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These important concessions naturally aroused widespread public interest. They gave rise also to a certain amount of misapprehension. Many people failed to appreciate that the changes affected only the insured population, and for a time there were many indications of a belief that the means test had been abolished altogether. On the other hand insured workmen over 70 failed quite frequently to realise that their earnings were no longer a barrier to the receipt of pension. In consequence many claims were delayed.

19. Place in the Contributory Pensions Scheme of the over70 pension free from conditions as to means.-The right to receive a widow's pension, and also the pension which will become payable under the Contributory Pensions Act after 2nd January, 1928, to persons of 65 and upwards ceases at age 70. By guaranteeing a pension from 70 onwards, free from conditions as to means, the scheme secures pensioners in the right to a life pension, failing any disqualifying occurrence such as the remarriage of a widow. Thus the pensioner attaining the age of 70 is freed from dependence for pension thereafter on a new group of qualifying conditions, with which he might be unable to comply. The over-70 pension free from means test accordingly completes the provision of the scheme, and relieves the pensioner from the prospect of a sudden stoppage of pension at the age of 70 without security of further right.

20. Persons over 70 or attaining that age before 2nd January, 1928. From 2nd July, 1926, the Act granted to all insured persons then over 70, and to their wives, the right to old age pension free from the means test. The concession is extended also to persons who attain age 70 before 2nd January, 1928. The main qualifying condition is simple, requiring insurance under the National Insurance Act only from 29th April, 1925, when the Contributory Pensions Bill was introduced into the House of Commons, to 2nd July, 1926, or, if later, the date when the insured person attains the age of 70. Easy conditions as to residence and last employment complete the requirements of qualification. Where a woman claims in right of her husband's insurance he only need satisfy the conditions.

21. Administration of Old Age Pensions free from means test. -Prior to 2nd July, 1926, the administration of pensions under the Old Age Pensions Acts rested entirely with the Commissioners of Customs and Excise, and such pensions were paid from moneys voted annually by Parliament to that Department under those Acts. Under the provisions of the Contributory Pensions Act the duty of deciding claims for old age pension by virtue of the Act, and of controlling payment of such pensions, was laid upon us. All pensions for persons over 70, however, whether awarded by us or by the Commissioners of Customs and Excise, continue to be payable from the moneys voted by Parliament to the Commissioners of Customs and Excise. It

follows therefore that as that Department is required to account to Parliament for the moneys so voted, we in turn must account to the Commissioners of Customs and Excise for the sums expended on account of old age pensions that are awarded by virtue of the Contributory Pensions Act to persons over 70. was necessary therefore to discuss and agree with the Commissioners the mutual arrangements necessary to give effect to this subdivision of responsibility.

Acting through their local officers and the Local Pension Committees set up under the Old Age Pensions Acts, the Commissioners continue to decide claims for old age pension which do not satisfy the conditions of the Contributory Pensions Act and are therefore subject to the means test. The control of payment of pensions awarded independently of the Contributory Pensions Act also remains with the Commissioners. This partition of responsibility creates problems of its own for which consultation with the Commissioners was required in good time to secure the adjustment of appropriate working arrangements before 2nd July, when the system of dual control was due to begin.


Certain general guiding principles having been determined, the system of dual administration now in force was worked out in detail with the Commissioners of Customs and Excise. affords security against duplicate awards of pension and at the same time eliminates all redundant and overlapping labour and machinery, so far as is practicable under a scheme of divided responsibility.

22. Preparations for the introduction at 2nd July, 1926, of Old Age Pensions by virtue of the Contributory Pensions Act.For the form of claim previously in use the new form of claim providing for the possibility of fulfilment of either group of qualifying conditions was substituted at Post Offices in April. From that time all claims for old age pension were received by us.

There were in Scotland about 2,200 persons over 70 in receipt of old age pension at a rate less than the maximum because of the amount of their means. Many of these persons would be qualified from 2nd July for pension at the full rate by virtue of the new conditions set up by the Contributory Pensions Act. Pension Officers were supplied with a special form of claim for issue to such pensioners to enable them to claim increase of pension to the full rate.

It was necessary also to make arrangements for persons in receipt of old age pension at the full rate who might desire to have their pensions made payable, by virtue of insurance, free from the means test. Pensioners desiring to engage in remunerative work, or whose means were increased or subject to fluctuation, would find it to their interest to do so. To meet such cases a third type of claim form was supplied to Pension Officers for issue to full-rate pensioners on request. It was also arranged that Pension Officers, before raising with the Local

Pension Committee any question of reduction of pension consequent on increase of means, should afford the pensioner an opportunity of claiming pension free from the means test, if there appeared to be any possibility of compliance with the requirements of the Contributory Pensions Act.

Special claim forms were also required for applications by women in respect of their husbands' insurance, and by widows who, under a special provision of the Act, were given the right to contributory old age pension if they would have been qualified for widow's pension had they not been over 70 when their husbands died.

The inauguration of the new provisions involved many other adjustments and amplifications of existing forms, procedure and machinery which need not be described in detail.

23. Claims for over-70 pension between 2nd July and 31st December, 1926.-By 2nd July 11,746 claims for old age pension had been received. 2,569 of these did not satisfy the conditions of the Contributory Pensions Act, and were accordingly transmitted to the local Pension Officer for investi→ gation and decision by the Local Pension Committee in relation to the conditions as to means.

Claims to the number of 9,177 were retained for investigation of title in respect of insurance, and at the commencing day 2,865 of these had been awarded. Of the claims in hand, undecided at 2nd July, nearly 6,000 had been received in June. Though claim forms had been available from April, and wide publicity had been given to the new provisions, many claimants were not to be persuaded that their claims should be submitted early.

By 1st October over 23,000 claims had been received; 6,790 had been transmitted for decision by Local Pension Committees. Nearly 12,600 old age pensions had by this date been awarded independently of the conditions as to means.

At the end of 1926 the position stood as follows:

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Fully 15,000 of the pensions awarded were new pensions. A little more than 1,200 claims for pension at the full rate had been granted in favour of pensioners who were previously in receipt of pension at a reduced rate because of their means. Of the large body of persons in receipt of full-rate pension subject to the means test, only some 700 or thereby had elected to apply, by virtue of their insurance, to have their pensions made payable free from the conditions as to means.

The number of pensions awarded under the new provisions to persons over 70 at the commencing date but previously

ineligible for pension, mainly through the operation of the means test was somewhere around 11,000.*

The figures given of the results of six months' operation of the new conditions set up by the Contributory Pensions Act are testimony enough of the far-reaching importance of a concession so welcome to the insured population. It is not possible, however, to present more than one side of the picture. Not all pensions awarded represent a liability which would not have been incurred had the law governing old age pensions remained as it was before 2nd July, 1926. A proportion of the claims allowed in respect of insurance would satisfy the conditions as to means and admit payment of pension independently of the Contributory Pensions Act either in full or at a modified rate.

The experience of the Board after 2nd July would require to be put side by side with that of the Commissioners of Customs and Excise before a complete picture could be obtained of the full effect of the new provisions. Inasmuch as the Commissioners no longer receive claims for pension from that large section of the population which is included in the scope of the National Insurance Act, or from the wives of men qualified for pension by virtue of insurance, there is bound to be a substantial diminution in the number of old age pensions that might have been granted by Local Pension Committees under the conditions as to means. Thus the liability created by awards of pension free from the means test will be offset in a degree which there is not yet material to estimate. It is clear, however, all allowances being made, that a very substantial and increasing new liability has been created. So far as it is accounted for by the cost of pensions the burden will fall on the public. It has been deter. mined that the cost of administering old age pensions payable by virtue of the Contributory Pensions Act shall be met out of the Pensions (Scotland) Account.

24. Organised transfer of full-rate old age pensioners subject to the periodical inquiries as to means.-Old age pensions payable without inquiry as to means are simpler to administer and control than pensions payable to persons whose means require to be periodically reviewed. The initial conditions of title are easier to establish, and in general the right to a pension awarded free from the means test is terminated only by death.

It has been indicated that the decision of claims for old age pension under the means test, and the control of pensions awarded on these claims, is carried out by the Commissioners of Customs and Excise through their local officers and the Local Pension Committees. Under this system administration is decentralised over a large number of areas and delegated to the Pension Committee for each area, which acts in concert with the local officer of Customs and Excise, who maintains a separate register of pensioners for his' area. Sound though that system

* It is under consideration on what analysis the statistics relative to contributory pensions are to be based, and no more than an approximate figure in this, as in certain other categories, can yet be given.

is where the possibility of fluctuation of means renders the maintenance of local touch desirable, a system of central administration is less costly, and we therefore in consultation with the Treasury came to the conclusion that all pensions payable free from the conditions as to means should preferably be administered by us.

These considerations were discussed with the Commissioners of Customs and Excise, and we found that Department desirous, for reasons connected with its own domain of responsibility, that the Board should relieve it as soon as possible of all pensioners on the register of their local officers in Scotland who were entitled to claim exemption from the means test and could be induced to do so. The details of a scheme with this object were agreed, and the first step was taken in October 1926.

The total number of pensioners on the Scottish registers of the Board of Customs and Excise at that time was over 110,000. The substance of the arrangements agreed between the two Departments was that all these pensioners who were not obviously precluded by reason of their age, as were a limited proportion who had attained age 70 before the commencement of National Health Insurance, from satisfying the conditions of title free from the means test, should be afforded an opportunity of claiming transfer to our registers of pensioners.

The transference of these pensioners was commenced at the beginning of December, 1926, and by the end of December fully 3,300 pensioners had been granted exemption from enquiries as to means on claims lodged under the arrangements,

The measure of success which may attend this general effort to gather into the fold of pensioners free from conditions as to means all persons who have a title to be there is of course dependent on the response made by the pensioners. The grant of exemption from the means test leaves them free to engage in remunerative employment without loss or reduction of pension, and relieves them also of the need to make periodically to the Pension Officer a full disclosure of their means. On the other hand, exemption from the means test offers as a rule no certain or immediate financial advantage, since under either set of qualifying conditions the maximum rate of pension is the same.

From the number of claims received and the decisions given it is estimated that about 20,000 pensioners will be transferred from the registers of the Customs and Excise Officers to the Board's register under the arrangements described.

25. Advent at 2nd January, 1928, of pensions for persons between the ages of 65 and 70.-On the basis of Actuarial estimate it is expected that the initiation of pensions for persons of 65 to 70 will involve an immediate influx of 51,000 new pensioners. The collection and examination of claims for these pensions constitute the largest of the problems involved in the introduction of the Contributory Pensions Scheme.

From the date the new pensions begin to be payable to persons of 65 to 70, the right to cash benefits in respect of

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