Statutes

Published date01 January 1960
DOIhttp://doi.org/10.1111/j.1468-2230.1960.tb00574.x
Date01 January 1960
STATUTES
THE NATIONAL
INSURANCE
ACT,
1959
THE
National Insurance Act has now received both royal and
electoral assent. In April
1961,
therefore, the National Insurance
scheme will undergo several important changes. What these changes
amount to in essence is that, on the one hand, the large annual
deficits which were beginning to emerge, and which would otherwise
have fallen on the Exchequer, will be made good by means of an
additional contribution by employed persons and their employers,
related to weekly earnings; while, on the other hand, those who
have to pay this wage-related contribution are to be rewarded
(some would say inadequately) with the promise of a corresponding
addition to their retirement pensions.
The Government has never pretended that this additional pension
will be an adequate substitute for a good private pension scheme.
Indeed, one of the reasons given for pitching the benefits
so
low
was that employers would not be faced with “the bare choice
between abandoning their schemes and contracting out.”
It
is
quite possible to accept the additional state pension as a supplement
to the benefits offered by a private scheme, and no doubt many
employers will do
so,
especially for their higher-paid employees.
Nevertheless, the Act gives the employer an option of contracting
out
under certain conditions.
lhe
contributions
Although on the benefit side the Act is concerned only with
pensions, other National Insurance benefits remaining unchanged,
it is important to note that the contribution rates set out in the
First Schedule to the Act cover all benefits provided under the
National Insurance Act,
1946.
They are intended to come into
force in April
1961,
though section
1
leaves the date of commence-
ment to be fixed by the Minister.
There are no changes in the contribution rates for the self-
employed, the non-employed, persons under eighteen and employees
who are contracted out. The new minimum rates,
11s.
7d. per
week for a man and
10s.
9d. for a woman, divided equally between
employed person and employer, apply only
to
employed persons aged
eighteen and over, for each week in which they earn more than
E3
but not more than
E9.
After adding the Industrial Injuries and
National Health contributions, the total weekly contribution is
1
Provision
for
Old
Age:
The
Future
Development
of
the
National
Insurance
Gcheme
(1958)
Cmnd.
538,
p.
10.
52

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