Old-Age_Pensions

Old-Age Pensions. The provision of annuities for aged poor by the state was proposed in England in the 18th century - e.g. by Francis Maseres, cursitor baron of the Exchequer, in 1772, and by Mr Mark Rolle, M.P., in 1787. Suggestions for subsidizing friendly societies have also been frequent - e.g. by T. Paine in 1795, tentatively in Sturges Bourne's Report on the Poor Laws, 1817, and by Lord Lansdowne in 1837. The subject again became prominent in the latter part of the 19th century. Canon Blackley, who started this movement, proposed to compel every one to insure with a state department against sickness and old age, and essentially his scheme was one for the relief of the ratepayers and a more equitable readjustment of the poorrate. The terms provisionally put forward by him required that every one in youth should pay £10, in return for which the state was to grant 8s. a week sick allowance and 4s. pension after seventy. These proposals were submitted to the Select Committee on National Provident Insurance, 1885-1887. This body reported unfavourably, more especially on the sick insurance part of the scheme, but the idea of old-age pension survived, and was taken up by the National Provident League, of which Mr (afterwards Sir) J. Rankin, M.P., was chairman. The subject was discussed in the constituencies and expectation was aroused. An unofficial parliamentary committee was formed, with Mr J. Chamberlain as chairman. This committee published proposals in March 1892, which show a very interesting change of attitude on the part of the promoters. Compulsion, which at the earlier period had found favour with Canon Blackley, Sir J. Rankin and even Mr Chamberlain, was no longer urged. The annuitant was no longer required to pay a premium adequate to the benefits promised, as in Canon Blackley's proposal. The benefit was no longer a pure annuity, but premiums were, in certain cases, returnable, and allowances were provided for widows, children (if any) and for the next of kin. Canon Blackley's professed object was to supersede the friendly societies, which, he alleged, were more or less insolvent; a proposal was now introduced to double every half-crown of pension derived by members from their friendly societies. This suggestion was criticized, even by supporters of the principle of state aid, on the ground that unless a pension was gratuitous, the class from which pauperism is really drawn could not profit by it. Mr Charles Booth in particular took this line. He accordingly proposed that there should be a general endowment of old age, 5s. a week to every one at the age of sixty-five. This proposal was calculated to involve an expenditure of r8,000,000 for England and Wales and £24,000,000 for the United Kingdom, exclusive of the cost of administration. While Mr Booth severely criticized the weak points of the contributory and voluntary schemes, their most influential advocate, Mr Chamberlain, did not spare Mr Booth's proposals. Speaking at Highbury, for instance, on the 24th of May 1899, he described Mr Booth's universal scheme as "a gigantic system of out-door relief for every one, good and bad, thrifty and unthrifty, the waster, drunkard and idler, as well as the industrious," and very forcibly stated his inability to support it.

In 1893 Mr Gladstone referred the whole question to a royal commission (Lord Aberdare, chairman). A majority report, adverse to the principle of state pensions, was issued in 1895. A minority report, signed by Mr Chamberlain and others, dissented, mainly on the ground that public expectation would be disappointed if nothing was done. In 1896 Lord Salisbury appointed a committee "of experts" (Lord Rothschild, chairman) to report on schemes submitted, and, if necessary, to devise a scheme. The committee were unable to recommend any of the schemes submitted, and added that, "we ourselves are unable, after repeated attempts, to devise any proposal free from grave inherent disadvantages." This second condemnation was not considered conclusive, and a select committee of the House of Commons (Mr Chaplin, chairman) was appointed to consider the condition of "the aged deserving poor." After an ineffectual attempt by Mr Chaplin to induce the committee to drop the pension idea, and to consider the provision made for the aged by the poor law, the committee somewhat hastily promulgated a scheme of gratuitous pensions for persons possessing certain qualifications. Of these the following were the most important: age of sixty-five; no conviction for crime; no poor-law relief, "unless under exceptional circumstances," within twenty years; non-possession of income of ros. a week; proved industry, or proved exercise of reasonable providence by some definite mode of thrift. The committee refrained from explaining the machinery and from estimating the cost, and suggested that this last problem should be submitted to yet another committee.

Accordingly a departmental committee (chairman, Sir E. Hamilton) was appointed, which reported in January 1900. The estimated cost of the above plan was, by this committee, calculated at £10,300,000 in 1901, rising to £15,650,000 in 1921. Mr Chaplin had publicly suggested that £2,000,000, the proceeds of a is. duty on corn, would go a long way to meet the needs of the case - a conjecture which was obviously far too sanguine. These unfavourable reports discouraged the more responsible advocates of state pensions. Mr Chamberlain appealed to the friendly societies to formulate a plan, an invitation which they showed no disposition to accept. Efforts continued to be made to press forward Mr Booth's universal endowment scheme or some modification of it. To this Mr Chamberlain declared his hostility. And here the matter rested, till in his Budget speech in 1907 Mr Asquith pledged the Liberal government to start a scheme in 1908.

In 1908 accordingly there was passed the Old-Age Pensions Act, which carried into effect a scheme for state pensions, payable as from the 1st of January 1909 to persons of the age of 70 years and over. The act grants a pension according to a graduated scale of not exceeding 5s. a week to every person, male and female, who fulfils certain statutory conditions, and at the same time is not subject to certain disqualifications. The statutory conditions, as set out in § 2 of the act, are: (1) The person must have attained the age of seventy; (2) must satisfy the pension authorities that for at least twenty years up to the date of receipt of pension he has been a British subject and has had his residence in the United Kingdom; and (3) the person must satisfy the pension authorities that his yearly means do not exceed £31, ros. In § 4 of the act there are elaborate provisions for the calculation of yearly means, but the following may be particularly noticed: (1) in calculating the means of a person being one of a married couple living together in the same house, the means shall not in any case be taken to be a less amount than half the total means of the couple, and (2) if any person directly or indirectly deprives himself of any income or property in order to qualify for an old-age pension, it shall nevertheless be taken to be part of his means. The disqualifications are (1) receipt of poor-law relief (this qualification was specially removed as from the 1st of January 1 9 11); (2) habitual failure to work (except in the case of those who have continuously for ten years up to the age of sixty made provision for their future by payments to friendly, provident or other societies or trade unions; (3) detention in a pauper or criminal lunatic asylum; (4) imprisonment without the option of a fine, which disqualifies for ten years; and (5) liability to disqualification for a period not exceeding ten years in the case of an habitual drunkard. The graduated scale of pensions is given in a schedule to the act, and provide that when the yearly means of a pensioner do not exceed £21 he shall have the full pension of 5s. a week, which diminishes by is. a week for every addition of £2, 12s. 6d. to his income, until the latter reaches £31, 10s., when no pension is payable. The pension is paid weekly, on Fridays (§ 5), and is inalienable (§ 6).

All claims for, and questions relating to, pensions are determined by the pension authorities. They are (1) pension officers appointed by the Treasury from among inland revenue officers; (2) a central pension authority, which is the Local Government Board or a committee appointed by it, and (3) local pension committees appointed for every borough and urban district with a population of over 20,000, and for every county.

During the first three months of the year 1909, in which the act came into operation, there were 837,831 claims made for pensions: 490,755 in England and Wales, 85,408 in Scotland, and 261,668 in Ireland. Of these claims a total of 647,494 were granted: 393,700 in England and Wales, 70,294 in Scotland, and 183,500 in Ireland. The pensions in force on the 31st of March 1909 were as follows: 582,565 of 5s., 23,616 of 4s., 23,275 of 3s., 11,429 of 2S., and 6609 of is. By the 30th of September the total amount of money paid to 682,768 pensioners was £6,063,658, and in the estimates of1909-1910a sum of £8,750,000 was provided for the payment of pensions.

## Germany

The movement in favour of state aid to provision for old age has been largely due to the example of Germany. The German system (which for old age dates from 1891) is a form of compulsory and contributory insurance. One half of the premium payable is paid by the labourer, the other half by the employer. The state adds a subvention to the allowances paid to the annuitant. (See Germany.) France. - By a law of April 1910 a system of old-age pensions, designed to come into operation in 1911, was adopted. It is a contributory system, embracing all wage-earners, with the exception of railway servants, miners and sailors on the special reserve list of the navy. It applies also to small landowners, tenant farmers and farm labourers. All are eligible for a pension at the age of 65, if in receipt of less than £120 a year. The actual rente or pension is calculated on the basis of the total obligatory contribution, together with a fixed viagere or state annuity. Male wage-earners are required to contribute 9 francs a year, and females 6 francs, the employers contributing a like amount. The largest pension obtainable is for life contributions and amounts to 414 francs. A clause in the act permits wage-earners to claim the rente  at the age of 55 on a proportionately reduced scale without the viagere. The total cost of providing pensions in 1911 is estimated at over £5,500,000.

## Denmark

The Danish system of old-age pensions was instituted by a law of 1891, and has been extended by further acts of 1902 and 1908. By the law of 1891 the burden of maintaining the aged was in part transferred from the local to the national taxes, and relief from this latter source was called a pension. Recipients of public assistance must be over 60 years of age, they must be of good character and for 5 years previous to receipt must have had their domicile in Denmark without receiving public charity. Such public assistance may be granted either in money, or kind, or by residence in an institution, such as an hospital. The assistance given, whatever it may be, must be sufficient for maintenance, and for attendance in case of illness. The actual amount is determined by the poor-law authorities, but all private assistance amounting to more than loo kroner (£5, 13s.) a year is taken into account in measuring the poverty of the applicant. The cost of assistance is met in the first case by the commune in which the recipient is domiciled, but half the amount is afterwards refunded by the state. In 1907-1908, 71,185 persons were assisted-53,008 by money and 18,177 otherwise. The total expenditure was £489,200, £242,660 being refunded by the state.

## New Zealand

In 1898 a bill, introduced by the Rt. Hon. R. J. Seddon, premier, became law which provided for the payment of an old-age pension out of the consolidated fund (revenue of the general government) to persons duly qualified, without contribution by the beneficiaries. The claimants must be 65 years of age, resident in the colony, and have so resided for 25 years. They must be free from conviction for lesser legal offences for 12 years, and for more serious breaches of the law for 25 years, previous to the application. They must be of good moral character and have a record of sobriety and respectability for five years. Their yearly income must not exceed £52, and they must not be owners of property exceeding in value £270\. Aliens, aborigines, Chinese and Asiatics are excluded. The pensions are for £18 per annum, but for each LI of yearly income over and above £34, and also for each £15 of capital over and above £50, LI is deducted from the amount of the pension. Applications have to be made to the deputy registrars of one of 72 districts into which the colony is for this purpose divided. The claim is then recorded and submitted to a stipendiary magistrate, before whom the claimant has to prove his qualifications and submit to cross-examination. If the claim is admitted, a certificate is issued to the deputy registrar and in due course handed to the claimant. Payment is made through the local post-office as desired by the pensioner. The act came into force on the 1st of November 1898. An amending act of 1905 increased the amount of the maximum pension to £26 a year. See further, New Zealand. The authors of the measure maintain that it is a great success, while others point to the invidious character of the crossexamination required in proving the necessary degree of poverty, and allege that the arrangement penalizes the thrifty members of the poorer class, and is a direct incentive to transfer of property, of a more or less fraudulent character, between members of a family.

## Victoria

By the Old-Age Pensions Act 1900, £75,000 was appropriated for the purpose of paying a pension of not more than I os. per week to any person who fulfilled the necessary conditions, of which the following were the principal: The pensioner must be 65 years of age or permanently disabled, must fill up a declaration that he has lived twenty years in the state; has not been convicted of drunkenness, wife-desertion, &c.; that his weekly income and his property do not exceed a given sum (the regulation of this and other details is intrusted to the governor in council). Further sums were subsequently appropriated to the purposes of the act.

## Authorities

\- Report and Evidence of Select Committee on National Provident Insurance (1887); Report of Royal Commission on Aged Poor (1895); Report of Lord Rothschild's Committee (1898); Report of the Select Committee on Aged Deserving Poor (1899); Report of Departmental Committee, &c., about the Aged Deserving Poor (1900); J. A. Spender, The State and Pensions in Old Age (1892); George King, Old Age Pensions (1899); Reports of Poor Law Conferences; Annual Reports of the Chief Registrar of Friendly Societies; E. W. Brabrook, Provident Societies and the Public Welfare (1898), ch. viii. For: Charles Booth, The Aged Poor in England and Wales (1894) Old Age Pensions (1899); Right Hon. Joseph Chamberlain, "The Labour Question," Nineteenth Century  (November 1892) Speeches (21st April 1891 and 24th May 1899); Rev. J. Frome Wilkinson, Pensions and Pauperism (1892) Publications of the National Providence League. Against: C. J. Radley, Self-Help versus State-Pensions (3rd edition); Plea for Liberty 0892); Report of Royal Commission from a Friendly Society Point of View, reprint from Oddfellows' Magazine (1895) The Foresters' Miscellany  (February 1902); Unity, a Monthly Journal of Foresters, &c. (February 1902); C. S. Loch, Old-Age Pensions and Pauperism  (1892); Reply of Bradfield Board of Guardians to circular of National Provident League (1891); Publications of the Charity Organization Society.