SOCIAL INSURANCE

Southland Times, Issue 19546, 9 May 1925, Page 7

SOCIAL INSURANCE

SCHEMES COMPARED. NEW ZEALAND’S DISTINCTION. NATIONAL PROVIDENT PLAN. z (Special to the Times). WELLINGTON, May 8. The contributory social insurance proposals outlined *in the British Budget may not without more detailed information be effectively compared with the National Provident Scheme of New Zealand, which was the first British country to institute contributory social insurance. The problem of contributory provision for old age, upon the basis of social insurance, which has arisen latterly in so many countries, has been under consideration in New Zealand from time to time since 1883. The proposals of Sir Harry Atkinson three, times Premier in the ’eighties, contained sickness and family benefits as well as deferred annuities. Other proposals were discussed subsequently, but the more immediate originator of the action culminating in the Dominion’s present law, was the late Mr Seddon, who partly under the inspiration of the Belgian Caisse De Retraite had a National Annuities Bill drawn'Up in 1906. This provided for deferred annuities, with a somewhat complicated scale of subsidies depending upon earnings and family I status, and also included subventions to Friendly Societies. Mr Seddon died before the project came into fruition. I A Bill introduced in New South Wales ■ about this time, was apparently based upon Mr Seddon’s measure With some simplifica- > tion, and resulted in the enactment of a i system of subventions to Friendly Societies ! there. The New Zealand Friendly Societies, j however, had rejected the subvention proposals placed before them by Mr Seddon. Sir Joseph Ward who took up the Bill j after Mr Seddon’s death, had it re-drafted i upon a considerably modified basis, and this 'substantially passed into law as the National Provident Fund Act, 1910. This Act permits any New Zealand resident to , become a contributor, who is between 16 i and 45 (now 50) years of age and whose (income does not exceed £2OO (now £300) per annum. There is no medical examination, and the contributions are payable weekly. BENEFITS OF SCHEME. The benefits are as follow: (1) After contributing for twelve months or for such shorter period as the Board determines, a payment not exceeding £6 (now a payment of £6) on the birth of a contributor’s child or children, provided the parents’ joint income does not exceed £2OO (now £300). (2) After contributing for five years, an allowance after three months’ incapacity to ' work of 7s 6d per week for each child under [ 14 years of age, not to exceed the pecuniary i loss. Ceases at the ago of 60 and extends ' to the age of 18 in the case of an infirm : child. (3) After contributing for five years, an ! allowance on the death of a contributor of 7s 6d per week for each child until 14 years of age and 7s 6d per week for the widow, so long as any child is under 4 years of age. (4) On reaching the age of 60, a pension of 10s, 20s, 30s or 40s per week according to the scale of contributions. (5) 'Return of contributions less benefits, on giving twelve months’ notice of cessation of membership. This right is exercisable at any time before drawing the first payment of the pension. ! (6) Return of contributions less bene- ; fits on death whether before or after receiving pension. I The weekly contribution, it may be mentioned, may be paid within six months of ; the due date without fine. After six months and within eighteen months, a fine of one- ' eighth of the amount reducible by the Board is payable. The State pays the ex- | penses of administration as well as the maternity benefits, and in addition subsidises the Fund to the extent of one-fourth of the contributions paid by the contributors, besides being responsible for any further sums actually required to maintain a condition of solvency. THE ENGLISH PROPOSAL. It would be of interest to compare the incidence of the cost in the proposals of the Chancellor of the British Exchequer (Mr Winston Churchill) with the New Zealand National Provident Fund Scheme, but this does not appear possible at present. The cabled reports state that for a pension of 10s a week at age of 65 and certain specified annuities to widows and children, employers and workers are each to contribute weekly at the rate of 4d for each man and 2d for each woman. It is difficult to judge whether these rates apply irrespective of age, or whether there are any limitations, and in this connection one would have liked some information as to what was meant by the scheme operating in successive stages, and also some details as to the “progressive increases in contribution” referred to in the cabled reports. Until this information comes to hand, it is not possible to make any analysis or comparison of the cost to the State, which apparently will have to supplement the contributions of the employer and employee, by an amount sufficient to make the Fund actually solvent.