entitled to become voluntary contributors had the concessions made by the Contributory Pensions Act from 4th January, 1926, been open at the time. Thus a person, say, of 55 years of age on becoming insured may escape any modification of pension on the ground that the hypothetical earlier title to become a voluntary contributor matured before he attained the age of 45. The over-70 pension of a person who was "exempt " before becoming insured is not reduced, but that of the former "excepted" person is at the same rate as his pre-70 pension. 27. Numbers of persons in "excepted" employment.-We are at present engaged in preparing for the Government Actuary a return shewing the number of persons engaged in excepted employment as at 4th January, 1926. 28. Legal Proceedings: (a) National Health Insurance and Contributory Pensions.-During the year 26 prosecutions were instituted against employers for non-payment of health insurance and contributory pensions contributions. In each case a conviction was obtained, and fines ranging from £25 downwards were imposed. The following table shews those prosecutions allocated to the different districts : (b) Unemployment Insurance.-During the year 24 prosecutions were instituted against employers for non-payment of unemployment insurance contributions, and in each case a conviction was obtained and fines ranging from £100 downwards were imposed. The total amount of fines imposed in all these cases relating to health, contributory pensions and unemployment insurance was £269. (c) Pensions Offences.-Prosecutions were instituted under the Widows', Orphans' and Old Age Contributory Pensions Act against three widows who obtained payment of pensions which they were disqualified from receiving, in one case by reason of imprisonment and in the other two cases by reason of remarriage. In two cases the accused were fined £5 or 20 days and £3 or 17 days respectively, and in the other case there was an admonition. (d) Offences in relation to National Health Insurance Cards, Unemployment Insurance Books and Stamps.-During the year prosecutions were instituted against eleven persons for various offences in connection with National Health Insurance Cards and Unemployment Insurance books. The offences charged were the defacing of cards and books and the removal and affixing of used insurance stamps. In every case except two, convictions were obtained, and in six cases fines ranging from £10 downwards were imposed. In one case the accused was sentenced to four months' imprisonment with hard labour, and in another the sentence was thirty days' imprisonment. In one case the accused was admonished. In the two remaining cases the charge was found not proven. From inquiries made following on information supplied, it was ascertained that in the Aberdeen area the buying and selling of National Health and Unemployment Insurance cards, books and stamps had been proceeding on a large scale and for a considerable period. Eleven persons were prosecuted and convicted in respect of these offences, and fines ranging from £10 downwards were imposed. (e) Civil Proceedings.-Four actions were raised in the Sheriff Courts for recovery of National Health Insurance contributions due by employers. In three cases decree was obtained, while in the remaining case the defender assoilzied. was Four actions were raised in the Sheriff Courts for recovery of Unemployment Insurance contributions due by employers. In three of these decree was obtained and the fourth is still pending. 29. Half-yearly stamping of Health and Pensions Insurance Contribution Cards.-On making a sufficient deposit, employers may defer the stamping of the cards of their employees until the end of the half-year. The number of employers under this arrangement at the end of the year was 58, a decrease of three from the previous year, and the number of employees included was 39,889, a decrease of 858. The value of stamps issued was £109,012, made up of £58,492 for health insurance, and £50,520 for pensions insurance, contributions. 30. Derelict Contribution Cards.-The work of identifying and suitably disposing of derelict contribution cards continues on the lines indicated in previous Reports. Of the 9,200 lost or derelict cards which reached the Department in 1926, 5,200, or 56.5 per cent., were forwarded to their appropriate destination. Unclaimed cards are eventually destroyed, and the value of contributions represented thereon is disposed of as directed by Section 68 (2) of the Act. 31. Deposit Contributors.-The number of deposit contributors at 31st December, 1926, shews a slight decrease compared with the previous year, the actual figures being given in Appendices XI and XII. During year 1926, 9,900 new accounts were opened, and a somewhat larger number of accounts were closed, including those of 5,600 deposit contributors who transferred to Approved Societies. The total number of transfers from the Deposit Contributors Fund to Approved Societies since the inception of National Health Insurance now exceeds 79,000. Deposit contributors are still being constantly urged to join Approved Societies in their own interests. Information regarding the amounts of benefits paid from the Deposit Contributors Fund in 1926 is contained in Appendices IX and X. 32. National Health Insurance Accounts and Statistics.The National Health Insurance Fund Accounts for the year ended 31st December, 1925, have been published as a Parliamentary Paper (H.C. 42 of 1927). A separate Parliamentary Return forming an Appendix to the National Health Insurance Fund Accounts and containing abstracts of Approved Societies' and Insurance Committees' receipts and payments is also published. The latest return covers the year ended 31st December, 1924 (Cmd. 2,850). An abstract of the cash receipts and payments of the National Health Insurance Fund (Scotland) for the year 1926 and certain other accounts and statistics are supplied in Appendices IX and X. WORK OF THE INSURANCE INSPECTORS IN 1926. 33. General.-The additional work thrown on the Inspectors in connection with the Contributory Pensions Act has been detailed in the last chapter. Along with much arduous preparation and active work on the pension schemes the Inspectors have carried on their usual work under the Health Insurance and Unemployment Insurance Acts, including surveys, complaints regarding non-compliance and benefits, questions of insurability, &c. In particular, they have maintained that watch on the timely payment of contributions under Health, Pensions and Unemployment Insurance which is essential to the financial welfare of the three Funds concerned and to the interests of the insurably employed population. 34. Collection of Contributions.-From the point of view of the collection of contributions under the Insurance schemes the year has had its special difficulties apart from those due to the industrial situation. New rates came into force on 4th January under both the health and the unemployment schemes. The substantial increase under the former head due to the incorporation of the pensions contribution in the machinery of health insurance collection was on the whole quietly received, mitigated as it was for all but the agricultural and domestic classes by the decrease in the latter. The immediate payment of widows' and orphans' pensions, not only in cases arising after 4th January but also to the pre-Act widows, led in a marked way to the calm acceptance of the new burden both by employers and employed persons. These changes entailed for the staff an increased amount of clerical work in the matter of collecting arrears. Money payments instead of stamped cards had to be accepted with all the calculation, recording and supervision which such payments involve, especially where the period in question runs back for many years. Since 1920 there have been four changes in the unemployment insurance rates. A single defaulting employer may be the cause of a complex enquiry and calculation involving careful application of rates and rules long since repealed. The work of survey had unavoidably to be relegated mainly to the later part of the year, in view of the urgent demands of the pension claims throughout the first nine months, and especially at the beginning of the year and immediately after 2nd July, 1926. A steady effort was made in these later months to overtake the arrears, and although the standard of the years prior to pensions work was not reached, the results for 1926 were at least as satisfactory as those for 1925. The following figures shew the extent and results of the survey work undertaken : ... ... 16,160 108,592 No. of establishments visited for survey purposes The estimate of the total number of insurable employees is 1,626,000 for health and pensions insurance and 1,331,000 for unemployment insurance. The former figure includes the latter. The number of employers found in contravention of the health and pensions requirements was 1,792, being 14 per cent. of the number of employers surveyed. Most of these irregularities were of a minor character. The number of employees thus affected was 7,147, or 7 per cent., of the number of employees surveyed. With this last figure should be considered the number of employees found to be themselves in default, namely 375. The number of prosecutions was 26. In other 21 cases warning letters were sent to the parties concerned. For unemployment insurance the corresponding figures were: ... Number of employers in contravention Percentage of number of employees surveyed Generally it may be said, from the evidence of survey and lodged complaints, that the machinery of collection worked satisfactorily even in spite of the peculiar economic difficulties of the year. Irregularities were of the usual character-neglect to stamp at the proper time, errors in rates, doubt as to liability. Bankruptcies were a fruitful source of trouble. As a rule employers profess to be anxious to comply with the Acts and Regulations. The openly expressed defiance of bygone days is now rare indeed in any aspect of the State Insurance Schemes. 35. Approved Societies and Insurance Committees. The work in relation to Approved Societies and Insurance Committees was generally of the normal type, except that the Societies were called upon to aid in the pensions work by providing the records of insurance history necessary to the consideration of the statutory conditions. Apart from some delays in large centralised Societies, this new work was performed in a satisfactory and expeditious manner by Societies as a whole. The number of benefit complaints dealt with was 1,995, a very small figure relatively to the number of beneficiaries under the Health Insurance Scheme. It is generally reported that, in most of these cases, the insured person himself was at fault, and that on the whole the benefit machinery works smoothly and with justice to the insured person. 36. Voluntary Insurance.-An outstanding feature of the year has been the revival of voluntary insurance. Where such insurance, for health benefits only, failed to make any great appeal during the last fourteen years, the institution of the pensions produced a marked change, even though the voluntary contributor himself had to pay 1s. 6d. a week or, in the case of a woman, ls. 1d. a week. This interest is, however, confined to the better educated and more thrifty section of the population, and even among these the assistance and advice of the inspectorate was sought mainly by persons of mature years. An interesting incident in this connection appears in the action of a leading insurance company which, ascertaining from their books the names of all their uninsured staff who had the necessary qualifications from their past State Insurance, strongly advised all these employees to become voluntary contributors, which they did. SUMMARY. 1. The permanently invested funds of Scottish Societies and Branches have now reached a total of £11,600,000. 2. The generally satisfactory standard of administration by Approved Societies has been maintained. There has been con |