354.    Single Contribution:   There will be a single weekly contribution for all purposes for each person, paid by affixing an insurance stamp to the appropriate insurance document, described as employment book for Class I, occupation card for Class II, security card for Class IV.   This is subject to the  following provisos:—

(a)        In addition to the contribution paid by insurance stamps there will be an industrial levy on employers in scheduled industries (para. 360).

(b)        Regulations may provide for payment of contributions in Classes II and IV at intervals longer than a week.

(c) Regulations may provide for a reduced contribution for periods of employment for less than a week (para. 408 (d)).

355. Class I Contribution: In Class I, the insurance stamp will be affixed to the employment book by the employer and will represent the joint contri­bution of employer and employee, the employee’s share being deducted from his wages or salary.

356. Class II Contribution:   Every person carrying on any occupation for gain, otherwise than by way of employment in Class I, will be required to hold an occupation card and to affix to this an insurance stamp representing his Class II contribution for each week that he holds the card unless he is  exempted or excused under paras. 363-364.

357. Class III Contribution:  Contributions in respect of housewives, that is married women of working age, will be paid as part of their husband’s contributions, the contributions of all men being higher than those of women in order to provide part of the benefits of housewives. Housewives who also undertake employment (Class I) or other gainful occupation (Class II) will have the choice of obtaining:

(i) Ordinary employment books or occupation cards paying the full contributions and getting unemployment or disability benefit at reduced rates with maternity benefit;

or (ii) Exemption from their own contributions in the appropriate class, and getting only maternity benefit.

A housewife working as an exempt person in Class I who is disabled by an industrial accident or disease will get disability benefit in the first instance at the reduced Hat rate, but after 13 weeks will get industrial pension, so long as she is disabled.

358. Class IV Contribution:  Every person not holding an employment book, occupation card or housewife’s policy will be required to hold a security card and to affix to this an insurance stamp representing his Class IV contri­bution for each week, unless he is exempted under para. 363.

359. No Exception for Pensionability of Occupation or Rate of Remuneration.
There will be no exception from the obligation to contribute either for particular employments or occupations on the ground that they are regular or pensionable or for individuals on the ground that their remuneration or income exceeds a specified amount.

360. Industrial Levy:   In addition to the contribution for industrial accident and disease included as part of the employer’s share of the insurance stamp in every case in Class I, there will be a special levy on employers in industries scheduled as liable to materially more than the normal risks of industrial accident or disease, with a view to providing for two-thirds of the additional cost of disability in respect of those employments.   The amount of the levy will depend upon the degree of risk in the particular employment and the employer’s pay-roll.

361. State Contribution:  In accordance with the proposals set out in Part IV, para. 279, the National Exchequer will make a contribution to the Social Insurance Fund, in addition to paying the whole cost of children’s allowances and national assistance, and the cost of treatment and rehabilitation subject to a grant towards this cost made from the Social Insurance Fund.

362. Demarcation of Classes: Since no person will be expected or allowed to contribute in more than one insurance class at one time, provision must be made both for movement from one class to another and for persons who, while remain­ing in their present class, take work which in the normal way would bring them into another class.   Movement from one class to another will mean obtaining the document appropriate to the new class by surrendering the insurance document already held.    Where, without leaving his present class, a person takes work which would normally bring him into another class, he will be able to obtain exemption from the contribution of the other class. Many detailed points in regard to movement from class to class and demarcation of classes will be dealt with by Regulations.    The general principle is that, except in so far as exempted or excused for any of the reasons stated in paras. 363-364 and subject to the option for housewives in para. 357, every person of working age will make a contribution on a single document and will not make a contribution in more than one class.

363.   Exemption from Contributions: Exemption means that, on application being made by him, an individual is allowed to escape contributions for which he would otherwise be liable.  Exemption may be either for a fixed period or indefinite during continuance of the grounds of exemption. Exemption involves possession of an insurance document marked as for exemption. Except in the case of maternity benefit, contributions from which persons are exempted are not deemed to be paid by them for the purpose of satisfying contribution conditions for benefit. Exemption will be allowed

(i) From Class I on the ground that the principal occupation is Class II or Class III. In this case the insured person must present to the employer an employment book marked for exemption and the employer must affix stamps for his share of the joint contribution;

(ii) From Class II on the ground that the principal occupation is Class I or Class III;

(iii) From Class II or Class IV in any contribution year (or quarter) on the ground that total income in that year (or quarter) has been less than at the rate of £75 a year;

(iv) From contributions for pensions by persons over the age of 55 for men or 50 for women at the beginning of the scheme (say 1st July, 1944) who are not within the present pension contributory classes.

Note.—The right to obtain exemption from Class II or Class IV contributions on the ground of total income below £75 a year is suggested in order to deal with the difficulty of enforcing contributions where there is no income obviously available to pay them. Some of those in Class II (street sellers and others) may be extremely poor; some of those in Class IV may have no cash incomes of their own, but may merely receive support from a relative with whom they live. It is desirable nevertheless to secure Class IV contributions so far as possible in such cases, as the title to pension; those who get unpaid domestic service from daughters or sisters who might otherwise be earning should pay the security contri­butions of these persons. Moreover, the bulk of persons in Class IV at any time (other than those permanently incapacitated) will have been or will be gainfully occupied at some other stage of their lives and will have made or will make contributions whose continuity should be main­tained as a qualification for pension. It is probably necessary to give the possibility of exemption where there really is no income to meet the contributions. But the income to be considered is total income, not the earnings in a particular gainful occupation.

A further question in regard to exemption under this heading is whether the exemption should be total or form a part of the contribution only. All persons will receive medical treatment. It may be desirable to provide both for total exemption from contributions when the income is below a small minimum figure (or possibly for the National Exchequer in such cases to pay the contributions by way of assistance) and in other cases to provide for exemption only from that part of the contribution which is not required for medical treatment. The relatively small contribution for medical treatment would in effect become a registration fee.

The grounds for the fourth type of exemption (from pension contri­butions in case of persons over 55 or 50 in 1944) are given in para. 242.

In addition to the four types of exemption named above, provision must be made for exemption from contributions or other suitable treat­ment in respect of persons in prisons or similar institutions.

  1. Excusal of Contributions: Excusal means that contributions to which a person would otherwise be liable are not required, and for the purpose of contribution conditions are deemed to have been made by him or on his behalf, although they have not in fact been made. Grounds of excusal are:—

(i) From Class I contributions: certified unemployment or disability, and maternity.

(ii) From Class II contributions :   certified disability after 13 weeks and maternity.

(iii) From Class IV contributions :  receipt of widow’s or guardian benefit,

(iv) From all contributions :  receipt of training benefit.

365. Contribution Year and Benefit Year: Each class of insurance document —employment book, occupation card or security card—will be current for a contribution year ending July, and will be exchanged at the end of that year for a new document current for the next contribution year. Subject to further examination of the administrative problems involved, the benefit year for all benefits will run for twelve months from the 1st October, and the claim of an insured person to be in full benefit for benefits, grants and allowances in that benefit year will depend upon the contributions made or excused in the pre­ceding contribution year. For a housewife the relevant contributions are those of her husband.

366. Initial Qualifying Contributions: When the scheme is in full operation, no person will be able to obtain unemployment or disability benefit until he has paid 26 actual contributions, or to obtain disability benefit for more than 52 weeks unless he has paid 156 actual contributions; these conditions do not apply to disability due to industrial accident or disease for which there are no contribution conditions.  The qualifying contributions for pensions are explained in para. 242 dealing with the transition from the present pensions to the new scheme. No initial contribution conditions will be required for widows or guardian benefit.   At the outset of the scheme, transitional Regulations will be required defining the extent to which contributions made under the present schemes shall be taken into account as qualification for the
new benefits.

367. Conditions for Full Benefit: In order to be in full benefit during any benefit year for   unemployment, disability, training, widow’s   or  guardian benefit, or any of the grants or allowances other than industrial or funeral grants, 48 contributions must have been paid or excused in the preceding con­tribution year by or in respect of the insured person.   In order to be in full benefit for pension there must have been paid, or been excused, by or in respect of the insured person, contributions averaging not less than 48 a year throughout his working life since the beginning of the scheme.   In general any person dependent on earnings will remain in full benefit, by certifying unemployment or disability when not earning.   Only those who do not depend on their earnings are likely to be out of full benefit, e.g., seasonal workers or others taking work occasionally only and not continuously available for work. There may also be persons in Class IV who obtain exemption under para. 363 or neglect contribution and persons coming to Britain late in life or leaving it for a time.  The right to full maternity benefit will be governed by special  conditions allowing contributions to count whether made by both parties or only by the employer, with the insured woman having exemption; the number of contributions required for full benefit is a matter for further consideration.   The contributions required for full benefit in respect of funeral grant will be prescribed by Regulations, in accord with the general principle that the contributions to be taken into account are those of or in respect of the deceased person if of working age, and those of the responsible parent if the deceased person was below working age.   The Regulations should make it easy for persons to keep in benefit by taking account of contributions paid or excused either in the past contribution year or over an average of three contribution years, and the number of contributions required should be materially less than to qualify for unemployment or disability benefit. Subject to the exclusion from funeral grant of all persons who are over 60 at the beginning of the scheme, persons retired on pension will automatically be on full benefit for funeral grant. The provisions of this paragraph, like those of the preceding paragraph will apply when the scheme is in full operation. Transitional Regulations will be required to define the extent to which con­tributions made under the present schemes shall be taken into account at the outset of the new scheme.

368.   Reduced Benefit: The benefit to be accorded to persons who are not on full benefit will be determined by Regulations appropriate to each type of benefit.   In the case of unemployment, disability and maternity benefit, these Regulations may provide either for reducing the weekly rate of benefit or for reducing the period in respect of which it can be drawn.   In the case of pension the Regulations will provide either for postponing the date of retirement or reducing the rate of pension.   In the case of funeral grant they will provide for reducing the amount of the grant, but for the reasons given in the preceding paragraph it will be rare for people not to be on full benefit.

Note.—The Regulations in regard to title to pension may be different according as failure to be in full benefit is due to the claimant having been exempted from payment of contributions under paragraph 363 (iii) or is due to some other cause. The Regulations should allow persons who have been exempted under paragraph 363 (iii) to pay the exempted con­tributions subsequently within a limited time, with a view to qualifying for pension.

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