The weekly contributions are at a flat rate irrespective of the age at which persons first become insured. The rates are fixed so as to cover the actuarial cost of the benefits in the case of persons entering insurance at the age of 16. For persons first becoming insured at higher ages the contributions at the flat rate would not in themselves be sufficient to cover the actuarial cost of the benefits and the shortage is made good by the creation of book credits called reserve values. These book credits are gradually converted into cash through the operation of a sinking fund derived from small deductions from all weekly contributions over a period of years. This system of reserve values, taken in con junction with the payment by the State of a proportion of the cost of benefits and administration, is equivalent in its effect to the provision by the State of the reserves required to enable the benefits to be given to all insured persons at a flat rate of contri bution irrespective of age at entry into insurance.
(2) Sickness Benefit, which consists of weekly cash payments to the insured person when rendered incapable of work by illness, the standard rates being 15s.od. a week for men and 12s.od. a week for women. Sickness benefit is payable from the fourth day of incapacity and may continue for a maximum period of 26 weeks. A person does not become entitled to sickness benefit until he has been insured for 26 weeks and has paid 26 weekly contri butions. Benefit is then payable at the reduced rate of 9s.od. a week for men and 7s.6d. a week for women. When 204 weeks of insurance have been completed and 104 contributions paid, benefit becomes payable at the full standard rates.
(3) Disablement Benefit, i.e., weekly payments at a reduced rate when, and so long as, incapacity continues of ter the title to sickness benefit has been exhausted. The weekly benefit is 7s. 6d. for men, 6s.od. for unmarried and 5s.od. for married women. The qualifying conditions for the receipt of disablement benefit are 104 weeks of insurance and the payment of 104 weekly contri butions.
(4) Maternity Benefit, i.e., a money payment in the event of the confinement of an insured woman or the wife of an insured man. The standard rate of maternity benefit is £2, and in the case of a married woman who is herself insured, benefit is pay able both in respect of her own and her husband's insurance. The qualification for maternity benefit is 42 weeks of insurance and the payment of 42 weekly contributions.
(5) Additional Benefits, which may take the form either of an increase in the standard rates of the cash benefits, or of payment towards the cost of various forms of treatment required by the insured persons, such as dental, ophthalmic or convalescent home treatment. These additional benefits differ from the ordinary benefits in that they are only payable by Approved Societies which are found on valuation to have a surplus available for the purpose.
Contributions are payable for every week during the whole or any part of which an insured person is employed. If there has been no employment during a week the insured person falls into arrears and unless these arrears are excused or redeemed by making the appropriate payment within the time allowed, penalties in the form of reduction or suspension of cash benefits will result. From the inception of the scheme arrears have been excused when due to incapacity for work through sickness of which notice has been given, and by the Act of 1928 arrears which can be shown to have been due to genuine unemployment also involve no penalty. In effect, therefore, the present position is that an insured person is credited with a contribution in respect of every week during which he is either employed, sick or genuinely out of work, but if, during any contribution year (July to June) there are any weeks in respect of which no contribution is credited, e.g., weeks of voluntary abstention from work or weeks during which the insured person is engaged in some occupation which is not employment within the meaning of the Act, then unless the arrears for such weeks are redeemed within the period of grace the rates of sickness and disablement benefits are reduced throughout the ensuing cal endar year in proportion to the number of arrears outstanding.
The title to sickness and disablement benefits and the liability for the payment of contributions cease on an insured person attaining the age of 65, at which age in the normal case the title to a contributory old age pension accrues.