sickness and unemployment will cease at the age of 65 in consequence of amendments then due to take effect in the legislation affecting National Health and Unemployment Insurance. The intention of the legislature is that the loss of the old rights should be compensated in general by the immediate acquisition of the new right to pension. Effect can be given to this most important object only if the collection and examination of claims can be begun an appreciable time before the end of 1927. A programme has been prepared which is designed especially to secure beneficiaries against the suspension of rights under any of the National schemes which late claims in large numbers would inevitably involve. Ultimately of course the timeous assertion of his rights rests with the person concerned, but at any rate all prospective pensioners will have the fullest possible opportunity to establish their title in time to receive payment at the commencing date. 26. Financial experience of the scheme.-The total sum expended during 1926 in payment of pensions for widows and orphan children was £790,036. This sum is the full amount of pensions paid during the year out of the Pensions (Scotland) Account. The payments made between 2nd July and the end of the year in respect of pensions under the Old Age Pensions Acts which were awarded free from conditions as to means amounted to fully £171,000. The preliminary work in connection with the inauguration of the scheme commenced in the autumn of 1925 and the administration costs up to 31st December, 1926, including initial expenses, amounted to £86,824. That figure includes the cost of administering all pensions awarded by the Department, whether the source of payment was the Pensions Account or the moneys voted to the Board of Customs and Excise under the Old Age Pensions Acts. Interesting in themselves, the above figures are no index of future liabilities. For years to come there will be a greatly increasing liability on the Pensions Account in respect of widows' and orphans' pensions. The Account has yet to feel also the burden of the immense liability that will be created by the introduction in January 1928 of the new category of pensions for persons between 65 and 70, to which allusion has been made. No inference that surplus funds are available for extension of the benefits can therefore be taken from the fact that the amount of the contributions paid thereunder in 1926 was greatly in excess of the sum disbursed. The receipts in respect of contributions for the year amounted to £2,017,067, and, after repayment of an advance of £20,000 made from the Civil Contingencies Fund to meet the initial costs, there was at the end of the year an excess of receipts over expenditure amounting to £1,140,207. Of this balance all but £1,057 had been transferred to the Treasury Pensions Account. The sums paid into the Treasury Account, and meantime deriving interest from investment, are merely put aside for the present. They will require to be applied later, together with the Annual Parliamentary Subvention provided for in the Act, in aid of the deficiency which the Government Actuary has advised will make itself felt from 1931, when the increasing cost of pensions payable from the Pensions Account will exceed the receipts in respect of contributions. Neither would it be sound to regard the administration costs as an index of the future cost of working. The inauguration of an entirely new scheme necessarily involves outlays of a non-recurring kind, and the administration expenses should shew a relative diminution in future. The cost of bringing the scheme into operation and of administration up to December, 1926, was equivalent to 9-14 per cent. of the expenditure on all pensions awarded and to 4.3 per cent. of the contribution income in 1926 -an income which, it must be remembered, was very much lower than it would have been but for the coal stoppage and the attendant widespread unemployment. 27. Numbers insured under the scheme at 31st December, 1926. The approximate number of persons insured at 31st December, 1926, for benefits under the Contributory Pensions Scheme is shewn in Appendix XI. The figure is subdivided according to the range of benefits for which the persons in each category were eligible. 28. Repayments of poor relief afforded by Parish Councils to claimants for pension.-We indicated in our last Report that parish councils are entitled, under the Contributory Pensions Act, to claim repayment of poor relief from arrears of pension otherwise payable to claimants on awards of pension. The amount so repaid for 1926 was £10,730, of which £7,858 was in refund of relief afforded to pre-Act widows and orphans and £2,872 in respect of relief to post-Act widows and orphans. As repayment of relief can be claimed only in respect of the period intervening between the date on which right to pension accrues and the date when the first payment of pension is made, the amount of relief repaid for the year represents only a fraction of the saving in expenditure on poor relief which must have been realised through the operation of the Pensions Act. But for the grant of pension the persons in respect of whom relief was repaid would in many cases, especially in view of the continued unemployment, have remained indefinitely dependent on the succour of the Poor Law. The immediate right to pension on the death of the wage-earner must also have relieved many pensioners of the necessity of having recourse to the assistance of the parish council at all. The savings of the husband would often be enough to tide the widow over the brief period before she made good her title to pension. The scheme also comes in aid of expenditure on poor relief in virtue of the recognition of the parish council as "the guardian or other person having the charge of" orphan children boarded out, otherwise than with relatives, at the cost of the ratepayers. The parish council thus acquires the right to receive payment of orphans' pensions payable for such children. In a proportion of cases also, allowances payable for children to mothers or stepmothers entitled to widow's pension are paid to parish councils maintaining or assisting to maintain the children. In such cases the widow has not claimed the allowances, or has authorised the parish council to receive them. In a very few cases we have directed the allowances to be paid to the parish council in exercise of the powers conferred by the Act where a widowed mother or stepmother has deserted the children. The sum paid to parish councils in 1926 in respect of orphans' pensions and children's allowances was £5,279. 29. Payments to Institutions.-Substantial aid has also been given, through the operation of the scheme, to institutions for children, particularly orphan children. £5,590 was paid to such institutions by way of pension or allowances in respect of child inmates in respect of the year 1926. 30. Particular aspects of the scheme.-In common with most other legislation of recent times, the Pensions Act, aiming as is natural at the prevention of overlapping on the one hand and the inclusion of all proper cases on the other, reflects in many complications the varying needs and independent rights of different categories of the insured population. It is a platitude that no scheme of National scope can embrace every individual who should be within it; there is fresh evidence of the fact, from the administrative point of view, in the cost and labour involved in giving effect to the provisions of the Pensions Act, which set out to meet exceptional types of case, whether by way of restriction or concession. Space does not permit a detailed account of all the difficulties encountered, and specific allusion can only be made to a few of the principal problems created by special sections in the Act. Apart from these, however, innumerable points of doubt on law or of administrative difficulty have required consideration and decision. Many have arisen from the linking of the scheme of pensions with the highly complex scheme of National Health. Insurance. It was inevitable that the locking of two schemes. essentially different in their proximate purposes, however correspondent in their general aim, would at times require the subordination of the seemingly expedient to the assimilated requirements of the law and regulations governing National Health Insurance. In the administration of pensions, and reflexively in that of National Health Insurance also, it has been no small part of the task to act in the constant realisation that on neither side is the Board administering a self-contained scheme, but merely one of two parts of a unified scheme, based on common principles. 31. Allowances for children between 14 and 16 years of age. -Title to an allowance in respect of a child between 14 and 16 depends on the child's remaining under "full-time instruction in a day school." This condition has been prolific of difficulties, and has been by far the most fruitful source of overpayments from the Pensions Account. It is extremely difficult in many cases to decide whether, in view of prolonged absence or frequent truancy, a child can be regarded as remaining under full-time instruction. It is often difficult also to control payment of allowances in respect of holiday periods. Attendance at school after the age of fourteen is not compulsory, and although it is ascertained, under the arrangements made, that the intention before the holidays begin is to send the child back to school, some offer of employment or other circumstance may intervene and cancel that intention. In spite of the clearest instructions many pensioners continue to receive payment of an allowance for a child after it has been decided, or circumstances make it clear, that there is no intention to resume attendance at school. Failure on the part of the parent or guardian to realise that the weekly payment of allowance or pension is made in advance intensifies the difficulties experienced. In very great measure we are dependent on certificates periodically furnished by Head Teachers for the control of payment of allowances in this class, and we wish to take this opportunity of acknowledging the indispensable services they have rendered in the treatment of this troublesome problem. 32. Workmen's Compensation.-A child in respect of whom compensation is awarded or agreed under the Workmen's Compensation Act is not entitled to allowance or orphan's pension save to the extent, if any, that the rate of allowance or pension exceeds the calculated weekly value of such compensation. The effect of this provision was to reduce from £169, 18s. to £22, 5s. 6d. the total weekly amount of allowances otherwise payable in respect of children for whom compensation had been agreed or awarded. The saving to the Pensions Account thereby represented is £7,676, assuming, as is true of the great majority of cases, that but for the compensation title to full allowance would have endured for at least a year from the date of the reduction. The figure of £7,676 is not, however, a basis on which to gauge the saving in future which may result from compensation awarded in any year. In the case of pre-Act widows and orphans the Act required account to be taken of compensation in respect of deaths arising from injury sustained after the end of 1923. On the other hand, the number of fatal accidents within the scope of the Workmen's Compensation Act was very sensibly diminished in 1926 by the suspension of risk, particularly in the mining industry, through idleness during the long industrial dispute. 33. Disqualification for pension.-By arrangement with the Prison Commission, the General Board of Control and parish councils, notification is made of the admission to prisons, asylums or poorhouses of persons who, on inquiry, appear to be pensioners. The arrangements have proved of material assistance in giving effect to the provisions of the Act disqualifying such persons, in general, for receipt of pension. 34. Inquiries by Public Health Local Authorities.-There were 46 cases during the year in which reference was made to Public Health local authorities for inquiry and report regarding matters affecting payment of pension. Principal among the causes of reference were allegations made, for the most part anonymously, that widow pensioners were living in cohabitation, and were consequently disqualified, in terms of the Statute, for receiving payment of widow's pension. Disqualification was established in four cases. Though not numerous, cases of this kind require very careful investigation, and we are glad to express appreciation of the thoroughness with which local authorities have in general dealt with references. It is of the utmost assistance to be able to have recourse to the many channels of inquiry and sources of reliable information which are available to Public Health local authorities. 35. Concluding observations.-In the last Report notice was taken of the widespread satisfaction with which the Pensions scheme had been received. The evidence of the past year has shewn that the Old Age Pension part of the scheme has been equally popular. Apart from the removal of the means test, the fact that the pension is contributory has been welcomed in some quarters, a number of claimants stating that they would never have applied under the non-contributory scheme. One man who had been awarded a pension under the 1908 Act declined to present his warrants until the payments were authorised under the Contributory Act. Appreciation of the arrangements for payment of pensions at the Post Offices has also been frequently expressed. On the other hand, criticisms of the scheme have not been wanting. The bitterest comment comes from the childless widow whose husband died before the Act came into force, or although he died after that date was then over 70. Where the husband in such cases had an unimpeachable insurance record, it is difficult to convince the claimant-and complainant-- that there is good reason for refusal of the pension. One childless widow, much embittered by rejection of her claim, pointed out that her husband had contributed from 1912 to 1923. home was being sold up and she could get no work; yet she asserted that she knew a widow, in receipt of pension, who was going to Germany for a holiday. In one village it so happened that two childless women were left widows, one in December, 1925, and the other on 4th January, 1926, two hours after that critical midnight. The latter got the pension, the former did not. Her Then there is the small employer's grievance. He does not grudge the insured persons their benefits but, in common with |