In view of the interest
aroused by the passing- of the National Insurance Amendment Act, 1913,
which became law on 15th August, 1913, the following notes may possibly
be regarded as in some degree helpful in eliminating certain
difficulties attendant upon an initial consideration of its provisions
as affecting Scotland.
A very important
concession has been granted to such persons by the extension until 13th
October, 1913, of the period within which advantage may be taken of the
right to enter into full insurance at the flat rate of contribution.
All employed contributors
entering into insurance before that date will do so at a uniform rate of
contribution, while those who become employed contributors after 13th
October will require to pay a rate appropriate to their age at entry or
suffer an equivalent reduction of benefit.
A very important
alteration has been made with reference to the sickness benefit payable
to insured persons of age 50 and upwards. Under the principal Act such
persons were subdivided into four distinct classes :—
(a) Persons between 50
(b) Persons between 60
(c) Persons between 65
and 70 as at 15th July, 1912, who entered into insurance prior to 15th
(d) Persons under 65 at
15th July, 1912, who did not become employed within the meaning of the
Act until after attaining age 65.
These various classes
were dealt with as follows :—
Classes (a) and (b)
received substantially reduced sickness benefit.
Class (c) received only
such benefit as their Societies might determine.
Persons in class (d) were
not allowed to be insured or to receive any benefit, but their employers
were required to contribute 5d. per week in respect of them.
All these restrictions
have now been swept away, and persons in the four classes referred to
may now become insured persons enjoying the same rates of benefit as
other employed contributors. The only qualification now existing is that
persons who become employed contributors, after attaining age 65, shall
not be entitled to medical benefit after age 70 unless at least 27
contributions have been paid in respect of them.
A new class of employment
has been brought within the scope of the Act’s compulsory provisions,
viz., “Employment under any local or public authority except such as may
be excluded by a special order.”
over 60 may, if they have ceased to be so insurable and if they are
otherwise qualified to do so, become voluntary contributors at any time
irrespective of the duration of their insurance as employed
contributors. The rate of contribution exigible in such case continues
to be the employed rate. Under the principal Act this privilege was
allowed only to employed contributors who had been insured as such for
at least five years.
The period during which a
voluntary contributor under age 45 may come into insurance at the flat
rate has been extended to 13th October, 1913. This provision will
necessitate the allowance of special credits in respect of excess
contributions during the period between 15th January and 13th October,
No voluntary contributors
whose income from all sources exceeds 1 GO will be entitled to receive
medical benefit, but if in insurance their weekly contributions will be
reduced by one penny.
A new class of exempt
persons has been created. Any person who proves that he is ordinarily
and mainly dependent for his livelihood on the earnings derived by him
from an occupation which is not employment within the meaning of the Act
is entitled to a certificate of exemption. This provision meets the
case, for example, of the certificated teacher under a pension scheme
who may take a class in an evening school.
Another of the provisions
of the new Act is that which confers upon exempt persons the right to
receive medical and sanatorium benefit, subject only to certain
qualifying conditions to be imposed by the Commissioners.
It is expressly
stipulated that exempt persons whose annual income from all sources
exceeds ^160 shall be required to make their own arrangements for
medical treatment. A proportionate payment will be made to them out of
funds reserved for this purpose.
The position of women
who, prior to their marriage with an alien had been British subjects,
has now been materially improved. Formerly the State proportion of the
cost of benefit was denied them, but now such a married woman is
entitled to receive full benefits if she is herself insured and whether
or not she is so insured the maternity benefit payable in respect of her
alien husband’s insurance is increased by two-sevenths. The cost of this
increase is defrayed out of moneys furnished by Parliament.
The effect of this
provision is that a British woman’s rates of benefit remains unaltered
for insurance purposes even although she marries an alien.
Aged and Infirm
Members of Societies.
All members of Societies
as at lGth December, 1911, who were not qualified to become insured
persons by reason of age or permanent disablement and who were then
entitled to medical attendance and treatment are to receive medical
benefit as from 12th January, 1914. This privilege was formerly confined
to members of such Societies as became approved, but the restriction has
now been removed. Parliament contributes towards the cost of medical
treatment for this class the same proportion as that provided in the
case of ordinary insured persons.
formerly caused by the fact that the Seamen’s National Insurance Society
could not admit to its membership masters, seamen and apprentices to the
sea-service, or the sea-faring service, who were qualified to become
voluntary contributors. This power has now been granted and it is
anticipated that some fishing boat owners and other sea« faring men, not
employed under contract of service, will avail themselves of the
benefits secured by this provision.
It is also provided that
where a shipowner—although liable to provide maintenance and medical
treatment—is not liable to pay wages, a Society shall have power, in the
case where the seaman was serving on a home trade ship, to apply
sickness benefit in whole or in part for the benefit of his dependants.
Perhaps the most widely
discussed clause during the passage of the Bill through Parliament was
that dealing with
Maternity Benefit. Its
provisions may be briefly outlined as follows :—
Maternity Benefit is now
in all cases regarded as the mother’s benefit, her receipt alone being
regarded as a valid discharge to the Society or Committee concerned. The
husband’s receipt, on her behalf, may be accepted if authorised by her.
The position where the
husband alone is an insured person otherwise remains unchanged, but in
all cases where the wife is herself an insured person, and a Society
member qualified for benefit, double maternity benefit of £3 is payable.
If the husband is a
Society member and entitled to maternity benefit half of this sum is
paid in respect of his insurance. If he is a deposit contributor, as
much of the 30s. as his account will bear is advanced, and the balance
is made good by the wife’s Society, otherwise the entire cost of
maternity benefit is borne by the latter Society.
It will be observed that
the anomaly previously existing in the case where husband and wife were
both insured persons, but the husband was unqualified for maternity
benefit, has now been removed.
It should be noted that
where any benefit is paid in respect of the wife’s insurance, she is
required to abstain from remunerative work during a period of four weeks
after her confinement. The position of maternity benefit under the Acts
may thus be summarised :—
(a) Husband .insured,
wife not insured—husband’s society pays one benefit to the wife.
(b) Husband and wife both
insured—husband’s and wife’s society each pay one benefit to the wife.
(c) Wife insured, husband
not insured—wife’s society pays two benefits to her.
'd) Unmarried insured
woman—her society pays her one benefit.
Of the provisions
affecting- the practice of Approved Societies, those dealing with the
treatment of arrears incurred during periods of unemployment must be
regarded as particularly worthy of notice.
The hardship entailed
upon members of Approved Societies in having to pay not only their own
but also their employers’ contribution during unemployment has
frequently been adversely criticised.
In terms of the principal
Act the employers’ share of contributions might be disregarded, but only
at the discretion of the Society. In the new Act it is explicitly laid
down that an employed contributor falling into arrears requires to make
payment only of his own share of the contributions, and fot-the purpose
of determining this share the rate of remuneration, except where
sufficient evidence to the contrary is adduced, is deemed to exceed 2s.
6d. per working day. Thus a man who has been out of work for 15 weeks
requires to pay only 15 x 4d., or 5s., in order to come back into full
benefit, instead of 15 x 7d., or 8s. 9d., as formerly.
The loss to Societies in
excess of an average of three full weeks’ contributions per member per
annum is to be made good out of the sums retained for cancellation of
reserve values. If the aggregate amount so payable in any year exceeds
^100,000 this excess is to be met out of moneys to be provided by
It is proposed that
instead of permitting arrears to accumulate from year to year, the rate
of sickness benefit payable to the defaulting member should during each
year be reduced roughly in proportion to the value of the loss incurred
by the Society from his failure to pay contributions during the
preceding year. This reduction of benefit will be based upon the
expectation of sickness of the individual. Thus a man of 40 would
require to forego, say, 6d. a week of sickness benefit for one year for
every contribution in arrear during the previous twelve months. That is
to say, this man, if 12 weeks in arrear would suffer reduction of
sickness benefit to the extent of Gd. x 12, or 5s. per week; but
provided that he incurred no further arrears during the year of
reduction he would come automatically into full benefit as from the end
of that year.
reduction in the case of a man presently aged 55 would be, say, 3d. per
Tables will doubtless be
calculated shewing the value of arrears at various ages, and an
examination of these tables will at once reveal the precise position of
the individual member to the member himself and to the Society Secretary
responsible for the administration of his benefits.
Before leaving this
topic, it may be pointed out that if in any year more than 48
contributions are paid in respect of any member, these excess
contributions will be held to his credit and will be utilised in wiping
out any arrears of contributions which may subsequently accrue in
respect of him.
Other modifications of
the provisions affecting the administration of sickness benefit may here
be briefly referred to :—
The requirement that 50
contributions must be paid between two periods of illness to prevent
them being regarded as continuous is now dispensed with. It is still
necessary, however, that a period of at least 52 weeks should intervene.
“Commencing on the fourth
day of such incapacity ” is to be substituted for “ commencing from the
fourth day after being so rendered incapable of work.” A day upon which
the incapacitated person was prevented by the incapacity from doing any
effective work is to be treated as a day of incapacity, but Sunday is
not deemed one of the three working days which must elapse, unless the
insured person would, but for his incapacity, have actually been
employed upon that day.
Members in Hospital.
The provisions of the
principal Statute dealing with the treatment of sickness benefit while
the member is in hospital have been somewhat modified. It is now laid
down that where no payment, or partial payment only, of Sickness Benefit
has been made— /
(a) To his dependants, or
if he had no dependants,
(b) to the Insurance
(c) under a previously
existing agreement to the hospital authorities ; the money so withheld
shall be applied—
In the provision of
surgical appliances or otherwise for his benefit after he ceases to be
an inmate, or if not so expended shall be paid in cash, in a lump sum,,
or in instalments, to the member after leaving the institution.
Member in receipt of
compensation under Workmen’s Compensation Act, 1906.
Where an insured person
is receiving reduced sickness allowance, representing the difference
between full sickness benefit and the sum payable in accordance with the
provisions of an agreement under the Workmen’s Compensation Act, the
amount paid in sickness benefit shall be totalled and the number of
weeks during which he shall be deemed to have received sickness benefit
will be reckoned by dividing this total by the full weekly rate of
benefit. For example, suppose that the insured person has during the
first period of illness received a compensation allowance of 7s. 6d. per
week and sickness benefit of 2s. 6d. per week. If now it be assumed that
these sums were paid for 16 weeks and that at some later period during
the same year the insured person again falls ill, it is necessary to
reckon the period during which full sickness benefit can be allowed. The
period during which full benefit was formerly paid is consequently 2s 6d
/ 10s x 16, or 4 weeks, and the insured person is therefore entitled to
full sickness benefit during the further period of 22 weeks.
This, it should be
observed, applies only in the case where the member recovers and
subsequently becomes ill. In the case of a continuous illness, however,
each week during which any payment is made counts as a full week towards
the 26 weeks throughout which benefit is payable.
Several most important
administrative changes are made by the Clause dealing with international
Societies. Previously, the members of such Societies resident in each
part of the United Kingdom were required to be treated for the purposes
of valuations, surpluses, deficiencies and transfers as if they formed a
separate Society. These provisions have now been done away with.
Fortunately, however, it is provided that if application to the Joint
Committee be made before 15th February, 1914, Scottish members of such
Societies may continue to be regarded as constituting separate
societies. Thanks to this Clause, Scottish members will, if immediate
action is taken, be entitled to preserve for their own benefit any
surpluses expected from the higher sickness rates or better management
which may prevail in Scotland. If this option be not exercised, it is
obvious that if there are surpluses derived from the contributions of
Scottish members, these will be utilised to set off in some degree any
less favourable conditions experienced in the administration of sickness
benefit in the sister countries.
It cannot therefore be
too strongly urged that Scottish members should immediately consider the
whole position in the light of the conditions appertaining to their
entry into insurance and to the potential possibilities of Scottish
experience and management. The first step should take the form of
availing themselves, through their branch Societies, of the proviso of
Section 16 (1). If it is further wished to have districts separately
valued in Scotland, the second step would then be to apply under Section
40 of the original Act for association m geographical areas if their
rules permit. If they do not so permit, they should be altered.
This would result in
achieving a separate valuation from England. Each of the groups
exceeding 5,000 would also be valued separately in Scotland. If the
proviso of Section 16 (1) is not excepted, then deficiencies or
surpluses will be pooled with England. If the proviso is generally
accepted such pooling is confined to Scotland. Such a process would keep
the whole country (i.e., Scotland) together, would keep the whole
Societies together, and still allow for local autonomy.
Insurance Committees are
now constituted bodies corporate and power is given them to take,
purchase and hold land for the purposes of the National Insurance Act.
They are also empowered under certain conditions (in accordance with a
scheme to be submitted for the approval of the Commissioners) to pay to
their members subsistence allowances and compensation for loss of
remunerative time caused by necessary attendance at Committee meetings.
Committees are also
authorised to subscribe to any association of insurance Committees whose
objects are approved by the Commissioners, and to pay reasonable
expenses incurred by their representatives in attending meetings of such
In conclusion, the
following miscellaneous provisions may be noted :—
non-compliance with the provisions of the Act and its regulations may be
taken at the instance of the Procurator Fiscal or of the Scottish
Stamp Duly is no longer
exigible in respect of certain documents frequently required in the
operation of the Act.
Certificates of marriage
required for production in connection with applications for maternity
benefit are now obtainable for a fee of 1s.
An Approved Society may,
notwithstanding that its membership is less than 50 or more than 5,000,
join an association of Societies for valuation purposes.
Scottish County Councils
are empowered to borrow on security of the General Purposes Rate in
order to obtain funds for the erection of sanatoria, and can now
purchase and lease land. County Councils, which have been authorised to
provide sanatoria, have now received the same powers of providing
treatment for all persons suffering from tuberculosis as were formerly
possessed by local authorities for the treatment of infectious diseases.
The appended Schedule
gives particulars of the dates upon which the various provisions of the
new Act come into operation.