SOCIAL SECURITY

Evening Post, Volume CXXVI, Issue 78, 29 September 1938, Page 14

SOCIAL SECURITY

THE MEANS TEST

BLOW TO LODGE MEMBERS

:. r ... ' # . EXCESSIVE COST

The following article is written by Mr. H. W. Gourlay, of Christchurch, prominent friendly society member.

The institution of a national health service and a superannuation scheme would have been received with enthusiasm in New Zealand . had the measures for providing them not discounted the value of individual effort and ignored the provident. There are very few people in New Zealand who have not made some provision for the future, either by contribution to a friendly society or a sick benefit society or to a superannuation fund. While the few improvident ones are being forced into providence/the rest are being forced into the ridiculous position of having to pay twice over for their benefits. , The provisions of the Social Security Act are particularly damaging to friendly societies. Since 1842 these societies have carried on their beneficent work with every satisfaction to their members. Their affairs have been prudently managed by competent officers elected from their own ranks, many of them giving gratuitous service, inspired by their love of benevolent works. In place of this there is to be the soulless substitute of a Government Department with its hordes of officials, costing in the first year alone no less a sum than £850,000. INSIDIOUS MEANS TEST. A lodge makes no distinction,'of income among its members. One and all receive the same benefits for the same contributions. Social Security j offers the lodge member £5 per week (£4 social security plus £1 lodge) as j the maximum rate of sick pay, but to receive this he must have a family i of at least nine children under six-1 teen years of age, and an income of: not less than £7 10s per week. But j another lodge member earning £5 a week, though he has nine children under age, can receive a maximum of only £3 6s Bd, that is two-thirds of his weekly 'earnings, and of this his lodge contributes £1. In other* words, there is applied to sick pay under the Social Security Act an insidious means test.

According to Section 47b of the Act, this two-thirds restriction applies only to lodge members. Had the man , not been a lodge, member, he would ' have been entitled to receive £4 per week from the security funds instead of £2 6s Bd.

Societies pay sick benefit from the day sickness begins; social security pays no sick pay for the first seven days. The loss of seven days' benefit for each sickness is "so serious that the bread-winner in a large family , will be deterred ifrom declaring" sick. COST TOO HEAVY. The cost of the scheme is a point well worth serious consideration. For a. sum of from £4 to £5 per annum, a lodge member receives sick pay, medical, and hospital attention, and medicine, and is entitled to a funeral benefit. ' He has social amenities and privileges". that are most attractive, though-these are purely incidental to 'the benevolent work of the lodge. The grandiose Social Security Act would destroy all >" this, offering as a bribe the dry and empty husk of Mr. Nash's "eight ■ points." Briefly these are that .lodges can pay social security sick ' pay to their members, that the funeral benefit will not be taxed, that societies will be reimbursed for services rendered to_ the security fund, and that members with special knowledge will bJ included on administration committees. . The other four points are various paraphrases of these four. Obviously the Minister was hard put to -it to justify the Act in the eyes of friendly society members. There is nothing in his eight points to disprove the fact that the Act deals a damaging blow to all friendly societies in New Zealand. One of the charms of the friendly society ipethod of distributing benefits is its simplicity. Members in the majority of cases pay their contributions quarterly, they know exactly how much they have lo pay, how the moneys will be divided among the various benefit, management, and social funds, and tha exact nature of what they receive in return for their payments. They know, too, that they have bought security not only for themselves, but also for their wives and:, children, who also receive the medical benefits. In Christchurch the amounts paid each quarter are approximately 5s for doctor, 4s for hospital and medicine, 3s for • management, 3d for social and benevolent, and from 7s to 13s (according to age at joining) for sick and funeral funds. Under social security they will not heed to pay the first two amounts (9s altogether), but instead there will be Is in the £1 on all income, and regis-tration-fees for all members of the family, over sixteen years of age. Even the mother must pay her 5s yearly. Naturally, it is to be expected that there will be considerable extra benefits for this heavy extra payment. Well, of course, there is some benefit. There are still'available the old benefits of .doctor, ihqspital, and medicine, for which the sum \df 36s a year was paid. In, addition there is the maternity benefit. As a! lodge member he has always been entitled to the National Provident Fund maternity .benefit if his income is less than; £300, > but this must now go on the debit side. Then there' is superannuation, which may be attractive i.if he is not already contributing to such a fund, and if it were not "just an old age pension under another name. Unemployment benefits he had thought out of date under competent administration, but apparently they must still be paid for.

CRAZILY PRETENTIOUS ACT. Tlfere are so many things provided I for in this crazily pretentious Act that money, much money, must be found to pay for them all, and the lodge member who prided himself on his .forethought and gloried in his independence must be regimented with the rest. He is faced with the necessity of abandoning his lodge membership, but here he is faced with another problem. The total funds of tho societies in : New Zealand . are more than £5,000,000, and the average capital p>r member more than £42. If he forfeits his membership he forfeits also his. interest in this large amount of capital. However, it will be so necessary for him to economise in his outlay for thrift'purposes that his lodge membership will be too great, a luxury for him to continue. Since the Social Security Act makes lodge membership a luxury, those who at present find it no easy matter to keep their contributions regularly paid will have no option but to resign. # But is there any need to retain the friendly societies or to worry , about their impending dissolution? . The report of the National Health and Superannuation Committee, in answer to the challenge of the representatives of the New Zealand branch of the Britisn Medical Association that the development of friendly societies renders unnecessary a scheme of the extent pro-

posed, states: "While we appreciate the very good work that has been done by the friendly societies, we cannot agree that the existence of a friendly society service fully meets the needs of* -the people." t First appreciation, then depreciationj The report proceeds ,to state that the friendly society movement covers only about one-fifth of the people of the Dominion. Actually, the fraction is nearer one-third than onefifth, and this in spite of the fact that entrants to a lodge must satisfy a certain medical standard.

Since 1934 the membership of the societies in New Zealand has increased by over 12,000. These new members have been attracted into the lodges by the medical benefits more than by the sick and funeral benefits. That nearly 10,000 persons were initiated in the 960 lodges in 1.937 is sufficient proof of the popularity of the societies. But the real attractions will no longer exist from April 1, and the member who has hitherto been a propagandist for his lodge will have nothing to offer the prospective member. As the Act goes into operation, the membership mast fall, firstly through the exodus of those who cannot afford to continue, and, secondly, through lack of recruits. Lodge meetings with their simple rituals, much of which will become meaningless, will lose their interest unless the social and educational advantages are inviting enough. I repeat that these features of lodge work have been only incidental, and it has been the joy of dispensing benevolence that has provided the real interest for those who have worked so well in their lodges. i Financially, the outlook \ is dismal. Although there are total assets of over £5,000,000, they are in the form of mortgages and land and buildings (lodge rooms). Although the critics sometimes say'that such huge reserves show that members pay too heavily for their benefits, this is not so. Three things have contributed to this healthy growth, namely, the earning of a rate of interest greater than that calculated, the secession of careless members, and a sickness experience less than was expected. In 1937, £215,600 was paid out in sick and funeral benefits in return for £206,700 paid in contributions, while £177,800 was received in interest on investments. I The drop in membership that must be expected will mean a reduction in the amount of contributions received and sick and funeral benefits paid out, but the interest will continue to grow. Will covetous eyes be cast af these sums of money, or will the members, realising the danger, direct their energies to devising new ways and means of providing benefits? I believe this to be the only solution, but it is not an attractive one, for it cannot avert the disaster that has already befallen. I am afraid that Mr. Shrimpton's remarks in evidence to the Committee are as concise a summary as can be found. He said: "Unless the friendly societies are given an important part to nlay in the new organisation, I envisage a slow strangling of the friendly society movement." i As it happens, tiie only role that they, have been allotted in the comedy is that of "noises off." ■ ,