PAYMENTS AND BENEFITS

Press, Volume LXXV, Issue 22662, 17 March 1939, Page 12

PAYMENTS AND BENEFITS

SOCIAL SECURITY ACT OPERATION FROM APRIL 1

APPLICATION FORMS ISSUED

Details of the operation of the Social Security Act, which will come into force next month, were ascertained by “The Press” yesterday by inquiry at Government departments and by reference to a circular issued by the Canterbury Chamber of Commerce for the information of its members. The information secured covered both contribur tions and benefits under the act, about which there has been a considerable amount of uncertainty among the public. The information on contributions, gained mainly from the circular issued by the chamber, which was subjected to departmental confirmation, is contained in the following paragraphs. Section 102 of the Social Security Act (the section dealing with contributions) reads; “This part of the act shall come into force on the first day of April, nineteen hundred and thirtynine.”

Salaries and Wages In dealing first with the charge on salaries and wages, it is relevant to quote section 113, sub-section (1) of the act, which reads as follows: “The rates of the social security contribution shall be as follows: — (a) “With respect to the registration fee. the rate shall be five shillings a quarter in respect of all men over twenty years of age, and in all other cases the rate shall be five shillings a year. (b) “With respect to the charge on salaries and wages earned before the date of the commencement of this part of this act, but paid on or after that date, the rate shall be one penny for every two shillings and sixpence or part thereof included in the amount of such salary or wages f (c) “Except as provided in the last preceding paragraph, the rate of charge on salaries, wages and other income shall be one penny for every sum of one shilling and eightpence or part thereof included in every amount in respect ol which the charge is payable.”

The statement issued by the chamber makes the following comment;— “From the foregoing it will be seen that the charge payable is 8d in the pound on salaries and wages earned up to and including March 31, 1939, and Is in the pound on salaries and wages earned thereafter. This ruling applies, irrespective of the date of payment of salaries and wages. “The machinery for the collection of the charge has not been varied, although the name has been changed from employment tax to the social security charge. Employers, therefore, may continue to follow the employment tax procedure in respect of stamps or schedule, etc.” The position may be illustrated by assuming a concrete instance: March 31 falls on Friday, a day on which many firms pay wages. These firms may pay on Friday for the week from Monday to Saturday inclusive. In that case the charge would be 8d in the pound for the amount earned from Monday to Friday inclusive, and Is in the pound for Saturday. No matter when the wages for this week were paid, ’whether earlier in March or later in April, the charge would be exactly the same.

Other Forms of Income The payment of the contribution on income other than salary or wages is subject to different conditions. Section 120, sub-section (1) of the Act reads as follows: — “The charge imposed by this part of this Act in respect of income other than salary or wages .. . shall be due and payable by equal instalments on the first day of the months of May, August, November, and February in the year following the financial year for which such income was derived (the first such instalment being due on the first day of May, nineteen hundred and thirty-nine, in respect of incqme derived for the financial year ending the thirty-first day of March immediately preceding).” The comment made by the chamber on this section of the act is: “This section makes it clear that on income other than salaries and wages for the year ended March 31, 1939, Is in the £ is payable on the full amount, and that the first instalment is due in May, 1939. The chamber’s circular concludes: “The responsibility of persons liable for the Social Security charge on income other than salary and wages is very fully set out in the special forms now available at the post office. Members are recommended to secure copies and make themselves familiar with the much more elaborate type of form in use this year.” Charge on Annual Returns It appears that businessmen who furnish annual returns for the year ending on March 31 will have to pay Is in the £ for the year where wageearners will only have to pay 8d in the £ for the same period. But when the unemployment tax was reduced from Is to 8d in the £ those furnishing annual returns gained where the wage earner lost under a similar provision At the same time the businessman who has been accustomed to make quarterly returns will be in the position of being charged at the rate of 8d in the £ on his income furnished in this manner. Payment of Benefits As for benefits under the Social Security Act, they will, in practice, begin on April 23. The last payment Of pensions under the present system will be made on March 23, when the payments for the month (from March 1 till March 31) are due. On April 23 the new payments under the social security scheme are due, although they cover the whole months, from April 1, when the act comes into force.

A copy of the application form for age benefit under the act was made available to “The Press” yesterday. It requires the applicant to fill in detailed information. The following are representative questions asked:— “My full address is; my former address was; my occupation is (or was); I first arrived in New Zealand on the

...... day of ... at the port of . . . During the last 20 years I have lived in the following towns of New Zealand, and the person named against each place can verify my residence there.”

Many questions follow relating to the financial affairs of the rpplicant.