The principle is that adopted in the National Health Insurance Acts, viz., that benefits should not accrue until a substantial number of contributions have been paid. The waiting period for disablement benefit under those Acts is two years, and this is adopted for the normal case of the old age pensioner ((3) above).

No contributions can, however, be paid in respect of existing widows and orphans or persons over 70, because in the first case the husband or father is dead and in the second case the person by virtue of whose insurance the claim arises will have ceased contributions at age 70 under the working of the National Health Insurance scheme with which this scheme is interlocked. The principle therefore cannot be applied in these cases, and the dates selected for commencement of benefits in (1) and (2) are simply the earliest dates by which the administrative arrangements can be ready. The post-Act widow and orphan cannot be placed in a worse position than the existing widow and orphan, and are therefore also brought in from January, 1926.

6. CONTRIBUTIONS.

(a) Rates of contribution (Clause 9).—The ordinary rates of contribution, commencing from the 4th January, 1926, will be 9d. for a man (of which 44d. will be payable by the employer and 44d. by the employee) and 44d. for a woman (of which 24d. will be payable by the employer and 2d. by the employee). It should, however, be noted that, as a result of the reduction of the health insurance age from 70 to 65 (see heading 10), the health insurance contribution is being reduced by ld. a week in the case of men and d. a week in the case of women, so that the net increase consequent on the scheme in the weekly contributions payable in respect of employed persons is 8d. for a man and 4d. for a woman, divided equally between employer and employee.

Lower rates of contribution are applicable to exempt persons and, in certain circumstances, to excepted persons (see heading 7).

Contributions are payable in respect of every employed person under the age of 70 until 2nd January, 1928, but as from that date contributions by an employed person cease to be payable on his attaining the age of 65, and his right to sickness and disablement benefits, but not to medical benefit, under the health insurance scheme, as well as to unemployment benefit, ceases at that age. Although contributions will cease on that date to be payable by the employed person, his employer will, nevertheless, be required to pay a contribution which is equivalent in amount to his share of the combined contribution for health insurance and pensions, in respect of every person employed by him who is of the age of 65 or upwards [Cl. 9 (1) (ii)]. In addition the employer must pay his share of the unemployment insurance contributions (see heading 11). The object of this provision is to remove any temptation which might otherwise exist to give a preference for employment to men who are over the age of 65.

In addition to the contributions above mentioned there will be an Exchequer contribution (Clause 11 (3)) at the rate of £4,000,000 a year for ten years, beginning in respect of the financial year 1926-1927, and thereafter at such rate as Parliament may determine.

It is provided (Clause 42) that the Government Actuary shall report on the financial position of the scheme in the year 1935 and in every succeeding tenth year. It is further provided in the same clause that, unless Parliament otherwise determines, the ordinary rates of contributions shall, during the decennial period from 1st January, 1936, be increased by twopence in respect of men and one penny in respect of women, divided equally between employer and employed, and that similar additional increases are to be made in the decennial periods from the 1st of January, 1946, and 1956.

(b) Collection of Contributions (Clause 10).-The contributions in respect of an insured person under the scheme and under the National Health Insurance Act will be payable as one contribution and all the arrangements under the latter Act for the payment and collection of contributions will apply automatically to the contributions under the scheme. The scheme will not impose any additional work on the employer in regard to the stamping of cards since he will merely be required to affix to the employee's health insurance card a stamp representing the combined health and pensions contributions for each week for which a contribution is payable under the health insurance scheme. There will be no change in the arrangements for the surrender of contribution cards the stamped cards of members of approved societies will be surrendered through the societies, and deposit contributors and exempt persons will surrender their cards to the Insurance Department of the Ministry of Health.

7. SPECIAL CLASSES OF INSURED PERSONS.

The general arrangements already described are modified as regards certain special classes of insured persons. The most important of these are as follows :

(a) Exempt Persons.-Men who hold exemption certificates under the National Health Insurance Act will be required to be insured for widows' and orphans' pensions but not for old age pensions (Clause 14). Insurance for old age pensions is not necessary in their case, for holders of exemption certificates must normally possess a private income of an amount at least equal to the old age pension given under the scheme. The rate of contribution payable in respect of an exempt man is accordingly reduced to 7d. a week, of which 44d. is payable by the employer and 24d. by the employed person (Clause 9). If the holder of an exemption certificate wishes to be insured for an old age pension he must surrender his exemption certificate and he will then be insured for health insurance and for widows' and orphans' and old age pensions. Exempt women, however, the majority of whom will be widows in receipt of pensions

under the scheme, will not pay contributions for pensions, but the employer of such a woman will be required to pay in respect of her the same contribution (2d. per week) under the scheme as he pays for the ordinary employed woman.

(b) Persons engaged in Excepted Employments.-Persons in this class if they are insured for widows', orphans' and old age pensions will pay the ordinary rates of contribution (9d. for a man and 44d. for a woman-see under heading 6), but the Bill provides that, if it is established that the terms of the employment are such as to secure to men employed therein benefits on the whole not less favourable than the benefits conferred by the scheme by way of old age pensions on men and their wives, they will not be required to be insured for old age pensions and a reduced contribution at the rate of 7d. per week (41d.payable by the employer and 24d. by the employee) will be charged, which will insure them for widows' and orphans' pensions. Women employed on similar terms will be insured for orphans' pensions only, and the reduced contribution payable in respect of them will be 3 d. a week (24d. payable by the employer and ld. by the employee) (Clauses 9 and 15).

It is anticipated that the majority of excepted persons will fall within the class for which contributions at the lower rates are payable.

Power is taken (Clause 10 (1)) to modify the regulations made under the Insurance Act for the collection of contributions and the power will probably be used to allow of direct cash payment of contributions by the employers of excepted persons, a method which will prove more suitable in their case than the normal method of payment by stamps affixed to cards.

If the Minister of Health certifies as regards any excepted employment that provision is made by a scheme under an Act of Parliament for securing to the employees, their widows and children or, as regards women, to them and their children, benefits on the whole not less favourable than all the pensions provided under the scheme, the persons so employed will not be required to be insured under the scheme at all and no contributions will be payable either by them or by their employers (Clause 9 (1), proviso (b)).

(c) Men serving in the Navy, Army and Air Force. Such men will be fully insured under the scheme and contributions will be payable in respect of them at the ordinary rate of 9d. a week (Clause 16).

(d) Men serving in the Mercantile Marine.-Special considerations will arise with regard to men serving in the Mercantile Marine, and in order to avoid loading the Bill with detailed provisions applicable only to this limited class of insured persons, the Minister of Health is empowered to make a special order, after consultation with the Board of Trade, modifying the provisions of the scheme in their application to masters and seamen (Clause 17). This provision corresponds to that contained in the Unemployment Insurance Act, 1920. The rates of contribution cannot, however, be increased or the rates of pension reduced by the special order.

8. ADMINISTRATION OF THE SCHEME.

The scheme provides for central administration by the Minister of Health, with assistance from local authorities in certain cases (Clauses 6 and 40). No estimate can be made of the expenses to which local authorities will be put by reason of this provision, but they will be small.

All claims for pension are to be made to the Minister, and any person dissatisfied with his decision is given a right of appeal (except on certain points reserved for the Minister's discretion) to one or more referees selected from a panel to be appointed in accordance with the regulations to be made by the National Health Insurance Joint Committee (Clause 28).

Power is taken (Clause 29) to make regulations for, among other matters, enabling pensions to be paid through the Post Office. The pension will be paid weekly in advance at a Post Office selected by the pensioner.

Power is taken (Clause 30) to obtain at a reduced fee certificates of births, deaths and marriages of persons who are entitled to pensions or from whom pension rights are derived under the scheme.

9. MISCELLANEOUS PROVISIONS.

Residence abroad, etc.-Payment of pension will not be made while the pensioner is absent from Great Britain, and no payment will be made in any case after three months from the date on which it becomes due (Clause 22).

Double Pensions, etc. (Clause 24).-Provision is made to secure that a person cannot obtain two pensions under the scheme or, in the case of a child, two allowances or an allowance and an orphan's pension. In certain other cases pensions are not payable or are payable at reduced rates. Thus the Bill provides that, where a pension (or allowance) is payable by the Ministry of Pensions, the Admiralty, War Office, or Air Ministry to any dependant of a man whose death was attributable to or connected with service, or where a pension is payable out of public funds to a dependant of any other person whose death was attributable to or connected with service in the late war, the person entitled to that pension shall not be entitled to a pension (or allowance) under this scheme, unless the "service dependant's pension" is at a rate lower than the rate to which he or she would otherwise be entitled under the scheme, in which case the difference will be paid by way of addition to the "service dependant's pension." One class of war pension is excepted from this provision, viz., a "need pension," the amount of which is variable and is determined by reference to the total income of the pensioner from all other sources. A person in receipt of a "need pension" will not be disentitled to a pension under this scheme, but the receipt of such a pension will make an addition to his income and may therefore lead to a reduction of the pension payable by the Ministry of Pensions.

It will be noted that an ex-service man who is himself entitled to a disability pension is not disqualified from receiving a pension under the scheme.

Safeguarding of the Interests of Widows and Children under the Scheme. Clause 6 provides for a variety of cases in which it is established that it is in the interests of a child who is entitled to an allowance or orphan's pension that the allowance or pension should be taken away from the person to whom it is payable and should be paid to the local authority or to some other person, to be applied for the benefit of the child.

The same clause empowers the Minister to discontinue direct payment to a widow entitled to a widow's pension, if the circumstances justify that course, and to pay the pension (including any additional allowance) to the local authority or to some other person, to be applied for the benefit of the widow and children (if any).

Disqualifications, etc. (Clause 21).—If a woman who is in receipt of a widow's pension is convicted of an offence and the Court reports the fact to the Minister, the Minister may cancel her pension or suspend it for such time as he thinks fit. He may restore a cancelled pension or shorten a period of suspension if, in his opinion, the circumstances justify that course.

A widow is not entitled to and is disqualified from receiving a pension if and so long as she and any person are cohabiting together as man and wife.

A person is disqualified from receiving or continuing to receive a pension while he is an inmate of any workhouse or other poor-law institution; while he is detained in an asylum within the meaning of the Lunacy Acts or is being maintained in any place as a pauper or criminal lunatic; or while he is undergoing a term of imprisonment. The disqualification of an inmate of a poor-law institution will not apply, up to a maximum period of three months, if he has become and continues to be an inmate for the purpose of obtaining medical or surgical treatment. This is an adaptation of the disqualifying provisions of the Old Age Pensions Acts, 1908 to 1924, which are applied by Clause 21 (3).

Penalties are provided in the case of persons who knowingly receive pensions to which they are not entitled (Clause 33).

10. AMENDMENTS OF THE NATIONAL HEALTH INSURANCE ACT.

The principal amendments of the National Health Insurance Act consequent on the scheme are :

(i) The rates of contribution will be reduced from 10d. to 9d. for men and from 9d. to 8 d. for women, as from 4th January, 1926. (Clause 37.)

(ii) Contributions and sickness and disablement benefits will cease to be payable in respect of an insured person at the age of 65 instead of 70, as from 2nd January, 1928. (Clause 36.)