m a n .
(vi) Similar considerations h a v e sometimes o p e r a t e d t o m a k e the w o r k m a n
reluctant to s u b m i t to a n y rehabilitation t r e a t m e n t , a n d the D e l e v i n g n e * a n d
Tomlinson t C o m m i t t e e s on R e h a b i l i t a t i o n h a v e b o t h c o m m e n t e d on t h e
possible a d v e r s e effects o n w o r k m e n w h o h a v e only p a r t i a l l y recovered, of
a s y s t e m u n d e r which t h e provision of light w o r k m a y be r e g a r d e d chiefly
as a m e a n s of reducing t h e c o m p e n s a t i o n . T h e former C o m m i t t e e recom­
mended (page 5 7 of their Report) " t h a t a n injured w o r k m a n ' s c a p a c i t y for
light work which c a n be reached a t a certain s t a g e of his t r e a t m e n t s h o u l d be
regarded n o t from the point of view of c o m p e n s a t i o n a n d a s a reason for
reduction of t h e c o m p e n s a t i o n , b u t solely a s a m e a n s b y which t h e c o m p l e t e
restoration of his w o r k i n g c a p a c i t y can be f u r t h e r e d . " T h e T o m l i n s o n Com­
mittee ( p a r a g r a p h 4 4 of t h e i r R e p o r t ) while accepting t h e view t h a t light work
as an aid to r e s t o r a t i o n m a y , in s o m e cases a n d subject t o c e r t a i n c o n d i t i o n s ,
more s u i t a b l y be given in i n d u s t r y t h a n in a special c e n t r e , s t r o n g l y d e p r e c a t e d
" a s y s t e m u n d e r which t h e provision of light e m p l o y m e n t is t r e a t e d n o t as
part of t h e r e h a b i l i t a t i o n process b u t m e r e l y a s a factor in d e t e r m i n i n g t h e
q u a n t u m of c o m p e n s a t i o n . "
(vii) A n o t h e r grievance has been t h a t , whenever t h e r e is a n increase in
wage r a t e s resulting in increased earnings, t h e weekly p a y m e n t s of c o m p e n ­
sation to p a r t i a l l y disabled w o r k m e n are reduced u n d e r t h e m e t h o d prescribed
in t h e Acts b y half t h e a m o u n t of t h e increase, s o t h a t t h e w o r k m a n does n o t
get t h e full benefit of t h e a d d i t i o n . An a t t e m p t was m a d e in t h e W o r k m e n ' s
Compensation Act, 1943, t o mitigate this c o m p l a i n t by p r o v i d i n g t h a t , w h e n e v e r
a change t a k e s place in t h e rates of r e m u n e r a t i o n in t h e class of e m p l o y m e n t
in which an injured w o r k m a n was previously e m p l o y e d , his a v e r a g e weekly
earnings can be recalculated, at t h e instance of either t h e e m p l o y e r or t h e
w o r k m a n , on t h e basis of w h a t his earnings would h a v e been h a d t h e c h a n g e d
rates been in o p e r a t i o n o v e r t h e relevant period before t h e injury. A s a result
of this provision, which applies t o t o t a l a s well as t o p a r t i a l d i s a b l e m e n t cases,
m a n y disabled w o r k m e n h a v e been able to get t h e i r sveekiy p a y m e n t s i n c r e a s e d ;
and, s o long as wages t e n d to increase, t h i s provision benefits t h e w o r k m a n .
But in the e v e n t of a fall in wage levels, t h e c o m p e n s a t i o n r a t e s over a wide
field would b e subject t o r e d u c t i o n , a n d t h e G o v e r n m e n t d o u b t w h e t h e r a n y
scheme which p r o v i d e s for fluctuations of benefit a c c o r d i n g t o w h e t h e r wages
rise or fall would in the long run be found t o b e satisfactorj'.
* I n t e r - D e p a r t m e n t a l Committee on t h e Rehabilitation of Persons Injured b y Accidents,
1939.
t Inter-Departmental
C o m m i t t e e on t h e Rehabilitation and R e s e t t l e m e n t of Disabled
Persons, 1943 (Cmd. 6415).
29. (i) T h e principle of providing c o m p e n s a t i o n based on loss of e a r n i n g
c a p a c i t y , which the R e p o r t proposed to retain in all cases of m o r e t h a n t h i r t e e n
weeks' d u r a t i o n , is t h e cause of all t h e difficulties referred to in p a r a g r a p h 28
a b o v e a n d in the G o v e r n m e n t s view these difficulties are insuperable so long
a s this principle is retained. If necessitates in all such cases, w h e t h e r of t o t a l
or of p a r t i a l incapacity, t h e calculation of pie-accident earnings, a n d in cases
of p a r t i a l incapacity it necessitates also the calculation of post-accident e a r n i n g
c a p a c i t y . This m e t h o d of assessing c o m p e n s a t i o n m o r e o v e r m u s t necessarily
be a c c o m p a n i e d by a s y s t e m of review at a n y t i m e of t h e weekly p a y m e n t ii
o r d e r t o ascertain "whether (u) incapacity still exists, and if so, to w h a t e x t e n t ,
a n d (b) w h e t h e r the loss of e a r n i n g c a p a c i t y is properly ascribable t o t h e injury
or t o o t h e r causes.
(ii) T h e G o v e r n m e n t h a v e c o m e t o the conclusion t h a t t h e o n l y s a t i s f a c t o r y
solution is to a b a n d o n t h e principle of a w a r d i n g c o m p e n s a t i o n in respect of.
loss of e a r n i n g c a p a c i t y , a n d to a d o p t t w o c o m p l e t e l y new features for t h e
assessment of industrial pensions. These features a r e : —
(a) to p r o v i d e , in a c c o r d a n c e with the generally a c c e p t e d principle of social
i n s u r a n c e , uniform flat r a t e s of pension w i t h o u t regard t o pre-accident
e a r n i n g s , b u t t a k i n g account of family responsibilities; a n d
(b) t o give benefit according to t h e degree of disablement d u e t o t h e injury
in t h e s a m e w a y a s is d o n e u n d e r w a r pensions s c h e m e s , n a m e l y t h r o u g h
a n assessment b y a Medical B o a r d of the c o n d i t i o n of t h e w o r k m a n
resulting from t h e injury as c o m p a r e d with the condition of a n o r m a l
h e a l t h y person of t h e s a m e age anil sex.
(iii) T h e new principle of giving c o m p e n s a t i o n for t h e injury itself a n d not
for loss of earning c a p a c i t \ is a cardinal feature of t h e G o v e r n m e n t proposals.
It h a s t h e following a d v a n t a g e s : —
-
(a) B y g e t t i n g rid of t h e distinction h i t h e r t o d r a w n between t o t a l and
p a r t i a l incapacity for work, a n d giving the w o r k m a n who has suffered
a n i n j u r y causing p e r m a n e n t or prolonged d i s a b l e m e n t a pension com­
m e n s u r a t e with t h e assessed degree of d i s a b l e m e n t , irrespective of his
e a r n i n g c a p a c i t y , it eliminates as a cause of d i s p u t e t h e questions w h e t h e r
or t o w h a t e x t e n t t h e w o r k m a n h a s recovered his e a r n i n g c a p a c i t y .
(b) I t r e m o v e s t h e grievance t h a t an i m p r o v e m e n t in t h e w o r k m a n ' s earning
c a p a c i t y results in an a u t o m a t i c reduction of his c o m p e n s a t i o n .
(c) I t avoids a n y g r o u n d for suspicion on t h e p a r t of t h e w o r k m a n t h a t he
is being pressed t o r e t u r n to unsuitable work with a view t o reduction
of his c o m p e n s a t i o n , a n d t h e fear t h a t if h e r e t u r n s t o w o r k h e will
jeopardise his right t o further c o m p e n s a t i o n ; a n d it should r e m o v e a n y
hesitation he maj- feel in s u b m i t t i n g t o a course of rehabilitation t r e a t ­
m e n t . I t should t h u s p r o m o t e a m o r e s p e e d y recovery.
(d) I t helps to meet t h e complaint often m a d e t h a t no c o m p e n s a t i o n is
p r o v i d e d for m u t i l a t i o n or disfigurement e x c e p t in so far as it causes
loss of e a r n i n g capacity.
(iv) T h e G o v e r n m e n t h a v e considered w h e t h e r in conjunction w i t h t h e new
principle of assessment t h e r e m i g h t be r a t e s of benefit v a r y i n g according to
c o m p a r t m e n t s of earnings, so t h a t the higher p a i d w o r k m a n w o u l d receive
benefit a t a higher r a t e t h a n the lower p a i d w o r k m a n . I t is, however, impos­
sible t o reconcile this differentiation of benefit with uniform c o n t r i b u t i o n s , and
it would involve t h e calculation of earnings, the objections to which h a v e been
set o u t a b o v e . F u r t h e r , if there were o n l y a few c o m p a r t m e n t s t h e r e would
be c o m p l a i n t s . o f h a r d s h i p in cases where the w o r k m a n ' s earnings j u s t failed
t o qualify h i m for a higher rate.of pension which o t h e r s , p e r h a p s in t h e same
e m p l o y m e n t , might a t t a i n . On t h e o t h e r h a n d , a large n u m b e r of c o m p a r t ­
ments w o u l d involve a precise calculation of e a r n i n g s in a large n u m b e r of
cases. T h e possibility h a s also been considered of differentiation b e t w e e n
grades (e.g. m a n a g e r , f o r e m a n , skilled or o t h e r w o r k m a n ) , b u t as t h e r e are n o
definite a n d u n i f o r m g r a d e s recognised t h r o u g h o u t i n d u s t r y , a n y s u c h d e m a r ­
cation w o u l d be entirely a r b i t r a r y .
(v) T h e G o v e r n m e n t a p p r e c i a t e t h a t in s o m e cases of higher paid w o r k m e n ,
benefits a t t h e uniform flat r a t e s p r o p o s e d in t h e G o v e r n m e n t s c h e m e (para­
- - a p h s 38-46) w o u l d n o t w o r k o u t so f a v o u r a b l y as p a y m e n t s u n d e r t h e s c h e m e
proposed in t h e R e p o r t based on loss of e a r n i n g c a p a c i t y , b u t t h e y a r e satisfied
that, t a k i n g i n t o a c c o u n t t h e n e w principle of a s s e s s m e n t , t h e benefits u n d e r
the G o v e r n m e n t s c h e m e will in t h e g r e a t m a j o r i t y of disability' cases be m o r e
favourable. I t s h o u l d be b o r n e in m i n d t h a t experience of t h e w a r pensions
schemes shows t h a t a large p r o p o r t i o n of pensioners whose d i s a b l e m e n t is
assessed a t 100 per cent a r e capable of s u b s t a n t i a l earnings.
(vi) T h e G o v e r n m e n t believe t h a t a r r a n g e m e n t s on t h e lines proposed, which
have w o r k e d satisfactorily in t h e case of civilian w a r injuries, can b e a p p l i e d
without difficulty t o i n d u s t r i a l i n j u r y t h o u g h in s o m e classes of i n d u s t r i a l
disease t h e i r a p p l i c a t i o n will call for special provisions.
Fatal C a s e s .
30. T h e G o v e r n m e n t agree t h a t special provision s h o u l d be m a d e in fatal cases
resulting from i n d u s t r i a l a c c i d e n t or disease, b u t t h e y d o n o t agree w i t h t h e
proposal i n t h e R e p o r t t h a t this provision s h o u l d be b y w a y of t h e g r a n t of a
lump s u m , in a d d i t i o n t o social i n s u r a n c e benefits b u t t a k i n g a c c o u n t of t h e m .
They do n o t r e g a r d l u m p s u m p a y m e n t s , e v e n if a d m i n i s t e r e d u n d e r strict
control, as a satisfactory m e t h o d of assuring a n income. F u r t h e r , if t h e l u m p
sum were t o be of t h e order c o n t e m p l a t e d in t h e G o v e r n m e n t A c t u a r y ' s M e m o ­
r a n d u m o n t h e finance of t h e p r o p o s a l s (an a v e r a g e of £300 w h e r e a t o t a l
dependant is left—see A p p e n d i x A t o t h e R e p o r t ) , t h e y t h i n k t h a t t h e p r o ­
vision m i g h t often fall s h o r t of w h a t is necessary a n d a p p r o p r i a t e . T h e G o v e r n ­
ment consider t h a t provision for d e p e n d a n t s in fatal cases s h o u l d be b y w a y of
pension or w e e k l y allowance.
Special Levy o n E m p l o y e r s in the H a z a r d o u s I n d u s t r i e s .
31. (i) T h e f o u r t h p r o p o s a l in t h e R e p o r t which t h e G o v e r n m e n t c a n n o t a c c e p t
is the p r o p o s a l t h a t a s u b s t a n t i a l p a r t of t h e fund for p a y m e n t of benefits s h o u l d
be found b y m e a n s of a special l e v y on e m p l o y e r s in t h e h a z a r d o u s i n d u s t r i e s .
This p r o p o s a l involves a d e p a r t u r e from t h e principle of all " s t a n d i n g - i n "
with c o m p l e t e pooling of r i s k s — a principle which, as t h e R e p o r t p o i n t s o u t , h a s
found w i d e s p r e a d a c c e p t a n c e a n d is a d o p t e d generally in o t h e r b r a n c h e s
of social i n s u r a n c e . H a z a r d o u s i n d u s t r i e s are n o t h a z a r d o u s b e c a u s e t h e
employers i n t h e m a r e less active in t h e p r e v e n t i o n of a c c i d e n t s t h a n o t h e r
employers, or b e c a u s e t h e w o r k m e n in t h o s e i n d u s t r i e s a r e less careful t h a n o t h e r
workmen. T h e y a r e h a z a r d o u s because of t h e n a t u r e of t h e e m p l o y m e n t a n d
the i n h e r e n t risks. T h e p r o p o s a l n e e d s , therefore, s t r o n g g r o u n d s t o justify it,
particularly as t h e special l e v y w o u l d fall m o s t h e a v i l y on c e r t a i n i m p o r t a n t
industries w h i c h h a v e to m e e t foreign c o m p e t i t i o n .
(ii) T h e m a i n g r o u n d a d v a n c e d in t h e R e p o r t for t h i s d e p a r t u r e is t h a t b y
introducing " m e r i t r a t i n g , " i.e. fixing t h e e m p l o y e e s c o n t r i b u t i o n according
to t h e risks e i t h e r in p a r t i c u l a r i n d u s t r i e s or in i n d i v i d u a l u n d e r t a k i n g s , a r e a l
financial i n c e n t i v e w o u l d b e given t o e m p l o y e r s t o t a k e m e a s u r e s for t h e
prevention of a c c i d e n t s . T h e G o v e r n m e n t are n o t satisfied t h a t m e r i t r a t i n g
based on t h e risks in p a r t i c u l a r i n d u s t r i e s w o u l d h a v e t h i s effect. Merit r a t i n g
on this b a s i s is, in fact, t h e general p r a c t i c e o n which i n s u r a n c e a g a i n s t w o r k ­
inen's c o m p e n s a t i o n risks is c o n d u c t e d u n d e r t h e p r e s e n t s y s t e m i n t h e h a z a r d o u s
industries, a n d it is applied not merely to a part b u t to t h e whole of t h e charge
involved b y the A c t s ; b u t it would not a p p e a r from t h e R e p o r t s of the D e p a r t ­
m e n t a l C o m m i t t e e s of 1904* a n d 19207 which e n q u i r e d i n t o the operation
of the Acts, or from a n y o t h e r information in the possession of t h e G o v e r n m e n t ,
t h a t this practice has m a d e a n y significant c o n t r i b u t i o n to safety. It m u s t be
borne in m i n d t h a t a s u b s t a n t i a l n u m b e r A accidents are d u e to causes outside
the e m p l o y e e s c o n t r o l — m a n y , for e x a m p l e , are a t t r i b u t a b l e to risks inherent
in the conditions of the e m p l o y m e n t , as in the m i n i n g i n d u s t r y where m a n "
accidents occur t h r o u g h the operation of released n a t u r a l forces.
Moreovt.,
t h e whole charge in respect of industrial c o m p e n s a t i o n is, a n d u n d e r a n y new
scheme will c o n t i n u e to be, a c o m p a r a t i v e l y small i t e m in relation to wages and
o t h e r costs of p r o d u c t i o n . As regards merit r a t i n g according to risks in
individual u n d e r t a k i n g s , this s y s t e m m i g h t , if it w e r e possible t o i n t r o d u c e it on
an extensive scale, prove m o r e effective, t h o u g h even so, t h e v a r i a t i o n of
p r e m i u m s or levies would be of small a m o u n t . H a v i n g regard, however, t o tin
wide differences in conditions between different works, d u e largely t o causes
outside the e m p l o y e r ' s control, t h e G o v e r n m e n t d o n o t t h i n k t h a t a n y system
of this kind could be o p e r a t e d on a n e q u i t a b l e basis, a n d t h e y feel sure t h a t the
complication a n d expense involved in a n ) ' such s y s t e m would be out of all
proportion to t h e results likely to b e achieved.
(iii) T h e proposal in t h e R e p o r t is to define h a z a r d o u s industries as " those
having materially more t h a n t h e n o r m a l risk of accident a n d disease in i n d u s t r y
as a w h o l e . " T h e r e are wide v a r i a t i o n s in t h e h a z a r d s of different b r a n c h e s of
the same i n d u s t r y , some processes being h a z a r d o u s a n d others n o t : a n d , more­
over, industrial h a z a r d s are n o t c o n s t a n t b u t are subject t o frequent change.
It follows t h a t t h e r e would be g r e a t difficulties of definition, a n d t h e r e would
consequently be m u c h scope for c o n t e n t i o n as t o w h e t h e r p a r t i c u l a r industries
or b r a n c h e s of industries were r i g h t l y included in, or excluded from, the hazard­
ous list at a n y given time. Complications would also arise from the existence
of large u n d e r t a k i n g s engaged in a wide v a r i e t y of p r o d u c t i o n , including pro­
cesses belonging t o different industries, some h a z a r d o u s a n d some c o m p a r a t i v e l y
safe.
(iv) If a special levy on e m p l o y e r s in h a z a r d o u s industries were a d o p t e d , it is
difficult to see w h y it ought not to be e x t e n d e d t o t h e w o r k m e n engaged in those
industries. T h e p r e v e n t i o n of accidents in these as in o t h e r industries depends
in large p a r t on t h e care exercised by t h e w o r k m e n , a n d it m a y be a r g u e d that
in t h e i r case, as in t h e case of t h e e m p l o y e r s , it is desirable t o e m p h a s i s e the
need for c o n s t a n t vigilance.
(v) For these reasons t h e G o v e r n m e n t d o not consider t h a t t h e p r o p o s a l for
a special levy is justified. Their view is t h a t for f u r t h e r progress in prevention
of accidents reliance m u s t be placed on o t h e r m e a n s , such as t h e development
of t h e s t a n d a r d s set u p u n d e r t h e F a c t o r i e s , Mines a n d o t h e r safety enact­
ments, a n d increasing co-operation between e m p l o y e r s a n d w o r k m e n . In a
n u m b e r of h a z a r d o u s industries joint m a c h i n e r y for dealing w i t h safety ques­
tions a l r e a d y e x i s t s — s o m e t i m e s u n d e r s t a t u t o r y powers a n d s o m e t i m e s through
v o l u n t a r y a c t i o n — a n d t h e G o v e r n m e n t would welcome t h e e s t a b l i s h m e n t of
such joint bodies in all i n d u s t r i e s in which t h e r e are s u b s t a n t i a l risks of indus­
triai accident a n d disease.
(vi) Thej- accordingly p r o p o s e t h a t , following t h e principle in H e a l t h and
U n e m p l o y m e n t I n s u r a n c e , t h e whole cost of t h e benefits u n d e r t h e scheme
should be b o r n e by weekly c o n t r i b u t i o n s from employers a n d w o r k m e n ,
with a c o n t r i b u t i o n from t h e E x c h e q u e r , w i t h o u t discrimination between
industries.
* Cmd. 2208.
t
Cmd. 816.
IV.-GOVERNMENT
PROPOSALS FOR INDUSTRIAL
INSURANCE SCHEME
INJURY
32. (i) T h e following is a n outline of t h e new s c h e m e p r o p o s e d b y t h e G o v e r n ­
m e n t . Several i m p o r t a n t questions remain to he s e t t l e d — a s for e x a m p l e , the
special provisions which will be required to adjust t h e S c h e m e in its application
to seamen a n d t o cases of industrial disease; t h e r e are also m a n y details which
will require further consideration in the working o u t of the full scheme, a n d
discussion with r e p r e s e n t a t i v e s of employers a n d w o r k m e n will be necessary.
(ii) In view of the special benefits which it is p r o p o s e d t o p r o v i d e , the Scheme
c a n n o t b e unified with t h e general scheme of social insurance, but m u s t be
t r e a t e d a s a s e p a r a t e b r a n c h of social insurance.
(iii) T h e benefits p r o v i d e d u n d e r t h e Scheme will t a k e t h e place of t h e cash
benefits p a y a b l e u n d e r t h e general scheme in cases of disability a n d of t h e
w i d o w s , o r p h a n ' s a n d g u a r d i a n ' s benefits in cases of d e a t h . N o funeral benefit
will be p a y a b l e u n d e r this S c h e m e : this will be provided b y the d e a t h g r a n t
proposed u n d e r t h e general scheme of social insurance.
S c o p e of S c h e m e .
3 3 . (i) T h e Scheme will cover b r o a d l y all p e r s o n s w o r k i n g u n d e r a c o n t r a c t
of service or a p p r e n t i c e s h i p , a n d will correspond closely with Class I of
the classification u n d e r t h e general social insurance s c h e m e . It will n o t a p p l y
to those u n d e r school-leaving age, b u t otherwise it is i n t e n d e d t o cover all classes
of p e r s o n s covered b y t h e existing A c t s a n d it will a p p l y to n o n - m a n u a l w o r k e r s
w i t h o u t a n y income limit. N o provision is c o n t e m p l a t e d for " c o n t r a c t i n g
out " s c h e m e s such as a r e p e r m i t t e d u n d e r the existing A c t s .
(ii) T h e S c h e m e will a p p l y t o p e r s o n a l injury b y accident arising o u t of a n d
in t h e course of e m p l o y m e n t j a n d t o specified i n d u s t r i a l diseases. I t is p r o ­
posed t o a d h e r e g e n e r a l l y t o t h e principles at present recognised in e x t e n d i n g
the Acts t o diseases d u e t o i n d u s t r i a l e m p l o y m e n t . T h e G o v e r n m e n t are
aware of t h e criticisms w h i c h h a v e been m a d e of the p h r a s e " arising o u t of a n d
in t h e course of e m p l o y m e n t , " but t h e y d o n o t t h i n k a n y o t h e r form of w o r d s
would be found in p r a c t i c e t o be m o r e satisfactory. T h e y c o n s i d e r it essential
to p r o v i d e t h a t t h e r e s h o u l d be a c a u s a l connection b e t w e e n t h e injury a n d t h e
employment.
(iii) I t is also p r o p o s e d t h a t t h e provision in t h e existing Act for persons
engaged in rescue work in m i n e s should be e n l a r g e d in s c o p e so as t o cover
a c c i d e n t s t o p e r s o n s e n g a g e d in rescue work a n d o t h e r specified classes of
emergency work i n connection w i t h industrial u n d e r t a k i n g s generally.
(iv) T h e p r e s e n t Act p r o v i d e s t h a t if it is p r o v e d t h a t t h e i n j u r y is a t t r i b u ­
table t o t h e serious a n d wilful m i s c o n d u c t of t h e w o r k m a n a.ny c o m p e n s a t i o n
claimed in respect of t h a t i n j u r y shall, unless t h e i n j u r y results in d e a t h or
serious a n d p e r m a n e n t d i s a b l e m e n t , be disallowed. I t is p r o p o s e d to include a
similar provision in t h e n e w Scheme.
Finance.
34. (i) A n I n d u s t r i a l I n j u r y I n s u r a n c e F u n d will b e set u p o u t of w h i c h
all benefits a n d a d m i n i s t r a t i v e charges will be paid. T h e F u n d will be m a i n ­
tained b y weekly c o n t r i b u t i o n s from emplo3'ers a n d w o r k m e n , w i t h a c o n t r i ­
bution from t h e E x c h e q u e r .
(ii) E m p l o y e r s a n d w o r k m e n will p a y t h e s a m e w e e k l y c o n t r i b u t i o n s . E q u a l
contributions will be r e q u i r e d for t h e m a i n benefits u n d e r t h e general s c h e m e
of social i n s u r a n c e , a n d from t h e w o r k m a n ' s p o i n t of view it would seem
desirable t h a t lie should lx* on an e q u a l i t y in this respect with the employer.
Moreover, it is proposed ( p a r a g r a p h s .35 a n d 3 6 ) t h a t workers a n d employers
should share equally in t h e d e v e l o p m e n t a n d a d m i n i s t r a t i o n of the Scheme,
being equally represented on the Advisory C o m m i t t e e or Council and on the
local appeal t r i b u n a l s , a n d equal c o n t r i b u t i o n s are a n a t u r a l , if n o t necessary,
corollary of such a r r a n g e m e n t s . U n d e r this a r r a n g e m e n t , employers a n d
workmen will each c o n t r i b u t e five-twelfths of the cost a n d the E x c h e q u e r will
c o n t r i b u t e one-sixth.
(iii) W o m e n will receive the same basic rates of benefit as m e n , b u t since
the allowances proposed for d e p e n d a n t s — s e e p a r a g r a p h s 40 a n d 46—will be
payable mainly to or in respect of d e p e n d a n t s of m a l e w o r k m e n , the rates of
contribution for women will (as u n d e r the general scheme) be lower t h a n those
for men. There will also be lower rates of c o n t r i b u t i o n s with lower rates of
benefits for juveniles u n d e r 18.
(iv) T h e c o n t r i b u t i o n s will be collected b y s t a m p , t o g e t h e r w i t h t h e contri-'
butions u n d e r the general scheme of social insurance. T h e employer will pay
the joint c o n t r i b u t i o n a n d will h a v e the right t o d e d u c t t h e w o r k m a n ' s share
from his wages.
(v) Benefit will n o t d e p e n d on a c o n t r i b u t i o n qualification.
(vi) T h e c o n t r i b u t i o n s will not be p a y a b l e w h e n t h e w o r k m a n is i n c a p a c i t a t e d
for work or u n e m p l o y e d .
General Administration.
35. (i) A l t h o u g h t h e Scheme will be s e p a r a t e from t h e general scheme of
social insurance, the a d m i n i s t r a t i o n of t h e two schemes should be i n t e g r a t e d
to the fullest possible e x t e n t ; a n d , for this reason a n d on g r o u n d s of economy,
the G o v e r n m e n t propose t h a t the general a d m i n i s t r a t i o n a n d supervision of
the working of the I n d u s t r i a l Injury Insurance Scheme should be e n t r u s t e d to
the A u t h o r i t y responsible for the general scheme t h a t is, t h e Minister of Social
I n s u r a n c e — s e e p a r a 152 of P a r t I of t h i s p a p e r , a n d t h a t the offices a n d staff
set u p under t h a t scheme should be used wherever possible.
(ii) T h e G o v e r n m e n t also consider it i m p o r t a n t t o provide for t h e collabora­
tion of i n d u s t r y in the d e v e l o p m e n t a n d a d m i n i s t r a t i o n of t h e Scheme, a n d
t h e y propose t h a t a n Advisory C o m m i t t e e or Council should be set u p on which
employers a n d w o r k m e n would be equally represented, for t h e purpose of
advising the Minister on i m p o r t a n t questions of policy a n d a d m i n i s t r a t i o n
referred to t h e m .
7
(iii) Questions as to insurability a n d liability t o c o n t r i b u t e will be settled,
as under t h e general scheme of social insurance, b y t h e Minister subject to the
right of t h e Minister in special circumstances t o s u b m i t t h e question for
decision to t h e High Court (in Scotland, t h e Court of Session). A p a r t y
aggrieved b y a decision of t h e Minister will h a v e a right of a p p e a l t o t h e High
Court (in Scotland, t h e Court of Session) on questions of law.
P r o c e d u r e for S e t t l e m e n t of C l a i m s
36. (i) All claims will, in t h e first instance, be dealt w i t h b y an I n d u s t r i a l
Pensions Officer located in the local Social I n s u r a n c e office, one of whose duties
will be to advise a n d assist a p p l i c a n t s for benefits u n d e r t h e Scheme in the
submission of their claims. Claims in respect of disablement will normally
be m e t on a n application b y or on behalf of the w o r k m a n (giving such particulars
of the injury and family responsibilities as m a y be prescribed, a n d accom­
panied b y a certificate from his medical adviser or hospital a u t h o r i t y ) a n d on
confirmation of t h e injury b y t h e employer. T h e w o r k m a n will c o n t i n u e as
a t present t o be u n d e r a n obligation to give notice of his i n j u r y t o the employer
a n d t h e employer will be required to r e p o r t t h e injury to the Pensions Officer.
In cases of d o u b t the Pensions Officer will m a k e such further e n q u i r y a s m a y
seem desirable, a n d will h a v e t h e r i g h t t o r e q u i r e t h e a p p l i c a n t t o s u b m i t to
an e x a m i n a t i o n b y an a p p o i n t e d Medical Officer.
In cases of i n d u s t r i a l disease,
it m a y be necessary to require, in lieu of a certificate from t h e w o r k m a n ' s own
doctor, a certificate from t h e E x a m i n i n g Surgeon a p p o i n t e d u n d e r t h e F a c t o r i e s
Act or some o t h e r specially a p p o i n t e d medical officer or a u t h o r i t y .
I t is
c o n t e m p l a t e d t h a t the certification of silicosis, asbestosis, a n d o t h e r forms of
oneumoconiosis will be carried o u t as a t p r e s e n t b y a special m e d i c a l b o a r d ,
.nd similar m a c h i n e r y m a y be necessary for o t h e r i n d u s t r i a l diseases.
(ii) T h e decision of t h e I n d u s t r i a l Pensions Officer on q u e s t i o n s of e n t i t l e ­
ment (such as e.g. w h e t h e r t h e injury arose o u t of a n d in the course of em ploy­
men t ; w h e t h e r t h e d i s a b l e m e n t or d e a t h w a s d u e t o t h e i n j u r y or w h e t h e r it w a s
due to serious a n d wilful m i s c o n d u c t ) , a n d , e x c e p t so far as m a y b e o t h e r w i s e
provided, on o t h e r questions a r i s i n g in connection w i t h t h e d e t e r m i n a t i o n of
claims, will be subject t o a p p e a l to a local a p p e a l t r i b u n a l , o n which e m p l o y e r s
a n d w o r k m e n will be e q u a l l y r e p r e s e n t e d , presided over b y a n i n d e p e n d e n t
C h a i r m a n w i t h legal qualifications. I t will also b e o p e n to t h e P e n s i o n s
Officer t o refer a n y such q u e s t i o n to t h e local a p p e a l t r i b u n a l w i t h o u t himself
giving a decision. W h e r e in a p a r t i c u l a r case medical issues a r e i n v o l v e d o r
are likely t o arise, provision will be m a d e for one or m o r e medical p r a c t i t i o n e r s
to join t h e t r i b u n a l either as m e m b e r s or in a n a d v i s o r y c a p a c i t y .
(iii) T h e r e will b e further r i g h t s of a p p e a l t o a n I n d u s t r i a l I n j u r y I n s u r a n c e
Commissioner on leave being given either by t h e C h a i r m a n of t h e local a p p e a l
t r i b u n a l or b y t h e Commissioner on q u e s t i o n s of law or on s u c h o t h e r q u e s t i o n s
as m a y b e prescribed. T h e Commissioner will be a p p o i n t e d b y t h e Crown,
a n d his decision will be final. Provision will also be m a d e for t h e a p p o i n t m e n t
of one or more d e p u t y Commissioners w i t h power to a c t in place of t h e
Commissioner.
(iv) T h e medical assessment for pension, when t h e w o r k m a n ' s condition is
considered t o w a r r a n t it, will be m a d e b y a medical b o a r d , a n d it is c o n t e m ­
plated t h a t the Medical B o a r d s of t h e Ministry of Pensions m i g h t be utilised
for this purpose. T h e r e will be r i g h t s of a p p e a l a g a i n s t a final assessment,
or in certain cases against an i n t e r i m assessment, to a t r i b u n a l consisting of a
c h a i r m a n of a local appeal t r i b u n a l a n d t w o medical p r a c t i t i o n e r s .
(v) A n y a r r a n g e m e n t s necessary for c o n t i n u e d m e d i c a l supervision will b e
m a d e b y t h e M i n i s t r y of S o c i a l I n s u r a n c e . I t will b e t h e c o n c e r n of t h e
Ministry t o see t h a t t h e w o r k m a n receives a n y m e d i c a l t r e a t m e n t o r c o u r s e of
t r a i n i n g a v a i l a b l e t o h i m u n d e r t h e n a t i o n a l services w h i c h m a y b e a p p r o p r i a t e
in his case, a n d t h e r e will be a n o b l i g a t i o n o n t h e w o r k m a n t o u n d e r g o s u c h
treatment or training.
Benefits.
37. (i) I n framing t h e benefits set o u t below, t h e G o v e r n m e n t h a v e h a d
regard t o t h e provision m a d e in t h e existing W o r k m e n ' s C o m p e n s a t i o n A c t s ,
the w a r pensions schemes, a n d t h e proposals for t h e general social i n s u r a n c e
scheme. T h e m a i n benefits in i n d u s t r i a l d i s a b l e m e n t cases will consist of a n
industrial i n j u r y allowance followed, in cases of p e r m a n e n t or p r o l o n g e d
disablement, b y a n i n d u s t r i a l pension. I n b o t h cases allowances will be
paid in respect of family responsibilities.
(ii) I n view of t h e G o v e r n m e n t s c h e m e of family allowances special provision
will b e m a d e in i n d u s t r i a l d i s a b l e m e n t cases for t h e first child only.
(iii) T h e A p p e n d i x t o this P a p e r c o n t a i n s (a) a c o m p a r i s o n b e t w e e n t h e
rates of i n j u r y allowance a n d pension for 100 p e r cent, d i s a b l e m e n t for a d u l t s
proposed u n d e r t h i s S c h e m e a n d t h e r a t e s for t o t a l i n c a p a c i t y u n d e r t h e
Beveridge plan a n d u n d e r the existing Acts, a n d (b) a comparison between the
benefits in fatal cases u n d e r this Scheme, t h e Beveridge plan a n d the existing
Acts.
I n d u s t r i a l Injury A l l o w a n c e .
38. An injury allowance will be p a y a b l e so long as the w o r k m a n r e m a i n s inca­
p a c i t a t e d for work as the result of a n industrial injury, unless it is replaced b "
a n industrial pension. T h e r a t e of the allowance will be initially 35s. weekly,
b u t if the w o r k m a n has not previously been assessed for pension it will lie
raised at t h e end of the t h i r t e e n t h week to the industrial pension r a t e for
100 per cent, disablement. As u n d e r t h e existing practice of w o r k m e n ' s
c o m p e n s a t i o n , the injury allowance will n o t be p a y a b l e in respect of the first
t h r e e days if i n c a p a c i t y lasts less t h a n four weeks.
Industrial Pension.
' 39. (i) W h e r e the d i s a b l e m e n t is likely t o be p e r m a n e n t or prolonged, the in­
j u r y allowance will be replaced b y a n i n d u s t r i a l pension based on t h e degree of
disablement caused b y t h e injury as assessed by t h e medical b o a r d . An
industrial pension will, unless the w o r k m a n ' s condition p e r m i t s of a final
assessment of t h e e x t e n t of the d i s a b l e m e n t , be a w a r d e d on a t e m p o r a r y
basis until a final assessment can be m a d e . If a t a n y time a w o r k m a n ceases
t o b e i n c a p a c i t a t e d for work b u t still suffers some d i s a b l e m e n t on account of
t h e injury, he will be e n t i t l e d t o a p p l y for a pension t o be assessed forthwith.
(ii) T h e r a t e of pension proposed where t h e degree of d i s a b l e m e n t d u e to the
i n j u r y is assessed at 100 per cent, will be 40s. weekly. W h e r e t h e degree of
disablement is assessed a t less t h a n 100 per cent the pension will be propor­
t i o n a t e to t h e degree of d i s a b l e m e n t .
(iii) Following the practice in w a r pensions, special provision will be m a d e
for t h e pensioner w h o n o t w i t h s t a n d i n g remedial m e a s u r e s r e m a i n s , by reason
of his industrial injury, virtually u n e m p l o y a b l e . I n such cases a personal
s u p p l e m e n t of 10s. weekly will be p r o v i d e d .
*
Family Allowances.
40. T h e following allowances will be p a y a b l e , in a d d i t i o n t o t h e injury allowance
o r pension.
(i) An allowance will be p a y a b l e in respect of a wife t o w h o m t h e w o r k m a n
w a s m a r r i e d at t h e d a t e of t h e i n j u r y a n d w h o was either residing with or
wholly or mainly d e p e n d e n t on him. Where the i n j u r y allowance is 35s. the
allowance for a wife will be 8s. 9d. weekly, a n d where it is 40s., or where a
100 per cent, disablement pension is a w a r d e d , it will be 10s. weeklv.
(ii) An allowance will be p a y a b l e in respect of a first child of t h e w o r k m a n
w h o is wholly or m a i n l y d e p e n d e n t on him. W h e r e the i n j u r y allowance is
35s., the allowance for t h e child will be 5s.; a n d where it is 40s., or w h e r e a 100 per
cent, disablement pension is a w a r d e d , it will be 7s. 6d. weekly. T h e allowance
will be payable u p t o t h e age of 15 a n d thereafter so long as t h e child remains
u n d e r full time instruction in a school (or is a n apprentice) u p to t h e 31st J u l y
following t h e 16th b i r t h d a y . " Child " will include a child of t h e w o r k m a n
w h o was born not later t h a n 9 m o n t h s after the d a t e of t h e injury, or a stepchild
whose m o t h e r or father was m a r r i e d to t h e w o r k m a n before the injury, or a
child legally a d o p t e d by the w o r k m a n before the injury.
(iii) W h e r e a pension a t less t h a n t h e 100 per cent, r a t e is a w a r d e d , allow­
ances proportionate to the pension will be p a y a b l e in respect of t h e wife and
first child.
(iv) W h e r e n o wife's allowance is p a y a b l e t h e w o r k m a n will be entitled, so.
long as he r e m a i n s incapable of w o r k a s a result of t h e injury, to claim a n
allowance, a t the r a t e for a wife, in respect of one a d u l t person in respect of
w h o m a d e p e n d a n t allowance would be p a y a b l e u n d e r t h e general s c h e m e of
social insurance in cases of o r d i n a r y disability. T h u s a w o r k m a n will be able
t o claim an allowance (subject t o the s a m e c o n d i t i o n s as will a p p l y u n d e r t h e
general social i n s u r a n c e scheme) in respect of an invalid father or widowed
m o t h e r , or a d u l t sister or d a u g h t e r , or a housekeeper, w h e t h e r resident or
non-resident, w h o looks after his d e p e n d e n t children.
(v) W h e r e a p e r s o n a l allowance is a w a r d e d in respect of v i r t u a l u n e m p l o y ­
ability, allowances a t t h e 100 p e r cent r a t e in respect of a wife a n d first child
will be payable irrespective of t h e d a t e of m a r r i a g e or t h e d a t e of b i r t h of t h e
child.
Maintenance in H o s p i t a l and T r e a t m e n t A l l o w a n c e .
41. (i) A w o r k m a n a d m i t t e d t o h o s p i t a l for t r e a t m e n t will be e n t i t l e d u n d e r
the new N a t i o n a l H e a l t h Service t o be m a i n t a i n e d in hospital w i t h o u t charge.
It is proposed u n d e r t h e general social i n s u r a n c e scheme t h a t t h e benefits u n d e r
t h a t scheme shall b e reduced d u r i n g m a i n t e n a n c e in hospital in respect of
home savings, after t w e n t y - e i g h t d a y s . U n d e r t h e existing W o r k m e n ' s Com­
pensation Acts t h e weekly p a y m e n t to t h e disabled w o r k m a n has n o t been
subject t o reduction during his m a i n t e n a n c e in hospital a n d in view of this it
is proposed t h a t t h e w o r k m a n disabled b y industrial injury a n d r e m o v e d t o
hospital shall receive his cash benefits in full w i t h o u t d e d u c t i o n , as p a r t of t h e
special benefits p r o v i d e d for i n d u s t r i a l c a s u a l t i e s .
(ii) W h e r e an industrial pensioner h a s t o re-enter a hospital or i n s t i t u t i o n
for further a p p r o v e d t r e a t m e n t for disability d u e t o his injury, his pension will
whilst undergoing such t r e a t m e n t be a t t h e 100 per cent, r a t e w i t h full family
allowances related t o his responsibilities a t t h e time, b u t the pension will b e
subject t o a d e d u c t i o n of 10s. a week in respect of h o m e s a v i n g s .
A l l o w a n c e for c o n s t a n t a t t e n d a n c e .
42. W h e r e a w o r k m a n h a s been a w a r d e d a n i n d u s t r i a l pension for d i s a b l e m e n t
assessed a t 106 p e r cent., a n d needs c o n s t a n t a t t e n d a n c e on a c c o u n t of t h e dis­
ablement, he m a y be a w a r d e d a special allowance a t a weekly r a t e n o t
exceeding 20s.
Women.
43. W o m e n will be entitled to i n j u r y allowance and pension a t t h e s a m e basic
rates as m e n . A m a r r i e d w o m a n whose h u s b a n d is wholly or m a i n l y d e p e n d e n t
on her earnings a n d incapable of self-support will be e n t i t l e d t o a n allowance
for her d e p e n d e n t h u s b a n d (at t h e r a t e for a wife) t o g e t h e r w i t h an allowance
in respect of a first child, subject t o t h e c o n d i t i o n s applicable t o t h e first child
of a male w o r k m a n . W h e r e n o h u s b a n d ' s allowance is p a y a b l e , a w o m a n will
be e n t i t l e d t o claim a n allowance for a d e p e n d a n t o n t h e c o n d i t i o n s a p p l i c a b l e
to a m a l e w o r k m a n .
Juveniles.
44. T h e r a t e s of benefit for u n m a r r i e d w o r k m e n u n d e r 18 y e a r s of age will be
half t h e rates for a n a d u l t , t o be raised t o t h e a d u l t r a t e on a t t a i n i n g 18 y e a r s
of age. A n y d e p e n d a n t ' s allowances p a y a b l e will b e a t t h e full r a t e s .
Minor Injuries.
45. W h e r e a n i n j u r y results in o n l y a m i n o r degree of d i s a b l e m e n t , p r o v i s i o n
will be m a d e for a final s e t t l e m e n t b y a n a w a r d of a g r a t u i t y , or of a t e m p o r a r y
allowance at a special rate w i t h or without a final g r a t u i t y . If successive
injuries occur resulting e v e n t u a l l y in s u b s t a n t i a l d i s a b l e m e n t , the c a s e will be
reviewed on t h e basis of t h e disablement resulting from the c o m b i n e d
injuries.
P e n s i o n s and A l l o w a n c e s in Fatal Cases.
46. T h e following provision will be m a d e for t h e p a y m e n t of pensions a n d
allowances to widows a n d children a n d to o t h e r d e p e n d a n t s of t h e w o r k m a n
subject to the conditions set o u t in each case a n d to the general conditions as
to dependency mentioned in s u b - p a r a g r a p h (ix) below.
(i) T h e widow of a deceased w o r k m a n , w h o was married t o him previous to
the injury' a n d was resident w i t h him a t the t i m e of d e a t h , will receive (a) if she
is 50 years of age or over, or being u n d e r t h a t age h a s the care of a child of the
w o r k m a n or is incapable of self-support, a pension of 30s. weekly a n d , (6) in
other cases, a pension of 20s. weekly. If she would h a v e qualified u n d e r t h e
general scheme of social insurance for a widow's benefit at a higher r a t e for an
initial period following the d e a t h , an allowance a t t h a t r a t e will b e p a y a b l e
for a similar period a n d pension will begin when the allowance e n d s . W h e r e
a widow under 50 y e a r s of age is awarded a pension a t t h e 30s. r a t e because
she has t h e care of a child of t h e w o r k m a n , the pension will c o n t i n u e a t this
r a t e when the child ceases to be qualified for allowance if she has t h e n a t t a i n e d
t h e age of 50 years. In t h e case of a widow w h o was s e p a r a t e d from t h e
w o r k m a n , provision will be m a d e for t h e a w a r d of a pension in accordance w i t h
a n y p a y m e n t she h a s been receiving or entitled t o receive from h i m , subject
t o a m a x i m u m of t h e a p p r o p r i a t e r a t e a b o v e . On re-marriage, t h e pension
will cease but there will be a m a r r i a g e g r a t u i t y equal to one y e a r ' s pension.
(ii) A n allowance of 7s. 6d. weekly will be p a y a b l e in respect of a first child
of the w o r k m a n (child being defined as in p a r a g r a p h 40(h)). As u n d e r t h e
general scheme of social insurance, there will be a weekly allowance of 12s. (of
which 5s. will be provided b y t h e Exchequer) for each child who becomes an
o r p h a n (i.e. a child b o t h of whose p a r e n t s are dead) b y the d e a t h of the w o r k m a n .
(iii) W h e r e t h e w o r k m a n w a s in receipt a t t h e t i m e of d e a t h of a n allowance
in respect of v i r t u a l u n e m p l o y a b i l i t y , the widow's pension a n d the allowance in
respect of a first child will be p a y a b l e irrespective of t h e d a t e of m a r r i a g e or t h e
d a t e of the b i r t h of t h e child.
(iv) A widower w h o s e wife w a s m a r r i e d t o him p r e v i o u s t o h e r i n j u r y a n d
w a s resident w i t h h i m a t t h e t i m e of her d e a t h will be eligible for a p e n s i o n of
2os. weekly, if he is i n c a p a b l e of self-support.
(v) A pension will be p a y a b l e , w h e t h e r or n o t a widow's pension is p a y a b l e ,
t o a p a r e n t who is incapable of self-support. T h e m a x i m u m r a t e of pension for
one p a r e n t will be 20s. weekly or, if b o t h p a r e n t s qualify, 30s. weekly.
(vi) W h e r e no pension is p a y a b l e to a widow or a p a r e n t , one o t h e r a d u l t
m e m b e r of the deceased w o r k m a n ' s family w h o was residing with h i m a t t h e
t i m e of t h e injury, will be eligible for a pension if incapable of self-support.
T h e m a x i m u m rate of pension will be 20s. weekly.
(vii) W h e r e no pension is p a y a b l e u n d e r t h e foregoing provisions, a w o m a n ,
w h e t h e r or not a m e m b e r of t h e deceased w o r k m a n 's family, w h o w a s residing
with t h e w o r k m a n a t the t i m e of t h e injury, will be eligible for t e m p o r a r y pen­
sion if she has the care of his child or children. T h e m a x i m u m r a t e will be
20s. weekly a n d the pension will be payable so long as a t least one child is w i t h i n
t h e qualifying age for allowance u n d e r the Scheme.
(viii) Any adult m e m b e r of t h e deceased w o r k m a n ' s family w h o is not
eligible for a n y pension u n d e r this Scheme will be eligible for a t e m p o r a r y
allowance of 36s. weekly for 13 weeks.
(ix) T h e foregoing pensions a n d allowances will b e subject t o t h e condition
t h a t t h e c l a i m a n t was wholly or m a i n l y d e p e n d e n t on t h e w o r k m a n a t t h e time
of the injury a n d either continued t o be so d e p e n d e n t u p to t h e d a t e of d e a t h
or would b u t for the injury h a v e been so d e p e n d e n t . T h e widow a n d t h e first
child will be deemed to h a v e complied with this condition a n d will be t r e a t e d
as wholly d e p e n d e n t on the deceased if they were resident with h i m a t t h e time
of d e a t h ; a n d some further modification as to t h e r e q u i r e m e n t of d e p e n d e n c y a t
the t i m e of the injury will be necessary in t h e cases referred to in s u b - p a r a g r a p h
(iii) a b o v e . T h e m a x i m u m r a t e in s u b - p a r a g r a p h s (v), (vi) a n d (vii) will be
given w h e r e t h e d e p e n d a n t h a d been wholly m a i n t a i n e d b y the w o r k m a n ; in
o t h e r cases t h e a m o u n t will be p r o p o r t i o n a t e t o t h e degree of m a i n t e n a n c e
which h a d been given. In t h e case of a female d e p e n d a n t , t h e pension will
cease o n s u b s e q u e n t marriage. A person i n c a p a b l e of self-support m e a n s a
person p r e v e n t e d b y reason of physical or m e n t a l infirmity of a p e r m a n e n t
or prolonged n a t u r e from s u p p o r t i n g himself.
Cost
47. (i) I t is e s t i m a t e d t h a t before t h e w a r t h e cost of w o r k m e n ' s c o m p e n s a t i o n
p a i d b y e m p l o y e r s , excluding a d m i n i s t r a t i v e cost, w a s a b o u t £10 millions
per a n n u m , a n d t h a t t h e t o t a l cost including a d m i n i s t r a t i v e cost w a s a b o u t
£13 millions. W a r t i m e legislation is e s t i m a t e d t o h a v e increased t h e cost of
c o m p e n s a t i o n to a b o u t £17 millions, a n d it will also h a v e increased t h e a d m i n i s ­
t r a t i v e cost to a s u b s t a n t i a l , t h o u g h n o t t o a p r o p o r t i o n a t e , e x t e n t .
(ii) A s s u m i n g r a t e s of wages at a b o u t 25 p e r cent in excess of t h e i r level
in 193S, a n d t h e r e s t o r a t i o n of p e a c e t i m e c o n d i t i o n s before t h e i n t r o d u c t i o n
of t h e social security scheme, t h e G o v e r n m e n t A c t u a r y e s t i m a t e d t h a t t h e
cost of benefits for industrial cases u n d e r t h e proposals in t h e R e p o r t (exclud­
ing a d m i n i s t r a t i v e cost) w o u l d be a b o u t £15 millions p e r a n n u m , of w h i c h
£10 millions w a s t o be found b y t r i p a r t i t e c o n t r i b u t i o n a n d £5 millions b y a
special l e v y o n e m p l o y e r s in t h e h a z a r d o u s i n d u s t r i e s (see A p p e n d i x A t o t h e
Report).
(iii) I t is difficult t o m a k e a c o m p a r i s o n b e t w e e n t h e cost of t h e G o v e r n m e n t
p r o p o s a l s a n d t h e cost u n d e r t h e existing A c t s or u n d e r t h e proposals in t h e
R e p o r t , since t h e G o v e r n m e n t S c h e m e is based on flat r a t e s of benefit w h i c h
are n o t r e l a t e d to earnings.
T h e benefits u n d e r t h e G o v e r n m e n t S c h e m e
w o u l d , however, in some i m p o r t a n t respects b e s u b s t a n t i a l l y m o r e g e n e r o u s t o
t h e w o r k m a n t h a n those r e c o m m e n d e d in t h e R e p o r t . F o r e x a m p l e , d u r i n g t h e
first 13 weeks of incapacity' t h e single m a n w o u l d get 35s. p e r w e e k i n s t e a d
of 24s. T h e cost of i n d u s t r i a l pensions also will in m o s t cases be s u b s t a n t i a l l y
g r e a t e r owing t o t h e n e w m e t h o d of assessment proposed. T h e R e p o r t d i d n o t
fully specify t h e provision c o n t e m p l a t e d for fatal cases, b u t it seems clear
t h a t t h e cost of t h e pensions proposed u n d e r the n e w s c h e m e will be s u b s t a n ­
tially higher. W h i l s t , therefore, it is impossible to m a k e a n a c c u r a t e forecast
of t h e t o t a l cost of benefits u n d e r t h e new scheme, t h e G o v e r n m e n t are a d v i s e d
t h a t it will m a t e r i a l l y exceed t h e cost of t h e proposals in t h e R e p o r t a n d is
likely t o be of t h e order of £20 millions a y e a r .
(iv) T h e cost of a d m i n i s t r a t i o n u n d e r t h e Scheme expressed as a p e r c e n t a g e
of t h e cost of benefits should, over t h e whole field, be lower t h a n u n d e r t h e
existing s y s t e m . T h e G o v e r n m e n t a r e advised t h a t p e n d i n g experience of t h e
w o r k i n g of t h e Scheme it would b e wise t o allow 15 per cent of t h e cost of benefits
for a d m i n i s t r a t i v e charges.
(v) A s s u m i n g t h e cost of benefits u n d e r t h e G o v e r n m e n t
t h e order of £20 millions, a n d t a k i n g a further £3 millions
m i n i s t r a t i o n , t h e G o v e r n m e n t are advised t h a t allowing for
of disability a n d u n e m p l o y m e n t , t h e weekly c o n t r i b u t i o n
proposals t o b e of
as t h e cost of a d ­
excusals in respect
r e q u i r e d for m e n
will be 6d. a n d t h a t for women 4c!. If the c o n t r i b u t i o n is divided equally
between employers a n d workers as proposed in p a r a g r a p h 34, t h e weekly r a t e
for each will be 3d. for m e n a n d 2d. for w o m e n . T h e rates for boys a n d girls
u n d e r 18 years will be half t h e rates for m e n a n d women. These c o n t r i b u t i o n s
would provide five-sixths of the income of t h e F u n d , t h e remaining one-sixth
being contributed by t h e E x c h e q u e r . O v e r l a p p i n g of B e n e f i t s w i t h o t h e r S c h e m e s .
48. T h e question of overlapping benefits is dealt w i t h in P a r t I of this p a p e r .
One such case where a d j u s t m e n t will be required is t h a t of the industrial
pensioner who qualifies for sickness or u n e m p l o y m e n t benefit; a n o t h e r is t h e
industrial pensioner, who becomes qualified for a r e t i r e m e n t pension. Similarly
in fatal cases, overlapping will occur if the d e p e n d a n t s qualify for sickness or ,
u n e m p l o y m e n t benefit or retirement pension. These, however, are only examples
of t h e m a n y t y p e s of case where benefits m a y overlap, a n d t h e G o v e r n m e n t
h a v e reserved the t r e a t m e n t of all such cases for further consideration.
Medical Treatment and Rehabilitation.
49. T h e medical t r e a t m e n t and rehabilitation of injured w o r k m e n a n d post­
hospital rehabilitation a n d t r a i n i n g will be p r o v i d e d as p a r t of the general
medical a n d p o s t - h o s p i t a l rehabilitation services organised b y t h e H e a l t h
D e p a r t m e n t s a n d b y t h e Ministry of L a b o u r a n d N a t i o n a l Service respec­
tively, t h o u g h it m a y be reasonable t h a t a c o n t r i b u t i o n from t h e I n d u s t r i a l
I n j u r y Insurance F u n d should be m a d e t o w a r d s t h e cost of the l a t t e r
service.
Close c o n t a c t will clearly h a v e t o be m a i n t a i n e d between t h e
M i n i s t r y of Social I n s u r a n c e a n d t h e D e p a r t m e n t s responsible for these services
with a view t o e n s u r i n g t h a t t h e injured w o r k m a n secures full benefit from
t h e m . It is i m p o r t a n t t h a t there should be consultation between the M i n i s t r y
a n d these D e p a r t m e n t s on all major questions affecting t h e t r e a t m e n t of indus­
trial pensioners. T h e M i n i s t r y should be able to furnish t h e D e p a r t m e n t s w i t h
m u c h useful information a n d advice as t h e result of experience of t h e Scheme,
a n d of the comprehensive statistics which it will h a v e collected as t o the incidence
and effects of industrial accident a n d disease.
P r e v e n t i o n of A c c i d e n t s .
50. It is not c o n t e m p l a t e d t h a t the M i n i s t r y of Social I n s u r a n c e s h o u l d
have a n y responsibility for the prevention of industrial accidents a n d
diseases, b u t its position will give it a unicjue o p p o r t u n i t y to c o n t r i b u t e
valuable information in this sphere a n d in t h i s a n d o t h e r w a y s it will be able
t o p r o m o t e a n d assist research. I t will be one of its functions to s u r v e y a n d
analyse the incidence a n d effects of industrial accidents a n d diseases over t h e
whole of the industrial field.
A p p l i c a t i o n of t h e n e w S c h e m e to p a s t c a s e s .
5 1 . (i) T h e R e p o r t raises t h e question of t h e application of t h e new S c h e m e
t o cases occurring before t h e c o m m e n c e m e n t of t h e Scheme. I t is clear t h a t
in a n y e v e n t , as recognised in the R e p o r t , there can be n o re-opening of cases
where t h e liability for weekly p a y m e n t s has been redeemed b y p a y m e n t of a
l u m p sum. N o r would it seem practicable to a d j u s t the provisions of t h e new
Scheme to fatal cases where a l u m p s u m has been paid into Court a n d wholly
or partially disbursed for t h e benefit of the widow a n d o t h e r d e p e n d a n t s ,
a n d where t h e widow will, subject to re-marriage, be c o n t i n u i n g t o d r a w a
pension u n d e r t h e Widows, O r p h a n s a n d Old Age C o n t r i b u t o r y Pensions Act.
(ii) As r e g a r d s cases of prolonged disability w h e r e t h e w o r k m a n is still
receiving weekly p a y m e n t s , t h e R e p o r t , whilst a d m i t t i n g the p r a c t i c a l diffi­
eulties, suggested two a l t e r n a t i v e s for c o n s i d e r a t i o n :
(rt) t h a t the existing p a y m e n t should c o n t i n u e t o b e provided as a t present,
the Social I n s u r a n c e F u n d p a y i n g s e p a r a t e l y t h e a d d i t i o n s involved in t h e
new scales; or
(b) t h a t the Social i n s u r a n c e F u n d should t a k e over t h e whole responsibility
a n d m a k e weekly p a y m e n t s to t h e w o r k m a n a t the new r a t e s .
f
1
(iii) B o t h these a l t e r n a t i v e s w o u l d involve serious practical difficultiesThere is a f u n d a m e n t a l difference between t h e m e t h o d s of fixing t h e weekly
p a y m e n t s u n d e r t h e existing A c t s a n d u n d e r t h e n e w Scheme. It w o u l d be
necessary to m a k e a medical assessment in each case in a c c o r d a n c e w i t h the
new principle, b u t t h e G o v e r n m e n t a r e a d v i s e d t h a t it w o u l d b e a m a t t e r of
e x t r e m e difficulty after a lapse, in a large n u m b e r of cases, of m a n y y e a r s for
a ivledical B o a r d t o d e t e r m i n e t h e degree of d i s a b l e m e n t d u e t o t h e i n j u r y
either a t t h e t i m e of t h e i n j u r y or at t h e d a t e of their e x a m i n a t i o n .
Further,
as r e g a r d s (b) it would be necessary, as t h e R e p o r t p o i n t s out, for t h e C e n t r a l
F u n d t o t a k e over in respect of each case such reserves of insurance c o m p a n i e s ,
m u t u a l i n d e m n i t y associations a n d i n d i v i d u a l e m p l o y e r s as h a v e b e e n ear­
m a r k e d for the p u r p o s e of t h e liability. While in t h e case of I n s u r a n c e Companies
a n d some M u t u a l I n d e m n i t y Associations a d e q u a t e reserves are n o d o u b t set
aside t o cover t h e liability u n d e r the existing A c t s , t h e r e will b e cases where
the provision m a d e will be i n a d e q u a t e , a n d t h e A u t h o r i t y responsible for the
new Scheme would h a v e t o ascertain the capitalised liability of t h e e m p l o y e r
a n d be given power t o recover a n y deficiency from t h e employer or his insurers.
(iv) Since the R e p o r t w a s published t h e c o m p e n s a t i o n p a y m e n t s u n d e r t h e
Acts h a v e been s u b s t a n t i a l l y increased b y r e c e n t legislation a n d t h e n e w r a t e s
provided b y the W o r k m e n ' s C o m p e n s a t i o n ( T e m p o r a r y Increases) A c t , 1943,
have diminished t h e i m p o r t a n c e of t h e transfer of p a s t cases t o t h e F u n d
The G o v e r n m e n t h a v e come t o t h e conclusion t h a t t h e right course is t o leave
the liability in p a s t cases on t h e employer, i n a c c o r d a n c e w i t h t h e existing
Acts. T h e s e Acts, including t h e W o r k m e n ' s C o m p e n s a t i o n
(Temporary
Increases) Act, 1943, w o u l d b e c o n t i n u e d in force for t h e purpose, subject t o
a n y a p p r o p r i a t e a d j u s t m e n t in respect of family allowances p r o v i d e d
under t h e n a t i o n a l s c h e m e .
(v) T h e G o v e r n m e n t propose, however, t o p r o v i d e t h a t a w o r k m a n w h o ,
if h e c a m e u n d e r t h e n e w Scheme, w o u l d be d e e m e d t o be v i r t u a l l y u n e m ­
ployable as a result of t h e injury, m a y a p p l y t o t h e M i n i s t r y of Social
I n s u r a n c e for a p e r s o n a l allowance of 10s. w e e k l y which will be p a y a b l e irre­
spective of t h e d a t e of t h e injury. T h e cost of s u c h allowances w o u l d be borne,
not b y t h e employer, b u t b y t h e I n d u s t r i a l I n j u r y I n s u r a n c e F u n d .
Alternative
Remedies
52. (i) T h e R e p o r t r e c o m m e n d s (a) in t h e C h a p t e r h e a d e d " T h e P r o b l e m of
Alternative Remedies " ( p a r a s . 25S-264) t h e s e t t i n g u p of a C o m m i t t e e t o
consider t h e relation, b o t h in i n d u s t r i a l a n d n o n - i n d u s t r i a l cases, between
claims t o s e c u r i t y benefit a n d claims for d a m a g e s in respect of p e r s o n a l injury
caused b y negligence, a n d (b) in p a r a g r a p h 98 (see also p a r a g r a p h 81) a review
of t h e law governing t h e liability of e m p l o y e r s a n d t h i r d p a r t i e s t o p a y d a m a g e s
or c o m p e n s a t i o n to w o r k m e n , or t h e i r legal r e p r e s e n t a t i v e s a n d d e p e n d a n t s ,
independently of t h e provision for t h e m p r o p o s e d to be m a d e in the new S c h e m e .
(ii) T h e G o v e r n m e n t agree t h a t a n i n q u i r y u n d e r b o t h heads (a) a n d (6)
is desirable a n d h a v e set u p for this p u r p o s e a C o m m i t t e e w i t h c o m p r e ­
hcnsive t e r m s of reference u n d e r t h e C h a i r m a n s h i p of Sir W a l t e r M o n c k t o n ,
K.C.V.O., K.C.
V-SUMMARY
OF
MAIN
FEATURES
SCHEME
OF
THE
GOVERNMENT
53- (') W o r k m e n ' s c o m p e n s a t i o n will be t r e a t e d in future not as p a r t of t h e
law of e m p l o y e e s liability b u t as a social service. As, however, t h e new Scheme
d e p a r t s from t h e general scheme of social insurance as regards r a t e s of benefit
a n d is, in m a n y respects, assimilated to t h e war pensions schemes, it will not
be unified with the general scheme b u t will be a s e p a r a t e scheme.
(Paragraph^
24 a n d 32.)
(ii) The Scheme will be comprehensive in scope, i.e. it will cover, b r o a d l y
speaking, all persons w o r k i n g u n d e r a c o n t r a c t of service or apprenticeship,
except those u n d e r school leaving age. It will not provide for " c o n t r a c t i n g
Out " s c h e m e s . It will a p p l y to accidents arising out of a n d in t h e course of
e m p l o y m e n t , a n d to specified i n d u s t r i a l diseases. ( P a r a g r a p h 33.)
(iii) T h e liability, instead of being on t h e individual employer, will be placed
u p o n a Central F u n d out of which all benefits, b o t h in d i s a b l e m e n t a n d fatal
cases, a n d a d m i n i s t r a t i v e charges, will be paid. ( P a r a g r a p h 34.)
(iv) T h e F u n d will be m a i n t a i n e d by weekly c o n t r i b u t i o n s from employers
a n d w o r k m e n collected by s t a m p , witli a c o n t r i b u t i o n from t h e E x c h e q u e r . The
weekly rates of c o n t r i b u t i o n will be 6d. for adult men a n d 4d. for w o m e n , to
be shared equally between t h e e m p l o y e r a n d w o r k m a n . T h e r a t e s for juveniles
will be half these r a t e s ( P a r a g r a p h 47). Benefits will not d e p e n d on a contri­
b u t i o n qualification.
( P a r a g r a p h 34.)
(v) T h e Scheme will be u n d e r t h e general charge of the M i n i s t e r of Social
I n s u r a n c e , b u t provision will be m a d e for the collaboration of i n d u s t r y in
t h e d e v e l o p m e n t and a d m i n i s t r a t i o n of t h e Scheme in t w o w a y s . First, an
A d v i s o r y C o m m i t t e e or Council will be set u p on which e m p l o y e r s and
w o r k m e n will be equally represented, t o advise t h e Minister on i m p o r t a n t
m a t t e r s of policy a n d a d m i n i s t r a t i o n referred to t h e m . Secondly, employers
a n d w o r k m e n will b e equallv represented on t h e local Appeal Tribunals.
( P a r a g r a p h s 35 a n d 36.)
(vi) T h e present procedure b y which t h e w o r k m a n claims a g a i n s t his em­
plover, subject to appeals t o Courts of L a w , will be superseded b y a system
u n d e r which claims will be dealt w i t h b y a Pensions Officer subject t o rights
of a p p e a l t o local tribunals, a n d further rights of a p p e a l to a n I n d u s t r i a l Injury
I n s u r a n c e Commissioner whose decision will be final. ( P a r a g r a p h 36.)
(vii) In disablement cases, benefits will be at uniform flat r a t e s . T h e y will
consist of an industrial i n j u r y allowance p a y a b l e for an initial period while the
w o r k m a n is i n c a p a c i t a t e d for w o r k , t o be replaced, in cases where t h e disable­
m e n t is likely t o be p e r m a n e n t or prolonged, by a n i n d u s t r a l pension, which will
be s u p p l e m e n t e d b\* a special allowance if the pensioner is u n e m p l o y a b l e .
Allowances will be given for family responsibilities.
T r e a t m e n t allowances and
allowances for c o n s t a n t a t t e n d a n c e will be provided in certain circumstances.
( P a r a g r a p h s 37 to 45.)
(viii) T h e industrial pension will n o t be based on loss of e a r n i n g s , b u t on the
degree of d i s a b l e m e n t due t o t h e injury. The degree of d i s a b l e m e n t will be
assessed b y a medical board, subject t o certain rights of a p p e a l t o a special
t r i b u n a l , o n a c o m p a r i s o n of t h e condition of t h e w o r k m a n resulting from the
i n j u r y with t h e condition of a n o r m a l h e a l t h y p e r s o n of t h e s a m e age a n d sex.
T h e pension will be unaffected b y s u b s e q u e n t earnings. N o provision will be
m a d e for c o m m u t a t i o n of t h e pension b y a l u m p s u m p a y m e n t .
(Paragraphs
29, 36, a n d 39.)
(ix) W h o r e t h e injury results in only a m i n o r degree of disability, provision
will be m a d e for a final s e t t l e m e n t by an a w a r d of a g r a t u i t y , o r of a t e m p o r a r y
allowance at a special r a t e with o r w i t h o u t a final g r a t u i t y . ( P a r a g r a p h 4 5 . )
(x) In fatal cases, provision will be m a d e for p a y m e n t of a pension t o t h e
widow with a n allowance for the first child. W h e r e t h e first child is a n o r p h a n ,
a higher r a t e of allowance will be payable. In a d d i t i o n , provision will be m a d e
in certain c i r c u m s t a n c e s for p a y m e n t of a pension to one or b o t h p a r e n t s , of
where no widow o r p a r e n t s pension is p a y a b l e , t h e p a y m e n t of a pension to
jne adult d e p e n d e n t m e m b e r of the deceased vvorkman's family.
Provision
will be m a d e for p a y m e n t of t e m p o r a r y pension or benefit in certain o t h e r
eases. ( P a r a g r a p h 4 6 . )
APPENDIX
A . COMPARISON OF RATE OF INJURY ALLOWANCE AND OF IOO% PISABLEMENT PENSION PROPOSED FOR ADULTS UNDER THE GOVERNMENT SCHEME,
WITH THE RATES FOR TOTAL INCAPACITY UNDER THE EXISTING ACTS AND UNDER THE BEVERIDOE PLAN.
Government Proposals Injury
Injur y allowallow anc
ancee during
durin g inin capacit
capacityy for
for
work
wor k (first
(first
13 weeks)
weeks )
(I)
(2
(2))
Workmen'$ Compensation
Injury
Injur y allowallow Pension,
Pension , if
afte
afterr 13 weeks
week s 100%
100% disabled
disable d
an
andd pension
pensio n
an
andd unemployunemploy ­
rate
rat e for
for 100%
100% able
abl e
disablementt
disablemen
s.
d.
(a) Single man or
woman without dependant
35
0
(b) Single man or
woman with
adult dependant 43 9
(c) Married man .
43 9 50 0
(d) Married man
and first child
48 0
57
s.
d.
s.
Pre-wa
Pre-warr First 13 weeks After 13 weeks
(5
(5))
d.
s.
d.
s.
50 0
,
50 0
f)
60 0
67 6
1 A earnings f 30 0 max.
Disabilit
Disabilityy
Benefit
Benefi t (first
(first
13 weeks)
weeks )
Industrial
Industria l
Pensio
Pensionn (after
(afte r
13 weeks)
weeks )
(8)
(8)
(9)
(9)
(7)
(")
40 0
60 0
Beveridge Plan
With war increases
(-1
(-1))
(3
(3))
Acts
d.
35 0 max.
(limit of
iirds
earnings)
s.
d.
40 0 max.
.
(limit of
3""ds
earnings)
s.
s.
d.
24 0
d.
jrds earnings
60s. m a x .
40 0
r
(minimum as
in Col. 8)
.­
50 0 max.
(limit of j r ds earnings)
45 0 max.
55 0 max.
' (limit of It h earnings)
40 0 max.
40 0*
4S 0*
* Subject to
wife not being
gainfully occupied.
J
ijrds earnings
-f 8s.
68s. max.
(Minimum
as in col. 8.)
The rates in Col. 3 and 4 may be increased by an allowance up to 20s. where constant attendance on the workman is necessary on account of the injury.
B . COMPARISON BETWEEN BENEFITS IN FATAL CASES UNDER THE GOVERNMENT SCHEME AND UNDER THE EXISTING ACTS AND
\Yorkmen's Compensation
Government
(I) Proposals
(2)
(a) One or more adult de­ ") Pension for widow, first child and/or one or
p e n d a n t s (Widow,
both parents, or one other dependent member
parent, etc.) or depen­
of t h e deceased workman's family (if no widow
p e n d e n t c h i l d or
or parent).
children.
Widow: temporary benefit as under t h e
general scheme,to be followed by pension—
(i) if 50 years of age or over,
or if under 50 years, with
dependent children or in­
capable of self support . . 30s.
[b) One or more adult de­
(ii) others
..
..
. . 20s.
pendants with one or
First child
..
..
7s. 6d.
more dependent chil­ 1 Orphan child
..
..
. . 12s.
dren.
'
One parent
..
..
. . 20s. max.
Two parents
..
..
. . 30s. m a x .
Other dependent member of
family
..
..
..
. . 20s. m a x .
Temporary Benefits
(i) O t h e r f e m a l e d e p e n d a n t
having care of deceased
workman's child if no pen­
sion as above is payable . . 20s. max.
(ii) Dependent member of de­
ceased workman's family
not entitled to pension
. . 36s. (for
thirteen weeks)
.IU BEVKRIDGE
Acts
Pre-war
rates
With temporary
increases
(3)
(4)
Minimum £200
Minimum £300 Maximum £$00
Maximum £100 Maximum /600
Maximum ^700 Beveridge Plan
(5
(5))
Benefits as under Social Security
Scheme, i.e. widow's temporary bene­
fit (36s. for 13 weeks), followed by
guardian benefit (24s. weekly) where
I there are children (first child 8s.
weekly) or training benefit (24s. for
26 weeks). In addition, a lump sum
in all cases (unspecified b u t taking into
account other benefits).
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