Invalidity Pensions

INVALIDITY PENSIONS. It is a generally accepted principle in almost all civilized countries that where an employed person becomes permanently incapacitated for work through sickness or accident he should receive from some source regular periodical payments with a view to preventing him from falling into destitution. Provision of this kind may be made in several different ways. In the case of persons employed by the State, local authorities, statutory undertakings or many establish ments, provision is usually made under a superannuation scheme. towards the cost of which contributions are paid by the employer and ordinarily by the employees also. Where the incapacity is due to an accident or an industrial disease arising out of the worker's employment, the worker becomes entitled to relief under the laws relating to workmen's compensation. (See WORKMEN'S COMPENSATION.) It is, of course, also open to any individual employed person to make provision for himself by private in surance. There remains, however, a large residue not covered by any of these forms of provision and in most countries the State has assumed the responsibility of making provision against the risk of invalidity amongst the general body of workers who are not otherwise protected.

In Great Britain such provision was first made in 1911 as part of the scheme of national health insurance. (See NATIONAL IN SURANCE: Health.) Under that scheme an insured person who is rendered incapable of work through sickness or physical or mental disability is entitled in the first instance to receive sickness benefit up to a maximum period of 26 weeks, and if incapacity continues beyond the end of that period he remains entitled to weekly payments at a reduced rate in the form of disablement benefit for so long as his incapacity continues, until he attains the age of 65, when the provisions of the old age pensions scheme be come available.

Under the Blind Persons Act, 192o, a person who is so blind as to be unable to perform any work for which eyesight is essen tial is entitled to a pension at the age of 5o on the same conditions as are applicable to persons of 70 under the general scheme of non-contributory old age pensions. (See OLD. AGE PENSIONS.) In all countries except Great Britain, State provision against invalidity is made not in conjunction with the State scheme of sickness insurance but ordinarily in association with the scheme of old age pensions, or in some cases under an entirely independent scheme. The essential difference between the schemes in force in most European countries and the British scheme is that • the former involve the conception of invalidity as a permanent physical condition requiring the minimum amount of supervision, whereas under the latter the payments are subject to the furnish ing at short intervals of proof of continued incapacity for work.

It is interesting to note that although several European coun tries had not, up to 1928, adopted general compulsory schemes of insurance against sickness, schemes of compulsory insurance against permanent invalidity were in operation in every country except Hungary, Norway, the Baltic States and parts of Switzer land. The schemes are ordinarily on a contributory basis, the cost being shared between employers, workers and the State. In some countries the schemes apply only to certain classes of workers, for example, in Austria, to miners and salaried employees only, and in Denmark, only to such persons as have voluntarily insured themselves against sickness.

German System.

The following short summary of the Ger man scheme will give an indication of the general character of the schemes in operation in most European countries: In Germany a scheme of insurance for invalidity and old age pensions for all manual workers was introduced in 1889 and a scheme for salaried workers in 1912. Under the former scheme the State contributes a fixed sum annually towards each pension, while under the latter it makes no contribution towards the pension but bears the whole cost of administration. The con tributions are graded according to earnings and are shared equally between employers and employed. The amount of the pension also varies in accordance with earnings and with the number of contributions paid. An insured person is entitled to a pension if, after he has exhausted his title to sickness insurance benefit, that is to say after 26 weeks of incapacity, he remains incapable, owing to sickness or infirmity, of earning one-third of his usual wages. A small additional allowance is made in respect of each dependent child of the insured person. The attainment of age 65 is treated for the purposes of the scheme as equivalent to permanent in validity, and pension is thereafter payable for life. The scheme is administered by insurance boards composed of Government officials and representatives of employers and insured persons. These boards have been pioneers in preventive and curative work and have provided sanatoria, hospitals and other institutions in which preventive and remedial treatment is given. Treatment in such institutions may in suitable cases be substituted for the invalidity pension.

In Australia a non-contributory scheme of invalidity pensions, of which the whole cost is met by the State, has been in operation since 1908. Up to 1928 no State scheme had been introduced in Canada, South Africa or New Zealand. In the United States also there is no public provision for insurance against invalidity.

(E. HA.)