H.—3o,

would apply on the basis of the husband's contributions. The inclusion of women would also raise administrative difficulties arising from the fact that — {a) Many women do not work for wages or salaries ; (b) Many are engaged in domestic service or other occupations which make it difficult to keep a check on contributions; (c) The period of employment for wages is often short, and ceases on marriage ; (d) Some of the benefits —e.g., widow's pension, children's and orphans' allowances —to which a claim would be given by husband's contribution do not enure equally to women. The following alternatives suggest themselves :— (1) Exempt women from the scheme, but retain provision for noncontributory old-age pensions for spinsters. Note. —Widows' and old-age pensions would be covered in the case of married women by the husbands' contributions. (2) Prepare a separate scheme for women, covering old age, sickness, and invalidity, but excluding children's sickness and orphans' pensions, and offering the alternatives of either — (a) Having the contributions capitalized on marriage : (b) Continuing the contributions and retaining the benefits of old-age pensions after marriage. would be necessary to make an estimate of the cost of such a supplementary scheme. Alternative (2) above appears to be the more satisfactory. C. Basis op Contributions. It is suggested that contributions might be made by the employee, the employer, and the State. . The contribution by the employee is justified by the fact that he is the beneficiary under the scheme. The contribution by the employer is justified because he benefits, in the profits which he earns, from the services of the employee, and it is not unreasonable to regard some contribution to meeting the hazards of sickness, invalidity, and old age as, a fair charge on industry. Incidentally, this responsibility is recognized by many business concerns. The contribution of the State is justified because, in the early stages, it is necessary to make such a contribution if a workable scheme is to be devised at a cost to the employer and employee which can be met, and because the State recognizes a responsibility for the welfare of the community. Contributions by employer and employee might be on a flat rate irrespective of age, on a graduated scale according to age, or on a graduated scale to a given maximum. Contributions by the State might be on a flat rate or a proportion of the contributions, or by way of a subsidy to meet deficiencies. In addition, the State would still retain responsibility for old-age pensions in respect of non-contributories. The charge on the State in respect of the proposed scheme and non-contributory old-age pensions combined might be expected to diminish as the number coming under the scheme at an early age increased and the number reaching pensionable age outside the scheme diminished. Eventually, if the Government decided to liquidate the initial deficiency within a definite term, the scheme could be made self-supporting without Government contribution, thus freeing public funds for other desirable social purposes. A decision on the scale and distribution of costs requires an estimate of the aggregate costs under different assumptions as to the ages to be covered, and a decision of the Government as to the cost which is to be borne by the State. D. Actuarial Soundness. It is regarded as imperative that the scheme should be actuarially sound from its inception and should be maintained in such a position.

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