moment, and a large number more did not claim till after, in many cases long after, the commencing date.

In consequence of this delay there were in hand at 4th January a little more than 4,100 claims still undecided, many of these being newly received.

6. Period of grace allowed for claiming without loss of pension.-Persons whose title to pension accrued at 4th January were allowed a period of two months thereafter to claim, without forfeiture of arrears of pension. Many took advantage of the concession, and fully 1,750 claims were received during the period of grace. In spite of the continuous inflow of claims there remained undecided at the end of the two months only 1,432 claims. Of these fully 800 had been received before 4th January, but their investigation was long protracted in the effort to establish facts. necessary to title on which information was difficult to obtain.

At the end of the period of grace, 5th March, 1926, 14,578 order books had been issued in respect of pre-Act widows and 969 in respect of pre-Act orphans.

7. Diminution in flow of pre-Act claims.-As was to be expected, the flow of pre-Act claims fell off considerably after the expiration of the two months' grace. In the three months following 5th March, 405 such claims were received, and in the succeeding three months 401. It is interesting to note that claims in this category continued to come in till the end of the year, 381 being received in the four months to 31st December, 1926.

8. Disposal of the residue of claims outstanding at 5th March and of claims made thereafter.-As has been noted, 1,432 claims remained undecided at 5th March, 1926. Taking into account. the 405 claims received between that date and the 4th June, the number of undecided claims had been reduced by the latter date to 573. This figure included a residue of some 195 claims received before 4th January, 1926, in which extreme difficulty was being experienced in the endeavour to test the claimant's title. The nature of the qualifications which it was necessary to establish in respect of men dead for many years, and the insufficiency of evidence in cases where it seemed that title really existed, made delay inevitable. Far, however, from shewing irritation, most of the claimants concerned made clear their gratitude for the assistance of the Inspectors in eliciting the necessary facts at the cost of much labour, and following up remote clues.

9. Position at 31st December, 1926.-Out of a total of 23,132 claims for pension received by and in respect of pre-Act widows and orphans at 31st December, 1926, only 65 were undecided. The total number of pensions awarded was 18,204, distributed as follows:

5,142 claims had been rejected, 54 per cent. of them because the widow claimants had no child and 29 per cent. because the occupation of the deceased husband was outside the scope of National Insurance; 379 claims for orphan's pension had been disallowed, and it is regrettable that many of these failed simply because no information was obtainable in regard to the parents, often entirely unknown.

346 pre-Act claims had been withdrawn or superseded.

10. Concluding observations regarding pre-Act claims.-It will be seen that the class of pre-Act widows and orphans can enter only to a negligible extent into the body of claimants after 1926. From now on the scheme is concerned almost entirely with claims founded on the insurance of living persons or persons deceased in the immediate past.

In requiring the resurrection of facts and circumstances which even a few years seemed to have covered with oblivion, claims in the pre-Act category raised difficulties, at times insuperable, and quite peculiar to themselves. With the exception of a few belated claims, however, the task of inaugurating this part of the pensions scheme has, to all intents and purposes, been completed.

11. Post-Act widows' and orphans' pensions.-Subject to the qualifying conditions stated in the last Report, widows of insured persons who died after the commencement of the Contributory Pensions Act on 4th January, 1926, are in general entitled to claim widow's pension free from any condition that the husband should be survived by a child or that there should have been a child at any time.

12. Non-contributory pensions for post-Act widows.-The only exception applies to widows whose husbands were at 4th January, 1926, over 70 years of age, and on that account incapable of becoming contributors under the Pensions Act. Such widows are precluded from claiming widow's pension unless at the time of the husband's death there is living a child or step-child of the husband under the age of 14. This restrictive condition is similar to that required in respect of pre-Act widows, the pensions in each class being non-contributory. pendence of title on the existence of a child under 14 is naturally much more restrictive in the case of widows of men over 70. and the number of non-contributory post-Act widow pensioners is therefore negligible.

The de

13. Contributory pensions for post-Act widows and orphans. -Although these pensions are classified as contributory, no such pensions awarded before the expiration of two years from the commencement of the Contributory Pensions Act on 4th January, 1926, can in the full sense be contributory pensions. If account were taken only of contributions paid into the Contributory Pensions Fund no person in this group could comply with the statutory conditions of qualification before payment of

at least 104 contributions under the Pensions Act had been made in respect of the deceased person on whose insurance the claim was founded.

As indicated in the last Report, however, the contributory principle is modified by the recognition of insurance and contributions under the National Health Insurance Act prior to the introduction of the Pensions Act. Claims by post-Act widows, and in respect of post-Act orphans, were thus admissible from the inception of the Act. As a class, widows' and orphans' pensions awarded before payment of 104 contributions after the commencement of the Pensions Act will therefore be only partially contributory, in the sense that, as a rule, full pensionsqualifying contributions will not have been paid, and title will be dependent partially on pre-Act Health Insurance contributions. The pensions granted in 1926 were obviously less contributory than non-contributory. The contract between the insured person and the State, under National Health Insurance, held no promise of pension, and the admission of Health Insurance and Health Insurance Contributions is not contractual but in the nature of a gift. It is convenient to contrast pensions payable for post-Act orphans and the general body of post-Act widows on the one hand with those payable for pre-Act widows and orphans and the small body, already referred to, of widows of men over 70 at 4th January, 1926, on the other, by classifying the former as contributory pensions. But we have thought it desirable to indicate the qualified sense in which for the present this description is really appropriate.

14. Preparations for dealing with contributory widows' and orphans' pensions.-Differences in conditions of qualification and duration of title to widow's pension, which were indicated in the last Report, called for machinery distinct from that set up for non-contributory pensions.

15. Flow of contributory claims.-During the period of approximately a month from 4th January to 2nd February, 1926, 220 claims were received for contributory widows' and orphans' pensions. The figure was below expectation, and indicated the probability of delay due to unfamiliarity with the new rights. By 2nd March the total had increased to 631, and at 1st April stood at 1.141. Even this figure is not representative of the average flow of claims during 1926. The total number of claims. up to 31st December was 5,978, of which 5,827 were claims for widow's pension and 151 claims for pension in respect of orphan. children. Of these claims 4,604 widows' pensions had been. awarded; 103 claims in respect of orphan children, involving payment of pensions for 164 children, were allowed.

Six hundred and seventy-three claims were in hand awaiting. investigation or decision at the end of the year. A claim cannot of course be decided immediately it is received. The necessary investigations fill an interval of a week or ten days even in cases of the clearest kind.

Claims involving doubtful points necessarily take longer to determine. On the whole, however, claims for contributory pensions have proved distinctly easier to settle than pre-Act claims. The necessary information has generally been readily available, and in consequence no material delay has occurred in the decision of the great majority of these claims.

The total number of claims in this class which were disallowed during 1926 was 566, representing less than 10 per cent. of the total received. The corresponding proportion of pre-Act claims was fully 22 per cent. The substantial drop in the proportion of unsubstantiated claims for contributory pension may be attributed mainly to two factors-(1) the clearer conditions of qualification, and (2) increasing familiarity on the part of possible claimants with the conditions of title. From such signs it is reasonable to infer that the qualifying conditions are generally understood by the public.

There is abundant evidence that, brief as has been the operation of the scheme, the rights it gives to widows and children already hold a definite place in the outlook of the many who maintain a household by their daily labours. It is a solid consolation to the prudent and industrious workman to know that the provision he makes by his own efforts will be supplemented in a measure sufficient to free his mind from the fear that his death will be followed rapidly by utter poverty for those he leaves behind. To them also the provision now made brings relief from the sense of abandonment that in the past too often magnified the grief of loss into the despair of desolation. The benefits of the scheme are not only welcome in themselves, but the more welcome because they come in time of adversity.

The fact that they arise from statutory right is a highly important matter. Critics of the various schemes of National Insurance have relied mainly on the argument that they sapped independence and discouraged the foresight and thrift of the people. The Contributory Pensions scheme is designed essentially to encourage and aid prudence; it also gives only what is stipulated by contract. In 1926, leaving out of consideration children of widows, the scheme came in aid of fully 4,768 widows and orphan children deprived during the year of the husband or parent on whose earnings they had depended. Their need was subject to no selective discretion; it was clear and contractual.

These great merits of a scheme founding rights on clear conditions should not be forgotten by claimants who do not comply with the required qualifications. However wisely and impartially applied, conditions admitting an exercise of discretion would be ultimately less satisfactory to the people as a whole.

16. Over-70 Pensions free from conditions as to means.While there were still in hand a substantial number of claims for pension for pre-Act widows and orphans and the claims of newly-bereaved wives and children, consideration had to be given to those provisions of the Act timed to take effect from 2nd

July, 1926, and of the machinery and other preparation which they required. These provisions modified in a fundamental way the conditions under which the insured population, including wives of insured men, can qualify for pension at the age of 70 under the Old Age Pensions Acts, 1908-1924.

17. Conditions of title to Old Age Pension at 70 prior to 2nd July, 1926.-Under the original Old Age Pensions Act of 1908 title to pension at the age of 70 rested principally on conditions as to residence, nationality and means. Yearly means in excess of £31, 10s. disqualified from any right to pension; the amount of pension rose on a graduated scale as the yearly means fell to £21, and full pension was payable if the means of the claimant did not exceed £21 a year.

By the Act of 1919 the minimum of means excluding any right to pension was raised to £49, 17s. 6d. and the minimum securing full pension was increased to £26, 5s. It was by this Act also that the maximum rate of pension was brought to its present level of 10s. weekly.

Until 1924 the means test was uniform in its application, and there was much question as to the wisdom of a scheme which, it was strongly urged, discouraged providence and thrift by penalising in loss or reduction of pension those who had built up a small capital by long-continued saving. This objection was met by the Act of 1924, which authorised the yearly means to be calculated without reference to unearned income save to the extent that it might exceed £39 a year.

No further alteration took place in the law governing old age pensions until the introduction of the provisions of the Contributory Pensions Act, which took effect on 2nd July, 1926. Before this date no workman who remained at work after attaining age 70 could, if unmarried or a widower, qualify for any payment of old age pension if his earnings brought him in £50 a year. The joint means of a married couple living together are divided equally in assessing the means of each. By continuing at work with a wage of £2 a week or upward an elderly workman forfeited title to pension for his wife as well as for himself. In general therefore people over 70 had to leave the field of employment before they could receive any payment of old age pension.

18. All means disqualifications lifted from insured persons and wives of insured men.-The principal effect of the changes made by the Contributory Pensions Act in the conditions. governing right to old age pension was to give the insured population absolute freedom from any conditions as to their means. An insured man or woman who satisfies the conditions required by the Contributory Pensions Act is no longer asked to make any disclosure of income whether earned or unearned. When she is over 70 the wife of a man who has become entitled to old age pension free from means test becomes entitled to a full-rate pension without any conditions whatever.