In view of the interest aroused by the passing- of the National Insurance Amendment Act, 1913, which became law on 15th August, 1913, the following notes may possibly be regarded as in some degree helpful in eliminating certain difficulties attendant upon an initial consideration of its provisions as affecting Scotland.

The Employed Contributor.

A very important concession has been granted to such persons by the extension until 13th October, 1913, of the period within which advantage may be taken of the right to enter into full insurance at the flat rate of contribution.

All employed contributors entering into insurance before that date will do so at a uniform rate of contribution, while those who become employed contributors after 13th October will require to pay a rate appropriate to their age at entry or suffer an equivalent reduction of benefit.

A very important alteration has been made with reference to the sickness benefit payable to insured persons of age 50 and upwards. Under the principal Act such persons were subdivided into four distinct classes :—

(a) Persons between 50 and, 60.

(b) Persons between 60 and 65.

(c) Persons between 65 and 70 as at 15th July, 1912, who entered into insurance prior to 15th July, 1913.

(d) Persons under 65 at 15th July, 1912, who did not become employed within the meaning of the Act until after attaining age 65.

These various classes were dealt with as follows :—

Classes (a) and (b) received substantially reduced sickness benefit.

Class (c) received only such benefit as their Societies might determine.

Persons in class (d) were not allowed to be insured or to receive any benefit, but their employers were required to contribute 5d. per week in respect of them.

All these restrictions have now been swept away, and persons in the four classes referred to may now become insured persons enjoying the same rates of benefit as other employed contributors. The only qualification now existing is that persons who become employed contributors, after attaining age 65, shall not be entitled to medical benefit after age 70 unless at least 27 contributions have been paid in respect of them.

A new class of employment has been brought within the scope of the Act’s compulsory provisions, viz., “Employment under any local or public authority except such as may be excluded by a special order.”

Employed contributors over 60 may, if they have ceased to be so insurable and if they are otherwise qualified to do so, become voluntary contributors at any time irrespective of the duration of their insurance as employed contributors. The rate of contribution exigible in such case continues to be the employed rate. Under the principal Act this privilege was allowed only to employed contributors who had been insured as such for at least five years.

The Voluntary Contributor.

The period during which a voluntary contributor under age 45 may come into insurance at the flat rate has been extended to 13th October, 1913. This provision will necessitate the allowance of special credits in respect of excess contributions during the period between 15th January and 13th October, 1913.

No voluntary contributors whose income from all sources exceeds 1 GO will be entitled to receive medical benefit, but if in insurance their weekly contributions will be reduced by one penny.

Exempt Persons.

A new class of exempt persons has been created. Any person who proves that he is ordinarily and mainly dependent for his livelihood on the earnings derived by him from an occupation which is not employment within the meaning of the Act is entitled to a certificate of exemption. This provision meets the case, for example, of the certificated teacher under a pension scheme who may take a class in an evening school.

Another of the provisions of the new Act is that which confers upon exempt persons the right to receive medical and sanatorium benefit, subject only to certain qualifying conditions to be imposed by the Commissioners.

It is expressly stipulated that exempt persons whose annual income from all sources exceeds ^160 shall be required to make their own arrangements for medical treatment. A proportionate payment will be made to them out of funds reserved for this purpose.

Aliens.

The position of women who, prior to their marriage with an alien had been British subjects, has now been materially improved. Formerly the State proportion of the cost of benefit was denied them, but now such a married woman is entitled to receive full benefits if she is herself insured and whether or not she is so insured the maternity benefit payable in respect of her alien husband’s insurance is increased by two-sevenths. The cost of this increase is defrayed out of moneys furnished by Parliament.

The effect of this provision is that a British woman’s rates of benefit remains unaltered for insurance purposes even although she marries an alien.

Aged and Infirm Members of Societies.

All members of Societies as at lGth December, 1911, who were not qualified to become insured persons by reason of age or permanent disablement and who were then entitled to medical attendance and treatment are to receive medical benefit as from 12th January, 1914. This privilege was formerly confined to members of such Societies as became approved, but the restriction has now been removed. Parliament contributes towards the cost of medical treatment for this class the same proportion as that provided in the case of ordinary insured persons.

Seamen.

Dissatisfaction was formerly caused by the fact that the Seamen’s National Insurance Society could not admit to its membership masters, seamen and apprentices to the sea-service, or the sea-faring service, who were qualified to become voluntary contributors. This power has now been granted and it is anticipated that some fishing boat owners and other sea« faring men, not employed under contract of service, will avail themselves of the benefits secured by this provision.

It is also provided that where a shipowner—although liable to provide maintenance and medical treatment—is not liable to pay wages, a Society shall have power, in the case where the seaman was serving on a home trade ship, to apply sickness benefit in whole or in part for the benefit of his dependants.

Maternity Benefit.

Perhaps the most widely discussed clause during the passage of the Bill through Parliament was that dealing with

Maternity Benefit. Its provisions may be briefly outlined as follows :—

Maternity Benefit is now in all cases regarded as the mother’s benefit, her receipt alone being regarded as a valid discharge to the Society or Committee concerned. The husband’s receipt, on her behalf, may be accepted if authorised by her.

The position where the husband alone is an insured person otherwise remains unchanged, but in all cases where the wife is herself an insured person, and a Society member qualified for benefit, double maternity benefit of £3 is payable.

If the husband is a Society member and entitled to maternity benefit half of this sum is paid in respect of his insurance. If he is a deposit contributor, as much of the 30s. as his account will bear is advanced, and the balance is made good by the wife’s Society, otherwise the entire cost of maternity benefit is borne by the latter Society.

It will be observed that the anomaly previously existing in the case where husband and wife were both insured persons, but the husband was unqualified for maternity benefit, has now been removed.

It should be noted that where any benefit is paid in respect of the wife’s insurance, she is required to abstain from remunerative work during a period of four weeks after her confinement. The position of maternity benefit under the Acts may thus be summarised :—

(a) Husband .insured, wife not insured—husband’s society pays one benefit to the wife.

(b) Husband and wife both insured—husband’s and wife’s society each pay one benefit to the wife.

(c) Wife insured, husband not insured—wife’s society pays two benefits to her.

'd) Unmarried insured woman—her society pays her one benefit.

Arrears.

Of the provisions affecting- the practice of Approved Societies, those dealing with the treatment of arrears incurred during periods of unemployment must be regarded as particularly worthy of notice.

The hardship entailed upon members of Approved Societies in having to pay not only their own but also their employers’ contribution during unemployment has frequently been adversely criticised.

In terms of the principal Act the employers’ share of contributions might be disregarded, but only at the discretion of the Society. In the new Act it is explicitly laid down that an employed contributor falling into arrears requires to make payment only of his own share of the contributions, and fot-the purpose of determining this share the rate of remuneration, except where sufficient evidence to the contrary is adduced, is deemed to exceed 2s. 6d. per working day. Thus a man who has been out of work for 15 weeks requires to pay only 15 x 4d., or 5s., in order to come back into full benefit, instead of 15 x 7d., or 8s. 9d., as formerly.

The loss to Societies in excess of an average of three full weeks’ contributions per member per annum is to be made good out of the sums retained for cancellation of reserve values. If the aggregate amount so payable in any year exceeds ^100,000 this excess is to be met out of moneys to be provided by Parliament.

It is proposed that instead of permitting arrears to accumulate from year to year, the rate of sickness benefit payable to the defaulting member should during each year be reduced roughly in proportion to the value of the loss incurred by the Society from his failure to pay contributions during the preceding year. This reduction of benefit will be based upon the expectation of sickness of the individual. Thus a man of 40 would require to forego, say, 6d. a week of sickness benefit for one year for every contribution in arrear during the previous twelve months. That is to say, this man, if 12 weeks in arrear would suffer reduction of sickness benefit to the extent of Gd. x 12, or 5s. per week; but provided that he incurred no further arrears during the year of reduction he would come automatically into full benefit as from the end of that year.

The corresponding reduction in the case of a man presently aged 55 would be, say, 3d. per w’eek.

Tables will doubtless be calculated shewing the value of arrears at various ages, and an examination of these tables will at once reveal the precise position of the individual member to the member himself and to the Society Secretary responsible for the administration of his benefits.

Before leaving this topic, it may be pointed out that if in any year more than 48 contributions are paid in respect of any member, these excess contributions will be held to his credit and will be utilised in wiping out any arrears of contributions which may subsequently accrue in respect of him.

Sickness Benefit.

Other modifications of the provisions affecting the administration of sickness benefit may here be briefly referred to :—

Continuing Sickness.

The requirement that 50 contributions must be paid between two periods of illness to prevent them being regarded as continuous is now dispensed with. It is still necessary, however, that a period of at least 52 weeks should intervene.

Waiting Period.

“Commencing on the fourth day of such incapacity ” is to be substituted for “ commencing from the fourth day after being so rendered incapable of work.” A day upon which the incapacitated person was prevented by the incapacity from doing any effective work is to be treated as a day of incapacity, but Sunday is not deemed one of the three working days which must elapse, unless the insured person would, but for his incapacity, have actually been employed upon that day.

Members in Hospital.

The provisions of the principal Statute dealing with the treatment of sickness benefit while the member is in hospital have been somewhat modified. It is now laid down that where no payment, or partial payment only, of Sickness Benefit has been made— /

(a) To his dependants, or if he had no dependants,

(b) to the Insurance Committee,

(c) under a previously existing agreement to the hospital authorities ; the money so withheld shall be applied—

In the provision of surgical appliances or otherwise for his benefit after he ceases to be an inmate, or if not so expended shall be paid in cash, in a lump sum,, or in instalments, to the member after leaving the institution.

Member in receipt of compensation under Workmen’s Compensation Act, 1906.

Where an insured person is receiving reduced sickness allowance, representing the difference between full sickness benefit and the sum payable in accordance with the provisions of an agreement under the Workmen’s Compensation Act, the amount paid in sickness benefit shall be totalled and the number of weeks during which he shall be deemed to have received sickness benefit will be reckoned by dividing this total by the full weekly rate of benefit. For example, suppose that the insured person has during the first period of illness received a compensation allowance of 7s. 6d. per week and sickness benefit of 2s. 6d. per week. If now it be assumed that these sums were paid for 16 weeks and that at some later period during the same year the insured person again falls ill, it is necessary to reckon the period during which full sickness benefit can be allowed. The period during which full benefit was formerly paid is consequently 2s 6d / 10s x 16, or 4 weeks, and the insured person is therefore entitled to full sickness benefit during the further period of 22 weeks.

This, it should be observed, applies only in the case where the member recovers and subsequently becomes ill. In the case of a continuous illness, however, each week during which any payment is made counts as a full week towards the 26 weeks throughout which benefit is payable.

International Societies.

Several most important administrative changes are made by the Clause dealing with international Societies. Previously, the members of such Societies resident in each part of the United Kingdom were required to be treated for the purposes of valuations, surpluses, deficiencies and transfers as if they formed a separate Society. These provisions have now been done away with. Fortunately, however, it is provided that if application to the Joint Committee be made before 15th February, 1914, Scottish members of such Societies may continue to be regarded as constituting separate societies. Thanks to this Clause, Scottish members will, if immediate action is taken, be entitled to preserve for their own benefit any surpluses expected from the higher sickness rates or better management which may prevail in Scotland. If this option be not exercised, it is obvious that if there are surpluses derived from the contributions of Scottish members, these will be utilised to set off in some degree any less favourable conditions experienced in the administration of sickness benefit in the sister countries.

It cannot therefore be too strongly urged that Scottish members should immediately consider the whole position in the light of the conditions appertaining to their entry into insurance and to the potential possibilities of Scottish experience and management. The first step should take the form of availing themselves, through their branch Societies, of the proviso of Section 16 (1). If it is further wished to have districts separately valued in Scotland, the second step would then be to apply under Section 40 of the original Act for association m geographical areas if their rules permit. If they do not so permit, they should be altered.

This would result in achieving a separate valuation from England. Each of the groups exceeding 5,000 would also be valued separately in Scotland. If the proviso of Section 16 (1) is not excepted, then deficiencies or surpluses will be pooled with England. If the proviso is generally accepted such pooling is confined to Scotland. Such a process would keep the whole country (i.e., Scotland) together, would keep the whole Societies together, and still allow for local autonomy.

Insurance Committees.

Insurance Committees are now constituted bodies corporate and power is given them to take, purchase and hold land for the purposes of the National Insurance Act. They are also empowered under certain conditions (in accordance with a scheme to be submitted for the approval of the Commissioners) to pay to their members subsistence allowances and compensation for loss of remunerative time caused by necessary attendance at Committee meetings.

Committees are also authorised to subscribe to any association of insurance Committees whose objects are approved by the Commissioners, and to pay reasonable expenses incurred by their representatives in attending meetings of such associations.

In conclusion, the following miscellaneous provisions may be noted :—

Proceedings for non-compliance with the provisions of the Act and its regulations may be taken at the instance of the Procurator Fiscal or of the Scottish Insurance Commissioners.

Stamp Duly is no longer exigible in respect of certain documents frequently required in the operation of the Act.

Certificates of marriage required for production in connection with applications for maternity benefit are now obtainable for a fee of 1s.

An Approved Society may, notwithstanding that its membership is less than 50 or more than 5,000, join an association of Societies for valuation purposes.

Scottish County Councils are empowered to borrow on security of the General Purposes Rate in order to obtain funds for the erection of sanatoria, and can now purchase and lease land. County Councils, which have been authorised to provide sanatoria, have now received the same powers of providing treatment for all persons suffering from tuberculosis as were formerly possessed by local authorities for the treatment of infectious diseases.

The appended Schedule gives particulars of the dates upon which the various provisions of the new Act come into operation.