INTERNATIONAL LABOUR OFFICE
STUDIES AND REPORTS
Series M (Social Insurance) No. 10
COMPULSORY
PENSION INSURANCE
COMPARATIVE ANALYSIS OF NATIONAL LAWS,
AND STATISTICS
GENEVA
1933
Published in the United Kingdom
For the INTERNATIONAL LABOUR OFFICE (LEAGUE OF NATIONS)
By P . S. KING & SON, Ltd.
Orchard Hoase, 14 Great Smith Street, Westminster, London, S.W. 1
715. — Printer : OFFICE D B PUBLICITÉ (Ane. Établiss. J. L E B E O U E & 0 " ) .
16, rue Marcii, Brussels (Belgium).
PREFACE
In order to cover the risks of premature invalidity, early death
and old age, the State may introduce a scheme either of compulsory social insurance or of non-contributory pensions.
The International Labour Oifice has already published a comparative analysis of national non-contributory pension schemes,
and is dealing with compulsory invalidity, old-age and widows'
and orphans' insurance in a series of three studies.
The first of these studies contains a systematic examination,
on international lines, of the essential features of compulsory
invalidity, old-age and widows' and orphans' insurance.
The second, which is due to appear in 1933, will deal with the
position of foreigners and the maintenance of migrants' pension
rights.
The third will contain an international study of the statistical
and actuarial bases and the financial management of the various
schemes.
This volume—the first of the series—comprises five Parts :
scope, risks covered and cash benefits, benefits in kind, financial
resources, and administrative organisation (insurance institutions,
supervision, settlement of disputes).
In accordance with the guiding principles laid down by the
Seventh Session of the International Labour Conference (1925)
concerning the research work on social insurance undertaken by
the Office, this volume contains a comparative analysis of national
schemes and the statistical results of their application.
The method of examining the problems is the same as that
followed in the Office's study on compulsory sickness insurance,
published in 1927. The main elements of the problem are first
discussed; the characteristics of possible typical solutions are then
outlined,* next, the national schemes are classified according to the
solution which each embodies ; and finally comes an analysis of
the relevant legal provisions and statistics of the national schemes
seriatim.
IV
PREFACE
By the use of this method it has been attempted, first of all
to make such general remarks as permit each of the various
schemes to be given its proper place in the development of ideas
and of institutions, and secondly to describe each scheme in
sufficient detail to show its characteristic features. The study
thus contains neither complete expositions of social doctrines and
theories, nor the reproduction en bloc of the laws and regulations
of the various countries, but a summary of the ideas which have
led to existing practice and an analysis of the essential provisions
of the national schemes.
This analysis has been presented in a more concentrated form
than that adopted in the study on compulsory sickness insurance of 1927, for the Office has been informed from several
quarters that its research work is used not only for the international study of the problems with which it deals, but also
for a study of particular national schemes as a whole; that the
analyses of national schemes, being closely attached to the examination of a large number of problems on international lines, have
been too fragmentary; and that to reconstruct a single scheme
it has sometimes been necessary to consult fifty or sixty passages
of the work.
Therefore, without abandoning the method of comparative
international examination, which must remain an essential feature
of Office publications, we have presented the analyses of national
schemes in fewer and larger sections, which here appear in special
Chapters at the end of each Part. A reader who desires to
• study the work on national lines will thus find it easier to do so,
and will only have to seek out five or six passages in order to
assemble the essential features of a particular scheme.
But it must be stated that, even after this slight change of
method, the national analyses are necessarily brief; they are but
concise and systematic summaries of such legislative and administrative provisions as are interesting from an international point
of view, and they cannot replace a perusal of the texts.
In this book account is taken of the laws and regulations of
which the Office was aware up to 30 September 1932.
CONTENTS
VII
PAGE
Survivors' Pensions
Funeral Benefits
Other Lump-Sum Payments
CHAPTER I I : Conditions of Award of Cash Benefits
A. Conditions relating to the Insured Person
§ 1. Qualifying Period
Purpose of Qualifying Period
Point of Operation of Qualifying Period
Qualifying Period in Old-Age Insurance
Qualifying Period in Invalidity Insurance
Qualifying Period in Survivors' Insurance
§ 2. Retention of Status of Insured Person
Unconditional Retention of Status
Retention Conditional on Payment of Contributions during
the Period Immediately Preceding the Materialisation
of the Risk
Retention Conditional on Sufficiently Regular Payment
of Contributions
Recovery of Status by Completion of Fresh Qualifying
Period
B. Conditions relating to Survivors
§ 1. Survivors' Pensions
Widows
Children
Widowers
Parents
Brothers and Sisters
§ 2. Lump-Sum Payments at Death
§ 3. Benefits for which the Insured Person has Voluntarily
made Provision
C. Forfeiture, Suspension and Lapse of Right to Benefit
§ 1. Responsibility of the Insured Person for the Occurrence
of the Event Insured against; Attempts to Defraud the
Insurance Institution
164
166
167
168
169
169
169
169
171
173
175
178
179
§ 2. Coincident Rights
§ 3. Means Limit
§ 4. Disappearance of Circumstances for which the Pension
was Granted
§ 5. Maintenance of Beneficiary at Public Expense
196
199
199
200
CHAPTER I I I : Computation of Cash Benefits
A. Types of Benefit and their Respective Merits
§ 1. Fixed Benefits
Encouragement of Thrift
Smaller Cost
Easy Administration
Lack of Adaptability to Beneficiary's Needs
§ 2. Benefits Varying with Wage Loss
Payment of Benefit Irrespective of Beneficiary's M e a n s . . .
Adaptability to Beneficiary's Needs
§ 3. Benefits Varying with Length of Contribution P e r i o d . . . .
201
203
203
203
204
204
205
205
206
206
208
179
180
181
182
183
183
186
189
190
190
191
193
194
195
Vili
CONTENTS
PAGE
B. Computation of Benefits in National Laws
§ 1. Influence of Wages
§ 2. Influence of Period of Contribution
§ 3. Fixed Sums as Benefit. „
§ 4. Classification of Schemes according to Method of Computing Pensions
§ 5. Supplement where Constant Attendance is Needed
§ 6. Family Bonuses
§ 7. Occupation and Services Rendered
§ 8. Maximum Possible Total for Survivors' Pensions
§ 9. Lump-Sum Payments at Death
Funeral Benefits
Other Lump-Sum Payments
CHAPTER IV : Legal Provisions and Statistics relating to Risks Covered
and Cash Benefits, by Countries and Schemes
Introduction
Argentina, p . 227; Austria, p . 232; Belgium, p. 241;
Brazil, p . 247; Bulgaria, p . 250; Chile, p. 251; Cuba,
p. 255; Czechoslovakia,, p. 257; Denmark, p . 268;
Ecuador, p. 270; France, p . 271; Germany, p. 290;
Great Britain and Northern Ireland, p . 303; Greece,
p. 308; Hungary, p . 309; Irish Free State, p . 315;
Italy, p . 317; Luxemburg, p . 319; Netherlands, p . 326;
Poland, p . 331; Rumania, p . 341; Spain, p . 345;
Sweden, p . 346; Switzerland, p . 348; Uruguay, p . 351;
U. S. S. R „ p . 353; Yugoslavia, p . 358.
210
210
212
214
215
219
220
222
222
224
224
225
227
227
T H I R D PART
BENEFITS I N KIND
INTRODUCTION
363
CHAPTER I : Measures of Assistance to Individuals
§ 1. Beneficiaries
Conditions of Benefit for Insured Persons
Conditions of Benefit for Pensioners
Conditions of Benefit for Dependants
§ 2. Compulsory and Optional Benefits in Kind
Compulsory Benefits
Optional Benefits
§ 3. Nature and Scope of Assistance
Detection and Examination
Treatment and Care
Organisation of Assistance
366
366
367
369
371
372
373
374
375
375
378
379
CHAPTER I I : Role of Insurance Schemes in Combating Social Diseases.
§ 1. The Campaign against Tuberculosis
Individual Pathology
Social Pathology
382
384
384
386
CONTENTS
PAGE
PREFACE
in
GENERAL INTRODUCTION
1
F I R S T PART
SCOPE
INTRODUCTION
25
CHAPTER I : Compulsory Insurance of Insured Persons
§ 1. General Formula Denning Scope
Work in a Dependent Condition
Work under a Contract
Work as the Ordinary Means of Livelihood
§ 2. Scope of Compulsory Insurance in the Several Countries..
§ 3. Application of Insurance to the Several Branches of Economic Activity
Industry and Commerce
Mines
Agriculture
Domestic Service
Public Service
Home Workers
§ 4. Application of Insurance to Occasional, Subsidiary and
Temporary Employment
Occasional Employment
Subsidiary Employment
Temporary Employment
Seasonal Employment
§ 5. Limitations Arising Out of Personal Qualifications
Physiological Conditions
Political and Civil Conditions
Economic Conditions
§ 6. Application of Conventions to Apprentices and Independent Workers
Apprentices
Persons Working on Their Own Account
§ 7. Territoriality of Insurance Laws
Bilateral Treaties
§ 8. Position of Persons for whom Insurance Ceases to be
Compulsory
Temporary Free Maintenance of Conditional Rights
Provision for Persons whose Temporary Free Maintenance
of Conditional Rights has Expired
§ 9. Voluntary Insurance Proper
Conditions for Voluntary Insurance
"...
27
27
28
28
29
29
31
31
31
32
33
34
37
39
40
44
47
49
50
50
55
57
59
59
60
62
64
65
66
68
77
77
VI
CONTENTS
PAGE
§ 10. Legal Provisions and Statistics relating to Scope, by
Countries and Schemes
Argentina, p. 80; Austria, p . 8 1 ; Belgium, p . 84;
Brazil, p. 87; Bulgaria, p. 88; Chile, p . 89; Cuba, p . 90;
Czechoslovakia, p. 9 1 ; Ecuador, p . 93; France, p . 93;
Germany, p . 97; Great Britain and Northern Ireland,
p. 101; Greece, p . 104; Hungary, p . 104; Irish Free
State, p . 107; Italy, p. 107; Luxemburg, p . 108; Netherlands, p . 110; Poland, p. 112; Rumania, p . 115; Spain,
p. 116; Uruguay, p . 116; U. S. S.R., p. 117; Yugoslavia, p . 118.
CHAPTEB I I : Compulsory Insurance of Occupied Persons of Small
Means, Special Compulsory Insurance of Independent Workers and
Compulsory National Insurance
Introduction
§ 1. Compulsory Insurance of Occupied Persons of Small
Means
Denmark, p . 121.
§ 2. Special Compulsory Insurance of Independent Workers..
Czechoslovakia, p.. 123.
§ 3. Compulsory National Insurance
Arguments for Compulsory National Insurance
Arguments against Compulsory National Insurance
Sweden, p . 128; Switzerland, p . 129.
80
119
119
120
122
124
124
126
SECOND P A S T
RISKS COVERED AND CASH B E N E F I T S
INTRODUCTION
CHAPTER I : Risks Covered
A. Old Age
§ 1. Conceptions of Old Age
The Right to Rest
Presumption of Invalidity
§ 2. Respective Merits of the Two Conceptions
§ 3. Definition of Old Age in National Laws
B. Invalidity
§ 1. Conceptions of Invalidity
Occupational Incapacity
General Incapacity for Work
Physical Invalidity
§ 2. Degree of Invalidity entitling to Pension
§ 3. Establishment of Invalidity
§ 4. Review of Invalidity Pensions
C. Death
§ 1. Risk Covered
§ 2. Definition of the Risk in National Laws
133
134
134
134
134
136
137
144
148
148
148
151
153
156
158
161
162
162
163
CONTENTS
IX
PAGE
Detection
Diagnosis
Therapeutic Measures
Prophylactic Measures
§ 2. The Campaign against Rheumatic Diseases
§ 3. The Campaign against Cancer
§ 4. The Campaign against Venereal Diseases
CHAPTER III : General Measures
§ 1. Development of Medical Equipment
§ 2. Promotion of Health Work by Investments
§ 3. Education in Hygiene
392
397
401
409
413
418
424
430
431
437
439
FOURTH PART
FINANCIAL RESOURCES
INTRODUCTION
441
CHAPTER I : Sources of Funds
Introduction
§ 1. Principle of Contributions from the Insured Person
§ 2. Principle of Contributions from the Employer
§ 3. Principle of Contributions from the Public Authority
§ 4. Sources of Funds under the Several Laws
442
442
442
444
446
447
CHAPTER I I : Assessment of Contributions and Subsidies
A. Contributions
§ 1. Contributions Not Dependent on Wages or Income
§ 2. Contributions Fixed according to Individual Wages or
Income
§ 3. Contributions Fixed according to Wage or Income Classes.
§ 4. Sharing of Contributions by Insured Persons, Employers
and Public Authorities
§ 5. Sharing of Contributions in Special Cases
Insured Persons Not Paid in Cash
Insured Persons with Low Wages or Income
Apprentices
Sick Insured Persons
Unemployed Insured Persons
Voluntary Insurance
Additional Insurance
Employed Persons Exempt from Compulsory Insurance.
450
450
451
B. Subsidies from Public Authorities
§ I . Regular Subsidies to Revenue
Payment of a Contribution
Payment of a Lump Sum Not Earmarked for any Special
Purpose
Allocation of the Proceeds of Certain Taxes or Dues
473
473
473
452
454
457
462
462
462
463
464
466
468
470
471
474
475
X
CONTENTS
PAGE
§ 2. Subsidy towards Expenditure on Benefits
Payment of a Fraction of Benefits, or the Whole of CertainBenefits
Payment of Supplements to Pensions
Meeting a Shortage of Funds
Subsidies towards Expenditure on Benefits in Kind
§ 8. Subsidies towards Administrative Expenses
§ 4. Temporary or Exceptional Subsidies
§ 5. Distribution of the Charges among Various Public Authorities
CHAPTER I I I : Collection of Contributions
§ 1. Persons Responsible for Payment; Deduction at Source..
§ 2. Payment of Contributions
Discharge of the Obligation
Institutions or Services Responsible for Collecting Contributions
CHAPTER IV : Legal Provisions and Statistics relating to Financial
Resources, by Countries and Schemes
Argentina, p . 491 ; Austria, p . 493; Belgium, p . 497;
Brazil,p.503;Bulgaria,p.504; Chile,p.506; Cuba,p. 508;
Czechoslovakia, p . 509; Denmark, p . 515; Ecuador,
p. 516; France, p . 517; Germany, p . 525; Great Britain
and Northern Ireland, p . 531 ; Greece, p . 536 ; Hungary,
p. 536; Irish Free State, p . 539; Italy, p . 541; Luxemburg, p . 543; Netherlands, p . 545; Poland, p . 548;
Rumania, p . 551; Spain, p . 553; Sweden, p . 555; Switzerland, p . 557; Uruguay, p . 559; U. S. S. R., p. 560;
Yugoslavia, p . 562.
475
476
476
478
479
479
480
482
483
483
485
485
488
491
FIFTH PART
ADMINISTRATIVE
INTRODUCTION
ORGANISATION
565
CHAPTER I : Insurance Institutions
566
§ 1. Formation of Insurance Institutions
567
Formation of Insurance Institutions by a Public Authority
567
Formation of Insurance Institutions by Private Initiative.
568
§ 2. Legal Status of Insurance Institutions
572
§ 3. Competence of Insurance Institutions
574
Competence in respect of Risks
574
Competence in respect of Persons
575
Territorial Competence
577
§ 4. Membership of Insurance Institutions
581
Compulsory Affiliation to a Prescribed Institution
581
Free Choice of Institution and Subsidiary Compulsory
Affiliation
. 582
§ 5. Organisation of Insurance Institution
584
Modes of Administration
584
Administrative Bodies
586
CONTENTS
XI
PAGE
Appointment of Members of Administrative Bodies
The Rights and Duties of Members of Administrative
Bodies
§ 6. Federations of Institutions and Local Agencies
Federations of Institutions
Local Agencies of Institutions
CHAPTER I I : Supervision
589
593
598
598
601
604
Introduction
604
§ I. Supervisory Bodies
604
§ 2. Scope of Supervision
607
§ 3. Means of Exercising Supervision
Information and Inspection
Preventive Supervision
Review
609
609
610
6H
CHAPTER I I I : Settlement of Disputes
Introduction
§ 1. Subjects of Dispute
Disputes concerning Liability t o Insurance
Disputes concerning Contributions
Disputes concerning Benefits
Disputes concerning the Participation of the Insured Persons in the Management of the Institution
616
616
617
619
621
622
623
§ 2. Judicial Authorities
General and Special Judicial Authorities
Types and Functions of Special Authorities
Composition of Special Judicial Authorities
Territorial Competence
Instances of Appeal
624
624
627
629
633
634
§ 3. Rules of Procedure
General Rules of Procedure
Rules of Appeal Procedure
Table I. Authorities Competent to Settle Disputes under
General Schemes of Invalidity, Old-Age and Widows' and
Orphans' Insurance
Table I I . Constitution of Special Judicial Authorities Competent to Settle Disputes
635
636
641
645
648
CHAPTER IV : Legal Provisions relating to Administrative Organisation,
by Countries and Schemes
655
Argentina, p . 655; Austria, p . 656; Belgium, p . 666;
Brazil, p . 674; Bulgaria, p . 675; Chile, p . 677; Cuba,
p. 677; Czechoslovakia, p . 678; Denmark, p . 687;
Ecuador, p . 689; France, p . 689; Germany, p . 700;
Great Britain and Northern Ireland, p . 713; Greece,
p. 717; Hungary, p . 717^ Irish Free State, p . 722;
Italy, p . 724; Luxemburg, p . 727; Netherlands, p . 730;
Poland, p . 732; Rumania, p . 737; Spain, p . 738;
Sweden, p . 742; Switzerland, p . 743; Uruguay, p . 745;
U. S. S. R., p . 746; Yugoslavia, p . 749.
CONTENTS
XII
SIXTH PART
TRANSITIONAL SCHEMES
PAGE
INTRODUCTION
751
CHAPTER I : Risks Covered
752
CHAPTER I I : Beneficiaries and Conditions of Award of Pensions
§ 1. Persons Exempt from Contributing
Persons Entitled to Pensions
Conditions of Award of Pensions
§ 2. Persons Contributing under a Transitional Scheme
Persons Entitled to Pensions
Conditions of Award of Pensions
754
756
756
757
759
759
760
CHAPTER III : Computation of Pensions
§ 1. Duration of Employment
§ 2. Wages
§ 3. Flat Rates under the Transitional Scheme
§ 4. Classification of Schemes according to the Method of
Computing Pensions
CHAPTER IV : Distribution of Cost
§ 1. Sharing of Cost between the Community and the Contributors
§ 2. Distribution of Cost in Time
763
764
765
766
CHAPTER V : Legal Provisions relating to Transitional Schemes in
Certain Countries
,
Austria, p . 772; Belgium, p . 774; Czechoslovakia,
p. 777; France, p . 778; Great Britain, p . 779; Netherlands, p . 781 ; U. S. S. R., p . 782.
766
767
767
768
772
GENERAL INTRODUCTION
§ 1.—History of Systems for the Protection of Workers
against the Risks of Invalidity, Old Age and Death
Old age and, still more, premature invalidity and early death
have extremely grave consequences for workpeople, whose livelihood depends partially or wholly on regular occupational activity;
when this activity stops the income of the family concerned is
very seriously affected or completely disappears; and this fact
entails for workers a constant feeling of insecurity which is an
obstacle to the satisfactory organisation of labour, and even to
social peace.
Every political and economic system is bound to search for a
sound solution of this problem. The question of the insecurity
of the worker, with which public opinion, Parliaments and Governments are constantly brought face to face, thanks either to the
efforts of workers' organisations or to the regard for social justice
felt by individuals and groups, has given rise to numerous debates,
still unfinished, and to experiments of a very varied nature.
INADEQUACY OF INDIVIDUAL THBJFT
Large numbers of workers strive to accumulate in good time
sufficient savings to enable them to face the difficulties which
enforced idleness, whatever its cause, may later bring; but it is
not certain that wage earners as a body are in fact in a position
to save considerable sums. The whole question of the level of
wages is here involved. Does the wage earner receive a remuneration high enough both to meet the daily wants of himself and
his family and at the same time to leave a surplus for saving?
There can hardly be more than one reply. In general it may
be affirmed that wages—apart from those of certain categories
i
2
GENERAL INTRODUCTION
of particularly well-paid skilled workers in a few countries—are
on the whole low, so low as ito make it impossible for the sums
needed to meet occupational and social risks to be saved by
individual effort.
Moreover, certain risks cannot be fully met by individual
thrift, even in the case of highly paid workers. Invalidity and
death may occur at any moment, and do in fact sometimes strike
down young workers who have just founded a family, at a time
when the savings they have put by, however great and patient
the effort involved, cannot but be wholly insufficient.
INADEQUACY OF PUBLIC R E L I E F
A simple way of dealing with those who are without resources
and incapable of earning their living by their own labour—
invalids, widows, orphans and. the aged—consists in supporting
them at the expense of the coramunity. This is what the public
poor relief system does, whether the expenses are borne by the
central authority, province or municipality, or by several of these
units in varying proportions.
Is this solution rational, sufficient and acceptable to the workers ?
Despite the improvements introduced in many Poor Laws
towards the end of the nineteenth and at the beginning of the
twentieth century, the level of assistance is low, at times absurdly
so; nor is relief accorded as a right, but at the discretion of the
authority and only after a close enquiry into his means.
Notwithstanding the mitigation or repeal of the provisions of
the Poor Laws prescribing loss of civil or political rights, the
conditions under which poor relief is granted are clearly incompatible with the dignity of the worker.
Another objection to poor relief is that it does not come into
action until destitution has occurred; it has no preventive policy
and affords no encouragement to thrift.
NON-CoNTRIBUTOItY PENSIONS
During the last forty years certain States have developed
assistance of a higher standard than that of poor relief by establishing non-contributory pension schemes.
Under these schemes pensions are usually greater than poor
relief allowances, and the obligations of the community towards
GENERAL INTRODUCTION
3
invalids, the aged and widows with children are more clearly
defined. In the case of the best examples of these schemes the
claim to a pension tends to become a right on fulfilment of the
statutory conditions, for the applicant has an opportunity to
appeal to an authority other than that entrusted with the granting
of pensions.
But non-contributory schemes as a whole do not sufficiently
cover the risks.
The risk of invalidity is covered only in three countries—
Austria, France and Uruguay—and even there pensions are only
payable in case of permanent total incapacity.
In case of old age, the pensionable age is generally rather
high—sixty-five or seventy years.
The risk of the premature death of the breadwinner is incompletely covered, widows having no claim to pensions in their own
right but only in respect of children dependent upon them.
In general the conditions to be fulfilled are very stringent.
In almost all cases invalidity and old-age pensions are payable
only to nationals of the country concerned, and often the question
of race arises, aboriginal Natives, for instance, being excluded
from benefit. Further, a period of residence, often very long, is
required, particularly in the case of old-age pensions; while in
many cases legislation limits the right to pensions to persons who
have performed their civic duties satisfactorily—a rule which may
certainly be interpreted in a very restrictive manner.
In all these schemes pensions are only granted when an enquiry
has been made into the means of the applicant and when these
have been shown to be insufficient for him to live on. In this
feature non-contributory pensions closely resemble poor relief.
In some countries the amount of the pension is not rigidly fixed
by legislation, and the authorities are free to fix it as they think
fit, up to a certain maximum; in such cases the value of the scheme
depends on its administration.
The financial resources required to provide non-contributory
pensions are obtained from ordinary, or in some cases from special,
taxation. As a rule the credit placed at the disposal of the
authorities responsible for payment is sufficient to meet the cost
of the pensions awarded; but it sometimes happens in certain
countries that the credits available are smaller than the total
needed to continue regular payment of pensions already granted;
and this makes such schemes still more defective. Lastly,
4
GENERAL INTRODUCTION
though a right of appeal against the decisions of the authority
with primary jurisdiction on pensions exists in European and
Australian practice, it is rarely found elsewhere.
Can it therefore be said that non-contributory pensions are a
satisfactory solution of the problem of protecting the workers
against the risks of invalidity, old age and death? No doubt
there is a practical possibility that these schemes may be developed
and perfected; a generalisation of pensions for invalidity and
even for partial disablement can very well be imagined, as can
the abolition or relaxation of the restrictions in point of nationality, residence, race and moral record, the raising of the means
limit, the exact statutory definition of the amount of pensions to
be granted, the establishment of a right of appeal to a court of
magistrates and the obligation of the community to provide the
full credit required for the regular payment of pensions legally
accorded.
The adoption of such principles would, however, mean the
radical reform of a large number of legislative systems and lead
to a very considerable rise in the expense of non-contributory
pension schemes. But it is just the difficulty of finding the
resources needed to make such schemes function with pensions
at a reasonably high standard which has led a number of States
to abandon the system. In Belgium the non-contributory pensions instituted in 1920 are now incorporated, on a temporary
basis, in an insurance scheme; in Great Britain non-contributory
pensions have, since 1925, been gradually replaced by contributory pensions; in France the Act of 1905 on non-contributory
pensions has lost much of its importance as a result of the passing
of compulsory insurance Acts in 1910 and 1930.
Outside Europe, States with non-contributory pension schemes
have been examining the possibility of introducing compulsory
insurance; this is particularly the case in Australia and South
Africa, and a similar movement may be observed in New Zealand
and Canada. In Denmark the method of insurance has been
adopted for covering the risk of invalidity. Non-contributory
pensions have maintained a strong position in the United States
alone.
Although it is difficult to say what will be the future of noncontributory pension schemes, it may be stated that the world
in general now directs its efforts towards the establishment of
insurance schemes.
GENERAL INTRODUCTION
5
VOLUNTARY SOCIAL INSURANCE
Since individual thrift is insufficient, and if non-contributory
pensions are not regarded as an efficient and acceptable protection
for the workers, the only recourse is the pooling of risks and
payments, that is to say, insurance. Commercial insurance must
be immediately rejected, for, despite its great development, its
high rates make it generally inaccessible to persons of small means
and in particular to the vast mass of wage-earning workers.
Social insurance should create common interests among the
workers whom it is to protect; the question is whether it should
be voluntary or compulsory.
Voluntary social insurance, whose history is already long, has
developed considerably, particularly during the last fifty years,
in the form of mutual benefit societies. Favourably regarded by
the authorities, given the status of privileged associations and, in
some States, more or less liberally subsidised, such societies have
achieved much ; but, despite the value of this magnificent expression of voluntary solidarity, it is difficult to regard it as a thoroughly satisfactory solution of the problem of the insecurity of
labour.
First of all, the number of persons protected by voluntary
social insurance is, though considerable, but small in comparison
with the world total of wage-earning workers. It cannot be
denied that the very large majority of workers do not insure
voluntarily, and though it may be true that this abstention is in
part a result of man's natural improvidence, it is still more due
to the low level and the precarious nature of the worker's resources,
which are often absorbed to the last penny by the needs of his
everyday life.
Voluntary insurance institutions are too numerous, too weak
financially and ill-distributed between town and country. Their
small and fluctuating membership—particularly in times of
economic depression—robs them of sufficient stability, interferes
with the working of the law of large numbers and makes many
of them unsuitable for a satisfactory management of insurance
against risks involving heavy liabilities, such as premature invalidity and early death.
The resource", of voluntary social insurance institutions, derived
in the main from the contributions of their members, are usually
6
GENERAL INTRODUCTION
small and do not permit of the payment of such benefits as would
compensate adequately for the loss.
An exception should however be made in respect of a small
number of institutions in particularly well organised occupations
and in industries which are exceptionally concentrated or have
enjoyed a long period of prosperity. In such circumstances one
may find well-managed insurance funds provided with sufficient
resources—sometimes due to large contributions from employers
—and paying valuable benefits.
But such funds are rare, and it may be said that on the whole
voluntary social insurance has failed to protect workers sufficiently against the graver risks, and particularly against premature
invalidity and early death.
COMPULSORY SOCIAL INSURANCE
The results of voluntary social insurance not having been
sufficient, compulsory insurance became a necessity. In almost
all countries the first legislation on the subject gave rise to no
small degree of controversy; but it is almost universally agreed
to-day that the modern State is entitled and obliged, in the public
interest, to make insurance compulsory. The individual cannot
justly claim the right to a life of improvidence which may, in
case of invalidity, old age or death, compel him to place or leave
his dependants on the community's hands.
After half a century of unbroken efforts, compulsory insurance
has won a series of remarkable! victories. In order to throw into
relief the rapidity and the breadth of its development, we may
take each country in turn and pass in review the most important
stages in the introduction and extension of compulsory insurance
against invalidity, old age and death.
Principal Stages in the Development of Compulsory Invalidity,
Old-Age and Widows' and Orphans'1 Insurance
Argentina
1921 Invalidity, old-age and widows' and orphans' insurance for
staffs of private undertakings of public utility.
'1923 Invalidity, old-age and widows' and orphans' insurance for
staffs of banks.
Austria
1907 Invalidity, old-age and widows' and orphans' insurance
salaried employees.
1927 Invalidity, old-age and widows' and orphans' insurance
workers in industry and commerce.
the
the
for
for
GENERAL INTRODUCTION
1928
Belgium
1844
7
Invalidity, old-age, and widows' and orphans' insurance for agricultural workers. (The last two schemes are in operation
in respect of old age only.)
Sickness, invalidity, old-age and widows' and orphans' insurance
for seamen.
1911 Old-age and widows' and orphans' insurance for miners.
1924 Extension of compulsory insurance for miners to cover the risk
of invalidity.
1924 Old-age and widows' and orphans' insurance for workers.
1925 Old-age and widows' and orphans' insurance for salaried
employees.
Brazil
1923 Invalidity, old-age and widows' and orphans' insurance for
railway workers.
1926 Extension of the invalidity, old-age and widows' and orphans'
insurance scheme to harbour workers.
1931 Extension of the invalidity, old-age and widows' and orphans'
insurance scheme to the staffs of all public utility undertakings.
Bulgaria
1924 Invalidity and old-age insurance for employed persons.
Chile
1924 Invalidity and old-age insurance for employed persons and
independent workers of small means.
Cuba
1927 Invalidity, old-age and widows' and orphans' insurance for seamen
and harbour workers.
Czechoslovakia
1889 Invalidity, old-age and widows' and orphans' insurance for
miners.
1906 Invalidity, old-age and widows' and orphans' insurance for
salaried employees.
1924 Invalidity, old-age and widows' and orphans' insurance for
workers.
1925 Passing of an Act (not yet enforced) on invalidity, old-age and
widows' and orphans' insurance for independent workers.
Denmark
1927 Invalidity insurance for persons of small means who are regular
members of voluntary sickness insurance funds.
Ecuador
1928 Invalidity, old-age and widows' and orphans' insurance for the
staffs of banks.
France
1791 Establishment of the right of seamen to pensions in case of
invalidity.
1885 Compulsory old-age, invalidity and widows' and orphans' insurance for seamen.
1894 Compulsory old-age and widows' and orphans' insurance for
miners.
1910 Compulsory old-age, invalidity and widows' and orphans' insurance for employed persons (workers' and peasants' pensions).
1923 Extension of compulsory insurance for miners to cover the risk
of invalidity.
1928 Compulsory invalidity, old-age and widows' and orphans' insurance for employed persons.
8
GENERAL INTRODUCTION
1930
Amendment and enforcement of the compulsory invalidity,
old-age and widows' and orphans' insurance scheme for
employed persons.
Germany
Old-age and invalidity insurance for all workers and salaried
employees earning less than a certain remuneration.
Old-age and invalidity insurance for persons employed in
1899
agriculture.
Extension of compulsory insurance to cover the risk of death.
1911
Establishment of a special invalidity, old-age and widows'
and orphans' insurance scheme for salaried employees.
1923 Establishment of a Federal invalidity, old-age and widows' and
orphans' insurance scheme for miners (legislation on miners'
insurance had previously fallen within the competence of the
States).
1889
Great Britain and Northern I r e l a n d
1911 Sickness and invalidity insurance for employed persons.
1925 Old-age and widows' and orphans' insurance for employed
persons.
Greece
1907
1922
1922
1926
1932
Establishment of the Seamen's Invalidity Fund.
Invalidity, old-age and widows' and orphans'
seamen.
Invalidity, old-age and widows' and orphans'
workers and salaried employees (this Act has
to a very limited extent only).
Invalidity, old-age and widows' and orphans'
tobacco workers.
Invalidity, old-age and widows' and orphans'
persons employed in industry and commerce.
insurance for
insurance for
been enforced
msurance for
msurance for
Hungary
1925 Invalidity, old-age and widows' and orphans' insurance for
miners.
1928 Invalidity, old-age and widows' and orphans' insurance for
persons employed in industry and commerce.
Irish F r e e S t a t e
1911 Sickness and invalidity insurance for employed persons.
Italy
1861 Establishment of seamen's invalidity funds (covering the risks
of invalidity, old age and death) in place of the former seamen's
savings and relief funds.
1918 Fusion of the seamen's invalidity funds into a single institution.
1919 Compulsory invalidity and old-age insurance for employed
persons. Reorganisation of compulsory invalidity, old-age
and widows' and orphans' insurance for seamen.
Luxemburg
1911 Invalidity, old-age and widows' and orphans' insurance for
workers in industry and commerce.
1931 Invalidity, old-age and widows' and orphan's insurance for
salaried employees in industry and commerce.
Netherlands
1913 Passing of an Act on invalidity and old-age insurance for
employed persons.
1919 Enforcement of above Act, including provision for a conditional
pension right for widows.
GENERAL INTRODUCTION
Poland
1889
1907
1911
1927
9
Invalidity and old-age insurance for employed persons in the
Western Provinces and Upper Silesia.
Invalidity and widows' and orphans' insurance for miners in the
Southern Provinces.
Invalidity, old-age and widows' and orphans' insurance for
salaried employees in the Southern Provinces.
Extension of insurance for employed persons in the Western
Provinces and Upper Silesia to cover the risk of death.
Invalidity, old-age and widows' and orphans' insurance for
salaried employees in the Western Provinces and Upper
Silesia.
Invalidity, old-age, and widows' and orphans' insurance for
intellectual workers (throughout the country).
Rumania
1912 Compulsory invalidity and old-age insurance for handicraftsmen
and persons employed in industry (former Kingdom).
1932 Legal basis fixed for the unification of the insurance schemes of
the whole country. Extension of compulsory invalidity and
old-age insurance to all persons employed in industry and
commerce.
Spain
1919
Old-age insurance for employed persons.
Sweden
1913 National invalidity and old-age insurance.
Switzerland
Federal Legislation
1925 Parliament and people add an Article (34, iv) to the Federal
Constitution instructing the Confederation to introduce oldage and widows' and orphans' insurance and subsequently
invalidity insurance.
1931 Federal Parliament passes an Act to apply the old-age and
widows' and orphans' insurance scheme.
The above Act is rejected by the people.
Cantonal
1916
1925
1931
Legislation
Invalidity and old-age insurance in Glarus.
Old-age insurance in Appenzell (Outer Rhodes).
Old-age and widows' and orphans' insurance in Basle Town.
Uruguay
1919 Invalidity, old-age and widows' and orphans' insurance for the
staffs of public utility undertakings.
1925 Invalidity, old-age and widows' and orphans' insurance for the
staffs of banks and the Stock Exchange.
U. S . S . R .
1922 Invalidity and widows' and orphans' insurance for employed
persons.
1927 Old-age insurance for workers in the textile industry.
1929 Extension of old-age insurance to workers in the basic industries
and transport.
1932 Extension of old-age insurance to all workers and various classes
of skilled salaried employees.
10
GENERAL INTRODUCTION
Yugoslavia
1889 Invalidity, old-age and widows' and orphans' insurance for
miners in Slovenia and Dalmatia.
1907 Invalidity, old-age and widows' and orphans' insurance for
salaried employees in Slovenia and Dalmatia.
1922 Passing of an Act on invalidity, old-age and widows' and orphans'
insurance for employed persons (not yet enforced).
1924 Extension of invalidity, old-age and widows' and orphans'
insurance for miners to the whole country.
The above list proves to t h e full t h a t compulsory invalidity,
old-age a n d widows' a n d orphans' insurance has developed and
improved, particularly but not exclusively in Europe, with a
speed varying from period t o period, and t h a t its progress has
continued during t h e last few years in spite of t h e economic
depression. The results are gratifying. The information a t t h e
Office's disposal enables it t o count some 95,000,000 compulsorily
insured persons, excluding several schemes now in force for which
no statistics are available and t h e special schemes for seamen,
railway workers, public officials, and t h e staffs of public undertakings, which cover large nuimbers of persons b u t which are not
dealt with in this volume. If, besides t h e insured persons
themselves, their wives and children are included—for these are
also protected in case of death of t h e breadwinner—it must be
admitted t h a t compulsory invalidity, old-age and widows' a n d
orphans' insurance plays an extremely important p a r t in t h e
protection of vast numbers of persons.
Compulsory insurance has not yet reached its zenith. Import a n t plans for t h e introduction or extension of compulsory invalidity, old-age a n d widows' and orphans' insurance are now in
preparation or before t h e legislature in m a n y countries—Australia,
Belgium (sickness and invalidity insurance), Brazil, J a p a n , Poland,
South Africa, Spain, Yugoslavia, etc.—and it m a y be hoped t h a t
further large numbers of workers will in t h e near future feel t h e
benefits of insurance.
The principle of compulsory insurance has also won general
approbation in international circles. I n 1925 t h e Sixth Session
of t h e International Labour Conference adopted a resolution
stating t h a t " a system of labour regulation, if true t o social
justice, must secure t h e effective protection of t h e workers against
risks endangering their livelihood or t h a t of their families ", a n d
t h a t " this protection can best be attained b y means of a system
of social insurance granting clearly defined rights t o t h e beneficiaries ". In 1927 t h e Tenth Session of the Conference adopted
GENEBAL INTRODUCTION
11
two international Conventions on compulsory sickness insurance
for workers in industry, commerce and agriculture. Lastly,
in 1932 the Sixteenth Session of the Conference examined the
possibility of framing international regulations on invalidity,
old-age and widows' and orphans' insurance, and, by an overwhelming majority, adopted a report which stated that " invalidity, old-age and widows' and orphans' insurance, which is
required to cover risks materialising after a long period, could
only cover those risks adequately and protect those who are
most in need of protection if it were obligatory ".
There is then ample justification for the statement that compulsory insurance is becoming a more and more essential element
in any system by which the modern State, mindful of its obligations, seeks to protect its workers against occupational and social
risks.
§ 2.—Essential Characteristics of Compulsory
Insurance Schemes
This volume contains a comparative analysis of some fifty
schemes applying either to employed persons in general or to
workers, salaried employees or certain more limited groups.
Special schemes for the insurance of seamen, railway workers
and officials, employees and workers in the public services, on
which the Office contemplates issuing special publications, are
left out of account here. Even with its scope thus limited, this
publication has necessitated the study of a vast amount of material; and many and varied problems and solutions have been found
to exist. It is, nevertheless, possible to reveal, from out of the
mass of texts and commentaries, the essential features of the
schemes and the direction in which their evolution tends; and this
has been attempted, in the following paragraphs, in respect of the
several problems studied in this volume—scope, risks covered
and cash benefits, benefits in kind, financial resources, administrative organisation (insurance institutions, supervision, settlement of disputes).
SCOPE
Invalidity, old age and death threaten all men, and the occurrence of these events may severely reduce or altogether cut off
the resources of any family. It has therefore to be decided
12
GENEEAL INTRODUCTION
whether the obligation to be insured shall apply to the whole
population of a country (national insurance) or to workers of
small means whether employed or independent (popular insurance),
or again to dependent workers only (insurance of employed
persons). Compulsory national insurance has met with very
strong resistance and has been established in a small number of
cases only (Sweden and certain Swiss Cantons).
Compulsory popular insurance implies the extension of the
compulsory prmciple to employed persons and to the mass of
independent workers whose annual income does not exceed a
certain figure; though this principle has given rise to much
serious discussion, it has not been widely applied. There is no
doubt that the small independent worker needs insurance, for
his earnings are often very low and his power to save is small,
particularly at a time when financial and economic depression
has to a large extent reduced the income of this stratum of
the population to subsistence level; but there are grave obstacles
to the realisation of such a scheme, for it is difficult to determine earnings or income, to collect contributions and to verify
the materialisation of the risk of invalidity. For these reasons
a compulsory insurance scheme including the bulk of the independent workers exists as yet only in Belgium, Czechoslovakia
and Denmark, and the Czechoslovak scheme of 1925 has not
yet been put into force.
At present, then, the large majority of compulsory invalidity,
old-age and widows' and orphans' insurance schemes apply to
employed persons only, though some cover also certain categories
of independent workers.
In some fifteen States compulsory insurance, applied first of
all to the workers of certain industries (mines, shipping) and then
to industrial and commercial workers, now covers all employed
persons.
The extension of this obligation to agriculture has met with
obstacles and resistance, but during the last few decades the
difficulties have diminished and a dozen States have now established the principle of compulsory invalidity, old-age and widows'
and orphans' insurance for agricultural workers.
Restrictive conditions, applying mainly to the amount earned,
the duration and regularity of employment, age and nationality,
still exist in many schemes, but they are gradually being relaxed
or disappearing, except those tending to exclude workers—
GENERAL INTRODUCTION
13
non-manual workers in particular—who earn more than a certain
figure.
On the whole it is clear that as schemes develop they tend to
extend compulsory insurance against invalidity, old age and death
to all workers who habitually earn their livelihood in the service
of an employer.
FINANCIAL RESOURCES AND DISTRIBUTION OF CHARGES
The resources needed to permit an invalidity, old-age and
widows' and orphans' insurance scheme to function may be
obtained from the insured persons, from their employers and from
the public authorities. Which parties are to bear the charges
involved, what the amount of these charges is to be, and how
they are to be distributed among the parties, are questions which
have always given rise to discussion and continue to do so.
The interest of the worker who is to benefit by the scheme is
so direct and preponderating that the principle of contribution by
the insured person is generally recognised, and the payment of this
contribution is often regarded as the soundest basis for the right
both to benefit and to participate in the management of the
insurance institution, and as the most efficient preventive
of malingering and fraud. Contributions by insured persons are
provided for in all the schemes for compulsory invalidity, old-age
and widows' and orphans' insurance now in force except those of
the Netherlands, Spain and the U. S. S. R.
The principle of contribution by the employer is founded on the
argument—not universally recognised—that the generally low
level of wages does not permit the worker to save to any appreciable extent; industry is regarded as responsible in some degree
for invalidity and premature death and as bound to afford the
worker or his dependants a livelihood not only when he is at
work but also during periods of distress resulting from disablement, old age or death; and the employer is considered as interested in the stability and health of his staff and in its freedom
from the feeling of insecurity. Employers pay contributions in
all cases of compulsory insurance with the exception of certain
national insurance schemes (Sweden and some Swiss Cantons),
the scope of which is not limited to employed persons.
The principle of contribution by the public authorities is advocated on a number of grounds : the insufficiency of the resources
14
GENERAL INTRODUCTION
raised by contributions from the insured persons and their
employers ; recognition of some degree of State responsibility for
invalidity and death (unhealthy housing conditions, bad working
conditions, imperfection of public health organisation) ; and the
importance of insurance to the whole community as creating
security and well being and materially facilitating social peace.
Public authorities give financial aid to insurance in one form or
another (contributions, supplements to benefits or to certain
classes of benefit, fixed subsidy, administrative expenses, etc.),
in more than two-thirds of the existing schemes.
A study of the schemes as a whole shows a general tendency
to divide the charges into three parts—the contributions of
insured persons, employers and the State respectively.
In some schemes the insured persons' and employers' contributions are independent of the economic position of the former,
while in others they vary with earnings or income.
In the case of contributions independent of the individual
economic position of the insured person, the scheme undertakes
to pay to all a fixed benefit corresponding to a certain minimum
of subsistence.
In the case of contributions varying with earnings or income,
insured persons or their families receive, on the occurrence of the
event insured against, a benefit corresponding, to some extent at
least, to their previous standard of living, judged according to
their earnings.
The former system is simpler from the administrative point of
view, but it is generally recognised that the latter, though more
complicated and more expensive, is more equitable and permits
contributions to be more closely related to the widely varying
economic abilities of insured persons. Examination shows that
in nearly three-quarters of the schemes now in force contributions
vary with wages or income.
The reasons given to justify the payment of contributions by
insured persons, employers and the State do not provide a sufficient criterion for fixing exactly how the charges should be
distributed; it is indeed obvious that the interest which the various
parties have in the scheme and the responsibility of each in the
materialisation of the risks cannot be measured mathematically.
The size of the contributions required of each of the parties
concerned therefore varies widely from scheme to scheme.
Nevertheless, in two-thirds of the schemes the worker's and
GENERAL INTRODUCTION
15
employer's contributions are equal, and in one-quarter the
employer's contribution is greater than that of the worker, while
in only two schemes is the reverse the case.
It should not be forgotten that the distribution considered
here is that fixed by law, and that its actual incidence can be
profoundly different; it is therefore very difficult to say what
proportion of the charges is actually borne by the insured person,
the employer and the national community.
The total charge too varies greatly from scheme to scheme;
in some cases it amounts to 2 or 3 per cent., in others to 10 and
even 12 or 15 per cent, of the basic wage. I n each country the
fixing of the financial resources of insurance is the outcome of
a compromise between the level of benefits it is desired to pay
to insured persons and the level of charges it is desired not to
exceed. The result betrays at times the wish to cover risks
fully and at others the wish to limit charges on production;
it depends on very complex factors in national life—the position
of industry, the relative strength of employers' and workers'
organisations, the composition of political majorities, etc.
The collection of the contributions due by the insured persons
and their employers raises an important problem of administration. The insurance institutions are faced with hundreds of
thousands and even with millions of debtors who are required to
pay small sums at close and regular intervals. The difficulty
is usually solved by " deduction at source "; this means that
the employer pays his staff's contributions as well as his own,
and is entitled to stop the corresponding amount from the wages
of the insured persons, who have no right to object. This system
is almost universal, the only exceptions being provided by the
Danish invalidity insurance and some national insurance schemes
(Sweden and certain Swiss Cantons).
RISKS COVERED
Compulsory insurance schemes cover as a rule the three risks
of invalidity, old age and death, sometimes those of old age and
death only, and more rarely that of invalidity alone.
Old age may be considered either as entitling the worker
concerned to repose or as justifying the presumption of incapacity
to work. I t is hard to say which of these two views has been
held by legislators when fixing the pensionable age (usually sixty-
16
GENERAL INTRODUCTION
five years, but sixty in some countries and as low as fifty-five
in certain particularly arduous occupations, such as mining).
The pensionable age is at the moment a subject of debate in several
countries owing to the permanent unemployment of large numbers
of workers; in certain circles the view is held that old-age pensioners should cease work and give place to younger men, and that
the pensionable age should be reduced to sixty. There are two
objections to such proposals. One is that if cessation of work
were made a condition of eligibility for a pension, it would be
necessary to pay pensions sufficiently high to provide a livelihood
—and this is unfortunately not the case under a large number
of schemes. The second objection is that average longevity and
consequently the average interval between arrival at the pensionable age and death, is increasing, and that a reduction of the age
would mean a considerable rise in the resources needed to maintain
the solvency of a scheme. However that may be, the payment
of an old-age pension is very rarely made conditional on cessation
of work.
Invalidity as covered by insurance is usually taken to mean
incapacity to earn a living by labour or, in the case of schemes
applying to special categories of workers (salaried employees,
miners), incapacity to exercise a specified occupation. The
object of the insurance is thus to compensate not for the physical misfortune but for its economic consequences. Moreover,
whether interpreted as the incapacity of a worker to exercise his
former occupation or his inability to find fresh employment,
invalidity only implies the right to compensation if it is present
to a high degree. In the large majority of schemes a worker
must have lost two-thirds of his capacity to work, though
in some occupational schemes the proportion required is one-half
only.
In the same way widows' and orphans' insurance undertakes
to compensate to some extent for the economic consequences of the
death of the breadwinner. While most schemes pay, as compensation to certain categories of survivors, a proportion of the loss
of income entailed, others confine benefit to a lump sum sufficient
to meet, at least in part, the exceptional expenses caused by
death, or to tide the survivors over a period during which they
may adapt themselves to their new circumstances. But pensions
for survivors are the only real and efficient cover for the risk
of the death of the breadwinner, and the efforts of compulsory
GENERAL INTRODUCTION
17
insurance schemes—excepting a small number, relatively recently
established which, for the present at least, pay lump sums only—now tend as a rule in that direction.
CONDITIONS OF AWARD OF BENEFITS
Only in very few cases is the occurrence of the event insured
against alone sufficient to give the right to a pension; as a rule
the insured person must also have completed a qualifying period
and have subsequently maintained the right thus acquired by
paying contributions with at least a minimum of regularity.
Such a period must have been completed and such subsequent
contributions paid as qualifications not only for an invalidity or
old-age pension payable to the insured person himself but also
for benefit payable to his survivors in case of his death. The
survivors entitled to benefit are very exactly determined in
legislation.
In theory the purpose of the qualifying period in old-age insurance is not the same as in insurance against invalidity or death.
In the former case the object is to relate benefit to the amount
contributed, in the latter it is to exclude from insurance persons
whose sole aim is to obtain benefit in the immediate future by
adopting or pretending to adopt an insurable occupation. In
practice the length of the qualifying period provided for tends
less and less towards the establishment of an equilibrium between
the value of the benefits due and that of the contributions paid;
and under some schemes the qualifying period is the same whether
the risk to be covered is invalidity, old age or death.
Moreover, periods of sickness and unemployment, during which
no contributions have been paid, are taken into account in reckoning the qualifying period in many important schemes, if not in
all; this further accentuates the tendency not to treat the qualifying period as a means of guaranteeing the financial equilibrium
of the scheme.
,
The maintenance of the status which the insured person
acquires by the completion of the qualifying period depends in
theory on the continuation of the payment of contributions until
the materialisation of the risk. This should guarantee the fulfilment of a condition which is essential to the stability of the
scheme, namely, the payment of contributions by or on behalf
of the insured person, in accordance as far as possible with actua2
18
GENERAL INTBODUCTION
rial forecasts, during t h e whole of his active life. I n fact, regularity of payment must normally be secured by a strict and
effective enforcement of the obligation t o insure. Hence t h e rule
as t o continuity of contribution is tempered by a number of
exceptions, among which, as has been noted, is the almost universal practice of assimilating periods of sickness and unemployment
t o periods of contribution.
I n determining the survivors who are t o be entitled t o pensions,
t h e first consideration is t h a t they must have been dependent
on t h e insured person ; b u t a double restriction which is introduced
here shows t h e direction in which legislation has still t o develop.
First of all, t h e status of dependent person can in most cases be
allowed t o t h e wife (husband) or children only, whatever other
persons may have been in a state of alleged or proved economic
dependency on t h e deceased; and only a very small number of
schemes permit ascendants and collaterals to lay claim to pensions, and then only in exceptional cases. Secondly, the s t a t u s
of dependent person is automatically recognised only in the case
of orphans under a certain age, while the economic dependency
of widows is rarely presumed t o exist except in certain occupational schemes; the others require a fulfilment of certain conditions with regard t o age, incapacity tó earn, or family responsibilities, as justification for the conclusion t h a t the person concerned is in need of assistance.
ASSESSMENT AND AMOUNT OF B E N E F I T S
The amount of benefits, like t h a t of contributions, is either
independent of t h e economic situation of t h e insured person or
varies with his wage or income or with t h e number and rate of
his contributions. The method of assessment depends on t h e
object attributed t o insurance. The system of uniform benefits
(which may, however, vary with t h e sex or age of t h e insured
person) has, in spite of the advantages of simplicity in administration, been applied in a small number of countries only.
The same applies t o the system of benefits varying with wages
or income b u t not with t h e number of t h e contributions paid,
though this system affords particularly good cover for the risks
of premature invalidity and early death.
The great majority of schemes make t h e amount of benefit
depend t o a fairly large extent on t h e number and rate of contri-
GENERAL INTRODUCTION
19
butions; this is much the most serious fault which can be found
in the present position of insurance schemes.
The first objection to it is that the risks of invalidity and death
may materialise at any moment of a worker's life, and, in the case
of one with family responsibilities, the more premature such an
occurrence is the more serious its consequences. The attempt to
cover these two risks by means of benefits closely related in amount
with the duration of the contribution period has the all-important
drawback that it does not allow sufficient benefit to be paid to
insured persons prematurely struck down by invalidity or to the
survivors of those who die young.
Secondly, the consequences of giving too much weight to the
length of the contribution period in assessing benefits are particularly grave in case of long periods of sickness or unemployment.
As was said above, many schemes provide that the insured
person, when sick or unemployed, retains his status, the period
of sickness or unemployment being assimilated, in respect of
qualification and maintenance of rights, to a period of contribution. But such a solution is insufficient, for the assimilation is
no more than partial; if contributions are not actually paid during
periods of sickness or unemployment, the rights in course of
acquisition do not increase, and so, when the risk materialises,
an insured person who has been sick or unemployed for a long
period is entitled to much smaller benefits than would otherwise
have been the case. If insurance is to afford its full measure of
social protection, if benefits are to reach a satisfactory level and
if the financial equilibrium of institutions is to remain intact,
contributions to cover the risks of invalidity, old age and death
must be paid on behalf of the insured persons even when they
are sick or unemployed. Unfortunately this is the case only in
a very small number of the compulsory insurance schemes now
in force. Each of the millions of insured persons who are
unemployed from no fault of their own must suffer the consequences of unemployment a second time if and when invalidity
or old age supervenes, as must his dependants in case of his
death. Insurance benefits being insufficient, many old or disabled persons, widows and orphans will have to apply for poor
relief.
The problem of the effect of sickness and, more important still,
of unemployment on benefits under compulsory invalidity, old-age
and widows' and orphans' insurance schemes, which the economic
20
GENERAL INTRODUCTION
depression makes all the more urgent, can apparently be solved
either by the payment of sick and unemployed persons' contributions by the community, or by legislative reform abolishing
or at least considerably reducing the influence of the length of
the contribution period on the amount of benefit, particularly
in case of insurance against invalidity and death. Such a reform,
meaning that a large part of every benefit was independent of
the length of the membership period, would moreover be in perfect
harmony with the object of social insurance.
BENEFITS IN K I N D
Insurance schemes are not inactive in face of their responsibilities; in order to reduce their financial charges, diminish
human suffering and improve health among insured persons and
hygiene in their dwellings, the insurance authorities in a large
number of countries undertake prevention and treatment of sickness. In addition to the pensions and temporary benefits which
they are in any case required to pay, they provide benefits in
kind—curative and preventive treatment and other measures
calculated to improve the physical resistance of insured persons
and their families.
Most insurance Acts of recent date authorise or even require
the institutions to share in the task of improving the workers'
health. Not only almost all the occupational schemes (particularly those for salaried employees and miners), but also most of
the general schemes for employed persons (Austria, Chile, Czechoslovakia, France, Germany, Great Britain, Hungary, Italy,
Luxemburg, Netherlands, Rumania, U. S. S. R., etc.), and the
popular invalidity insurance scheme in Denmark provide for
curative and preventive treatment.
Benefits in kind include treatment and care. The curing of
sickness and the restoration of health are the general aims of
curative medicine, but invalidity insurance assigns special tasks
to its medical service—the restoration of the capacity to earn
and the avoidance, or at least the postponement, of the onset of
invalidity; this work is of special importance where there is an
opportunity to put an end to or lessen incapacity resulting from
illness or to prevent threatened, incapacity from materialising.
However vigilant and well ada,pted to individual requirements
a medical service is, it cannot alone hold up the advance of social
GENERAL INTRODUCTION
21
diseases. These diseases, of which tuberculosis is the most
dangerous to persons of small means, require an enormous preventive organisation combined with assistance of a social and
economic nature. The duty of insurance is to protect the life
and health of the workers, and it is therefore essentially concerned
with the struggle against these diseases. It acts in concert with
other bodies whose aims are similar—public health services, social
aid organisations, the medical faculty—brings also its own contribution of a curative and preventive nature, and, as the chronic
character of social disease demands, combines medical with
material aid.
Insurance helps too in the development of general equipment
for the struggle against ill-health. Its indirect contribution is
very substantial, for it permits and helps its beneficiaries to
attend curative establishments; but its direct contribution is
greater still, for where other equipment is insufficient in quantity
and quality, where certain types of establishments are too few
in number and where the rates of many specialised establishments
are too high for insured persons, it has begun in many countries
to create its own equipment, thus remedying a deficiency and
improving the efficacy of health services in general.
INSURANCE INSTITUTIONS
If insurance is to function satisfactorily, institutions must be
created with the object of spreading the risks of the members of
the community and so substituting collective liability for the
individual liability of each member. The institution is creditor
in respect of contributions and debtor in respect of benefits, and
thus takes over all the legal relationships arising out of insurance.
Insurance institutions may be brought into existence by public
authorities or by private initiative. In compulsory invalidity,
old-age and widows' and orphans' insurance, the establishment
of institutions is very often left to public authorities, and institutions set up by private initiative (individual or corporative) are
only to be found in a small number of schemes, some of which,
however, are very important.
Since invalidity, old-age and widows' and orphans' insurance
carries heavy liabilities and entails the accumulation and administration of a large capital, it requires institutions which embrace
great numbers of insured persons and thus provide the indispen-
22
GENERAL INTRODUCTION
sable guarantee of stability in membership, resources and risk.
In order to permit the law of large numbers to operate, a single
central institution for insurance against invalidity, old age and
death has been formed in many countries, and for the same
reason the existence of more than one institution pre-supposes
a minimum membership for each and the establishment of
equalisation or re-insurance funds.
In order to conform with the law of large numbers and with
the essential condition that membership and resources be stable,
the institutions under most schemes are territorial and interoccupational, for organisation on a territorial basis enables risks
to be spread over different occupations and avoids, in part at
least, the dangerous consequences of prolonged unemployment in
certain occupations and of economic changes which sometimes
gravely affect the essential vitality of occupational insurance
schemes.
Nevertheless, beside this general movement towards a territorial
organisation of insurance institutions, another movement tending
towards the establishment of special institutions for certain groups
of workers—miners, seamen and salaried employees in particular
—has retained undeniable force. These groups and their
employers justify their claim to special institutions on the ground
of the uniformity of the risks to be covered, the need for adapting
contributions, benefits and administrative organisation to their
particular habits and needs, and the exceptionally strong feeling
of solidarity among persons exercising the same occupation or
employed in the same branch of industry.
Insurance institutions may be administered by the State or by
the persons concerned, enjoying more or less complete autonomy.
Administration directly and exclusively by the State is rare,
and very generally speaking the insurance institutions are independent entities not only from a financial and accounting but also
from an administrative point of view.
The autonomous insurance institutions are seldom administered
exclusively by the representatives of the insured persons and their
employers : the most frequent form of organisation is that of
tripartite administration by representatives of the three parties :
insured persons, employers and the State. Frequently, too, the
State plays its part in administration not only through its own
representatives on the administrative organs of the institution,
but also by exercising the right to approve or veto appointments
GENERAL INTRODUCTION
23
and even in some cases to choose between proposals submitted
by the insured persons and employers respectively. This intervention by the public authorities, which is much more extensive
than in sickness insurance, is generally explained on the ground
that States must satisfy themselves that insurance schemes
involving heavy liabilities and affecting the vital interests of a
large proportion of the community are functioning satisfactorily.
SUPERVISION
A State which imposes on its citizens the obligation to insure
is both entitled and bound to supervise the working of its insurance
institutions. This supervision is sometimes in the hands of the
general administrative authorities, but it is entrusted more and
more frequently to bodies specially competent to judge on the
very numerous and complex problems raised by the enforcement
of an invalidity, old-age and widows' and orphans' insurance
scheme.
The functions of the supervisory authority are to judge either
on the legality or on the advisability of the administrative actions
of the institutions. When supervision applies to questions of
legality only, the institution is in practice autonomous; but when
it applies also to the advisability of administrative actions, or at
least to the more important of such actions, then the institution's
autonomy may be considerably reduced or even in practice
disappear.
An examination of the text of the laws and regulations concerned, and still more of the actual relations between insurance
institutions and supervisory authorities, seems to justify the
statement that there is in existence a marked tendency towards
an extension of supervision to the advisability of the institutions'
more important administrative actions.
SETTLEMENT OF DISPUTES
In many countries invalidity, old-age and widows' and orphans'
insurance applies to the great majority of the workers, raises
numerous juridical and technical problems, and involves the
interests of insured persons, employers and institutions; its
working thus inevitably leads to no small number of disputes.
The settlement of disputes may be entrusted to 'the ordinary
24
GENERAL INTRODUCTION
courts, to the general administrative authorities or to special
bodies. The general administrative authorities and the ordinary
courts are responsible under a comparatively small number of
schemes which cover small groups of workers or are based on a
simple system of fixed benefits.
The settlement of disputes arising out of the working of
compulsory insurance schemes which cover large masses of
workers and provide for benefits varying with wages or income
and with the length of the membership period, is generally
entrusted to special insurance tribunals. This method is popular
because it allows such authorities to acquire expert knowledge in
a very complex field, because it favours consistency in the interpretation of the scheme, because it means rapid and inexpensive
decisions and because it facilitates the collaboration of assessors
chosen from among the insured persons and their employers.
A large number of schemes provide for an authority of second
instance to which appeals against original decisions may be
brought, particularly in the matter of benefits. The object of
this provision is to give the insured person every possible guarantee
in respect of matters which are of vital importance to him, for
benefit is generally the chief or even the sole source of a pensioner's
income.
The participation of assessors chosen from among the employers
and workers also bears witness to the attempt to win the confidence of insured persons, to establish a very desirable contact
between judicial authorities and every-day life, and to infuse a
truly social spirit into the application of social insurance
schemes.
FIRST PART
SCOPE
INTRODUCTION
Invalidity, old age and death are risks t o which all persons are
exposed, and starting from this evident fact one may conclude
as to the necessity or desirability of a scheme of general compulsory insurance, which might be called national insurance.
If it should be considered as an excessive interference on the
p a r t of the State t o impose an obligation on millions of individuals, many of whom possess adequate means and are capable
of covering their risks by individual thrift or private insurance,
then one is led to adopt a scheme of compulsory insurance the
scope of which will be determined on t h e basis of the nature of
t h e work and the amount of the means of the persons t o be
insured.
Compulsory insurance may be confined t o occupied persons,
whether employed or working on their own account, whose
wages or earnings do not exceed a certain limit ; a scheme of this
kind would be an insurance of occupied persons of small means
or, as it is sometimes also called, popular insurance.
If it is found t h a t the inclusion of independent workers meets
with too great difficulty, the scope may be limited t o employed
persons, who, as a class, are deemed t o be of small means, and in
t h a t case the scheme will be one of compulsory insurance of
employed persons.
I n reality the laws at present in force are, for the most part,
laws providing for the compulsory insurance of employed persons,
although some of t h e m include by the way certain categories of
independent workers. Compulsory national insurance and t h e
26
SCOPE
compulsory insvirance of occupied persons of small means have,
however, as yet been applied only a very restricted measure.
The following Chapters deal with :
I. The compulsory insurance of employed persons;
II. The compulsory insurance of occupied persons of small
means, the compulsory insurance of independent workers
and compulsory national insurance.
CHAPTER I
COMPULSORY INSURANCE OF EMPLOYED PERSONS
During the last fifty years schemes of compulsory insurance
for employed persons have multiplied rapidly in obedience to
imperative necessity. By reason of the level of their remuneration, which, as a rule, is not high, employed persons must
ordinarily devote the whole, or the greater part, of their wages
to the satisfaction of the immediate needs of themselves and
their families. Their ability to save is very limited, and for
them private insurance that would cover effectively the risks to
which they are exposed would be too costly. Moreover, for the
employed person or his family, invalidity, old age and premature
death entail almost always the gravest economic consequences,
since they imply the cessation or serious reduction of the wage
which is generally the sole resource of the worker's household.
Lastly, the rapid development of compulsory insurance for
employed persons has been assisted by the relative facility with
which it can be put into operation, since the cost of the scheme
can be charged partly to the employer and partly to the worker,
while the worker's contribution can easily be deducted by the
employer from his wages.
§ 1.—-General Formula defining Scope
Insurance legislation which, in principle, makes insurance
compulsory for employed persons might be expected to contain
an exact definition of the term " employed person ". The
formulation of such a definition, however, meets with serious
difficulties, so that in many cases the law does not make liability
to insurance dependent on the fact of being an employed person,
28
SCOPE
b u t prescribes t h a t insurance shall be compulsory for persons
working under certain conditions, which may be summed up
under three heads :
(1 ) Work in a dependent position ;
(2) Work under a contract;
(3) Work as the ordinary means of livelihood.
These conditions must be analysed in more detail.
W O E K IN A D E P E N D E N T POSITION
The first characteristic of the work of an employed person is
t h a t he is under the orders of the employer or his representative.
The employer can therefore dispose freely of t h e worker's services
during the whole period of his employment. The dependent
character of the work is quite clearly marked in the case of t h e
great majority of workers in commercial, industrial and transport
undertakings, etc. I t is less apparent in the case of persons who
work a t home under orders from their employer on materials
supplied by him or purchased a t his expense without being a t his
disposal or subject to his direct supervision. The position of
home workers under insurance legislation is examined separately
below.
W O R K UNDER A CONTRACT
I t may sometimes happen t h a t economically independent
persons who enter into a job-contract with some other person
perform this job t o the orders and under t h e constant supervision
of the person by whom they are being employed. B u t a worker
is n o t considered as being an employed person for the purposes
of insurance legislation unless he has entered into a contract of
employment with his employer, t h a t is, an agreement by which
the worker undertakes t o place his services at the disposal of
his employer. According to many insurance laws, it is immaterial
whether this agreement is written or oral, expressed or implied;
the one essential point is t h a t t h e relationship of master and
servant should exist and be effective. This relationship means
t h a t t h e worker undertakes to render services to the employer
according to the latter's instructions, while the employer for his
p a r t promises t o pay remuneration. Agreements which merely
specify the intention of the parties t o enter into such a relation-
COMPULSORY INSURANCE OF EMPLOYED PERSONS
29
ship are of no importance from the point of view of insurance;
they can be effective for insurance purposes only when such a
relationship is actually established by the worker's entering upon
his employment.
W O R K AS THE ORDINARY MEANS OF LIVELIHOOD
The fundamental idea of compulsory insurance is t h a t it should
cover all persons whose remuneration from employment is their
chief means of livelihood. Consequently, a person who is in a
dependent position and has concluded a contract with an employer
b u t who receives little or no remuneration cannot be considered
as an employed person within the meaning of insurance law.
The term " remuneration " must, of course, be understood in
its widest sense, as including everything which has any value.
I t follows t h a t the form of the remuneration is not a factor of
essential importance. I t may be paid in cash or in kind, in the
form of certain privileges, or in the form of economic advantages
the possession or enjoyment of which enables the worker to live.
The question of the person by whom the remuneration is paid is
also immaterial; it may be the employer or some third person.
§ 2.—Scope of Compulsory Insurance in the Several
Countries
Any person working under the conditions described in § 1 is
a n employed person within the meaning of insurance legislation,
irrespective of whether his occupation is described as t h a t of a
workman, skilled workman, foreman, overseer, manager, commercial employee, intellectual worker, clerk, etc. At the same time,
t h e nature of his work may be quite important from the point
of view of insurance, because in certain States the insurance
legislation does not provide for a unitary system b u t for a variety
of schemes for different groups of workers. The distribution of
individual workers among the various schemes of insurance must
t h e n be carried out in accordance with certain occupational
criteria. Experience has shown t h a t in these cases also the
distribution cannot be based on such definitions as " miners ",
" salaried employees ", " intellectual workers ", etc., b u t on a
set of essentially practical criteria. When any doubt arises a
decision must be given by an administrative or judicial authority.
30
SCOPE
In point of fact, separate insurance schemes for various occupational groups have often proved the first step towards a general
insurance scheme for all employed persons. It must not on that
account be concluded that in the course of time these separate
occupational schemes have showed any tendency to merge in
the general scheme. On the: contrary, where the attempt has
been made to unite all the schemes, considerable resistance has
often been met with from the occupational groups, which decline
to give up their separate scheme of insurance. This refusal
may be due to tradition, occupational motives or reasons of
insurance technique.
The number of States with compulsory insurance for all
employed persons has increased rapidly in recent years and now
includes Belgium, Bulgaria, Chile, Czechoslovakia, France,
Germany, Great Britain and Northern Ireland, the Irish Free
State (invalidity only), Italy, the Netherlands, Spain and the
U. S. S. R. The same is also the case in Poland, but for the
Western Provinces only. Austria has prepared a comprehensive
scheme of insurance, but it has not yet been fully applied to
workers; salaried employees have for a number of years past
been covered by pension insurance.
Schemes of insurance for employed persons, excluding agricultural workers, exist in Greece, Hungary, Luxemburg and
Rumania.
Poland has up to the present no general invalidity insurance
scheme for the whole country, but all intellectual workers are
covered by compulsory insurance.
In addition to the countries with a comprehensive compulsory
insurance scheme, there are a number of others which have made
insurance compulsory only for the members of certain economic
groups. Examples of this policy are found in Argentina (bank
staffs and staffs of private undertakings of public utility), Brazil
(staffs of public utility undertakings), Cuba (seamen and
harbour workers), Ecuador (bank staffs), Lithuania (workers
and salaried employees in Memel Territory), Uruguay (bank
and Stock Exchange staffs and staffs of public utility undertakings), Yugoslavia (miners, and in certain districts salaried
employees).
In addition, most countries have introduced insurance for
railway workers, and in countries where mining is of importance
miners are generally protected by insurance in virtue either of
COMPULSORY INSURANCE OF EMPLOYED PERSONS
31
legislation or of collective agreement. The same is often true
of seamen and other similar groups.
It will thus be seen that the necessity of insuring workers against
invalidity, old age and death is universally accepted; differences
exist only with regard to the extent to which and the form in
which the principle has been applied.
§ 3.—Application of Insurance to the Several Branches
of Economic Activity
INDUSTRY AND COMMERCE
Compulsory insurance is most firmly established in the two
branches of economic activity which employ the great majority
of workers, namely, industry and commerce. The chief reasons
for this are that the workers concerned were early organised in
trade unions, which could urge the adoption and development, of
insurance schemes, and that insurance can be most easily applied,
from the technical point of view, to these workers, who, as a
general rule, receive their remuneration entirely in cash and
whose earnings can easily be determined for the purpose of
reckoning contributions. It is, moreover, comparatively simple
to supervise the collection of contributions. This is true both of
workers and salaried employees.
Persons employed in industry and commerce are covered by
compulsory insurance in the following States :
Austria
Belgium
Bulgaria
Chile
Czechoslovakia
France
Germany
Great Britain and Northern
Ireland
Greece
HungaryIrish Free State
Italy
Luxemburg
Netherlands
Poland (Western Provinces
and Upper Silesia)
Rumania
U. S. S. R.
I t was pointed out in the previous section that in some other
States insurance is compulsory for workers in certain branches
only of industry or commerce.
MINES
In many countries mining is considered as part of industry;
but in others it is treated apart and a special insurance scheme has
been introduced for miners.
32
SCOPE
The conditions under which miners work are certainly of a
special nature, and, consequently, provision for covering the risks
to which they are exposed has always been found indispensable.
Work in mines not only involves considerable dangers, but also
affects the health of the workers to such an extent that there is a
grave risk of early invalidity or of a breakdown at an age when the
victim can scarcely be so thoroughly trained for a new occupation
as to enable him to earn a reasonable amount. The strong
feeling of comradeship which naturally exists among miners
has for centuries promoted measures to meet the economic consequences of the dangers which threaten the miner and his family,
and as a rule the insurance principle was adopted as the best
solution. In view of the special situation of these workers,
their insurance has often been organised on lines more or less
diverging from those adopted for the insurance of other workers.
Special schemes for miners are met with in Austria, Belgium,
Czechoslovakia, France, Hungary, Italy (sulphur mines), the
Netherlands, Poland and Yugoslavia.
In Germany there is also a special miners' insurance scheme,
but miners are at the same time covered by the ordinary workers'
insurance scheme, while the salaried employees of mining undertakings are compulsorily insured only in the miners' pension
insurance scheme.
In Great Britain miners are covered by the same compulsory
insurance scheme as all other employed persons.
AGKICULTUKE
Compulsory invalidity, old-age and widows' and orphans'
insurance has made its way more slowly into agriculture than into
industry and commerce. It could indeed be considered as less
urgent while the patriarchal nature of the relationship between
employer and worker continued to be the rule in agriculture.
Moreover, the insurance of agricultural workers is more difficult
to organise than that of industrial and commercial workers.
The fact that agricultural workers are scattered over large areas
impedes the work of insurance institutions and the enforcement
of compliance with the law, especially in countries where small
holdings are the rule. Moreover, payment in kind often represents
a considerable part of the wages of an agricultural worker, and
the estimation of its value offers some difficulty, since a certain
COMPULSORY INSURANCE OF EMPLOYED PERSONS
33
arbitrariness in estimating the value of payments in kind can
never be completely avoided. Moreover, it is only natural that
workers who receive a considerable part of their remuneration
in kind should feel more acutely any deduction from the fraction
which is paid in cash.
During the last thirty years, however, a great change has
taken place in many countries. The tendency, resulting from
the mechanisation of agriculture, to assimilate the working
conditions in agriculture to those in industry and commerce has
gathered force in recent years. Moreover, agriculture has suffered
severely from the rural exodus, and, if that exodus is to be effectively stopped, agricultural workers must eventually be granted
the benefit of compulsory insurance against invalidity, old age
and death, in the same way as workers in the other branches of
economic activity.
For these reasons, legislation on insurance for agricultural
workers is becoming more and more common. In Germany,
for example, where compulsory insurance was originally applied
only to workers in industry and commerce, the scheme was
extended to agricultural workers some ten years after its introduction. In other countries, where invalidity and old-age
insurance was introduced later, agricultural workers were covered
from the outset. At the present time agricultural workers are
liable to insurance in the following countries : Austria, Belgium,
Bulgaria, Chile, Czechoslovakia, Germany, Great Britain and
Northern Ireland, the Irish Free State, Italy, the Netherlands,
the U. S. S. R.
France has made agricultural workers liable to compulsory
old-age insurance, but has so far abstained from extending invalidity insurance to this group of workers.
In some States with wide schemes of compulsory insurance,
agricultural workers are still excluded : this is the case in Greece,
Hungary, Luxemburg and Rumania.
DOMESTIC SERVICE
Domestic servants performing personal service for their
employer and forming part of his household were for a long time,
and in many cases still are, employed under rather peculiar
conditions, which often retain certain patriarchal characteristics.
In the first place, a large part of their remuneration is paid in
3
34
SCOPE
kind, in the shape of board and lodging. Moreover, the great
majority of the wage earners in question are women whose work
as domestic servants is of a temporary nature, ceasing on their
marriage. It has consequently been doubted—and with some
justification—whether it would be fair and reasonable to render
such workers, who usually cease to be wage earners at a comparatively early age, liable to pension insurance, since they would
very probably not remain insured long enough to have a claim
to benefits.
Nevertheless, in spite of these difficulties, it has to be recognised that domestic servants need social protection like other
workers, and for this reason the tendency to extend compulsory
insurance against invalidity, old age and death to domestic
servants is gaining strength. I t has already been applied
by the legislation of Bulgaria, Chile, Czechoslovakia, France,
Germany, Great Britain and Northern Ireland, the Irish Free
State, Italy, the Netherlands and the U. S. S. R. The same
is true of Poland, but only for the Western Provinces and
Upper Silesia, and also of Luxemburg, where, however, domestic
servants in agriculture are not liable to insurance : the reason
for this is that no agricultural workers are covered by the
legislation.
In Hungary compulsory insurance has been prescribed by
legislation for domestic servants, but in view of the economic
situation the application of the legislation has been indefinitely
postponed.
There can therefore be no doubt that the idea of compulsory
insurance for domestic servants is making steady progress.
PUBLIC SERVICE
Public servants are as a rule covered by regulations which
entitle them or their dependants to claim certain benefits if
the risks of invalidity, old age or death materialise. In a number
of countries they are not considered as employed persons :
servants of the public authorities are expected to devote their
whole life to the public service, in return for which the authorities
provide suitable maintenance; for them and their dependants.
It is considered that persons in such a situation have no need
for compulsory insurance, since they are effectively protected
against the risks in question. In general, therefore, public
COMPULSORY INSURANCE OF EMPLOYED PERSONS
35
servants are not liable to insurance, but there are certain exceptions to this rule.
Public offices and undertakings employ not only officials, but
also persons who are not permanently appointed and who do
not enjoy the protection against the social risks which is provided
for officials. The number of these persons has somewhat increased
in most countries during and after the war. These workers
employed by public authorities are considered in most systems
of legislation as being in exactly the same situation as other
workers.
In a small number of countries, however, special legislation
has been adopted with regard to this category. This is the case,
for instance, in Bulgaria, Chile and Switzerland. In Germany
all persons recognised by general law as employed persons and
employed by the federal authorities are in principle liable to
workers' or salaried employees' insurance, but, in virtue of a
collective agreement which has been made generally binding,
they are, in addition, compelled to become members of a special
insurance scheme created for them.
At the same time there are a number of countries in which a
varying proportion of the persons recognised by law as employed
persons but employed by official bodies or in public undertakings
are exempt from liability to insurance. The reason for this is
that in many cases the public authorities have on their own
initiative created special insurance institutions for certain categories of persons employed by them. This may be done by
forming insurance associations or by making arrangements with
private insurance companies for the benefit of their workers,
In several States workers who are thus actually granted protection,
if not by legislative provision, at least by staff regulations, are
exempt from liability to insurance. In some cases they can be
exempted only on condition that the protection afforded by the
voluntary measures adopted by the authority in question is not
less than the protection granted by the compulsory insurance
scheme from the point of view both of security and of benefits.
The various conditions for exemption may be illustrated by a
few typical examples.
Under the Austrian Salaried Employees' Insurance Act,
persons who can claim protection on account of their position
in the service of a public authority are exempt. Under the
workers' insurance scheme, persons employed by public authorities
36
SCOPE
may be exempted by Order, in so far as they have a claim to
equivalent benefits for themselves and their dependants.
The Belgian Act concerning salaried employees' insurance
exempts the great majority of persons employed by the public
authorities or in public undertakings, since the Act applies only
when the salaried employee is not guaranteed from some other
source a benefit equal to that granted under the Act. A similar
provision is contained in the general legislation concerning old-age
and widows' pensions.
In the Czechoslovak Republic salaried employees and other
persons in the service of the State or other compulsory territorial
associations, as well as employees of their institutions and undertakings, are exempt, if thejr are entitled, with the necessary
guarantees, to benefits at least equal to those granted under
the Pension Insurance Act for private employees, or under the
Workers' Insurance Act, as the case may be.
According to the German Federal Insurance Code, persons
employed by the Federal or State Governments, the German
Federal Railways, a union of communes, a commune or an insurance institution are exempt, provided a right to a pension not
less than the invalidity pension for the lowest wage group, as
well as to a widow's pension not less than that of the lowest
wage group and to orphans' pensions, is guaranteed. When
other public associations or corporations or private schools or
institutions guarantee equal benefits to their employees the
persons in question can be exempted if application is made by
the institutions employing them.
In Great Britain and Northern Ireland and the Irish Free State
persons in the service of the State or of any other public authority,
as well as salaried officials of statutory companies entitled to
rights in a superannuation fund are exempt. A necessary condition is that the competent Minister should have certified that
the terms of the employment are such as to secure provision
on the whole not less favourable than the corresponding benefits
in the general insurance scheme. This does not mean that the
benefits provided should be precisely on the same lines as
those of the general insurance; scheme; the two are considered
as being equivalent when their actuarial value is equally great.
In Italy civil servants, workers and salaried employees in the
service of the State, the provinces, the State railways, the
Royal Household and public welfare institutions are exempt
COMPULSOEY INSURANCE OE EMPLOYED PERSONS
37
in so far as they are adequately protected against invalidity
and old age.
In the Netherlands it has been decided by the courts that the
compulsory invalidity insurance introduced for the benefit of
employed persons should in no case extend to public servants.
Nevertheless, any one employed by a public authority on the
basis of a contract of service recognised by civil law is considered
as being an employed person and is therefore liable to insurance.
The question whether he is actually protected against the risks
covered by the insurance is not raised.
HOME WORKERS
Wage earners who for any reason do not work on the employer's
premises but are temporarily or permanently employed in their
own homes, on the basis of an ordinary contract of employment
with an employer, are liable to compulsory insurance. As a
rule, therefore, no special rules are required in the case of this
class of home workers.
In the case of some home workers, however, who may be called
persons engaged in home industry, the conditions of employment
are somewhat different. It is true that these persons perform
work for an employer in accordance with his instructions in their
own dwelling or workshop, but, during the working processes,
they are not under the control of the person who gave them the
order. They decide at their own discretion how and when the
work shall be begun or ended and the order in which the different
processes shall succeed each other. If they like, they may employ
assistants, usually members of their family. As a rule, they are
paid by the piece; they are not bound to receive or give notice
or to comply with other rules of this nature; and, moreover,
they are generally free to accept orders from any person.
Although such workers are legally independent, they are often
in reality in a dependent position with regard to those who give
them orders. The latter cLTCy Sis cl rule, not individual consumers
but industrial employers (merchants, manufacturers, or other
persons like themselves), public associations and corporations or
co-operative societies. The essential point is that these persons
engaged in home industry do not themselves bear any business
risk. This risk is assumed by the person giving the order, who
generally purchases the material to be worked upon and pays the
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worker by the piece; the nature of the work, the time of delivery
and the other conditions are laid down by the employer who
gives the order.
A further point is that the earnings of a person engaged in
home industry differ very little from those of a corresponding
wage earner working in the workshop of his employer; in many
cases they may be decidedly lower, Although the legal relationship between a home worker of this type and his employer differs
in certain important points from the contract of employment
usually taken as a basis for compulsory insurance, the legislation
of many States has decided that these persons shall be liable
to insurance because their economic situation is very similar to
that of wage earners.
In Belgium, Czechoslovakia, France, Germany, Great Britain
and Northern Ireland, the Irish Free State, Italy, Luxemburg,
the Netherlands and Poland (Western Provinces) this category
of home worker is covered by compulsory insurance, In Czechoslovakia the Government may exempt from his liability any
home worker whose earnings from this source do not exceed
a certain minimum : the Central Social Insurance Institution,
in agreement with the competent Minister, has drawn up provisional rules, in virtue of which every home worker whose
earnings do not exceed 120 crowns a year is exempt. The purpose
of this provision being to prevent persons from being unreasonably compelled to pay insurance contributions when their
earnings from home work are of no importance for their maintenance.
According to the regulations in force in the U. S. S. R., home
workers who employ wage-earning assistants are exempt. The
Hungarian legislation on the subject leaves it to the competent
authorities to decide by Order whether home workers shall be
liable to insurance or not.
Middlemen often intervene between the home worker and the
employer who gives him the order. In Austria it has been
assumed that these persons are in the same economic situation
as home workers. They have therefore been made liable to
compulsory insurance in the same way as the latter group.
It should be noted that some persons engaged in home industry
have to obtain their materials wholly or partially at their own
expense, so that the payment which they receive from the
person giving them the order represents not only their remune-
COMPULSORY INSURANCE OF EMPLOYED PERSONS
39
ration, but also the value of the material. The legal situation
in this case is very similar to that of an independent industrial
worker. If such persons are made liable to insurance, it is
necessary to prescribe what fraction of their remuneration is to
be considered as earnings. Some systems of legislation have
expressly extended compulsory insurance to these persons without
any restriction. This is the case in France (Alsace-Lorraine),
Germany and Poland (Western Provinces). In Luxemburg
compulsory insurance may be extended by Order to cover this
group.
There is no need to enlarge on the special difficulties which
arise in connection with the application of compulsory insurance
to home workers. In each individual case extensive investigations are necessary before one can decide whether the person
is really a home worker or a person working on his own account.
Moreover, the conditions of work of such a person can rarely be
carefully supervised by the competent authorities, and the
insurance institution is not always in a position to enforce the
regular payment of contributions. In a country which has
grown to realise the benefits of social insurance, this difficulty
will automatically disappear in the course of time.
§ 4.—Application of Insurance to Occasional,
Subsidiary and Temporary Employment
Compulsory insurance for employed persons is intended solely
for persons who are entirely or almost entirely dependent on
their earnings from employment for a livelihood. A person who
is not in regular employment, but merely enters into a contract
of employment temporarily, obviously cannot obtain any benefit
from a long-term insurance based on wages. The same is true,
at least to some extent, of persons who are not actually wage
earners, but who take up employment in their spare time in addition to their usual occupation.
The application of compulsory insurance to persons whose
employment is temporary or subsidiary may be dealt with in
one of the following ways : the legislation may in principle include
them in its scope by laying down no special rules for such cases;
it may expressly define the conditions under which insurance
shall apply to such persons; or again, it may exempt all persons
in this situation from the application of the compulsory principle.
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If the first course is chosen, all persons engaging in temporary
or subsidiary employment are liable to insurance, and contributions must be paid in respect of them even if it is highly
probable that they will never acquire the right to benefit, by
reason of the nature or shortness of their employment. In such
cases the payment of contributions is simply an imposition with
no corresponding benefit. If, however, the payment of contributions were not required, temporary and subsidiary employment
would be encouraged to the detriment of persons genuinely
employed. At the same time it is true that the application of
compulsory insurance to all temporary and subsidiary employment
without exception is a matter of great difficulty in practice, since
occupations of this kind easily escape inspection.
The laws of a large number of countries have followed another
method in order to avoid this irregular situation. They lay
down special rules whereby certain kinds of temporary or subsidiary employment are excepted from the scope of compulsory
insurance, so that all other kinds save those specifically mentioned are insurable.
Rules of this kind may be contained in the law itself or in
administrative regulations. If they are included in the law,
there is no danger of its spirit being misinterpreted in administrative regulations. When exceptions are made by order,
this risk has been frankly accepted for the sake of greater practical
adaptability to circumstances. Whichever course is adopted,
the legal position is clear, and the only responsibility left to the
person concerned and to the executive or judicial authorities
is to decide the de facto situation in any doubtful case.
There remains the third method, which consists in excepting
from the scope of compulsor3r insurance all temporary and
subsidiary employment. This ignores the fundamental idea
of social insurance and also the necessity for protecting workers
employed in this way. There is, moreover, a danger that the
scope of the exceptions may prove to be much wider than was
intended by the legislation.
OCCASIONAL EMPLOYMENT
A person who seizes a chance opportunity of employment is
an occasional worker.
If the normal life of such a person consists in finding and accept-
COMPULSORY INSURANCE OF EMPLOYED PERSONS
41
ing casual jobs, he may be said to have an occupation which he
exercises regularly and not just occasionally, This is better
described as " temporary employment " and will be dealt with
under that heading.
Occasional employment in the strict sense must be taken to
mean work which is undertaken now and then but does not
constitute the usual means of livelihood of the worker, which
may be work on his own account or regular employment.
If a person who normally works independently takes up employment occasionally, there is no need for him to be covered by
compulsory insurance, since he will cease to be an employed
person from one day to the next and will return to his mdependent
occupation. This is only true if his occasional work is of brief
duration. If an engagement for a short period is subsequently
prolonged, then the employment obviously ceases to be occasional,
and becomes of such importance as a source of income for the
worker that it cannot be considered as being in a class apart.
There is then no justification for exempting a worker in this
situation from liability to insurance on the ground that he was
formerly independent and will probably be so again at some
future date. When occasional work is undertaken by persons
who are otherwise exempt from liability to insurance, it will be
excepted only if it is of short duration.
The situation is different in the case of persons who are normally wage earners. They may engage in occasional work when
temporarily unemployed or in addition to their main employment.
In the first case their occasional employment may be exempt
from the scope of compulsory insurance if it is of very minor
importance, as measured by its duration or the remuneration
afforded. The question then arises, for how many days employment can continue without ceasing to be of minor importance.
From the point of view of remuneration, employment may be
held to be of minor importance when the remuneration paid is
of negligible value for the maintenance of the worker during the
period of such employment.
In the second case, where occasional employment exists
concurrently with the worker's main insurable employment,
there is no additional liability to insurance, but the remuneration
earned from the occasional work may be taken into account in
calculating contributions.
A few of the national regulations on insurance for workers in
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occasional employment may be cited by way of example, the
reader being referred to the monographs on the various countries
for further details.
Under the Czechoslovak pension insurance scheme for salaried
employees, occasional employment is in principle insurable, the
only exemption being for persons attending universities or technical schools, whose employment can be considered as a prescribed
or usual complement to their studies. Under the workers'
insurance scheme, occasional employment does not render the
worker liable to insurance. The Supreme Court has decided
that occasional employment shall mean any work which may, in
view of the normal occupation of the person in question, be
considered as sporadic or casual and which does not constitute
his sole or usual means of livelihood.
According to the French Act of 1930, occasional employment
is in principle insurable, but, as it is desired to exclude from
compulsory insurance all who do not belong to the employed
class, it is stipulated that persons who engage in employment
for less than ninety days in the course of a year shall in every
case be excepted.
The German workers' insurance scheme exempts from liability
to insurance all persons who are not normally wage earners if
they are temporarily employed for negligible remuneration.
Under the salaried employees' insurance scheme, persons who are
not otherwise engaged in insurable employment remain exempt
in respect of employment which is merely occasional or which,
though recurrent, is subsidiary and carries with it only negligible remuneration. Employment is held to be occasional
when it does not continue for more than three successive months.
Remuneration is taken to be negligible when it does not exceed
100 RM. a month on the average, or when, although exceeding
this figure, it does not exceed 20 per cent, of the total income on
the average.
If an unemployed person whose normal occupation is insurable
employment obtains occasional work, such work entails liability
to workers' or salaried employees' insurance, as the case may be.
German law excepts also a number of occasional services,
such as salvage work for a short period and certain work by
coloured seamen or by the staffs of foreign railways or shipping
companies.
In Great Britain and Northern Ireland and the Irish Free
COMPULSORY INSUKANCE OF EMPLOYED PEBSONS
43
State persons who only occasionally perform paid work are in
principle liable to insurance irrespective of whether they are
employed persons normally or not. An exception is made to
this rule in the case of employment of a casual nature otherwise
than for the purposes of the employer's trade or business. On
the other hand, anyone occasionally employed on work for the
purposes of the employer's business is liable to insurance. He
may, however, be exempted on application if he can prove that
he is dependent on a non-insurable occupation or has been
employed intermittently for less than eighteen weeks in the
immediately preceding year.
In the salaried employees' insurance scheme in Luxemburg
liability to insurance covers only those persons who are permanently employed or permanently appointed. In the workers'
insurance scheme the Government has to determine to what
extent temporary employment shall be excepted. It may
also decide that foreigners resident in Luxemburg for a short
period only shall not be liable to insurance. Any person who
in the course of a calendar year is engaged in paid work at certain
seasons only and for not more than fifty days, and who at other
times works without remuneration or on his own account can be
exempted on application, provided that he has not already paid
contributions for 675 days. Exemption is granted to occasional
workers only if there is no likelihood of their completing the
qualifying period of 1,350 days. It is assumed that a person
who has paid contributions for 675 working days will generally
be likely to pay for the remaining 675 days of the qualifying
period.
In the Netherlands persons whose main occupation is not
employment are not liable to insurance in respect of short periods
of employment. A contract of employment for occasional
work is not considered as being a normal contract of employment
within the meaning of the insurance Act. The Supreme Court
of Appeal has given a rather narrow interpretation of this provision.
There is another group of States which in principle do not
except by law any occasional employment.
One example of these is Bulgaria, where the competent Minister
has powers, which have not yet been made use of, to exempt
persons from liability to insurance in respect of occasional or
temporary employment.
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In Chile also, in the absence of any legal provisions to the
contrary, occasional workers of all kinds are liable to insurance.
The insurance fund has advised the Government to exempt
all persons employed in agriculture for less than three weeks,
unless previously insured.
Hungarian law makes no mention of occasional work, but it
provides that a transitory, temporary or provisional contract
of employment renders the worker liable to insurance.
In Italy all employment, irrespective of its nature or duration,
even when it is brief and occasional, falls within the scope of
compulsory insurance.
SUBSIDIARY EMPLOYMENT
Employment regularly followed concurrently with some other
main occupation is known as subsidiary employment.
This employment may be in a branch of economic activity to
which the insurance scheme applies, or it may not. In the latter
case it is obviously of no importance from the point of view of
insurance, for a person who is liable to insurance in respect of his
main employment is not exempted on account of a subsidiary
occupation which would not render him liable. The only question
therefore which arises here concerns the circumstances in which
subsidiary employment is considered as insurable employment.
I t must be determined whether the subsidiary employment is
of substantial importance for the person engaged in it. What
are the criteria to be used for this purpose? A person who
regularly passes half his working day as an independent worker
in his own undertaking and during the other half is employed
for wages in some other undertaking may obviously assert either
that his employment is subsidiary or that his independent work
is subsidiary. It may also happen that the person in question
is regularly engaged in employment for a small part of his time
only, but yet earns more than he does from his main occupation,
On the other hand, a subsidiary occupation which requires a
great expenditure of time may be comparatively unimportant as
a source of income. Hence whim some activity is described as
subsidiary employment, that description carries with it no
precise indication of its economic importance for the maintenance
of the worker concerned.
In practice the treatment of persons engaged in subsidiary
COMPULSORY INSURANCE OF EMPLOYED PERSONS
45
employment usually varies according as their main occupation
renders them liable t o insurance or not.
If the person in question is liable t o insurance on account of
his main employment, then the problem arising out of his subsidiary employment can be quite easily solved. I n insurance
schemes where liability t o insurance is restricted to persons
whose annual earnings are within a certain limit,regulations must be
made to determine the extent to which the earnings from subsidiary employment are t o be taken into account in reckoning t h e
total annual earnings. Moreover, States which have separate
insurance schemes for different categories of workers must decide
whether the person who is already insured under one scheme on
account of his main employment and who engages in a subsidiary employment which would render him liable under another
scheme shall or shall not be obliged t o pay contributions under
this second scheme.
I n the case of persons whose main occupation does not render
them liable to insurance b u t whose subsidiary employment is in
principle covered, a decision must be taken whether they shall
be liable to insurance or not. There are two possibilities : the
main occupation may be completely outside the scope of compulsory insurance (e.g. employment as an independent worker).
On the other hand, the persons in question may be exempt from
liability t o insurance in respect of their main employment
(e.g. public officials covered by a pension scheme), although in
principle t h e employment is a n insurable one. As a general
rule, these persons will not be made liable in respect of their
subsidiary employment, because they have been expressly
exempted in respect of their main employment. There remains
only the question of the liability to insurance of persons whose
main activity does not fall within the scope of the insurance
legislation. Here again the legislator has three possible courses :
exemption of all subsidiary employments ; exemption of specified
subsidiary employments; inclusion in principle of all subsidiary
employment.
(1) Exemption
of all Subsidiary
Employments
Since compulsory insurance is intended for certain economic
strata of the population, and since, as a rule, the main occupation
of a person is t h e decisive factor, the legislator may adopt the
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attitude that only the main occupation should be taken into
account in determining liability to insurance. In that case all
subsidiary employment is excepted from the scope of compulsory
insurance. This solution has been adopted in Czechoslovakia,
Hungary and Luxemburg (salaried employees). The main
occupation alone is taken into account in deciding whether the
person is liable to insurance or not. If the main occupation is
not insurable, then the subsidiary exercise of an employment.
which is insurable is not taken into account. Such a solution
has advantages in practice, but in certain circumstances it may
unduly favour on the labour market persons who engage in
subsidiary employment.
(2) Exemption of Specified Subsidiary Employments
The legislator may start from the assumption that certain
employments which occupy only a small part of the working
life of the persons concerned are always of minor economic
importance.
This idea is exemplified in the Austrian salaried employees'
scheme, in which certain subsidiary employments are not insurable. For example, married women in charge of a household
are exempt from insurance if they engage in employment for less
than 50 hours a month and if their remuneration from such
employment does not exceed 80 schillings.
In Great Britain and Northern Ireland and the Irish Free State
employment of any class which may be specified in a special
order as being subsidiary and not a principal means of livelihood
is excepted from the scope of compulsory insurance. The
employments thus excepted include those of organist, fireman,
club secretary, newsboy, postman, etc. The persons concerned,
however, are only excluded from insurance when such employment is merely part-time, that is, when it regularly occupies less
than a full working day. When a person is partially employed
in any such occupation, it is assumed that he has some other
main occupation, whether this is actually the case or not.
The Polish insurance scheme: for intellectual workers exempts
persons who are not entirely dependent on an insurable employment for their livelihood, provided that this employment is only
subsidiary and that the remuneration earned from it is less than
the income from other sources.
COMPULSORY INSUEANCE OF EMPLOYED PERSONS
47
(3) All Subsidiary Employments Covered
The majority of laws make no mention whatsoever of subsidiary
employment. Here the legal position is that, as no limitation
is imposed by legislation, all subsidiary employment is in principle insurable. At the same time, subsidiary employment
which can also be considered as occasional and would be excepted
on that account may not render the worker liable to insurance.
This is the rule adopted in the insurance legislation of Germany
and the Netherlands, where subsidiary employment is excepted
when it is of very minor importance.
Reference should be made in this connection to the fact that
the French Act of 1930 renders persons engaged in an insurable
occupation liable to insurance only if their employment is for
not less than ninety days in the year. Consequently, if a person
is mainly engaged in a non-insurable occupation and subsidiarily
engaged in insurable employment, he is exempt if the time spent
in subsidiary employment is less than ninety days in the year.
TEMPORARY EMPLOYMENT
Any person whose trade is of such a kind that it involves a
series of short engagements is a temporary worker.
Such workers may be employed for short periods only by any
one employer or they may work for a number of employers in
succession each week or month (washerwomen, jobbing tailors,
street porters, dockers, etc.). These wage earners maintain
themselves, as a rule, from the remuneration which they earn
from a number of rapidly succeeding engagements. They require
the protection of insurance to the same, if not to a greater,
extent than persons in regular employment, for their earnings
are much less secure. For this reason there is no system of
legislation which exempts them in principle from liability to
insurance.
In some cases, however, on account of the difficulty of collecting
insurance contributions for such workers, a certain measure of
exemption has been provided for. The limits within which this
is done vary in different cases and have sometimes been left to
the discretion of the courts.
The workers' and salaried employees' insurance schemes in
Germany and France (Alsace-Lorraine) are applied to temporary
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workers without restriction, but when the work of such persons
can be considered as occasional employment they are exempt.
In the Netherlands, where invalidity insurance applies only
to employed persons, the courts have decided that these persons
must work under a contract of employment (section 1637a of
the Civil Code). Any person employed under another contract
is therefore not liable to invalidity insurance. Since contracts
for short periods of employment are not always contracts of
employment within the meaning of the section referred to above,
the liability to insurance of temporary workers has to be decided
in each case.
In Rumania insurance is compulsory only for workers in
certain kinds of undertaking, so that temporary workers fall
within the scope of insurance only when employed in these undertakings.
In the U. S. S. R. certain temporary workers are exempt from
liability to insurance. This is the case for charwomen, washerwomen, jobbing dressmakers, etc., who are employed by any
private individual for not more than five days in succession or
not more than ten days in any one month.
I t must be remembered that the application of insurance is
particularly difficult in the case of temporary workers. There
is no one employer who cart be made liable for the payment of
contributions. Consequently, it must be settled who is to pay
the insurance contribution on behalf of the temporary worker
and by what means it is to be collected. The great majority
of laws on the subject do not deal with the question but leave
it entirely to the administrative authorities. It is only in a
few States that general provisions on the subject exist.
In the Bulgarian administrative Order under the Social Insurance Act it is stated that porters, cab-drivers, dockers, etc.,
employed at railway stations or docks shall be insured by the
competent railway authorities or through the competent factory
inspectors. The same rule applies to all workers who are not
employed by factories or undertakings.
The German workers' insurance legislation provides that when
an insured person is employed by several employers in the course
of the week the first of those employers shall pay the contribution
and shall deduct the insured person's contribution from his
wages, provided the insured person has not made use of his right
to pay the whole contribution himself. If he has done so, the
COMPULSORY INSURANCE OF EMPLOYED PERSONS
49
first employer must refund t o him the employer's share of the
contribution. If the first employer does not comply with this
obligation and the insured person does not pay t h e contribution
himself, then the next employer is liable for payment, b u t be
may claim damages from t h e first one. As this procedure cannot
be applied to all types of temporary employment, the law empowers the supreme administrative authorities to give instructions
t h a t temporarily employed persons shall pay their half of the
contribution themselves and for the commune t o pay the other
half, with t h e right t o claim a refund from the employer. The
authorities may also issue instructions to the effect t h a t the
commune can collect the contribution by assessment instead of
in the form of a refund from the employer.
SEASONAL EMPLOYMENT
Seasonal work is t h a t type of work which is carried out only
a t certain periods of the year. I t is most frequently associated
with agriculture and its accessory industries (e.g. sugar-refining),
b u t it is also found in many other branches of industry, such as
t h e fashion industries, hotel-keeping, etc.
Since work of this kind can only be carried out during a comparatively short period in the course of any year, the employment
of the seasonal worker is always restricted to a period of a few
months or even a few weeks. Consequently, such work is often
undertaken by persons who, during the rest of the year, are not
engaged as wage earners, and for this reason some systems of
legislation have special provisions concerning the application of
compulsory insurance to seasonal workers. The basic idea generally is t h a t persons who are not deemed t o be wage earners
in respect of their normal activities should remain outside the
scope of insurance.
Under the German workers' insurance scheme, persons may
be exempted from liability t o insurance on application if they
engage in employment only a t certain seasons for not more t h a n
twelve weeks at a time, or for not more t h a n fifty days in all.
I t is stipulated t h a t they must maintain themselves by independent work or not work for remuneration for the rest of the year.
Such exemption is granted only when not more t h a n a hundred
insurance stamps have been used on behalf of the individual
applicant. The purpose of this restriction is t o prevent exemption
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from being granted to seasonal workers who have for a considerable time been engaged in some insurable employment, and who
therefore, if they continued their contributions, could acquire the
right to insurance benefits.
Special provisions have been adopted to meet the particular
needs of agricultural seasonal workers. Most of these persons
are foreign workers coming from Poland, and after spending a
certain time abroad they are obliged to return home. By a
Notification of the Federal Government these persons are
exempted, because it would be unjust to require the payment
of contributions when they could not acquire a right to benefits,
since they are only allowed to remain in the country for a short
period. Such exemption applies only to those Polish seasonal
workers in agriculture who are obliged to return to their own
country. Those who are released from that obligation cannot
claim exemption under the above-mentioned Notification, but,
like other seasonal workers, they can apply for exemption in
accordance with the general provisions.
The British and Irish laws except certain seasonal employments
(e.g. fruit and hop picking) unless the persons engaged in them
were already insured at the time of taking up the work.
The Bulgarian Act in principle exempts only seasonal agricultural workers, such as harvesters, vine-dressers, rose-pickers,
woodcutters, etc.
§ 5.—Limitations Arising Out of Personal Qualifications
The preceding section showed how the application of compulsory insurance is limited in certain cases on account of the
character of the worker's employment. A further group of limitations may result from the requirement of personal qualifications
in the worker, whose liability to insurance depends on the fulfilment of certain physiological conditions, political or civil conditions and economic conditions.
PHYSIOLOGICAL CONDITIONS
(1) Sex
In general, both sexes are treated on an equal footing in insurance legislation. At the same: time, it must not be forgotten
that, from the point of view of an insurance institution, the
COMPULSORY INSURANCE OF EMPLOYED PERSONS
51
average man constitutes a better risk than the average woman,
because the latter is more exposed to invalidity and has a longer
expectation of life than the average man. This obviously means
that compulsory insurance is, if anything, more necessary for
women. The only differentiation that might be made would
be to introduce special regulations concerning the amount of
the contribution and of the benefits for insured women.
There are very few laws which prescribe special treatment for
women as regards their liability or otherwise to insurance. In
the Austrian Salaried Employees' Insurance Act, for example,
married women who are engaged as salaried employees by way
of subsidiary employment are exempted from liability to insurance
under certain conditions (employment for not more than fifty
hours a month and earnings of not more than 80 schillings a
month). In the Greek legislation concerning msurance for
tobacco workers, insurance becomes compulsory for girls at the
age of fourteen, whereas for boys the age is sixteen.
(2) Age
If the principle of compulsory insurance for all employed
persons were strictly applied, age would be left out of account altogether. For practical reasons, however, the introduction of age
limits has been found desirable. The purpose of these age limits
is to exempt young persons and persons of an advanced age from
liability to insurance, or to terminate the insurance of persons
who have already reached the pensionable age.
(a) Lower Age Limit
As a rule, children or young persons cannot lawfully enter
into a contract of employment until they have reached the
school-leaving age. In the majority of States there are also
special regulations concerning the admission of young persons
to industrial employment, for which a certain minimum age is
prescribed. If these regulations are strictly applied, the mention
of a minimum age for entrance into compulsory insurance may
be dispensed with. At the same time, insurance legislation may
adopt the age limits laid down in other regulations, with a view
to enforcing thçm more completely.
This is the case, for instance, in the Invalidity Act of the Netherlands, which prescribes as a lower age limit the year in which
compulsory school attendance ceases (the age of fourteen years).
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The French Social Insurance Act of 1930 also fixes a lower
age limit which agrees more or less with that contained in
the legislation concerning compulsory school attendance. This
means that children under eleven years of age who have obtained
a leaving certificate and children under thirteen who have not
obtained such a certificate a,re not to be considered as employed
persons liable to insurance if they engage in such employment as
is permitted for them by the Labour Code. I t will be seen that
this Act bases itself on the regulations concerning the age limit
contained in other legal provisions, and prescribes a special age
limit for compulsory insurance only in so far as employment is
not forbidden for young persons by the Labour Code.
In other systems of legislation the special age limit laid down
for insurance purposes is based on the requirements of the insurance scheme itself. The main argument here is that young
persons generally receive little or no remuneration during the
early years of their employment, so that they are unable to pay
the contributions. Moreover, the first employment of such
persons does not necessarily mean that they have chosen employment as their normal occupation for life : after a short time they
may enter some non-insurable occupation.
When the legislator takes account of these considerations, he
excepts young persons from compulsory insurance, for a few
years after they have passed the school-leaving age. As it is
assumed that a young person will have decided what his occupation is to be by the time he has reached the age of sixteen, and
as his remuneration may then be expected to constitute a reasonable sum, most countries which have introduced a lower age
limit have chosen the age of sixteen. This is the case, for
example, in Czechoslovakia (workers and salaried employees),
Great Britain and Northern Ireland (employed persons), Greece
(tobacco workers : boys only; fourteen years for girls), the Irish
Free State (employed persons), Poland (miners in Upper Silesia),
Rumania (employed persons and craftsmen), Spain (employed
persons). In Austria the lower age limit is seventeen years for
salaried employees and eighteen for agricultural workers, and in
Czechoslovakia (miners) it is fourteen years.
(b) Upper Age Limit
Two purposes may be served by an upper age limit.
In the first place, there may be an intention to exempt from
COMPULSORY INSURANCE OF EMPLOYED PERSONS
53
liability to insurance persons who take up employment at an
advanced age. I n t h a t case the age limit represents a bar t o
entrance to insurance.
The second purpose may be t o exempt those who pass a given
age (absolute age limit). This means t h a t persons who are
employed when they reach the age limit cease t o be compulsorily
insured, and a person who has exceeded the age limit will not
become liable to insurance if he subsequently engages in insurable
employment.
An age limit for entry to insurance is the only one prescribed
in the following laws : Great Britain and Northern Ireland
(employed persons) : sixty-five; Greece (tobacco workers) :
thirty-five; Luxemburg (salaried employees) : forty; the Netherlands (employed persons) : thirty-five; Poland (intellectual
workers; miners in"Upper Silesia) : sixty; and Rumania (employed
persons and craftsmen) : sixty-five.
The absolute upper age limit exists in Bulgaria (employed
persons) and in France (employed persons). I n both cases persons
over sixty years of age are prevented both from entering insurance
and from continuing in insurance.
A special system has been adopted in Spain (employed persons).
The maximum age for entry into compulsory insurance is fixed
a t forty-five years, b u t any person who is already insured and
passes this limit remains compulsorily insured. On the other
hand, any person who enters on an insurable occupation after
passing the age of forty-five is obliged to pay contributions
under the scheme, b u t the contributions paid on his behalf are
treated as compulsory savings, and when he reaches t h e absolute
age limit they can be used for the purchase of an annuity. The
absolute age limit is fixed at sixty-five years, and anyone exceeding t h a t age limit is excluded from the scope of the compulsory
insurance legislation.
(2) Working
Capacity
I t is obvious t h a t a person who is already an invalid cannot
be insured against the risk of invalidity. On the other hand,
a person who loses part of his working capacity may enter employment, and the question then arises whether such partial invalids
are t o be liable to insurance.
There are technical arguments in favour of t h e exemption of
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such persons. Their insurance involves a greater risk for the
insurance institution than the average insured person. On the
other hand, the only method of excluding invalids would be to
require entrants to pass a medical examination certifying their
possession of full working capacity. Only a few occupational
insurance schemes have adopted this method : here persons are
not permitted to enter the occupation for which the scheme is
intended unless they have been proved by medical examination
to be entirely fit.
When there can be no question of a medical examination for
entrants, another method has to be adopted if it is desired to
avoid as far as possible bringing invalids under compulsory
insurance. To this end invalids are often exempt in principle
from liability to insurance, but workers are not obliged to prove
that they are not invalids. Whenever the insurance institution
considers that a person otherwise liable to insurance is an invalid
it can contest his liability and put the onus of proof on him.
A further safeguard exists in the fact that the laws generally
exempt all persons in receipt of a pension.
All persons who are incapacitated are excepted from insurance
in France (workers and salaried employees in Alsace-Lorraine),
Germany (workers and salaried employees) and Luxemburg
(workers). No medical certificate of health is required, so
that it is only in cases of doubt that an examination is
carried out to determine whether the insured person is an
invalid or not.
Persons in receipt of an invalidity or old-age pension under the
insurance legislation are exempt in Austria (workers and salaried
employees), Czechoslovakia (workers), France (workers and
salaried employees in Alsace-Lorraine), Germany (workers and
salaried employees) and Luxemburg (workers). The workers'
insurance law in Chile exempts all persons who are in receipt of
a pension equal to that granted under the scheme. Similarly,
the Polish legislation concerning insurance for intellectual workers
prescribes that those in receipt of old-age pensions or other
pensions shall be exempt whenever the amount of the pension
is equal to 40 per cent, of the remuneration obtained from any
employment entered upon after the pension was granted.
Under several of these schemes, e.g. those of Czechoslovakia
and Germany, not all pensioners are exempted, but only persons
in receipt of certain pensions enumerated in the laws.
COMPULSORY INSURANCE OF EMPLOYED PERSONS
55
POLITICAL AND CIVIL CONDITIONS
(1) Nationality
Most systems of legislation apply compulsory insurance to
foreigners in the same way as to nationals of the country.
A few States, however, only render foreigners liable to insurance
if their own nationals are liable under the laws of the respective
foreign States : liability to insurance therefore depends upon
reciprocity, which may be secured by law or treaty.
The Bulgarian Social Insurance Act, for example, makes
foreigners liable to insurance only when their country of origin
grants by law the same privilege to Bulgarian citizens. At the
present time Czechoslovak, Hungarian and Polish subjects are
insured on this condition.
In France, under the general scheme instituted by the Act
of 1930, foreigners are only liable to insurance if they are subjects
of States which have entered into treaties of reciprocity with
France. The position of foreign workers, for that matter,
varies according as their real and permanent residence is in
France or abroad :
(a) If their real and permanent residence is in France and if
they have worked there regularly for less than three
months, they are not insured and their risks are not
covered, although both they and their employers must
pay contributions : this restriction may be removed by
securing reciprocity.
(b) If their real and permanent residence is abroad, and their
permanent place of employment has been in France for
less than three months, they are not insured and their
risks are not covered, although contributions must be
paid as in case (a) : the restriction, however, may not
be removed as in case (a). If, however, they have
been employed in France fbr at least three months, they
become compulsorily insured, provided that a treaty
has been concluded with their country of origin.
In virtue of treaties entered into by France with Belgium,
Italy and Poland, the subjects of these three States are insurable
under the same conditions as Frenchmen, if their permanent
residence is in France. Such will likewise be the situation of
56 .
SCOPE
Austrian subjects when the treaty between France and Austria,
already concluded, comes into force.
Lastly, the laws of several countries enable the Government
to take measures of retaliation against foreigners. Such is the
case in Czechoslovakia, France (Alsace-Lorraine), Germany and
Poland. In these countries the Government may, if it considers
its subjects are unfairly treated by another country, refuse to
insure subjects of that country. In fact, however, no such
measures have ever yet been taken.
(2) Family Relationship with Employer
Since compulsory insurance: is intended fundamentally to apply
only to employed persons, and since near relatives do not work
together under a contract of employment, it may be found expedient to determine in what cases persons employed by relatives
are liable to insurance. The fact that the employer is responsible,
according to family law, for the maintenance of the members of
his family whom he employs does not preclude his entering into
a contract of employment with them. In so far as no special
provisions exist, each individual case will have to be judged in
the light of all the circumstances. In several countries, however,
special rules have been laid down to meet this situation.
(a) Employment of Wife by Husband or vice versa
In several countries a wife who is employed by her husband or
a husband employed by his wife is in principle exempt from
liability to insurance. Such is the case in Austria (workers),
Bulgaria (employed persons), France (workers and salaried
employees in Alsace-Lorraine)., Germany (workers and salaried
employees), Great Britain and Northern Ireland (employed
persons) and the Irish Free State (employed persons). Here
even the conclusion of a written contract of employment
and the payment of remuneration do not suffice to render the
person in question liable to insurance : the fact that the person,
otherwise liable, is employed by the husband or wife is sufficient
to exempt him.
Other laws do not go so fair, but stipulate that a husband
employed by his wife or a wife employed by her husband shall
be liable to compulsory insurance when cash remuneration is
paid. This is the case in the French social insurance legislation
COMPULSORY INSURANCE OF EMPLOYED PERSONS
57
in respect of agricultural undertakings. According to Hungarian law (employed persons), exemption is provided for only
when no remuneration in cash is paid. Consequently, such
persons will be liable t o insurance under these laws when they
receive money payment; they are still exempt if their remuneration takes any other form. I n the Netherlands (employed
persons) a wife employed by her husband or a husband employed
by his wife is liable to insurance if a contract of employment as
defined in t h e Civil Code (section 1637a) exists between them.
The Spanish general scheme rejects the criteria of the payment
of remuneration or the existence of a contract of employment;
it provides for exemption whenever the husband and wife live
constantly together.
(b) Employment
of Children by Parents
Children working for their parents are liable to compulsory
insurance under the following conditions :
(1) If they are paid remuneration in cash, in Belgium (workers),
France (employed persons), Germany (workers and salaried employees), Great Britain and Northern Ireland
(employed persons), Hungary (employed persons) and
the Irish Free State (employed persons). Children who
work for their parents b u t receive no remuneration in
cash are exempt.
(2) If a contract of employment exists, in Czechoslovakia and
t h e Netherlands.
(3) If they do not live with the father, in Spain.
ECONOMIC CONDITIONS
Maximum
Earnings
Compulsory insurance may apply to all persons employed in
the undertakings within its scope, or be confined to workers
whose means do not exceed a prescribed limit.
If the view is taken t h a t the purpose of insurance is to afford
compensation, at least in part, for the loss of earnings which is
the consequence of invalidity, old age and death, and to maintain
the insured person and his dependants at a standard of living
corresponding roughly to t h a t enjoyed during the period of gainful
activity, then no means limit will be prescribed.
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If, on the contrary, it is considered that compulsory insurance
should be reserved for persons of small means, the imposition of
such a limit would serve to exclude the higher-paid workers,
who are deemed to be capable of covering their risks by voluntary
thrift. The imposition of a means limit is also advocated on
the ground that it relieves the charge upon production.
In many States a compromise has been adopted, whereby the
limit is applied only to salaried employees or non-manual workers :
manual workers as a class being presumed to be of small means,
they are liable to insurance irrespective of the rate of their
earnings.
The limit might refer either to earnings only or to income of
every kind. In fact, however, almost all the laws fix the limit
in terms of earnings only, and for this there are several reasons.
First, it may be considered that the proportion of employed
persons who receive income from sources other than their employment is very small. Secondly, it may be desired to avoid
favouring on the labour market persons having private means by
exempting them and especially their employers from the obligation
to contribute. Thirdly, regard may be had to the expediency of
avoiding the administrative complication involved in the investigation of independent income.
The limit of earnings may be an absolute one, operative at
all times, or it may be imposed at the time of entry into insurance
only.
In the case of an absolute limit, a worker is exempted not only
when he enters employment for which the remuneration exceeds
that limit, but also as soon as his earnings in the insurable employment in which he lis engaged pass the figure stipulated in the
legislation.
If a limit for entry into insurance is fixed, then an insured
person whose earnings pass that limit does not cease to be liable
to insurance, but persons whose first employment is one in which
their remuneration is above the limit are exempt.
The application of the various policies in the different countries
is shown below.
(a) No LIMIT OF EARNINGS
Argentina : Bank staffs and staffs of private undertakings of public utility.
Austria : Workers and salaried employees.
Belgium : Workers.
Bulgaria : Employed persons.
Czechoslovakia : Workers and salaried employees.
COMPULSORY INSURANCE OP EMPLOYED PERSONS
59
Luxemburg : Workers and salaried employees.
Poland : Intellectual workers ; miners in Upper Silesia.
Rumania : Employed persons and craftsmen.
U. S. S. R. : Employed persons.
(b)
ABSOLUTE L I M I T OF EARNINGS FOB SALARIED EMPLOYEES ONLY
Germany : Salaried employees : 8,400 RM. a year. Miners : 8,400 RM.
a year.
Great Britain and Northern Ireland : Employed persons : £250 a year.
Hungary : Employed persons : 6,000 pengö a year.
Irish Free State : Employed persons : £250 a year.
Italy : Employed persons : 10,000 lire a year.
(c)
ABSOLUTE L I M I T OF EARNINGS FOB ALL INSURED PERSONS
Chile : Workers : 8,000 pesos a year of income from all sources.
France : Employed persons : 18,000 fr. a year in towns of over 200,000 inhabitants or in industrial areas; 15,000 fr. elsewhere. These limits are raised
by 2,000 fr. in respect of each child maintained by the insured person up
to a maximum of 25,000 fr.
Spain : Employed persons : 4,000 pesetas.
(d)
L I M I T FOR E N T R Y INTO INSURANCE FOR A L L EMPLOYED PERSONS
Netherlands : Employed persons : 2,000 florins a year. Persons not
previously insured whose annual earnings on entering employment exceed
2,000 florins are excepted. Persons engaged in an insurable employment
whose earnings rise above 2,000 florins remain compulsorily insured. When
the annual earnings exceed 3,000 florins for not less than six months consecutively, the worker can demand exemption. If he does not make use of
this right, he remains compulsorily insured.
§ 6.—Application of Insurance to Apprentices
and Independent Workers
APPRENTICES
An apprenticeship agreement is a contract of a special type,
so that the apprentice cannot be considered as being an ordinary
wage earner. It may, however, be assumed that he is preparing
to become a wage earner and for this reason he is rendered liable
to insurance in a number of countries. Moreover an apprentice
needs the protection of insurance, especially against the risk of
premature invalidity; it is indeed hard to admit that if he becomes
a permanent invalid during his apprenticeship, he should be left
to be supported by his family or to the care of the public assistance
authority.
There are many apprentices who receive no remuneration in
cash. In so far as they are employed without remuneration or
are paid in kind, there is no cash wage from which the employer
could deduct the apprentice's contributions, for the collection
of which he is responsible. If, therefore, compulsory insurance
60
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is extended t o apprentices: in receipt of no cash remuneration.
the employer is obliged to pay the whole contribution. F o r this
reason certain systems of legislation exempt apprentices if they
are not remunerated in cash.
I n other countries liability to insurance is dependent on t h e
existence of some form of remuneration, whether in cash or in
kind, and exemption is provided only for apprentices who receive
no remuneration whatsoever.
Still another group of laws make insurance compulsory for
apprentices irrespective of whether they are remunerated or not.
The table on page 61 shows the position of apprentices under
the insurance legislation of the different countries, in conjunction
with the relevant provisions as to the lower age limit.
P E R S O N S W O R K I N G ON T H E I R O W N ACCOUNT
Certain categories of persons working on their own account,
such as small craftsmen and shopkeepers, are frequently in a n
economic situation no better t h a n t h a t of employed persons :
their business often yields b u t small profits, and they may need
the protection of insurance just as much.
I n certain countries, therefore, all independent workers of
small means are covered by compulsory insurance. I n other
countries insurance is compulsory only for certain groups of such
persons, thought to be in special need of protection.
(1) Laws which make Insurance Compulsory for
Independent Workers of Small Means
All
According to the Belgian Act, all persons working on their
own account who are liable t o the occupational t a x and whose
earnings do not exceed 18,000 francs a year are covered by compulsory insurance. Mention should also be made of the workers'
insurance law in Chile, which applies compulsory insurance t o
all independent workers and craftsmen whose average annual
income is less t h a n 8,000 pesos.
(2) Laws which make Insurance Compulsory for Certain
Groups of Independent Workers
According t o German law, persons engaged in home industry
are liable t o workers' insurance, while independent teachers,
musicians and midwives who do not employ any employees are
COMPULSORY INSURANCE OF EMPLOYED PERSONS
61
LIABILITY OF APPRENTICES TO INSURANCE *
Insurance
ia compulsory
whether remunerated
or not
only when
remunerated
only when
remunerated in cash
Irrespective of Austria : Work- France : Em- Prance : Workers
age
ers.
ployed persons.
in Alsace-LorChile : Workers. Hungary : Em- raine.
Czechoslovakia :
ployed persons. Germany : WorkMiners.
Netherlands : Mi- ers and salarHungary : Miners. ners.
ied employees 2 .
Poland : Miners in
V. S. S. B. : EmSouthern Provinployed persons.
ces.
Yugoslavia : Miners.
_^
As from age of Bulgaria : Em14
ployed persons.
As from age of
16
Czechoslovakia : Italy : Employed France : Salaried
Workers and sal- persons.
employees in Alaried employees. Luxemburg : Wor- sace-Lorraine 2.
Poland : Intellec- kers.
Great Britain and
tual workers.
Northern
IreRumania : Emland : Employed
ployed
persons
persons.
Irish Free Stale :
and craftsmen.
Employed persons.
As from age of
17
Austria : Salaried employees.
.
As from age of Austria : Agricultural workers.
18
Yugoslavia : Salaried employees
in Slovenia and
Dalmatia.
1
Schemes not mentioned in the table either do not refer to apprentices or expressly
exclude
them.
2
Apprentices in receipt of remuneration, whether in cash or in kind, are covered, with
the exception of those whose remuneration consists only in maintenance.
covered b y t h e salaried employees' insurance scheme. I n
addition, it is provided in t h e salaried employees' insurance legislation t h a t t h e Federal Government, with t h e consent of the
Federal Council, can extend compulsory insurance t o persons
who are not salaried employees within t h e meaning of the Act
b u t who engage in some activity on their own account which is
similar t o t h a t of a salaried employee and who do not themselves
employ any other person.
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According to the French Social Insurance Act, old-age insurance
is compulsory for half-share tenant farmers who work with their
own families only and who have no livestock when they begin
their tenancy.
Under the workers' insurance scheme in Luxemburg, the
Government is empowered to issue orders making insurance
compulsory for heads of undertakings who regularly employ not
more than two wage earners and for persons engaged in home
industry irrespective of the number of wage earners whom they
employ.
§ 7.—Territoriality of Insurance Laws
Social insurance law applies, in the absence of express provision
to the contrary, only within the territory of the State which
establishes it. Its application to the territory of other States.
could hardly be enforced. In fact, therefore, whether explicitly
or implicitly, compulsory insurance is applicable only to
employment within the national territory, and in principle
the place of residence of the employed person is of no moment,
except in so far as a stipulation to the contrary exists in the
legislation.
It is, however, necessary to depart from this principle of
territoriality in certain cases. Such departures may be either
positive or negative in their character, since the insurance regulations of one State may be applied to persons who are outside
the territory of that State or, on the other hand, they may not
apply to certain persons within the territory of a State although
they are employed in an insurable occupation.
To deal first with the positive exceptions to the principle of
territoriality, it may be explained that, if the principle were
strictly applied, an insured person who was sent to work abroad
by his employer for a short period (e.g. as a fitter) would be
exempt from liability to insurance during the period of such
work. This would obviously be unjust, for the contract of
employment which created the liability to compulsory insurance
continues to exist. There is therefore justification for the view
that in cases of this kind an employed person who is temporarily
sent abroad should continue: to be compulsorily insured. In
only a few States, however, have rules been established by
law or interpretation governing temporary employment abroad.
COMPULSORY INSURANCE OF EMPLOYED PERSONS
63
I n Germany (workers and salaried employees) t h e practice
of the judicial authorities has evolved what is known as t h e
"radiation t h e o r y " . This means t h a t compulsory insurance
applies t o any occasional or inconsiderable extension of t h e
business activity of a German firm to a foreign country, provided
t h a t it has no independent economic importance b u t is merely a
part, appendage, continuation or extension of the home firm.
The radiation theory does not apply, for example, to foreign
branches of German firms, even when they are not granted the
right of incorporation under the law of the foreign country.
The same theory is applied in France (workers and salaried
employees in Alsace-Lorraine) and in Poland (workers in Western
Provinces).
A somewhat similar legal situation arises under the Czechoslovak pension insurance scheme for private employees, which
excludes from insurance any person who is permanently employed
outside the territory of the Republic by a Czechoslovak employer.
I t follows t h a t exclusion from insurance does not result from
temporary employment abroad. The Czechoslovak legislation
on workers' insurance likewise provides t h a t insurable employment, involving temporary absence abroad, on behalf of a Czechoslovak employer, does not exclude a worker already compulsorily
irisured from insurance.
Some laws expressly stipulate t h a t insurance shall be compulsory for all nationals employed in any diplomatic or other offices
representing the State abroad, provided their employment would
render them liable t o insurance if they were working within t h e
territory of the country.
I n most countries there are no definite provisions on this
point, so t h a t , unless any bilateral treaties have determined t h e
competence of the respective countries, each case must be settled
separately between the insurance institutions and other competent
authorities.
Negative exceptions to the principle of territoriality are found
only in a few States. I n the Austrian salaried employees' insurance scheme, for instance, it is provided t h a t salaried employees
belonging to a foreign firm b u t working in Austrian territory
are not liable t o insurance unless employed in an Austrian branch
of the foreign firm.
Other countries, such as Germany, exclude from insurance
persons employed by foreign firms if their employment in Ger-
64
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many is merely of a temporary character. This is t h e converse
of t h e " radiation theory " .
I t may be added t h a t a few States exempt foreigners who live
abroad b u t work in t h e territory of the country and are engaged
in some insurable employment (frontier workers). I n other
cases they become liable t o insurance only under certain special
conditions.
BILATERAL T R E A T I E S
The principle of territoriality does not take due account of
needs arising from international traffic. If the principle were
strictly applied, employment which involves moving from one
country t o another would sometimes be covered by t h e insurance
scheme of the one country and sometimes by t h a t of t h e other.
B u t frequent changes from, one insurance scheme t o another
involve disadvantages, especially in connection with long-term
insurance. I t is still more unfortunate when the principle of territoriality is disregarded by both States concerned, for in some
cases there will be overlapping and in others there will be exclusion
on both sides.
These difficulties can be mitigated by bilateral treaties defining
the territorial limits of the respective insurance schemes.
Among the treaties on social insurance which already exist,
t h a t of 15 December 1928 between Germany and Yugoslavia
and t h a t of 5 February 1930 between Germany and Austria
contain detailed provisions delimiting the field of application of
the pension insurance schemes of the countries concerned. The
aim of these provisions is to concentrate the insurance of a person
whose employment takes him from one country t o another in
the country in which his principal place of employment lies so
t h a t he is exempt in the other State. Such a system avoids
overlapping and at the same time prevents an individual from
being left uncovered b y insurance altogether.
Both the treaties referred t o above are based on the principle
of territoriality. I n general, social insurance is applied according
t o the legal provisions of the State in whose territory t h e person
concerned is employed. Certains exceptions, however, are made
t o this rule. If an undertaking which has its principal place of
business in one country sends workers t o another country, they
are subject to the insurance law of the former country for a
period of one year. This limited exception t o the principle of
COMPULSORY INSURANCE OF EMPLOYED PERSONS
65
territoriality also holds good in the case of employment which by
its nature requires the worker to reside in another State repeatedly but never for more than one year at a time. According
to the Austro-German Treaty, persons employed by public
transport undertakings having their head office in the one country
but working within the territory of the other are covered by the
regulations of the former country. This exception applies not
only to temporary employment on connecting lines and in frontier
stations, but also to permanent employment in the territory of
the other country. Under the Austro-German and the GermanYugoslav Treaties, further exceptions to the principle of territoriality can be arranged between the supreme administrative
authorities of the respective countries in any individual case or
for groups of persons.
In view of the spread of social insurance to many countries,
the need for uniform provisions as to migratory and frontier
workers is becoming more and more urgent. Many treaties
prepared in order to regulate the inter-relationship of States with
regard to social insurance concentrate the insurance of a person
belonging to one country and working in another in the country
where the head office of the undertaking is situated or in the
country in which the worker resides. The aim is to guarantee
uniform and uninterrupted insurance for migrants in so far as
that may be possible.
§ 8.—Position of Persons for whom Insurance Ceases
to be Compulsory
The liability of an employed person to insurance depends on
his being bound by a contract of employment and fulfilling
certain economic and personal conditions. When the conditions
on which insurance is based cease to exist, the liability to insurance generally ceases also, and the person in question is no
longer obliged to pay insurance contributions. That does not,
however, automatically put an end to his status as an insured
person. It would be quite unfair if an insured person who temporarily ceased to be liable to insurance on account of unemployment or sickness were to lose the rights he acquired by his previous
contributions. A person who ceases to be compulsorily insured
before he has completed the qualifying period should, if he again
5
66
SCOPE
becomes compulsorily insured, be entitled t o continue t h e completion of the qualifying period a t the point where he left off :
he should not be obliged, t o start again from t h e beginning.
Moreover, an insured person who has completed t h e qualifying
period and has therefore conditional rights t o benefits should
not immediately lose this right when he ceases t o be compulsorily
insured. So long as these conditional rights are maintained,
the insured person who ceases t o be compulsorily insured and
is no longer liable for the payment of contributions remains
within the ambit of the insurance scheme.
The rules for the maintenance of conditional rights depend
partly on the provisions relating t o scope and partly on the
conditions of award of pensions. The rules are dealt with below
in so far as they depend on the provisions relating t o scope : the
question will be taken up again in connection with the description
of t h e conditions of award of pensions.
TEMPORARY F R E E MAINTENANCE OF CONDITIONAL
RIGHTS
A number of insurance laws fix t h e length of the period during
which a person who ceases t o be compulsorily insured and therefore t o contribute may retain the rights which he acquired during
his period of insurance.
I t is only when the period fixed by the law has elapsed without
t h e insured person's again becoming liable t o insurance t h a t he
loses his conditional rights and the contributions already paid
cease t o be valid. The provisions whereby this period is determined vary considerably in different countries.
I n the Bulgarian general insurance scheme a person loses his
rights when he pays less t h a n 24 weekly contributions in any one
year.
I n t h e German workers' insurance scheme conditional rights
lapse if less t h a n twenty weekly contributions are paid during a
period of two years after the date of issue stamped on the insurance
card. According t o the Salaried Employees' Insurance Act,
conditional rights are lost when less t h a n eight monthly contributions are paid during any calendar year in t h e ten years following the year in which the first contribution month was completed, or when less t h a n four monthly contributions are paid in
any subsequent year. I n the case of miners' insurance, the right
t o a pension is lost when less t h a n twelve monthly contributions
COMPULSORY INSUBANCE OF EMPLOYED PERSONS
67
are paid in any two successive calendar years after the expiry
of the calendar year in which the employed person ceased to be
liable to insurance.
In the invalidity insurance scheme in Great Britain and Northern Ireland and in the old-age and survivors' insurance scheme
which is interlocked with it a person who ceases to be liable to
insurance before 30 June in any year continues to be treated as
an insured person for two calendar years as from 1 January
previously. If he ceases to be liable between 30 June and
31 December the period of two years is reckoned from 30 June
previously.
According to Hungarian law, conditional rights are lost if
less than thirteen weekly contributions are paid on behalf of the
insured person in any calendar year. In the special scheme for
miners it is provided that a worker who ceases to be insured
before completing the qualifying period loses his conditional
rights if he has not found employment within the scope of the
scheme within six months after ceasing to be compulsorily insured.
In the invalidity insurance scheme of the Irish Free State a
person who ceases to be liable to insurance continues to be treated
as an insured person for a period of twelve months.
In Luxemburg a worker loses his conditional rights if he pays
less than eighty daily contributions in the course of two succeeding
calendar years. Under the salaried employees' insurance scheme,
the maintenance of conditional rights depends on the payment
of an average of at least eight monthly contributions every year.
In any case an insured person loses his rights twelve months
after the last contribution was paid.
According to the Polish legislation on insurance for intellectual
workers, conditional rights are lost if no contributions are paid
during a continuous period of eighteen months.
The insurance legislation of Rumania provides that conditional
rights are lost if less than sixteen weekly contributions are paid
in any one year.
The periods referred to above are modified in almost every
country by the assimilation of certain periods (e.g. military
service, sickness, etc.) to periods of contribution.
The purpose of these provisions is that a person who ceases
to be compulsorily insured and therefore pays no contributions
should continue to be treated as an insured person for the specified
periods. If he had not completed the qualifying period when
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he ceased to be liable but later re-enters an insurable employment,
he is not required to begin the qualifying period over again but
simply continues to contribute until he completes the period
already begun in his previous insurable employment.
PROVISION FOR PERSONS WHOSE TEMPORARY F R E E MAINTENANCE
OP CONDITIONAL RIGHTS HAS EXPIRED
Not all the persons who become liable to insurance continue
to be so during the whole of their lives. There are a number
of employed persons who sooner or later become independent.
Others again migrate, or their earnings pass beyond the maximum
which is compatible with liability to insurance. In many cases,
women remain in an insurable employment only until their
marriage.
There are thus numerous cases in which persons fail to resume
insurable employment before the expiry of the period during
which their conditional rights are maintained and so these rights
are definitively lost unless any provision to the contrary is contained in the legislation. They would have been compelled by law
to pay contributions for insurance during a longer or shorter period
and would, at the end, have: no claim upon the insurance institution. The question of the relationship between a person who
permanently ceases to be insured and the insurance institution
has therefore to be faced. In other words, the law must decide
whether or not a person who ceases to be insured is entitled to
compensation for the compulsory contributions which he has
paid. It must also regulate the position of a person who has
ceased to be insured and becomes liable to insurance again at a
later date. The question then is whether the contributions
previously paid by him should be allowed to count under certain
conditions, or whether he should be treated as if he had never
been insured before.
These questions may be settled in a number of ways :
(1) The person who ceases to be insured may be granted the
right to a certain benefit, which generally takes the
form of a refund oí' his contributions.
(2) It may be provided that insurance contributions or conditional rights which have lapsed can be revived under
certain conditions when the person concerned once
again becomes liable to compulsory insurance.
COMPULSORY INSURANCE OF EMPLOYED PERSONS
69
(3) A person who ceases to be insured may be given the opportunity of maintaining his conditional rights by payment
of a continuation fee.
(4) A person who ceases to be compulsorily insured may be
given the opportunity of voluntary continued insurance.
These four possibilities will now be examined in more detail.
(1) Befund of Contributions
There are only a few systems of legislation which provide for
compensation for persons who cease to be insured. The general
assumption is that persons who cease to be compulsorily insured
for a considerable period will not remain outside the insurance
scheme for the whole of their future working career but will,
after a longer or shorter period, resume insurable employment.
I t is by no means unjust to refuse to refund contributions if
persons who cease to be liable to insurance are permitted to
maintain their status as insured persons by the payment of a
continuation fee or by continued insurance. Consequently, the
repayment of contributions is stipulated only in a few special
cases.
The Argentine law concerning insurance for bank staffs provides for the refund of contributions without interest to persons
who are dismissed after more than five, but less than fifteen,
years' service and who consequently cease to be insured.
Under the Bulgarian general scheme, insured women on their
marriage are refunded all the contributions which they have paid
after completing the qualifying period of 156 weeks.
In Chile salaried employees who leave Chile before acquiring
a right to a pension and who remain abroad for one year or over
receive the total capital sum standing to their credit. The same
applies if salaried employees do not engage in insurable employment for two consecutive years or if they acquire landed property
after paying contributions for at least two years.
In Ecuador (bank staffs) it is provided that any employee
who resigns his post voluntarily, or for some important reason,
is entitled to the refund of the total contributions paid on his
behalf (employer's and employee's contributions). If he resigns
because of certain misdemeanours he is entitled only to his own
contributions.
In the German Salaried Employees' Insurance Act it is provided
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t h a t women who have completed t h e qualifying period for an
old-age pension and who leave insurable employment within
three years after their marriage are entitled t o t h e refund of half
the contributions paid up t o t h e date of leaving.
Under the Greek insurance scheme for tobacco workers, persons
who cease t o be insured on account of sickness or invalidity
before they have acquired a right to an invalidity pension are
granted a refund of half the contribution (i.e. the workers' share)
with 6 per cent, interest.
I n Uruguay (bank and Stock Exchange staffs) the employees
of foreign banks who are transferred abroad are entitled t o the
refund of their own share of t h e contributions without interest.
If they return t o Uruguay later and become compulsorily insured,
they can revive their previous rights by paying back again t o
the insurance institution the sum refunded to them.
(2) Revival of Lapsed
Rights
The provisions on this subject are closely connected with t h e
general structure of the insurance scheme.
Whenever t h e system of uniform pensions has been adopted,
t h a t is to say, when the amount of t h e contribution paid by t h e
insured person does not affect the amount of t h e pension, it is
of comparatively little importance whether a person is re-credited
with his previous contributions or not, for an insured person who
leaves the insurance scheme for a long period and later returns
and completes a fresh qualifying period is in exactly t h e same
situation as another person who has paid contributions throughout
the whole of his working life. T h a t explains why in t h e British
health insurance and contributory pension schemes, where a
uniform pension is paid t o every insured person provided he has
completed t h e qualifying period, t h e question of t h e revival of
rights which have been allowed t o lapse hardly arises.
The situation is quite different under legislation which provides
for a pension rising in proportion t o the amount of t h e contributions paid. I n t h a t case, if there are no special provisions in
the legislation concerning t h e revival of lapsed rights, a person
who ceases to be insured before completing the qualifying period
and who later again becomes liable t o compulsory insurance
must not only complete the whole qualifying period just as if
he had never been insured, b u t also lose t h e contributions which
COMPULSORY INSURANCE OF EMPLOYED PERSONS
71
he paid when formerly insured, since they are not taken into
account when computing his pension. This treatment appears as
a great hardship to a person who during a previous period of
insurance had completed the qualifying period and so acquired
conditional pension rights which are not recognised on his re-entry
into insurance.
It is this situation which is dealt with by the provisions concerning the revival of lapsed rights. These provisions prescribe
the conditions under which the contributions paid during the
first period of insurance can be taken into account for the purpose
of reckoning the qualifying period for the pension.
Under the Bulgarian general scheme, former contributions are
taken into account as soon as the insured person has completed
a second qualifying period of 156 contribution weeks.
Under the miners' insurance scheme in Czechoslovakia, a
person who ceases to be insured after having completed the
qualifying period can revive the rights acquired during that
period after one year's membership, provided that he resumes
insurable employment within three years after ceasing to be
insured. Persons who cease to be compulsorily insured before
completing the qualifying period cannot revive their rights
except by continued insurance.
Under the German workers' insurance scheme, the rights
acquired by the previous contributions of a person formerly
insured are revived if he resumes insurable employment or
continues voluntarily to be insured, and completes a qualifying
period of 200 contribution weeks. In the case of persons who
have completed their sixtieth year before beginning their second
period of insurance, the above provision applies only when a
thousand insurance stamps were affixed during their first period
of insurance. In the case of persons over forty years of age,
voluntary insurance leads to the revival of lapsed rights only
when at least 500 insurance stamps were affixed during the first
period of insurance and when a period of 500 contribution
weeks has been completed in the second period of insurance.
Under the salaried employees' insurance scheme, lapsed rights
are revived when the insured person has resumed the payment
of contributions, either under the compulsory provisions or
voluntarily, for at least twenty-four months if the qualifying
period had already been completed or for at least forty-eight
months in other cases. Under the German miners' insurance
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scheme, lapsed rights can be revived when the person in question
again becomes compulsorily insured and remains so for six consecutive months. In Great Britain and Northern Ireland it is
provided under the contributory pension scheme that a person
who has exhausted his period of free insurance (2f years on the
average) but re-enters insurable employment within two years
thereafter shall recover his rights on completing a reduced
qualifying period of twenty-six weeks.
According to the Hungarian legislation on invalidity, old-age
and widows' and orphans' insurance, lapsed rights can be revived
if at least twenty-six weekly contributions are paid in the year
immediately following the date on which the worker ceased to
be insured, or if the necessary contributions for the maintenance
of conditional rights are paid up at any later date before the risk
insured against materialises, or again, if the insured person
becomes liable to insurance a,nd completes the qualifying period.
Under the miners' insurance scheme, lapsed rights can be
revived if the worker again becomes liable to insurance within
three years after losing his rights and pays contributions for one
year.
Under the salaried employees' insurance scheme in Luxemburg,
the validity of lapsed contributions is revived when the employee,
having again become liable to insurance, has paid monthly
contributions to the number of twenty-four if he had already
completed the qualifying period, or forty-eight otherwise.
Under the workers' insurance scheme, a worker can revive his
rights when he becomes liable to compulsory insurance again
and completes a fresh qualifying period of 1,350 contribution
days.
The Polish legislation on insurance for intellectual workers
stipulates that persons who have lost their rights and who again
become liable to insurance after a break of less than five years
can revive their rights by contributing for twelve months. If
the interruption exceeded five years but was less than ten years,
twenty-four monthly contributions must be paid. After an
interruption of from ten to fifteen years, thirty-six monthly
contributions are required. After an interruption of fifteen
years, lapsed rights cannot be revived.
In Rumania lapsed rights are automatically revived as soon as
contributions are paid on the basis of fresh insurance.
COMPULSORY INSURANCE OF EMPLOYED PERSONS
73
(3) Continuation Fee
In countries where this institution exists, a person who ceases
to be insured can maintain the rights acquired by his previous
contributions by the regular payment of a very low fee. This
means that when he has not completed the qualifying period and
has not yet acquired even a conditional right to benefit he can
prevent these contributions from lapsing altogether. At the
same time, the mere payment of a continuation fee cannot be
reckoned towards the completion of the qualifying period. If,
however, the worker again enters insurable employment, then his
previous contributions automatically count towards the qualifying period as a result of the regular payment of this fee. A
person who completes the qualifying period before ceasing to
be insured and who then regularly pays his continuation fee
maintains his conditional right to benefit, so that insurance
benefits must be paid to him in the event of the risk's materialising.
Such a fee exists in Czechoslovakia (miners), France (salaried
employees in Alsace-Lorraine), Germany (miners) and Hungary
(miners). In Czechoslovakia, however, the payment of a continuation fee is permitted only when the insured person has already
completed the qualifying period. Similarly in France (salaried
employees in Alsace-Lorraine) it is provided that only persons
who have completed the qualifying period by the payment of
120 monthly contributions may avail themselves of the continuation fee. If the qualifying period has not been completed,
the only way of maintaining the validity of past contributions
is by continued insurance.
The table on page 74 shows the rate of the continuation fee in
different countries.
(4) Continued Insurance
Where this solution is adopted, persons who cease to be liable
to insurance are afforded the opportunity of continuing to be
insured on a voluntary basis. I t is of course understood that
they must not have left the insurance scheme on account of
invalidity. If the person in question continues to pay insurance
contributions, he not only maintains his acquired rights but
may even augment these rights.
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AMOUNT OF CONTINUATION F E E
Country
Scheme
Amount
oí continuation lee
Czechoslovakia
(1) Workers
10 kr. a year.
(2) Salaried employees 10 kr. a year.
(3) Miners
3 kr. a month.
France (Alsace-Lorraine)
Germany
Salaried employees
Miners
Workers : 0.50 RM. a
month.
Employees : 15 RM. a
month \
Hungary
Miners
40, 60, 70 heller or
1 pengö a month,
according t o the
wage class.
Netherlands
Miners
0.10 fl. a month.
Poland (Upper Silesia)
Miners
0.50 zi. a month.
6 fr. a year.
1
This applies only to salaried employees in mining undertakings who cease to be insured
through exceeding the maximum lirait of earnings. Salaried employees who leave the
miners' insurance scheme and engage in some other occupation where insurance against
invalidity is compulsory or who are not engaged in any remunerative occupation pay only
0.50 RM. a month.
A person who, on ceasing to be employed, has not completed
the qualifying period and therefore has not even a conditional
right to benefits, can complete that period by continued insurance
and thus obtain benefits when the risk materialises. If the
person has already completed the qualifying period on ceasing
to be insured, he can augment his right to benefits by continued
insurance, since the contributions paid under continued insurance
are reckoned in the computation of the pension in the same way
as his earlier contributions.
(a) Persons Eligible for Continued Insurance
The various laws do not grant the same opportunity of continued insurance to all persons who cease to be compulsorily
insured.
The widest opportunity of continued insurance, open to all
persons leaving the compulsory insurance scheme, is granted in
Austria (salaried employees), Belgium (workers and salaried
employees), Czechoslovakia (salaried employees), France (workers
and salaried employees in Alsace-Lorraine), Germany (workers
COMPULSORY INSURANCE OF EMPLOYED PERSONS
75
and salaried employees), Hungary (employed persons and miners),
Italy (employed persons), Luxemburg (workers and salaried
employees), Poland (intellectual workers) and Spain (employed
persons). I n Great Britain and Northern Ireland and the Irish
Free State continued insurance is also permitted t o all persons
who were formerly compulsorily insured, with the exception of
married women.
I n other countries the number of persons eligible for continued
insurance is more or less restricted. I n Bulgaria, for example,
under the general scheme, continued insurance is possible only
for persons who cease t o be compulsorily insured on account of a
change of occupation. I n some countries continued insurance
is possible only for persons whose income or earnings remain
below a certain limit. I n Chile, for instance, persons who cease
t o be compulsorily insured are permitted t o continue in insurance
if their total income is less t h a n 16,000 pesos a year. Similarly,
in France, under t h e Act of 1930, advantage m a y be taken of
continued insurance only when the person in question earns less
than 17,000 francs a year from his occupation; in towns of over
200,000 inhabitants the limit of earnings is 20,000 francs; and
in both cases an allowance of 2,000 francs m a y be added for each
child, up t o a maximum of 27,000 francs. This means t h a t all
persons who cease t o be compulsorily insured because their
earnings have exceeded the prescribed limits may enter continued
insurance if their earnings are not more t h a n 2,000 francs a year
above t h e limits for compulsory insurance. Moreover, persons
who have taken advantage of continued insurance in good time
may remain in it even if their earnings should later exceed t h e
above-mentioned limits.
The Czechoslovak miners' insurance scheme grants the right
t o continued insurance t o persons who cease to be compulsorily
insured before completing the qualifying period of five contribution years. They are permitted to continue t h e payment of
their monthly contributions until the qualifying period has been
completed. There is no possibility of continuing further and
improving their situation, b u t the conditional rights t o benefits
acquired by completing the qualifying period can be permanently
maintained by t h e payment of a continuation fee.
The general scheme in Rumania permits continued insurance
only t o persons who have completed the qualifying period before
ceasing to be compulsorily insured.
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(b) Minimum Period of Insurance as a Condition for Continued
Insurance
In many countries continued insurance is possible irrespective
of the length of the period of compulsory insurance. That is
the case in France (employed persons), Germany (workers),
Italy (employed persons) and Luxemburg (workers), where no
time limit is laid down. It would indeed be sufficient for a
person to have paid one contribution under compulsory insurance.
In other countries a minimum period of compulsory insurance
is required : these periods are shown in the following table :
Austria
Salaried employees
60 months
Belgium
Salaried employees
10 years
Bulgaria
Employed persons
156 weeks
Czechoslovakia
Salaried employees
30 months
(Alsace-Lor- Salaried employees
6 months
Salaried employees
4 months
France
raine)
Germany
Great Britain and Nor- Employed persons
thern Ireland
104 weeks
Greece
Tobacco workers
Hungary-
Miners
Irish Free State
Employed persons
Luxemburg
Salaried employees
30 months
Intellectual workers
4 months
, Poland
Rumania
Employed persons and
craftsmen
1,500 weeks
60 months
104 weeks
200 weeks
Miners
8 years
(c) Time Limit for Entering Continued Insurance
Anyone who ceases to be compulsorily insured and wishes to
continue in insurance must indicate his intention to that effect.
In many countries no formal declaration is required; the payment
of the first voluntary contribution is taken as indicating the
intention of the worker to continue in insurance. This is the
case in Chile (workers), France (workers and salaried employees
in Alsace-Lorraine), Germany (workers and salaried employees)
COMPULSORY INSURANCE OF EMPLOYED PERSONS
77
and Luxemburg (workers and salaried employees). In these
countries it is not necessary for continued insurance to begin
immediately on the cessation of compulsory insurance. The
insured person can take advantage of his right to enter continued
insurance so long as his compulsory contributions remain valid.
In other insurance laws a special time limit is laid down for
entering continued insurance. This period is reckoned from the
date on which insurance ceases to be compulsory. The time
limit is one month in Austria (salaried employees), three months
in Czechoslovakia (workers and salaried employees) and in
Hungary (miners), and two years in Italy (employed persons).
Under the Bulgarian general scheme and the Rumanian miners'
scheme, it is provided that continued insurance must begin as
soon as compulsory insurance ceases.
§ 9.—Voluntary Insurance Proper
In a number of countries some classes of persons who have not
come within the scope of compulsory insurance are granted the
right of voluntary insurance.
According to a number of insurance laws, voluntary insurance
is permitted in principle only to persons who are employed but
who for some reason or other are not liable to compulsory
insurance. In another group of States this right is extended to
certain independent persons as well as to certain employed
persons. A further group of laws permits voluntary insurance
for all persons engaged in a non-insurable occupation. Finally,
there are a few insurance laws which permit any person not liable
to compulsory insurance to become insured voluntarily irrespective of whether he is engaged in any economic activity or not.
CONDITIONS FOR VOLUNTARY INSURANCE
(1) Physiological Conditions
(a) Sex
In a few laws there are special provisions relating to women.
In Spain, for example, women who are nationals of a foreign
country are not admitted to voluntary insurance under the
Workers' Insurance Act. Under British and Irish legislation
voluntary insurance is not open to married women.
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(b) Age
I n many laws voluntary insurance is permitted only t o persons
who have not passed a certain age limit, viz. :
Years
Belgium
Chile
France
Workers
Workers
Employed persons..
France (Alsace-Lorraine) . .
n
Germany
Luxemburg
Poland (Upper Silesia)
45
45
40
j u r i e d e'mp'toyees '. Z
\ Workers
40
^ Salaried employees .
40
Workers
40
Miners
45
Under the Spanish general scheme, foreigners are entitled t o
insure voluntarily only when they have become of age.
(c) Working
Capacity
Voluntary insurance is never permitted for invalids, and a few
laws require a medical certificate t o be produced before voluntary
insurance is allowed. This is the case in Austria (workers),
Chile (workers) and France (employed persons).
(2) Political and Civil
(a)
Conditions
Nationality
I n several countries voluntary insurance is permitted only for
nationals. This is the case without any exception, in Chile
(workers), France (employed persons) and Italy (employed
persons). Under the Bulgarian general scheme, foreigners may
enter voluntary insurance when they obtain a written permit t o
t h a t effect from t h e authority which admits t h e m t o t h e country.
Under the Spanish general scheme, foreigners are excluded from
voluntary insurance only if they are women.
(b)
Domicile
As a general rule, t h e occupation on which voluntary insurance
is t o be based must be followed on national territory. There are
no special provisions on the subject except in Hungary (employed
persons) and Italy (employed persons). I n these countries
nationals who are resident abroad and have engaged for a certain
time in employment which, on national territory, would render
them liable t o insurance are entitled t o be voluntarily insured.
COMPULSORY INSURANCE OF EMPLOYED PERSONS
79
(c) Civil Status
This is of importance in only a few laws. In Chile (workers),
for example, voluntary insurance is permitted only to persons
who are married or who have dependants to maintain. Under
the Italian general scheme, wives of compulsorily insured persons
are entitled to become voluntarily insured if their income tax is
less than 60 lire. On the other hand, under British and Irish
legislation, voluntary insurance is not open to married women.
(3) Economic Conditions
In many countries the right to voluntary insurance is available
only to persons whose income does not exceed a certain limit.
In a few States, such as Chile (workers), France (employed
persons) and Italy (employed persons), the same limit is applied
both to employed persons and independent workers, whereas in
Bulgaria (employed persons) and Luxemburg (workers) the limit
applies only to persons working on their own account. In
Hungary (employed persons) the limit of income applies only
to salaried employees.
The limit of annual income in the different countries is as
follows :
Bulgaria (employed persons) : 50,000 leva.
Chile (workers) : 8,000 pesos.
France (employed persons) : 18,000 fr. in towns of over 200,000 inhabitants
or in industrial areas, 15,000 fr. elsewhere. These limits are raised by
2,000 fr. in respect of each child maintained by the insured person up to a
maximum of 25,000 fr.
Hungary (employed persons) : 12,000 pengö.
Italy (employed persons) : income yielding direct taxation of 500 lire.
Luxemburg (workers) : 10,000 fr.
In certain countries voluntary insurance is open to organised
groups. In Italy, for example, the mutual insurance funds of
the staffs of industrial and commercial undertakings are entitled
to arrange with the competent insurance institutions for voluntary insurance for all their members who are not covered by
compulsory insurance. In the miners' insurance scheme in the
Southern Provinces of Poland, workers and salaried employees
in undertakings attached to the mine may become voluntarily
insured only as a body and on condition that apprentices are
included.
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§ 10.—Legal Provisions and Statistics relating to Scope,
by Countries and Schemes
In order to afford a synopsis of the scope of the several schemes,
the main provisions of each are given, together with the relevant
statistics. The analyses of the schemes follow, as far as possible,
a uniform plan, and are arranged by countries.
ARGENTINA
Insurance of the Staffs of Private Undertakings
of P u b l i c Utility
Insurance is compulsory for all persons (salaried employees and workers)
permanently employed in undertakings engaged in public utility or similar
services (tramway, telephone, telegraph, wireless, gas, electricity, water
and public health services). I t is also compulsory for doctors and salaried
employees of medical services or welfare funds attached t o undertakings
covered by the legislation and for the permanent staff of the National
Superannuation and Pension Fund.
A permanent salaried employee or worker is taken t o be any person
who has been employed continuously for more than six months in any
undertaking. There is no age or wage limit. Insurance is not compulsory
for apprentices.
Persons who cease t o be employed before acquiring the right t o benefits
are not permitted t o continue voluntarily in insurance, but they are entitled
to a refund of the contributions which they have paid or t o a lump sum
benefit.
STATISTICS OF INSURED PERSONS
Year
1921
1922
1923
1924
1925
1926
1927
1928
1929
1930
:
Number
of
Insured persons
22,984
24,069
—
27,437
32,746
35,275
39,158
41,481
41,908
44,329
The Act came into force on 1 March 1921. At the end of 1930, the
44,329 insured persons belonged t o 86 undertakings, of which 37 had their
headquarters in the federal capital and the ten national territories, 36 in
the province of Buenos Ayres, 7 in the province of Santa Fé, and 6 in the
province of Cordoba.
I n s u r a n c e of t h e Staffs of B a n k s
COMPULSORY INSURANCE
Insurance applies only to the staffs of private banking and credit undertakings and t o persons working in these undertakings under conditions
determined by the undertaking and for remuneration. Insurance is compulsory for all employed persons, irrespective of their earnings, so that there
COMPULSORY INSURANCE OF EMPLOYED PERSONS
81
are no restrictions concerning the nature or duration of remunerated employment, no conditions concerning the personal qualifications of the workers,
and no physiological, political or civil conditions. Insurance is not compulsory for apprentices.
VOLUNTARY INSURANCE
No provision is made for voluntary insurance. Nevertheless, the staffs
of banking undertakings of an official or semi-official nature belonging t o
the provinces or municipalities may, at the request of the majority of the
staff, be admitted to voluntary insurance. I n that case insurance becomes
compulsory for the whole staff of the undertaking. When an application
has been submitted and accepted, the official or semi-official undertaking
cannot withdraw from insurance.
STATISTICS OF INSURED PERSONS
Year
1924 l
1925
1926
1927
1928
1929
1
Number
of
insured persons
7,779
8,108
8,378
8,353
8,835
9,205
Year in which the legislation came into force.
AUSTRIA
Insurance of Workers In Industry and Commerce
COMPULSORY INSURANCE
Insurance is compulsory for every person working by way of trade under
a contract of employment or apprenticeship. In principle it is also compulsory for home workers and for intermediaries between these workers and
the manufacturer.
Insurance is not compulsory for the following persons, who are covered
by special schemes :
(a) persons employed in agricultural or forestry undertakings;
(b) persons liable to insurance under the provisions of the Salaried
Employees' Insurance Act or exempt from liability to insurance
under that Act;
(c) persons insured against sickness under the Act concerning sickness
insurance for Federal salaried employees;
(d) railway employees who have a permanent situation.
Exemption from compulsory insurance is granted :
(a) in respect of subsidiary or occasional employment specified by
Order ;
(b) for persons in receipt of an invalidity or old-age pension;
(c) for the husband or wife and parents of the employer;
(d) for persons in receipt of inconsiderable remuneration, t o be specified
by Order;
(e) for persons working in private households as charwomen, laundresses,
sewing women, etc.
VOLUNTARY INSURANCE
Persons employed in private households and exempt from insurance may
be insured voluntarily in accordance with regulations t o be published, which
may make their entry into insurance dependent on the production of a
medical certificate.
6
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TRANSITIONAL OLD-AGE P E N S I O N SCHEME
As the invalidity, old-age and widows' and orphans' insurance scheme is
not yet working normally, a special transitional old-age pension scheme has
been established for the benefit of persons who would have been covered
by the insurance scheme if it had been completely in force. This transitional
scheme took effect as from 1 July 1927. Under this scheme an old-age
pension is granted from the age of sixty to workers or former workers in
industry and commerce who have exhausted their right t o benefits under
unemployment insurance or who were ineligible for benefits under that
insurance through being incapacitated for employment. Domestic servants
who cannot find employment after the age of sixty are also entitled t o a
pension, provided they were employed in domestic service for at least two
years during the last six years.
This transitional scheme applies only t o Austrian citizens resident in
Austria.
Agricultural Workers' Insurance
COMPULSORY INSURANCE
Insurance is compulsory for every person over the age of eighteen who
is employed by way of trade under a contract of employment or apprenticeship in an agricultural or forestry undertaking, including subsidiary undertakings such as horticultural undertakings, or in hunting, fishing or the
collection of resin, or in an association of cultivators working for gain and
regularly employing not more t h a n five workers, or as domestic servants
in the household of an employer in agriculture or forestry.
I n certain cases compulsory insurance may be extended, by order of the
competent Minister, t o landowners and tenants in agricultural and forestry
undertakings.
Exemption from insurance is granted :
(1) t o the husband or wife of the employer;
(2) t o persons who obtain theiir livelihood principally from some other
dependent occupation or whose livelihood is secured by an equity
in land transferred t o the heirs, based on a notary's deed or entered
in the land register;
(3) persons who engage in an employment liable t o compulsory insurance
merely in addition t o another occupation, not carried on on their
own account, which is their principal means of'livelihood;
(4) t o persons in receipt of poor relief who engage in an employment
liable t o insurance only occasionally, and t o persons who, owing
t o physical or mental infirmity or advanced age, are only capable
of work t o an insignificant extent.
Exemption from insurance is granted only when these persons receive
no money wage or a wage which is less t h a n one-third of the money wage
customarily earned by average workers in the same occupation in the commune in question.
Exemption from liability t o insurance is also granted t o relatives of the
employer (children, step children, adopted children, sons-in-law, daughtersin-law, parents, parents-in-law, grandparents, brothers and sisters), provided
the employer transmits t o the competent authority a declaration in writing
by which he binds himself to provide maintenance for these persons in case
of invalidity. This exemption ceases when the employer withdraws his
declaration. He is not permitted t o withdraw it in the case of members
of his own family.
TRANSITIONAL O L D - A G E P E N S I O N SCHEME
The invalidity, old-age and widows' and orphans' insurance scheme for
agricultural workers does not come into force until an Order t o this effect
is issued. I n the meantime, a special transitional system has been instituted
COMPULSORY INSURANCE OF EMPLOYED PERSONS
83
for the benefit of agricultural workers who, on account of age, are unable
to earn their living. This scheme took effect as from 1 January 1929.
A pension is granted t o agricultural workers of sixty-five years of age
or over who, in the course of the preceding four years, were employed for
not less t h a n two years in an occupation entailing liability t o sickness insurance, and who are no longer able to find employment. For certain categories of workers employed in rural areas, and in particular for persons
employed by producing and distributive co-operative societies or in sawmills,
the pensionable age has been fixed at sixty years.
These old-age pensions are granted only t o Austrian citizens resident in
Austria.
Salaried E m p l o y e e s ' I n s u r a n c e
COMPULSORY INSURANCE
Insurance is compulsory for salaried employees aged seventeen and
upwards, including commercial apprentices, etc., employed either by a local
authority, by a corporation, or by a private undertaking, with the exception
of railway employees. The term " salaried employee " refers only to nonmanual workers, including foremen and works officials in the mining
industry and in agricultural and forestry undertakings.
Exemption from insurance is granted to :
(1) married women who manage the household of their family, if they
are not engaged in an employment entailing liability t o insurance
for more than 50 hours a month and do not earn thereby more than
80 schillings a month;
(2) persons who, under the Salaried Employees' Insurance Act or on
account of their employment by a public service, are guaranteed
the right t o a pension, if they are engaged in educational or welfare
institutions for not more than twelve hours a week;
(3) persons who do not belong to the class of private or public salaried
employees and who engage in an employment entailing liability
t o insurance only occasionally and for a predetermined period of
not more than one month;
(4) persons who give instruction in the course of their secondary school
or college studies;
(5) the non-permanent artistic staff of music halls and circuses;
(6) commercial representatives working solely abroad and domiciled
abroad;
(7) employees of a foreign undertaking who are employed in Austria but
do not belong t o an Austrian branch of the undertaking;
(8) salaried employees accompanying an employer whose normal domicile
is not in Austria, provided they are only temporarily resident in
Austria.
VOLUNTARY INSURANCE
Continued Insurance
Persons who have paid sixty monthly contributions and cease t o be
compulsorily insured are permitted t o continue in insurance.
Voluntary Insurance Proper
Voluntary insurance is permitted only in the case of teachers who are
not salaried employees and who exercise their profession personally, without
the assistance of a third party.
84
SCOPE
NUMBER OF INSURED PERSONS ON 31 DECEMBER OF E A C H Y E A R
1918
1919
1920
1921
1922
1923
1924
1
2
a
ä
59,15o 1
68,-MX)1
80,40o 1
108.800 1
118,20o 1
130,517
135,266
1925
1926
1927
1928
1929
1930
135,308
136,165
205,337 2
216,695
228,873 3
227,232*
Estimated Agares.
Amendment of the legislation.
Including 5,009 voluntarily insured persons.
Including 6,463 voluntarily insured persons.
Miners' Insurance
•Every miner or overman, irrespective of his nationality, must belong t o
a mining fund. The term " miner " includes not only persons employed
in actual mining work but also those employed in subsidiary establishments
attached t o mines (foundries, crushing mills, washeries, forges, etc.) for the
working up of raw materials (treatment of ore).
Continued insurance and voluntary insurance proper are not permitted.
NUMBER OF INSURED PERSONS
1925
1926
1927
1928
1929
22,500
22,063
20,089
19,369
18,350
BELGIUM
Workers' Insurance
COMPULSORY INSURANCE
There are two groups of persons for whom insurance is compulsory
fa) wage-earning workers;
(b) independent workers.
(a) Wage-earning workers.—This class includes all workers of both sexes
of fourteen years or over who are employed in Belgium in the service of an
employer and in the employment of an undertaking with its head office
established in Belgium, irrespective of the amount of their remuneration.
Insurance is therefore compulsory not only for workers in commerce,
industry and agriculture, but also for domestic servants in receipt of wages.
Exemption from insurance is granted t o miners, seamen and salaried
employees, who are covered by special schemes, as well as t o wage earners
in the service of the public authorities, in so far as their employment entitles
them to a pension.
(b) Independent workers.—This category means all persons engaged on
their own account in manual or intellectual work and liable t o the occupational tax. Insurance is compulsory for all independent workers whose
income from their occupation does not exceed 18,000 francs a year.
VOLUNTARY INSURANCE
Any person resident in Belgium and not liable to compulsory insurance
may, irrespective of his nationality, become insured voluntarily provided
he is between the ages of six and sixty-five years.
The benefits guaranteed to voluntarily insured persons are identical with
COMPULSORY INSURANCE OF EMPLOYED PERSONS
85
those under the compulsory scheme. The right t o a widow's pension cannot
be acquired until two years after the first voluntary contribution has been
paid. This qualifying period of two years must be repeated whenever the
voluntarily insured person ceases t o pay contributions for more than two
years. When a voluntarily insured person dies before completing the qualifying period, the fraction of his contributions in excess of 300 francs a year
is refunded t o his widow without interest.
STATISTICS OF INSURED PERSONS
I t is still too early to determine the effects of the application of the Act
of 14 J u l y 1930. From 1 January 1926 until the introduction of the present
legislation compulsory old-age and widows' and orphans' insurance was
governed by the Act of 10 December 1924, which applied to all wage earners
under 65 years of age whose annual earnings did not exceed 12,000 francs,
with a supplement of 500 francs a year for each child maintained by the
insured person. Insurance was voluntary for persons whose annual income
did not exceed 15,000 francs, with a possible supplement of 1,000 francs
when the insured person was married, and a further 1,000 francs for each
child under sixteen years of age maintained by him. Under the 1924 Act
the number of insured persons was as follows :
Year
1927
1928
1929
1930
Compulsorily
insured persons
Voluntarily
insured persons
Total
1,276,700
1,358,070
1,409,500
1,431,080
460,972
487,042
497,500
468,233
1,737,672
1,845,112
1,907,000
1,899,313
Salaried Employees' Insurance
COMPULSORY INSURANCE
Insurance is compulsory for the following persons :
(1) salaried employees of both sexes of Belgian nationality who are
employed in Belgium or abroad by a Belgian firm established in
Belgium or a branch established in Belgium by a foreign firm,
irrespective of the amount of their remuneration;
(2) salaried employees of both sexes of foreign nationality who are
employed in Belgium on account of a Belgian firm established in
Belgium or a branch established in Belgium by a foreign firm;
(3) all salaried employees in the service of the State, provinces and communes and also those of public institutions and public utility
undertakings when not guaranteed by staff rules the right t o
pensions similar t o those granted under the legislation.
The following persons are assimilated to salaried employees :
(1) journalists;
(2) members of t h e teaching staff of private educational institutions t o
whom the Acts concerning teachers' pensions do not apply;
(3) persons exercising in Belgium the profession of lyric or dramatic
artiste or instrumental musician in pursuance of a contract of
employment binding them for a period of not less than one
month.
86
SCOPE
VOLUNTARY INSURANCE
Continued Insurance
Any person who ceases t o be liable t o compulsory insurance and has been
compulsorily insured for not less than ten years may continue voluntarily
in insurance. The contribution for persons formerly compulsorily insured
may not exceed the average of the contributions paid by him and his employer
on his account during the last three years in which he was liable t o insurance.
The period of ten years required for admission t o continued insurance is,
during the transitional period, reduced by a period equal t o the number
of years by which the age of the insured person exceeded 55 years when
the Act came into force. Under continued insurance the right t o benefits
cannot be acquired until two complete years after the date on which the
insured person ceases t o be employed as a salaried employee.
If an event insured against occurs before the expiry of this period, the
voluntary contributions already paid will be refunded without interest.
Voluntary Insurance Proper
Salaried employees of both sexes of Belgian nationality employed in
Belgium on account of a foreign firm not having a branch in Belgium or
employed abroad on account of a foreign firm not having a branch in Belgium
but resident in Belgium are entitled t o become insured voluntarily.
I n the case of voluntary insurance, as in the case of continued insurance,
the right t o benefits is subject to the completion of a qualifying period of
two years. When the risk materialises before the completion of the qualifying period, the voluntary contributions paid are refunded without interest.
STATISTICS O:F INSURED PERSONS
Year
Number
of
insured persons
1927
1928
1929
1930
199,062
205,369
229,700
239,829
Miners' Insurance
COMPULSORY INSURANCE
Insurance is compulsory for ei.il workers employed in Belgian mining
undertakings, irrespective of their wage, sex or age. They cease t o be liable
t o insurance, however, at the age of sixty-five, and the payment of an
old-age pension must commence not later than t h a t age. The system covers
not only coal-miners, but also delegates appointed t o the mining inspection
service, workers employed in metal mines worked under a concession, persons
employed in underground works, such as slate quarries, clay quarries, etc.,
and workers employed in factories working up the by-products of coal, or
in undertakings for digging and boring pits.
Apprentices and salaried employees in the above undertakings are not
compulsorily insured.
VOLUNTARY INSURANCE
No provision is made in the legislation for continued insurance or for
voluntary insurance proper. Nevertheless, insured persons who cease t o be
compulsorily insured retain the rights acquired by their contributions, which
are accumulated in an individual account.
COMPULSORY INSURANCE OF EMPLOYED PERSONS
87
STATISTICS O F INSUBED PERSONS
Year
Number
of
insured persons
1911
1912
1925
1926
1927
1928
1929
1930
141,570
149,733
245,698
246,611
239,292
236,188
224,615
225,781
!
BRAZIL
Insurance of the Staffs of Public Utility Undertakings
COMPULSORY INSURANCE
Compulsory insurance, which was introduced in 1923 for railway workers
and extended t o dock workers in 1926, was reorganised and extended by
the Decree of 1 October 1931.
According t o the new regulations, insurance is compulsory for the staffs
of public services engaged in land transport, lighting, the supply of power,
telegraph and telephone services, harbours, water supply, drainage services, etc., directly controlled by the Federal authorities, the States, the
municipalities, undertakings or groups of undertakings, or private persons.
The staff of an undertaking means every person employed in it, whether
permanently or temporarily, irrespective of whether he is working under a
contract of employment or a special commission, and irrespective of the
nature of his remuneration.
Insurance is also compulsory for officials in the central accounts offices
(contadurías centraes) when they belong to the staff of undertakings covered
by the legislation.
Wage earners belonging to the undertakings specified continue t o be
insured when they are sent by those undertakings to work temporarily in other
undertakings not covered by the legislation, provided that the persons in
question continue t o pay their contributions.
The insurance does not cover temporary workers who are employed for
less than 30 consecutive days, or foreign technical workers whose salaries
are fixed in foreign currency and whose contracts are for a specified period.
VOLUNTARY INSURANCE
Continued Insurance
An insured person who is dismissed after more than ten years' service
may continue t o be insured until he has completed thirty years' contributions,
provided he pays double the contribution corresponding to his remuneration
a t the date of his dismissal. He will then be entitled, at the age of fiftyfive, t o a pension equal to that which he would have obtained if he had
remained in the situation which he formerly held.
Voluntary Insurance Proper
Voluntary insurance is permitted, provided the workers in question pay
double the contributions which they would have t o pay as compulsorily
insured persons. This applies to the following groups :
(1) Wage earners and employees of funds set u p under the Decree of
1 October 1931 and of co-operative societies managed or supervised
by the undertakings covered by that Decree;
88
SCOPE
(2) Teachers in schools maintained or subsidised by these undertakings or
by the co-operative societies attached t o the undertakings for the
benefit of the insured persons and members of their families;
(3) Employees in central accounts offices when they do not belong t o the
staff of undertakings covered by the Decree ;
(4) Foreign technical workers who are exempt from compulsory insurance.
STATISTICS! OF INSURED PERSONS
On 31 December 1929 the number of compulsorily insured persons was
140,435, of whom 130,163 were railway workers and 10,272 dockeTS. N o
statistics have so far been published of the number of insured persons under
the new regulations.
BULGARIA
Employed P e r s o n s ' Insurance
COMPULSORY INSURANCE
Insurance is compulsory for all workers, salaried employees and apprentices
between the ages of fourteen and sixty years employed in State, public or
private establishments, undertakings or estates, as well as domestic servants.
There is no wage limit for entry into insurance.
Insurance is not compulsory for craftsmen, traders, farmers, persons
engaged in the liberal professions, or public officials. The last-mentioned
group is covered by a special insurance scheme. The competent Ministry
may also exclude from insurance seasonal workers, casual or temporary
workers, etc.
Insurance is not compulsory for the wife of the employer or any other
members of his family in the ascending or descending lines.
VOLUNTARY INSURANCE
Continued Insurance
Persons compulsorily insured who have contributed for not less t h a n
156 weeks may continue in insurance.
Voluntary Insurance Proper
Voluntary insurance is open t o craftsmen, traders, farmers, and members
of the liberal professions, when their income does not exceed 50,000 leva.
Wage earners in public undertakings who are covered by a special insurance
scheme may become voluntarily insured if the benefits guaranteed them
under the special scheme are less than those provided by the general
insurance legislation.
STATISTICS OF INSURED PERSONS
Year
Number
of compulsorily
insured persons
1924
1925
1926
1927
1928
1929
167,220
241,143
225,074
217,760
243,429
278,443
The number of voluntarily insured persons is estimated at about 1,000.
COMPULSORY INSURANCE OF EMPLOYED PERSONS
89
CHILE
Workers' Insurance
COMPULSORY
INSURANCE
Insurance is compulsory for wage-earning workers and for certain groups
of independent workers.
Wage-earning Workers
Insurance is compulsory for every person under the age of sixty-five years
who normally has no income or means of subsistence other than the wage
or salary paid by the employer, provided that the said wage or salary does
not exceed 8,000 pesos a year. This clause applies also t o domestic servants.
Persons on probation or apprentices, even if they are not in receipt of remuneration, are compulsorily insured.
Persons Excluded from Compulsory Insurance
The legislation does not apply t o the following groups, which are covered
by special schemes :
(1) officials employed by the State or the communes;
(2) the staffs of newspapers;
(3) private employees;
(4) the staffs of State railways.
Persons Exempted from Compulsory Insurance
Exemption from insurance is granted to members of mutual benefit
societies when these societies grant benefits equal to those guaranteed by
the legislation, provided always that the society has been recognised by the
Insurance Fund.
Independent Workers
Insurance is also compulsory for workers and craftsmen working independently, persons who perform work or services directly for the public in streets,
public gardens, galleries or shops, small manufacturers and small tradesmen,
whether itinerant or not, provided, in all cases that their average annual
income does not exceed 8,000 pesos.
VOLUNTARY
INSURANCE
Continued Insurance
Insured persons who cease t o be compulsorily insured because their wage
or income has exceeded the limit of 8,000 pesos a year may continue in
insurance so long as their annual wage or income remains below 16,000 pesos.
Voluntary Insurance Proper
Voluntary insurance is open t o persons not liable t o insurance who are
under the age of forty-five and whose income does not exceed 8,000 pesos
a year, provided that they obtain a certificate of health from a doctor
appointed by the insurance fund. This right is restricted, however, t o
persons of Chilian nationality who are married or have a family t o support.
STATISTICS OF INSURED
Year
*
1925
1926
1927
1928
1929
1930
PERSONS
N u m b e r of
insured persons
148,569
496,802
722,934
924,901
1,124,190
1,240,000
90
SCOPE
As there were 8,943 persons who ceased to be insured in 1930, the actual
number of insured persons who were registered on 31 December 1930 was
1,231,057. The number of insured persons working on their own account
and the number of voluntarily insured persons are included in the above
table.
Compulsory Provident ¡Scheme for Salaried Employees
Although this scheme is not one of insurance in the strict sense of the term,
it may be of interest to mention its main features.
Employers are obliged t o pay t o the Savings Bank 10 per cent, of the
monthly wage of every employee covered, to be accumulated in an individual
'account. Half of this amount is charged to the employer himself, who
is also obliged t o pay into the fund :
, (1) half the first monthly wage;
(2) the difference between the old and the new wage for one month when
the employee's wage is increased;
(3) 25 per cent, of certain profits specified in the legislation concerning
the rights of salaried employees.
In principle, these provisions apply to employees of either sex between
the ages of fourteen and fifty years employed t o perform services which
are mainly intellectual.
No such payments are due in the case of employees covered by special
provident funds. Such funds exist for State officials and journalists, municipal officials, the employees of certain banks, the armed forces, the police,
railways and other State undertakings.
At the end of 1929 the number of individual accounts was 84,351.
CUBA
Seamen's and Harbour Workers' Insurance
• Insurance is compulsory for the following persons :
1. Salaried employees, skilled or technical workers and unskilled workers
of both sexes employed by shipping undertakings, whether working
in offices, at the docks, or on vessels;
2. Salaried employees and workers employed by forwarding agencies,
whether national or foreign;
3. Employees and workers employed in dockyards, shipbuilding yards
and marine engine factories ;
4. Employees and workers on wharves, employed by shipping companies
or by private persons, including wharves which have been conceded
by the State ;
5. Permanent employees and workers employed by undertakings engaged
in maritime or river transport ;
6. Employees and workers employed by companies or in warehouses for
the storing of sugar and other products to be transported by sea ;
7. Employees appointed by seamen's organisations for service under the
State, when they have been entered for more t h a n five years in the
registers of the Provincial Governments of the Republic.
Insurance is not compulsory for managers of shipping companies or for
persons working on piece or job rates, if they have a share in the capital
or in the profits of the undertaking.
COMPULSORY INSURANCE OF EMPLOYED PERSONS
91
CZECHOSLOVAKIA
Workers' Insurance
COMPULSORY INSURANCE
Insurance is compulsory for every person of the age of sixteen and
upwards who performs work or renders services in the Czechoslovak
Republic under a contract of employment or apprenticeship (as an improver
or probationer), and not by way of subsidiary or occasional employment.
Consequently insurance includes agricultural workers, domestic servants
and home workers. The workers' insurance scheme does not cover salaried
employees, whose insurance is regulated by special legislation. Similarly,
the workers' scheme does not apply t o miners, employees of the State,
communes, statutory corporations or their undertakings, including railway
workers, all of whom are covered by special schemes.
Persons who engage in an insurable occupation for the first time after the
age of sixty are exempt from insurance.
Certain groups of persons, such as home workers, charwomen, sewing
women, etc., may be exempted from insurance by Order when their earnings
do not exceed a minimum fixed by the Central Insurance Institution. This
minimum has been fixed in principle at 120 Kc a month for home workers,
but the figure may be altered for certain groups of these workers.
VOLUNTARY INSURANCE
Continued Insurance
Persons who cease t o be liable t o compulsory insurance but are not
incapacitated may continue in insurance if they do not enter another insurable employment and if they satisfy the following conditions :
(1) they must have been compulsorily insured for not less than three
months ;
(2) they must remain resident in Czechoslovakia;
(3) they must intimate their decision within four weeks of the date on
which they ceased t o be compulsorily insured.
Instead of continuing in insurance the worker may decide simply to maintain the rights acquired during his period of insurance. These rights automatically remain in force for eighteen months after he ceases t o be compulsorily insured. If he wishes t o maintain them beyond that date the worker
must pay a continuation fee of 10 Kc annually.
Voluntary Insurance Proper
The Central Insurance Institution is permitted t o insure persons not liable
t o compulsory insurance for benefits equal t o or higher than those prescribed
in the legislation. The conditions for such insurance and the rates of contributions must be approved by the competent Minister. Up t o the present
no advantage has been taken by the Institution of this faculty.
STATISTICS OF INSURED PERSONS
(At End of Year)
1926
1927
1928
1929
1930
2,168,000
2,177,000
2,331,000
2,306,000
2,200,000
These figures include voluntarily insured persons, the number of whom
is very small.
92
SCOPE
Salaried Employees' Insurance
COMPULSORY
INSURANCE
Insurance is compulsory for all persons over the age of 16 who render
services of a higher grade (i.e. intellectual services) in the Republic of Czechoslovakia under a contract of service or apprenticeship, provided their occupation is not subsidiary or occasional. Consequently, insurance extends t o
salaried employees in agriculture and mining undertakings. The law contains a list of the occupations covered, but this list is without prejudice to
the decisions of the Law Courts as t o liability t o compulsory insurance for
any other occupation not mentioned in the list. There is no limit of earnings.
Insurance is not compulsory for the following persons :
(1) Salaried employees of the State and the public authorities, and
employees of the National Bank and undertakings managed by
statutory corporations, in so far as these employees and their survivors are guaranteed the right to pensions at least equivalent to
those guaranteed under the compulsory insurance scheme ;
(2) Salaried employees of foreign undertakings which have no permanent
establishment in Czechoslovakia;
(3) Salaried employees of official representatives of foreign countries and
international commissions, in so far as they enjoy the rights of
extra-territoriality.
VOLUNTARY
INSURANCE
Persons who, while not incapacitated for employment, cease t o be liable
t o compulsory insurance may voluntarily continue in insurance, provided
that they have t o their credit at least thirty contribution months.
Insurance must be continued immediately after ceasing to be compulsorily
insured. Any person who does not wish t o continue in insurance may maintain the rights acquired undeir the compulsory scheme by paying a continuation fee of 10 crowns a year.
No provision is made for voluntary insurance by persons who were not
previously compulsorily insured.
STATISTICS OP INSURED PERSONS
1924
1925
1926
1927
1928
1929
186,968
203,580
224,611
243,884
265,070
293,917
DISTRIBUTION OF INSURED PERSONS BY OCCUPATIONS
(In 1927, per thousand insured persons)
Agriculture and forestry
Industry and the cra,fts
Commerce and transport
Other occupations
74
367
395
164
1,000
Miners' Insurance
COMPULSORY
INSURANCE
Insurance is compulsory for all persons, irrespective of their age or remuneration, who are employed in the Republic of Czechoslovakia by a mining
undertaking and are not covered by any other compulsory insurance
scheme. Compulsory insurance also applies t o apprentices.
COMPULSORY INSURANCE OP EMPLOYED PERSONS
93
The miners' insurance scheme does not apply t o salaried employees who
are covered by the salaried employees' pension scheme. Similarly, it does
not apply to workers employed in mining undertakings on woTk which is
not directly connected with mining : these workers fall under the general
workers' insurance scheme.
VOLUNTARY INSURANCE
Insured persons who cease t o be compulsorily insured before completing
the qualifying period of five years which gives them the right to benefits
may continue in insurance until they have completed this period.
STATISTICS OF INSURED PERSONS
(At 1 January of each year)
1926
1927
1928
1929
1930
134,003
137,063
133,981
135,801
140,340
ECUADOR
Insurance of the Staffs of Banks
COMPULSORY INSURANCE
Bank employees have been brought under the provisions of the Pension
Insurance Act for Government officials. According to the provisions of
that Act, the board of management of the pension fund must draw up rules
concerning the limits of the scope of this insurance. Insurance is not compulsory for foreigners.
VOLUNTARY INSURANCE
Continued Insurance
Persons who cease t o be compulsorily insured may continue in insurance
by the regular payment of the contribution due at the date when their
obligation ceased.
Voluntary Insurance Proper
Any person may become voluntarily insured in order t o obtain the right
to an individual pension.
FRANCE
Employed Persons' Insurance
COMPULSORY INSURANCE
Insurance against invalidity, old age and death is compulsory for all
employed persons, whether workers or salaried employees, as well as for
foremen and similar categories, with the exception of persons employed in
agricultural occupations, who are liable to compulsory insurance against
old age and death, but are exempt from invalidity insurance.
Insurance is not compulsory for persons whose annual earnings exceed
15,000 francs. I n towns of over 200,000 inhabitants and in industrial
areas t o be determined by the Ministry of Labour the maximum limit of
remuneration is 18,000 francs. This maximum is increased by 2,000 francs
if the employed person has one child dependent on him, by 4,000 francs if
he has two children, and if he has three or more it is increased t o 25,000 francs.
Employed persons are taken to be persons who habitually work for remuneration during not less than ninety days in the year. Subject to this
reservation, insurance is compulsory for temporary, seasonal or occasional
workers and for persons engaging in some subsidiary occupation. Apprentices are liable to insurance even when they receive no cash remuneration.
94
SCOPE
Insurance also covers half-sha.re tenants who usually work alone with
the assistance of members of their family, if they did not possess any livestock
when they took their farm.
Insurance ceases t o be compulsory when the insured person has reached
the age of sixty years, but he may postpone drawing his pension from year
t o year, and if he does so and continues in employment he is still insured
against the risks of sickness and death.
Children who. are subject to compulsory school attendance (under the
age of eleven if they hold a school certificate, or under the age of thirteen
if they have not such a certificate) who engage in remunerated employment
of a kind not prohibited by Bool: II (section 1) of the Labour Code are not
deemed t o be employed persons.
The scope of the legislation does not include officials employed by public
authorities or services, railwayman, miners, seamen, tramway workers, etc.,
who are covered by special schemes.
The Act of 1930 does not apply t o the following departments : HautRhin, Bas-Rhin, and Moselle, where the insurance schemes in force at the
time of their transfer t o France have been maintained.
Children who are employed by their parents and work with them without
receiving any money wage are excluded from the scope of the Act.
VOLUNTARY INSURANCE
Continued Insurance
Persons who have been compulsorily insured are not permitted t o continue
in insurance except when their earnings are not more t h a n 2,000 francs in
excess of the maximum figures laid down in the legislation. When persons
who were formerly compulsorily insured have been admitted to continued
insurance they remain insured, against the risks of invalidity, old age and
death, even when their remuneration passes these figures.
Voluntary Insurance Proper
Voluntary insurance is open to persons who, not being employed persons,
are mainly dependent on their work for their livelihood (craftsmen, small
employers, tenant farmers, smallholders, intellectual workers who are not
employees, etc.), provided that their annual income from their work does
not exceed the maximum figures laid down in the legislation. Admission
to voluntary insurance is possible only up t o the age of sixty, and the
applicant must produce a medical certificate stating that he is not suffering
from any acute or chronic disease or from any form of infirmity likely t o
cause considerably increased morbidity.
Should the income of a voluntarily insured person from his employment
exceed the limits fixed for admission, he is still entitled to continue as a
contributor. Voluntary insurance is reserved for persons of French nationality.
STATISTICS OF INSURED PERSONS
NUMBER OF INSURED PERSONS ON 3 1 DECEMBER 1 9 3 1
Commerce, industry sind assimilated occupations :
Compulsorily insured persons
Voluntarily insured persons
Agriculture :
Compulsorily insured persons.
Voluntarily insured persons
8,484,012 2x
24,105
784,839
86,471
1
To this figure should be added the number of persons covered by the schemes referred
to in section 49 of the Act of 30 April 1930, who, according to the Decrees on the subject,
have to be registered for the risks covered by social insurance which are not covered
by these special schemes. In this way 17,87i persons have been registered for sickness.
maternity
and death, and 10,008 have been registered for the risks of old age and invalidity,
8
Including women, to the number of 8,262, who are covered by a special insurance
scheme.
COMPULSORY INSURANCE OF EMPLOYED PERSONS
95
Workers' Insurance in Alsace-Lorraine
COMPULSORY INSURANCE
The scope of the workers' insurance scheme is substantially the same as
that of the German workers' scheme.
Salaried employees, foremen and other persons covered by special schemes
are excluded from compulsory insurance.
The insurance does not apply to persons employed on local railways or
tramways or to workers in State factories and military establishments, who
are covered by special schemes against the risks of invalidity, old age and
death.
VOLUNTARY INSURANCE
Continued Insurance
Any person who ceases to be liable to compulsory insurance may continue
voluntarily in insurance by paying the total contribution for any wage class
selected by him, but not lower than the third.
Voluntary Insurance Proper
Voluntary insurance is open to the following :
(1) persons carrying on industries and other owners of undertakings who
do not normally employ workers liable t o compulsory insurance
or who employ not more than two such workers;
(2) persons exempt from insurance on the ground that they are employed
only occasionally.
STATISTICS OF INSURED PERSONS
The exact number of insured persons is not known, but the official estimates are as follows :
1913
1919
1920
1921
1922
1923
393,185
260,613
348,182
322,175
347,029
374,813
-
1924
1925
1926
1927
1928
1929
392,392
410,738
423,793
421,353
435,049
438,031
Salaried Employees' Insurance in Alsace-Lorraine
COMPULSORY INSURANCE
The scope of compulsory insurance is substantially the same as in the
case of German salaried employees. The annual limit of earnings for
liability t o insurance is fixed at 18,000 francs.
VOLUNTARY INSURANCE
Continued Insurance
Insured persons who cease to be liable to compulsory insurance may
continue voluntarily in insurance provided that they have contributed for
not less t h a n six months under the compulsory scheme. Persons who are
thus insured must pay eight monthly contributions every year in a wage
class selected by them, but not lower than the second.
Compulsorily insured persons who have completed the qualifying period
and therefore paid at least 120 monthly contributions may maintain their
right to benefits by paying a continuation fee of 6 francs a year.
96
SCOPE
Voluntary Insurance
Proper
Persons exempt from compulsory insurance because their occupation,
although in itself insurable, is merely temporary, or because they do not
receive any cash remuneration, are permitted to become insured voluntarily.
STATISTICS OF INSURED PERSONS
1920
1921
1922
1923
1924
27,410
28,353
31,719
33,804
37,048
1925
1926
1927
1928
38,286
36,876
45,364
48,344
During 1928, out of 48,344 insured persons, 43,686 were compulsorily
insured and 2,739 voluntarily insured, while 1,919 were paying a continuation
fee.
Miners' Insurance
COMPULSOKY INSURANCE
Insurance is compulsory for all workers and salaried employees in mining
undertakings, including slate quarries. Insurance is thus compulsory for
the following persons :
(1) all underground workers;
(2) workers employed at the surface on subsidiary tasks connected with
extraction or performed on the premises or in the workshops or
yards which are dependencies of the mine ;
(3) salaried employees engaged in extraction, from the chief engineer t o
the overman;
(4) office employees who, on account of their place of employment or
their occupation, are directly attached t o and work on the premises
of the mine or are attached t o subsidiary undertakings which are
assimilated to mines;
(5) subject to certain conditions, the officials of workers' or salaried
employees' trade unions or federations of trade unions in the
mining industry;
(6) underground and surface workers and salaried employees in slate
quarries ;
(7) paid employees of relief societies (sickness insurance funds) ;
(8) safety delegates appointed by the miners;
(9) workers and salaried employees in industries attached to mines,
managed by the owners of the mines and assimilated to mines by
an Order of the competent Ministries.
Insurance is not compulsory for apprentices.
VOLUNTARY INSURANCE
The only form of voluntary insurance which exists is continued insurance
for workers and salaried employees who have worked for not less t h a n three
years in an undertaking assimilated t o a mining undertaking. When they
leave such an undertaking the insured persons may, on making application,
continue to be insured so long as they are employed in an establishment of
the same kind which has not been assimilated t o a mining undertaking.
COMPULSORY INSURANCE OF EMPLOYED PERSONS
97
STATISTICS OP INSURED PEBSONS
Year
1914...
1915...
1916...
1917...
1918...
1919...
1920...
Number
of accounts
to which
payments
were made
129,617
132,727
174,240
205,799
250,559
277,415
Year
1922
1923
1924
1925
1926
1927
1928
Number
of accounts
to which
payments
were made
321,470
357,556
392,469
431,012
408,596
418,900(approx.)
409,790
GERMANY
Workers' Insurance
COMPULSORY INSURANCE
Insurance is compulsory for the following persons :
(1) workers, journeymen and domestic servants;
(2) persons engaged in home industry;
(3) crews of German seagoing vessels and the crews of vessels engaged
in inland navigation, with the exception of the captain, officers
of the deck and engine-room crews, etc., provided that they are
liable to, or exempt from, insurance under the Salaried Employees'
Insurance Act;
(4) assistants and apprentices, unless they are liable t o , or exempt from,
insurance under the Salaried Employees' Insurance Act.
It is a prerequisite of insurance for the persons mentioned under Nos. 1,
3 and 4 that they are employed for remuneration.
The Federal Minister of Labour is empowered to render insurance compulsory for certain groups of independent workers and persons carrying on
industry who, as a rule, employ no persons liable to insurance in their
establishments or at most one such person.
The Act exempts from insurance the following persons :
(1) persons employed in the service of a public authority, railways, etc.,
provided that the right to an invalidity or widow's pension at
least equal to the pension corresponding to the lowest wage class,
and t o an orphan's pension, is guaranteed;
(2) officials of the Federation, the Federal Railway Company, the States,
the communes, etc. ;
(3) any person who is disabled or in receipt of an invalidity or widow's
pension;
(4) any person receiving no remuneration except free maintenance.
The following persons are exempt from compulsory insurance by Order :
(1) foreigners whom the authorities have authorised to reside in the
country for a limited period only, at the discretion of the Federal
Government ;
(2) persons whose employment is occasional, as defined by the Federal
Government.
The following persons may be exempted from compulsory insurance at
their own request :
(1) persons who have been guaranteed a pension not less t h a n that prescribed for the lowest wage class and whose survivors are guaranteed
the right t o survivors' pensions by the Federal Government, the
Federal Railway Company or a commune;
7
98
SCOPE
(2) persons in receipt of a pension under the salaried employees' or
miners' insurance schemes;
(3) students who engage in an insurable employment for the purpose of
training for their future occupation;
(4) independent persons who are not employed in an insurable employment for more than twelve weeks in any one year (seasonal
workers).
Exemption is not permissible when the number of contribution stamps
affixed t o the insurance card exceeds a hundred.
VOLUNTABY INSURANCE
Continued Insurance
Insured persons who cease to be employed in an insurable employment
may continue in insurance or may renew the insurance relationship at a
later date.
Voluntary Insurance Proper
The following persons are permitted t o become voluntarily insured u p
to the age of forty years :
(1) persons carrying on industries and other owners of undertakings who
as a rule employ no persons liable t o insurance in their establishments or not more than two such persons;
(2) persons exempt from insurance because they receive no remuneration
except free maintenance or because they are only occasionally
employed.
STATISTICS OF INSURED PERSONS
ESTIMATES BASED ON THE REVENUE FROM STAMP SALES
AND THE NUMBER OF CARDS EXCHANGED
1913
1924
1926
20,400,000
15,600,000
17,500,000
17,500,000
1927
1928
1929
1930
18,000,000
18,000,000
18,000,000
18,000,000 .
Salaried Employees' Insurance
COMPULSORY I N S U R A N C E
Insurance is compulsory for salaried employees in general, and in particular for the following :
(1) salaried employees in managing positions;
(2) works officials, foremen and other salaried employees in a similar or
superior position;
(3) office employees, inclusive of clerical apprentices and workshop clerks,
provided that they are not exclusively employed in running errands,
cleaning, tidying or similar work;
(4) commercial assistants and apprentices, other salaried employees
engaged in commercial duties, even in undertakings where the
main business is not commercial, and assistants and apprentices
in pharmacies;
(5) members of the theatrical profession and musicians, irrespective of
the artistic value of their services ;
(6) salaried employees engaged in the upbringing of children, teaching,
relief work, nursing the sick and public welfare work ;
COMPULSORY INSURANCE OF EMPLOYED PERSONS
99
(7) the following persons belonging to the crews of German seagoing
vessels and the crews of vessels engaged in inland navigation,
viz. captains, officers of the deck and engine-room crews, pursers
and assistant pursers, and salaried employees in a similar or superior
position, irrespective of their previous training. A German seagoing vessel means any vessel sailing under the German flag and
exclusively or primarily used for maritime navigation.
Nos. 5 and 6 include apprentices undergoing a regular training for any of
these occupations.
I t is a prerequisite of insurance for all the above-mentioned persons that
they are employed for remuneration, that their annual earnings do not
exceed 8,400 RM., and that they have not attained the age of sixty years
on their entry into the employment liable t o insurance.
The Federal Minister of Labour has power, after consulting the Federal
Insurance Institution and the Federal Insurance Office, t o specify in detail
by administrative regulations the occupational groups covered.
Independent teachers and tutors not employing any salaried employees
are assimilated to salaried employees for the purposes of insurance.
The Federal Government may, with the approval of the Federal Council,
render insurance compulsory for other persons carrying on activities similar
to those specified above on their own account but not employing salaried
employees in their undertakings.
The Act exempts from compulsory insurance the following persons :
(1) public officials, ministers of recognised religious denominations,
teachers and tutors in public schools and institutions;
(2) persons who work for remuneration in the course of their training for
their future occupation;
(3) persons not in receipt of remuneration except in the form of free
maintenance ;
(4) persons whose employment is occasional as defined by the Ministry
of Labour;
(5) persons suffering from occupational incapacity and persons in receipt
of an invalidity or widower's pension under the salaried employees',
miners' or workers' insurance schemes.
The following may be exempted from compulsory insurance at their
own request :
(1) persons granted a pension, half-pay or other insurance benefits not
less t h a n those corresponding t o their service income, and whose
dependants are guaranteed the right to survivors' pensions, by
the Federal Government, a State, a federation of communes, a
commune or a Federal insurance carrier;
(2) persons who have the same rights on account of previous employment
as teachers or tutors in public schools or institutions.
The Federal Insurance Institution decides in the case of such requests.
The superior insurance office of the district in which the applicant is domiciled decides on appeal.
The exemption is operative as from the date of receipt of the application
by the Federal Insurance Institution.
VOLUNTARY INSURANCE
Continued Insurance
Any person who, without suffering from occupational incapacity, leaves
an insurable employment after having paid contributions for at least four
months under the compulsory scheme may continue voluntarily in insurance.
Under the same conditions an insured person may also continue to be
voluntarily insured while resident abroad.
100
SCOPE
Voluntary Insurance Proper
Voluntary insurance in proportion t o income is permitted t o the following
persons up to the age of forty years :
(1) persons engaged on their own account in an occupation similar t o
those enumerated as compulsorily insurable;
(2) persons exempted from liability because they receive no remuneration
except free maintenance or because they are occasionally employed
or because they engage in an insurable employment for the purpose
of training.
These persons may continue their voluntary insurance even when the
above conditions cease to apply, provided t h a t they have paid contributions
under the voluntary insurance scheme for not less than four months.
STATISTICS OF INSUHED PERSONS
The number of insured persons is not exactly known, but it was estimated
at 3,400,000 in 1929 and 3,500,000 in 1930.
Miners' Insurance
COMPULSORY INSURANCE
Miners' insurance covers employed persons and apprentices of both sexes
working in mining undertakings. A mining undertaking means any undertaking in which minerals or similar substances are extracted by mining,
including subsidiary establishiments carried on in connection with a mining
undertaking in respect of premises and operation.
Subject t o certain conditions, plant connected with a mining undertaking
in respect of its management and operation may, on a joint application from
the employers and the majority of the employees concerned, be taken into
the Federal Miners' Benefit Society.
I n cases of doubt as t o whether an undertaking is a mining undertaking,
the Federal Minister of Labour decides after hearing the supreme State
authority concerned and the Federal Miners' Benefit Society.
The Minister of Labour may grant exemption from insurance t o the
following undertakings :
(1) smaller undertakings ;
(2) undertakings in the stone and earth industries.
Such exemption is granted only when a joint application is made by the
employer and the majority of the wage earners concerned, the latter voting
by ballot.
The workers covered by the legislation are obliged to become members
of the workers' pension fund of the Miners' Benefit Society, but this does
not affect their obligation to join the workers' insurance scheme under the
Federal Insurance Code. Consequently, miners are doubly insured.
Salaried employees, on the other hand, do not belong t o the employees'
pension fund, except in so far as they are liable t o compulsory insurance
under the Salaried Employees' Insurance Act. I n their case, therefore,
special insurance takes the place of the general salaried employees' scheme.
The Act grants exemption t o salaried employees whose annual income
exceeds 8,400 RM.
Exemption from compulsory insurance has been granted by order in the
case of persons occasionally employed as defined by the Minister of Labour.
The following persons may, on making application, receive personal
exemption from compulsory pension insurance :
(1) public officials, etc. ;
(2) students engaged in aia insurable employment for the purpose of
training for their future occupation ;
COMPULSORY INSURANCE OF EMPLOYED PERSONS
101
(3) persons who are guaranteed a pension by some public authority;
(4) persons working only during certain periods of the year (seasonal
workers).
Such personal exemption is granted by decision of a special committee,
and is cancelled when the requisite conditions are no longer present.
VOLUNTARY INSURANCE
Continued
Insurance
Members of a pension fund who, while not suffering from occupational
incapacity, cease t o be compulsorily insured, may maintain the rights already
acquired by them by the payment of a monthly continuation fee of 0.50 RM.
Those who lose their status as compulsorily insured persons because they
are no longer engaged in work rendering them liable to miners' insurance
may continue their membership in their pension funds. I n order t o do so,
they must pay the contributions corresponding to the wage class representing half the wage on which their last compulsory contributions were
based. The payment of a higher contribution is permitted.
Voluntary Insurance
Proper
Voluntary entry into insurance is permitted only in the case of salaried
employees who are exempt from compulsory insurance because their annual
income exceeds 8,400 RM. These persons may become members of the
salaried employees' pension fund u p t o the age of 40, and they may continue
t o belong t o this fund when the required conditions no longer exist.
STATISTICS OF INSURED PERSONS
(2 January of each Year)
Pension fund
1924
1925
1926
1927
1929
1931
for workers
for salaried employees
727,767
731,687
648,684
748,755
734,543
702,248
727,160
572,018
496,925
48,091
49,942
48,864
49,306
49,477
49,029
49,080
46,245
43,361
GREAT BRITAIN AND NORTHERN IRELAND
Employed Persons' Insurance
COMPULSORY INSURANCE
Insurance is compulsory for all persons of sixteen years or over who are
employed persons within the meaning of the Act. There are no conditions
of sex or nationality.
The Insurance Act enumerates six classes of employment :
(1) employment in the United Kingdom under a contract of service or
apprenticeship ;
102
SCOPE
(2) employment in the United Kingdom by way of manual labour under
a contract for the performance of such labour for the purposes of
any trade or business;
(3) employment in the United Kingdom under any public authority,
except in so far as such employment is excluded by special Order ;
(4) employment as master or a member of the crew of any ship registered
in the United Kingdom, or of which the owner resides in the United
Kingdom;
(5) employment in the United Kingdom as an outworker, except in so
far as such employment is excluded by special Order;
(6) employment in the United Kingdom in plying for hire with any vehicle
or vessel the use of which is obtained from the owner thereof under
any contract of bailment.
Persons liable t o insurance are simply required t o pay the contributions
prescribed in the Act. If they do not become members of an approved
society, they are insured only against old age and death, and are known as
" deposit contributors ". The fraction of the contribution intended t o
cover the disablement risk is paid into an individual account, the credit
balance of which is used (when the risk materialises) for the payment of
disablement benefit until it is exhausted.
Exclusions and Exemptions
Excepted Employments
The following employments are excepted from compulsory insurance :
(1) employment as apprentices without money payment;
(2) employment, otherwise than by way of manual labour, at a rate of
remuneration exceeding £250 a year;
(3) certain employments under a public authority excluded by a special
Order, namely : chaplain, medical practitioner, coroner, public
analyst, registrar, etc.;
(4) employment under the Crown or any local or other public authority,
or in the service of a railway or other statutory company where
the Minister certifies that the terms of employment secure provision on the whole not less favourable than the corresponding
benefits conferred by the Act. This exception may refer t o
disablement, t o old-age, and t o survivors' insurance separately;
(5) employment as a teacher in recognised service within the meaning
of the Teachers (Superannuation) Acts;
(6) employment of a casual :nature otherwise than for the purposes of
the employer's trade or business;
(7) employment of any class which does not ordinarily constitute the
principal means of livelihood;
(8) employment in respect of which no money payment is made on an
agricultural holding, or where the person employed is the child
of, or maintained by, the employer;
(9) employment in the servicie of the husband or wife of the employed
person;
(10) employment as an agent paid by commission or fees or a share in
the profits, where the person so employed is mainly dependent
for his livelihood on his earnings from some other occupation, or
where he is ordinarily employed by more than one employer, and
his employment under no one of such employers is that on which
he is mainly dependent for his livelihood;
(11) employment as an outworker, where the person so employed is not
himself substantially engaged in the actual manipulation of the
articles or materials given out t o him;
COMPULSORY INSURANCE OF EMPLOYED PERSONS
103
(12) employment in the mercantile marine when the seaman is neither
domiciled nor resident in the United Kingdom, the Irish Free
State, or the Isle of Man.
Exempt Persons
An " exempt person " is one who is employed within the meaning of the
Act but who is exempted from liability t o insurance because he has proved
to the satisfaction of the Minister of Health that he is either :
(1) in receipt of a pension or income of the annual value of £26 or upwards,
not dependent on his personal exertions ; or
(2) ordinarily and mainly dependent for his livelihood on some other
person; or
(3) ordinarily and mainly dependent for his livelihood on the earnings
derived from an occupation which is not employment within the
meaning of the Act ; or
(4) has been employed within the meaning of the Act for less than
eighteen weeks during the preceding year.
Exemption is granted only at the express request of the worker concerned.
VOLUNTARY INSURANCE
Persons who cease to be liable to compulsory insurance may continue to
be insured when they have been so liable for 104 weeks, and when 104 contributions have been paid in respect of them. They must exercise this right
within a period of eighteen t o twenty-four months from the date on which
they ceased t o be employed in an insurable employment. This right is
not granted t o married women.
No provision is made for voluntary insurance by persons who were not
previously compulsorily insured.
STATISTICS OF INSURED
PERSONS
Great Britain
NUMBER OF PERSONS INSURED AGAINST DISABLEMENT AND
(AFTER 4 JANUARY 1 9 2 6 ) AGAINST OLD AGE AND DEATH
(In thousands)
Insurance against disablement, old age
and death
Year
Compulsory
Voluntary
1914
1922
1923
1924
1925
13,032
19
—
—
—
—
—•
1926
1927
1928
1929
15,309
15,544
15,606
15,812
15,928
14,813
Total
Insurance
against
old age
and/or death
only
—
13,051
14,264
14,418
14,850
15,079
—
—
—
—
188
218
256
295
388
15,497
15,762
15,862
16,107
16,316
935
904
896
875
864
37
104
SCOPE
Northern Ireland
NUMBER OF PEBSONS INSURED AGAINST THE RISKS OF DISABLEMENT,
OLD AGE AND DEATH
(In
thousands)
1926
1927
1928
1929
1930
332
332
347
350
350
GREECE i
Tobacco W o r k e r s ' I n s u r a n c e
COMPULSORY INSURANCE
Insurance is compulsory for all persons between the ages of sixteen and
thirty-five years who are normally employed in tobacco factories.
The entrance age for insurance has been fixed at fourteen years in the
case of women. Admission to employment in tobacco factories is subject
t o the production of a medical certificate.
VOLUNTARY INSURANCE
Continued Insurance
Insured persons may continue in insurance during periods of unemployment. Persons who change their occupation cannot remain in insurance
unless they have contributed for not less than 1,500 weeks.
Voluntary Insurance Proper
Voluntary insurance is permitted only in the case of the officials of tobacco
workers' unions.
STATISTICS O F INSURED PERSONS
The number of insured persons on 1 January 1931 was 44,880.
HUNGARY
I n s u r a n c e of P e r s o n s E m p l o y e d i n I n d u s t r y a n d C o m m e r c e
COMPULSORY INSURANCE
Insurance is compulsory for all persons, including apprentices, employed
in exchange for wages (in cash or in kind) in the following undertakings,
offices and occupations :
(1) all undertakings, establishments and employments subject t o the
Industrial Code;
(2) undertakings, establishments and employments not subject t o the
Industrial Code, such as the offices of notaries public and of
advocates, technical bureaux, medical consulting rooms, newspaper publishing offices, editorial offices, theatres, pharmacies,
curative institutions, etc. ;
(3) all undertakings, establishments and employments subject to the
Mining Act ;
(4) undertakings, establishments and employments producing stone,
sand, gravel or clay, or working up stone or earth of any kind ;
1
An Act of 10 October 1932 has established compulsory insurance against invalidity,
old-age a n d d e a t h for persons employed in industry a n d commerce.
COMPULSORY INSURANCE OF EMPLOYED PERSONS
105
(5) building operations of all kinds (construction of houses, roads,
bridges, railways, tunnels, waterworks, etc.), and all building
maintenance work;
(6) the manufacture and working up of inflammable, noxious or poisonous substances and of explosives and explosive articles;
(7) chemical, physical and pharmaceutical laboratories;
(8) slaughterhouses and refrigerators;
(9) warehousing, storage and commercial cellarage;
(10) transport, forwarding and stock-keeping, including the maintenance
of racing stables;
(11) motor conveyance undertakings (motor vehicles, lifts and hoists,
aeroplanes, airships, etc.);
(12) railways, irrespective of the motive power used, and factories,
workshops and maintenance work in connection therewith ;
(13) shipping and the loading and unloading of ships (exclusive of maritime
snipping); dredging, freighting, ferrying and timber-floating
undertakings and operations;
(14) offices, factories and workshops and maintenance work in the postal,
telegraph and telephone services;
(15) subsidiary industries connected with production in agriculture,
forestry, stock-raising, fisheries, horticulture and viticulture,
even if the main object of the said industries is the manufacture
and sale of their own raw materials;
(16) institutions, undertakings and establishments maintained or managed
by religious denominations recognised by law;
(17) incorporated associations established by law (chambers of notaries
public, chambers of advocates, chambers of commerce and
industry, workers' insurance institutions, trade guilds, etc.);
(18) associations and societies, foundations and charitable institutions.
Persons employed in the above undertakings are liable to insurance,
irrespective of their sex, age or nationality.
Insurance will not be compulsory for home workers, caretakers, domestic
servants and newsvendors, as provided in the Act, until a special Decree has
been issued by the competent Minister.
The following persons are not liable to insurance :
(1) persons employed by public authorities or in institutions, undertakings and establishments managed by such authorities;
(2) persons employed in agricultural and forestry undertakings, stockraising, fishing, viticulture, etc. ;
(3) salaried employees of funds and foundations supervised by the State,
the employees of public corporations, public railways, shipping,
dredging, harbour, ferrying, and timber-floating undertakings, in
so far as they are covered by a special invalidity, old-age and
survivors' scheme;
(4) salaried employees of mutual benefit societies supported by the State
or of social insurance funds; clergymen of recognised religious
denominations and members of monastic orders and societies, as
well as members of the National Pension Institution for Postmasters, salaried employees of the National Bank, salaried
employees of mining undertakings covered by miners' insurance
and the articled pupils of notaries and advocates;
(5) public officials whose monthly remuneration exceeds 500 pengö (or
6,000 pengö a year). Other officials may be exempted from
liability t o insurance when they belong to a special pension fund
recognised by the competent Minister as a substitute fund ;
106
SCOPE
(6) officials in offices, foremen, clerks and all other salaried employees
whose remuneration exceeds 500 pengö a month or 6,000 pengö
a year ;
(7) apprentices not in receipt of remuneration.
VOLUNTARY INSURANCE
Continued Insurance
Persons whose liability t o insurance ceases may continue t o be insured if
contributions have been paid on their behalf for not less than thirteen weeks
during the year immediately preceding the cessation of liability to insurance
or twenty-six weeks during the two years immediately preceding such
cessation.
Voluntary Insurance Proper
Voluntary insurance is permitted to the following persons :
(1) persons who, not being liable t o compulsory insurance, receive a
pension after ceasing t o be employed ;
(2) persons engaged in home industry and persons engaged in industry
or trade on their own account ;
(3) day labourers not liable t o insurance and salaried employees of the
representatives of foreign States;
(4) clergymen and employees of recognised religious denominations and
members of monastic orders or societies;
(5) members of the armed forces;
(6) the articled pupils of notaries and advocates;
(7) salaried employees whose monthly remuneration exceeds 500 pengö,
provided it does not exceed 1,000 pengö;
(8) independent certificated midwives, commercial agents, etc. ;
(9) members of the employer's family working in his undertaking;
(10) persons of Hungarian nationality who have been resident abroad for
not less t h a n one year and are engaged in a n occupation which
would render them liable t o insurance in Hungary.
STATISTICS OF INSURED PERSONS
1929
1930
537,920
560,915
Miners' Insurance
COMPULSORY INSURANCE
Insurance is compulsory for all persons (workers, overmen, assistant clerks,
supernumerary employees, supervisors, etc.) in undertakings covered by
the Act. Exemption from insurance is granted to salaried employees
regularly employed and receiving remuneration exceeding 500 pengö a
month or 6,000 pengö a year.
Insurance is compulsory for apprentices, whether remunerated or not.
VOLUNTARY INSURANCE
Persons who cease to be liable t o insurance before completing the qualifying period may continue the payment of contributions until they complete
that period, provided that they have already paid sixty regular monthly
contributions.
Insured persons who cease t o be compulsorily insured after completing
the qualifying period may maintain their right t o benefits by the regular
COMPULSORY INSURANCE OF EMPLOYED PERSONS
107
payment of a continuation fee amounting t o 1 pengö for the first group
(subordinate employees, etc.); 0.70 pengö for the second group (employees
acting as subordinate employees); 0.60 for the third group (certain skilled
workers) ; and 0.40 in the fourth group (all other workers).
STATISTICS OF INSURED PERSONS
NUMBER OF PERSONS INSURED WITH THE NATIONAL
SOCIAL INSURANCE INSTITUTION
1927
1928
1929
1930
35,913
36,669
43,995
41,718
IRISH FREE S T A T E
Employed Persons' Insurance
The scope of disablement insurance in the Irish Free State is substantially
the same as in Great Britain.
There are however one or two differences in points of detail :
(1) Irish legislation does not mention " employment by way of manual
labour under a contract for the performance of such labour for the
purposes of any trade or business ";
(2) it recognises as beneficiaries only the members of approved societies;
the class of " deposit contributors " does not exist ;
(3) the class of " exempt persons " does not exist ;
(4) it provides that persons ceasing t o be liable t o insurance and wishing
t o remain in insurance must notify their intention within twelve
months from the date on which they left their insurable employment.
STATISTICS OF INSURED PERSONS
NUMBER OF PERSONS INSURED AGAINST DISABLEMENT
1923
1924
1925
1926
417,720
442,065
472,787
493,503
1927
1928
1929
523,209
416,406
424,284
ITALY
Employed Persons' Insurance
COMPULSORY INSURANCE
Insurance is compulsory for employed persons of both sexes between the
ages of sixteen and sixty-five (workers.home workers,salariedemployees,etc),
including agricultural workers and domestic servants.
The following are excluded from insurance :
(1) unpaid workers or apprentices ;
(2) salaried employees whose monthly salary exceeds 800 lire;
(3) seamen entered on the articles of any Italian ship, provided they pay
contributions t o the National Mercantile Marine Invalidity Fund ;
(4) persons in the service of the State, the public authorities, the State
railways, the Royal Household and public assistance institutions.
108
SCOPE
Administrative regulations will determine the scope of compulsory insurance in the case of persons entitled t o a pension who are in the service of
other public institutions or establishments. Regulations have so far been
issued excluding from insurance :
(5) workers in sulphur mines in Sicily, who are covered by a special
insurance scheme;
(6) the staff of branch railway lines and tramway companies, who are
also covered by special schemes.
VOLUNTARY INSURANCE
Continued Insurance
Persons ceasing to be compulsorily insured may continue in insurance,
provided they make use of this right within two years from the date on which
they cease to be liable t o compulsory insurance. The minimum contribution under continued insurance is 24 lire a year.
Voluntary Insurance Proper
All persons engaged in any activity covered by insurance but not compulsorily insured (for example, salaried employees whose monthly salary exceeds
800 lire) may become voluntarily insured. The same opportunity is granted
t o owners of small agricultural holdings or commercial or industrial undertakings who pay less than 500 lire in direct taxation annually. Voluntary
insurance is also open to the wives of compulsorily insured persons and to
women of other degrees of relationship who are occupied with household
work for such persons if the income taxes on which they pay to the State,
a province or a commune do not exceed 60 lire a year.
Two types of voluntary insurance are recognised :
(1) enrolment under the system known as " mutual benefit ";
(2) enrolment under the system of " reserved contributions " (contributi
reservati).
Enrolment under the mutual benefit system does not create any rights
for survivors, whereas the reserved contributions system guarantees to
survivors the repayment without interest of the contributions paid by the
insured person if he dies before his pension becomes due.
Mutual benefit societies and associations of the staff of industrial or
commercial undertakings or administrations may become voluntarily
insured on a collective basis.
STATISTICS OF INSURED PERSONS
The number of insured persons is unknown, but in 1930 the number of
compulsorily insured persons was estimated at 5,600,000.
LUXEMBURG
I n s u r a n c e of W o r k e r s i n I n d u s t r y a n d C o m m e r c e
COMPULSORY INSURANCE '
Insurance is compulsory after the completion of the sixteenth year for
workers, journeymen, apprentices, or servants, with the exception of workers
and domestic servants in agricultural or forestry undertakings or domestic
servants in private households. I n the case of all these persons liability to
insurance is dependent on their receiving remuneration.
COMPULSORY INSURANCE OF EMPLOYED PERSONS
109
As regards certain branches of economic activity, insurance may be
rendered compulsory, by public administrative regulations, for :
(1) heads of undertakings not normally employing moTe than two workers ;
(2) persons engaged in home industry, irrespective of the number of
workers they employ.
The Government may issue regulations t o determine the conditions under
which persons occasionally employed may be exempted from liability t o
insurance.
The following are exempt :
(a) public officials, salaried employees and other persons employed by
the State, the communes, public undertakings or public utility
undertakings when they and their survivors are guaranteed the
right to pensions not less favourable than those prescribed by the
Act or when they are merely training for their future occupation ;
(b) all disabled persons or persons in receipt of an invalidity pension
under the Act.
Aliens resident only temporarily in the Grand Duchy may be exempted
from liability t o insurance.
The following may be exempted from liability to insurance at their request :
(a) persons t o whom or to whose survivors a pension or corresponding
benefits have been granted by the State, a commune or a public
or public utility institution;
(b) persons who in the course of any calendar year engage in a remunerative occupation only at certain seasons for not more than fifty
days in all and who earn their livelihood from independent work or
who engage in work without remuneration.
ê
VOLUNTARY INSURANCE
Continued Insurance
Compulsory or voluntary insurance (cf. below) may be continued even
when the conditions under which these begin have ceased to exist. The
insured person must, however, prove that he has been engaged for not less
than 675 days in an insurable employment, or (in the case of persons voluntarily insured) that he has paid contributions for a like period. Persons
who wish to continue in insurance must notify their intention within three
months after they have ceased to be liable to compulsory insurance or
eligible for voluntary insurance.
Voluntary Insurance Proper
The following persons are entitled to become insured up to the age of
forty years, provided that their normal remuneration lies between 500 and
4,500 francs a year :
(1) salaried employees, foremen, clerks, etc.;
(2) heads of undertakings normally employing not more than two persons
liable to insurance, and persons engaged in home industry;
(3) persons exempted from liability t o insurance as being occasionally
employed or excluded as receiving in return for their employment
only free maintenance;
(4) private teachers and tutors;
(5) servants and workers in agricultural or forestry undertakings and
domestic servants in private households who are exempt from
compulsory insurance.
110
SCOPE
STATISTICS OF INSURED PERSONS
NUMBER OF PERSONS INSURED WITH THE- SICKNESS FUNDS
(Annual
Average)
1925
1927
1929
58,655
63,185
65,261
The number of persons insured against invalidity, old age and death is
approximately the same as the number insured against sickness.
Insurance of Salaried Employees in Industry and Commerce
COMPULSORY INSURANCE
Insurance is compulsory for all persons, including salaried members of
the managing staff, irrespective of nationality or sex, who are employed
continuously and not merely subsidiarily in the Grand Duchy in virtue of
a contract for a long period in the service of a third person, not being the
State, a commune, a public or public utility undertaking or a railway company, and are in receipt of remuneration paid wholly or partly in cash or
in any other form, provided that their work is wholly or partially of an
intellectual kind.
Citizens of Luxemburg temporarily employed abroad by the firm or
employer for whom they worked in the Grand Duchy remain members of
the salaried employees' fund.
Liability ceases when the conditions which gave rise to it no longer exist
or when the conditions for the granting of an old-age or invalidity pension
are fulfilled. Exemption from compulsory insurance is granted to salaried
employees over the age of fifty-five at the date when they first became
employed in an insurable occupation.
Aliens temporarily employed in the Grand Duchy by an undertaking
which has its headquarters abroad may be exempted from insurance, provided that the same right is granted to citizens of Luxemburg in the country
t o which the undertaking belongs.
VOLUNTARY INSURANCE
Insured persons who, not being disabled or having reached the age limit,
cease to be liable t o compulsory insurance because they are no longer
employed for remuneration in the Grand Duchy, may continue in insurance
if they have been insured for not less than 30 months.
STATISTICS OF INSURED PERSONS
On 29 February 1932 the number of insured persons was 6,225.
NETHERLANDS
Employed Persons' Insurance
COMPULSORY INSURANCE
Insurance is compulsory for all employed persons whose annual remuneration does not exceed 2,000 florins and who are not expressly excluded
or exempted from the liability. Insured persons whose remuneration rises
above the limit of 2,000 florins remain liable to insurance. If their remun-
COMPULSOBY INSURANCE OF EMPLOYED PERSONS
111
eration has been in excess of 3,000 florins for a certain period, they are
exempted from liability at their own request. Employed persons are taken
to be all persons over the age of fourteen employed under a contract of
employment for wages. Persons over the age of thirty-five who become
employed persons are not covered by compulsory insurance. Liability to
insurance ceases when the insured person receives remuneration exceeding
3,000 florins annually.
Insurance is thus compulsory for all workers, salaried employees, foremen, etc., in industry, commerce, agriculture, etc., as well as domestic
servants and home workers who receive wages.
The following persons are excluded from the scope of insurance :
(1) apprentices;
(2) railway workers, who are covered by a special scheme ;
(3) salaried employees and workers in the public services or semi-public
services, as, for example, the teaching staff of schools subsidised
by the State, who are guaranteed the right t o a pension under a
special scheme ;
(4) salaried employees and workers employed by statutory corporations
when they are guaranteed the right to pensions in case of invalidity,
old age or death, provided that the regulations concerning these
pensions have been declared by the Queen to fulfil the legal conditions and that adequate securities are given for the payment of
the pension ;
(5) miners employed in private or State mines, but excluding salaried
employees;
(6) workers and salaried employees employed by tramway companies
and certain other types of undertakings.
Special regulations concerning insurance have been introduced for the
persons mentioned above in paragraphs 5 and 6.
On application being made by the employers, exemption from insurance
is granted t o persons employed in any undertaking which has adopted a
special pension scheme or instituted a works fund. The granting of this
exemption is subject t o the following conditions :
(a) the employer must deposit sufficient security with the State Bank;
(b) the system of pensions must correspond to the provisions of the
legislation ;
(c) the regulations must contain sufficient guarantees concerning the
decisions t o be taken with regard to claims by insured persons.
These conditions have t o be declared by the Queen t o be satisfied. Up
to the present, advantage has not been taken of this possibility.
VOLUNTARY INSURANCE
Continued Insurance
Voluntary maintenance in insurance for persons who were formerly
compulsorily insured is not provided for in the legislation, because every
insured person remains in insurance even after he ceases t o fulfil the conditions for liability. Six months after he has ceased t o fulfil these conditions
the insured person may notify his intention of ceasing to be insured. If he
is under thirty-five years of age, the contributions paid remain valid, and
when he is readmitted to insurance they are transferred to his account at
their full value. When the insured person is over the age of thirty-five,
the account opened for the insured person under the voluntary scheme is
credited with the actuarial reserve corresponding to the value of his contributions at the moment when he ceased to be compulsorily insured.
112
SCOPE
Voluntary Insurance Proper
There exists in the Netherlands a voluntary insurance scheme, side by
side with the compulsory scheme, which is open t o everyone irrespective
of age and covers the risk of invalidity and old age (70 years). I n practice
no advantage has been taken of the voluntary scheme.
There is also a voluntary old-age scheme governed by a special Act
(Ouderdomswet).
STATISTICS OF INSURED PERSONS
NUMBER
OF
COMPULSO R I L Y
INSURED
PERSONS
ON
31
DECEMBER
OF EACH YEAR
1923
1924
1925
1926
1,905,122
1,998,441
2,093,007
2,198,908
Miners' Insurance
COMPULSORY INSURANCE
Insurance is compulsory for all miners engaged in work underground or
a t the surface, provided that their contract stipulates for fourteen days'
notice of dismissal. Salaried employees in the mining industry are not
liable. Apprentices who are not in receipt of remuneration and persons over
the age of forty years are net admitted t o insurance.
VOLUNTARY INSURANCE
No provision is made for continued insurance or for voluntary insurance
proper, but persons who cease to be insured may maintain their acquired
rights by paying a continuation fee of 0.10 florins per month.
STATISTICS O F INSURED PERSONS
Year
(31 December)
1919
1920
1921
1922
1923
1924
1925
1926
1927
1928
1929
1
Miners
in general 1
Compulsorily
Insured persona
Workers paying
a continuation fee
23,045
27,058
26,556
27,538
29,519
30,492
31,322
33,350
34,763
34,681
37,585
22,734
25,852
25,309
26,301
28,260
29,260
30,165
32,186
33,649
33,695
36,567
22
114
220
401
563
738
1,073
1,336
Including persons who began mining work after the age of forty.
POLAND
Intellectual W o r k e r s ' I n s u r a n c e
COMPULSORY INSURANCE
Insurance is compulsory for all intellectual workers between the ages
of sixteen and sixty years employed by other individuals or private or
public bodies corporate, including apprentices training for some occupation
covered by the legislation.
COMPULSORY INSURANCE OF EMPLOYED PERSONS
113
The term " intellectual workers " is taken t o mean not only managers
and directors of undertakings, engineers, masters, deck and engine-room
officers, officials and employees of agricultural undertakings, foremen, cashiers, commercial agents, accountants and office employees, but also supervisory employees responsible for the work of their respective branches.
Salesmen in shops and bookstores are not considered as intellectual workers
unless they satisfy certain conditions; they must have passed six classes
in a secondary school or a secondary technical school, or have completed
their course at a technical continuation school and taken a practical course
the conditions of which are laid down by an Order of the competent Minister.
Permanent civil servants, persons employed in the State railways or in
the public services who are covered by special insurance or pension schemes
are excluded from compulsory insurance. The same principles apply t o
officials of the Bank of Poland, the Post Office Savings Bank, the State Land
Bank and the National Development Bank.
There is no limit of earnings.
VOLUNTARY INSURANCE
Continued Insurance
Persons who, not suffering from disablement, cease to be compulsorily
insured may continue in insurance if they have paid contributions for four
months.
Voluntary Insurance Proper
The Act authorises insurance institutions t o determine in their rules the
conditions for voluntary insurance for persons not liable to compulsory
insurance. So far no advantage has been taken of this possibility.
Workers' Insurance in the Western Provinces
a n d U p p e r Silesia
COMPULSORY INSURANCE
The scope of compulsory insurance is substantially the same as in the
German workers' scheme. I n Poland, however, it covers also certain salaried
employees (salesmen, clerks, etc.), provided they are not insured under the
Intellectual Workers' Insurance Act. There is no wage limit for workers,
but salaried employees covered by the Act are not liable t o insurance if
their annual salary exceeds 2,500 zloty.
VOLUNTARY INSURANCE
Continued Insurance
The rules for continued insurance are the same as in Germany.
Voluntary Insurance Proper
Voluntary insurance is permitted for the following :
(1) salaried employees not liable t o insurance because their annual salary
exceeds 2,500 zloty, provided it does not exceed 5,000 zloty;
(2) persons engaged in industry on their own account and home workers
who do not normally employ any workers liable t o compulsory
insurance or not more than two such workers;
(3) persons not liable t o compulsory insurance because they are not in
receipt of cash remuneration or because they are only occasionally
employed.
8
114
SCOPE
M i n e r s ' I n s u r a n c e in U p p e r Silesia
COMPULSORY INSUBANCE
Insurance is compulsory for persons employed in mining undertakings
and subsidiary undertakings belonging t o mining undertakings, whether
they are the property of the State or of private persons. Insurance is also
compulsory for persons employed in miners' sickness funds, in so far as
they are compulsorily insured against sickness.
The following persons are excluded :
(1) salaried employees of mining undertakings who are covered by the
Intellectual Workers' Insurance Act;
(2) persons under the age of sixteen years, and those who did not enter
any occupation covered by the Act until after the age of forty
years, unless they produce a medical certificate of health.
The rules of the fund may provide that women are not admitted t o
membership.
VOLUNTARY INSURANCE
Continued Insurance
A person whose liability to insurance ceases is not permitted t o continue
in insurance. He may, however, avoid the loss of the contributions paid
and maintain his right t o benefits by payment of a continuation fee of
0.50 zloty a month. If he does so, his position with regard t o the fund
remains the same as it was at the moment when his liability to insurance
ceased.
Voluntary Insurance Proper
Persons under the age of forty-five years who are employed in an occupation covered by compulsory insurance but are excluded from membership of the fund on account of their health may, at their own request, be
admitted as voluntary members if they have paid at least 250 weekly contributions t o the sickness fund.
STATISTIC« OF INSURED PERSONS
I n 1929 the number of insured persons was 100,301.
Miners' Insurance in the Southern Provinces
COMPULSORY INSURANCE
Insurance is compulsory, irrespective of the amount of remuneration
paid, for workers in mining undertakings as defined in the Act. This obligation extends only t o manusil workers, since salaried employees have to
be insured under the Intellectual Workers' Insurance Act. Insurance is
not compulsory for permanent workers in mines belonging t o the State,
the communes, or any public corporation, provided that these establishments
guarantee to the workers and their survivors the right to pensions equivalent
t o those granted to insured persons. Administrative regulations may
extend the scope of compulsory insurance t o cover workers in petroleum
wells. So far this has not been done.
VOLUNTARY INSURANCE
Continued Insurance
Persons who cease to be liable t o compulsory insurance may not continue
in insurance.
COMPULSORY INSURANCE OF EMPLOYED PERSONS
115
Voluntary Insurance Proper
Voluntary insurance is permitted for workers employed in industrial
undertakings attached t o mining undertakings and for persons employed
by mining funds, provided that they join the insurance scheme collectively
so that all workers and apprentices employed in the undertaking are covered.
STATISTICS OF INSURED PERSONS
I n 1929 the number of insured persons was 12,699.
RUMANIA
Insurance of Employed Persons and Craftsmen
Until the middle of 1932 Rumania possessed two schemes of compulsory
invalidity and old-age insurance. Firstly, in virtue of the Act of 27 January
1912, operative in the Former Kingdom, compulsory insurance was instituted for employers following a craft, as well as for master-craftsmen,
journeymen, workmen, unskilled labourers, and apprentices, employed in
mines, quarries, factories and crafts, and for all persons employed in the
undertakings of the State, department and communes. Secondly, in Ardeal
there existed fraternal societies for the compulsory insurance of miners,
which were established under a Hungarian Act of 1907 : these societies were
abolished by a Decree of 1919, but insurance continued t o be applied under
their rules.
An Act of 18 May 1932 extended the operation of the 1912 Act t o the entire
territory of Rumania and also amended it in other respects. The scope
of the present legislation is indicated below.
COMPULSORY INSURANCE
Invalidity and old-age insurance is compulsory, from the age of sixteen,
for persons employed in industry, commerce and the crafts. I n the Former
Kingdom and Bessarabia employers who follow a craft continue to be
liable.
The scope of the scheme does not include agricultural workers, domestic
servants, civil servants, or railwaymen who are insured under a special
scheme.
Persons entering an insurable employment after the age of sixty-five are
exempt.
VOLUNTARY INSURANCE
All persons who have contributed under compulsory insurance for at
least 200 weeks may continue in insurance on a voluntary basis.
STATISTICS OF INSURED PERSONS
Former Kingdom and Bessarabia (Former Legislation)
Year
1919
1920
1921
1922
1923
1924
In 1930
CompulsorUy
insured
persons
66,128
122,057
164,261
205,659
219,217
180,209
the number of miners insured
Year
1925
1926
1927
1928
1929
Compulsorily
insured
persons
224,716 .
235,257
235,406
234,318
220,302
in Ardeal was 3,142.
116
SCOPE
SPAIN
Employed Persons' Insurance
COMPULSORY INSURANCE
Compulsory insurance extends t o all persons of both sexes who are
employed for remuneration (workers, home workers and salaried employees),
are between the ages of sixteen and sixty-five years, and whose annual
earnings do not exceed 4,000 pesetas.
The following are excluded from insurance :
(1) persons employed in public administrative offices;
(2) domestic servants;
(3) apprentices.
VOLUNTARY INSURANCE
Continiced Insurance
Persons whose earnings have passed the limit of 4,000 pesetas or who
have ceased t o be employed may continue in insurance, provided they pay
their contribution regularly. There is no condition concerning a qualifying
period for continued insurance.
Voluntary Insurance Proper
Persons who are not liable to compulsory insurance may, in accordance
with the Act of 1908, become voluntarily insured. This is really a system
of savings carrying with it the right to a pension when a sufficient sum has
been accumulated in the insured person's account.
STATISTICS OF INSURED PERSONS
Year
1922
1923
1924
1925
insured persons
838,598
1,212,623
1,597,720
1,989,504
2,378,074
2,430,497
2,813,743
3,232,128
3,618,709
1927
1928
1929
1930
1
With a view to obtaining: increased benefits.
the first column.
Compulsorily insured
persons paying
voluntary contributions 1
—
—
13,594
15,730
17,969
19,290
20,467
22,275
These persons are already included in
URUGUAY
Insurance of the Staffs of Public Utility Undertakings
Insurance is compulsory for salaried employees and workers employed
by railway, telegraph, téléphone and tramway companies or companies
for the supply of water or gas. Liability extends also t o the salaried
employees of restaurants a n i confectioners' shops in railway stations and
trains, even if not owned by the railway companies but leased t o other
persons. Insurance is also compulsory for salaried employees and workers
COMPULSORY INSURANCE OF EMPLOYED PERSONS
117
in mutual benefit institutions, docks, dry docks and engineering works
engaged in the refitting of ships, generating stations, harbour pilots in
national rivers and ports, as well as persons employed in a number of other
undertakings, such as professional journalists, employees and workers in
private hospitals, chambers of commerce, economic associations, etc.
Insurance is not compulsory for apprentices.
Insurance of the Staffs of Banks and the Stock Exchange
Insurance is compulsory for members of the staff of the three official
banks, national and foreign banks, the Stock Exchange, and the staff of the
sickness fund for employees of the Stock Exchange.
Insurance is also compulsory for persons employed in the branches of
foreign banks in Uruguay.
The employees of official banks who belong t o a civil pension fund may
continue to be insured with that fund, provided that they notify the Insurance Fund for the Staffs of Banks and the Stock Exchange within six
months of its foundation.
U.S.S.R.
Employed Persons' Insurance
The scope of invalidity insurance is not identical with that of old-age
insurance.
INVALIDITY INSUKANCE
Insurance is compulsory for all employed persons working for State,
public, co-operative, conceded, leased, mixed or private undertakings,
establishments or holdings, as well as for persons employed by private
individuals, irrespective of the nature or duration of their work and the
method of remuneration.
Insurance is further compulsory for all persons employed on agricultural
holdings, with the exception, however, of peasant holdings which are so
poor that they are exempt from the agricultural tax, provided that the
workers employed on these holdings are engaged for not more than fifteen
days at a time and not more than one month during the year, for urgent
work connected with sowing or the harvest, and provided also that the
employment of these workers is due t o the absence of members of the family
on account of death, sickness, pregnancy, childbirth or military service.
Insurance is also compulsory for domestic servants, home workers and
State officials, salaried employees and workers. It does not apply to a
certain number of categories of seasonal and occasional workers or to private
teachers.
All persons who are deprived of the right to participate in the elections
to the Soviets for any of the following reasons are excluded from the scope
of insurance :
(a) because they belong to the class of " exploiters " ;
(b) because of their activities during the Tzarist regime or the White
Governments ;
(c) because they belonged to the White Armies or of anti-revolutionary
bands;
(d) because they are ministers of religion.
OLD-AGE INSURANCE
Insurance against old age covers :
(1) all manual workers in every branch of economic activity;
(2) engineers and skilled technical workers;
(3) the navigating staff in civil aviation and various categories of salaried
employees enumerated in a special list.
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STATISTICS OF INSURED PERSONS
Number
oí
insured persona
7,888,000
8,620,000
8,566,000
12,700,000
17,150,000
Year
1925-1926
1926-1927
1927-1928
1928-1929
1931
According to officiai estimates, the number of insured persons is expected
t o be 20,700,000 in 1932.
YUGOSLAVIA
Miners' Insurance
COMPULSORY INSURANCE
Insurance is compulsory for all workers and other persons employed
under the provisions of the Mining Act. Salaried employees in mining
undertakings who have not a permanent position are liable t o insurance
even when they are excluded from the scope of the Mining Act. Compulsory insurance also covers worker^ engaged on temporary work indirectly
depending on mining undertakings. Apprentices are also covered.
Admission t o insurance is subject t o the production of a medical certificate.
VOLUNTARY INSURANCE
The rights of an insured person who is not engaged in an insurable employment for six months are maintained. After that period he remains in
insurance only if he pays his contributions regularly.
Salaried Employees' Insurance i n Slovenia and Dalmatia
COMPULSORY INSURANCE
Insurance is compulsory for salaried employees in the former Austrian
territory of the Kingdom of Yugoslavia who have reached the age of eighteen
years and. whose total annual earnings are not less than 150 dinars. Persons
who first enter an insurable occupation after the age of fifty-five are exempt.
Exemption is also granted to public officials, including railway officials and
the employees of foreign undertakings which have no branches in the
Kingdom, as well as employees in the service of persons not domiciled in
the Kingdom, provided they are resident only temporarily in Yugoslavia.
VOLUNTARY INSURANCE
Provision is made in the legislation for collective voluntary insurance,
which is dealt with by a special department of the Salaried Employees'
Pension Institution. Such collective voluntary insurance may be contracted
provided that not less than ten salaried employees have registered with the
special department in question,, and that the employer undertakes t o insure
the other employees and maintains such insurance for not less than three
years. Voluntary collective insurance operates over the whole territory of
the Kingdom.
CHAPTER II
COMPULSORY INSURANCE OF OCCUPIED PERSONS
OF SMALL MEANS, SPECIAL COMPULSORY
INSURANCE OF INDEPENDENT WORKERS AND
COMPULSORY NATIONAL INSURANCE
INTBODUCTION
The scope of the compulsory insurance laws which have been
described in the preceding Chapter is defined mainly by reference
to the contract of employment and is intended to embrace
employed persons as a social class.
Nevertheless, it has been observed that several of these laws
render insurance compulsory also for certain groups of persons
of small means working on their own account, and in a few
countries for all persons working on their own account whose
annual income does not exceed a prescribed limit.
In a few other countries employment is abandoned as the
criterion of liability to insurance and either all occupied persons
of small means, whether employed or working on their own
account, or else all members of the national community, are
brought within the scope of compulsory insurance, subject to
certain age limits and sometimes to certain conditions of
nationality or residence.
Lastly, one country, namely, Czechoslovakia, which possesses
several schemes of compulsory insurance covering all employed
persons, established in 1925 a special scheme of compulsory
insurance for persons working on their own account.
The following sections will deal with the compulsory insurance
of occupied persons of small means, the special scheme of compulsory insurance of independent workers, and compulsory national
insurance.
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§ 1.—Compulsory Insurance of Occupied Persons
of Small Means
In favour of compulsory insurance for occupied persons of
small means, whether employed or working on their own account,
it is generally pointed out that there exist in almost all countries
a large number of independent workers (small tradesmen, small
peasants, etc.) whose economic situation is quite comparable
with that of employed persons. These small independent workers maintain themselves and their families by their work, their
earnings do not as a rule exceed a very moderate amount, their
ability to save is slight, and they are often unable to bear the
cost of the premiums which private insurance would demand for
covering the risks of invalidity, old age and premature death.
They need, therefore, insurance protection, and this need has
become particularly urgent during the last few years by reason
of the war and the economic crisis, which have severely affected
the income of the middle class and have led to the assimilation
to the proletariat of small independent workers who, according
to changes in circumstances, frequently find themselves by
turns working on their own account or in employment.
If the compulsory insurance of independent workers of small
means has not, however, been widely adopted, it is because the
practical application of it meets with special difficulties. The
definition of the scope requires that a limit of earnings or income
should be fixed, so that a careful investigation of the earnings or
income of individuals must be made in order to verify the declarations made by the persons concerned. Independent workers,
unlike employed persons, have no employer who may be called
upon to pay part of the contribution and to deduct the insured
person's share from his wages : it is therefore necessary to use
other methods for the collection of contributions.
The verification of the existence of invalidity is likewise more
difficult than in the case of an employed person, and, moreover,
it must be admitted that very often invalidity, old age and death
do not have in the case of the independent worker the same
economic consequences as they do in the case of the employed
person. A small farmer or a small tradesman is often able, with
the help of his family, to continue, to some extent at least, to
manage his business and to obtain some profits from it.
COMPULSOEY INSURANCE OF PERSONS OF SMALL MEANS
121
The compulsory insurance of workers of small means has been
established in Denmark as regards the risk of invalidity; here
the compulsory insurance is grafted on to voluntary sickness
insurance.
DENMARK
Insurance of Persons of Small Means who are Regular M e m b e r s
of Sickness Funds
COMPULSORY INSURANCE
Insurance against invalidity is compulsory for all regular members of
voluntary sickness funds who are over 18 years of age and are deemed t o
be " without means ", i.e. of small means. Any occupied person may join
a sickness fund who :
(1) is of Danish nationality,
(2) is domiciled in Denmark ;
(3) is between the ages of fourteen and forty;
(4) is not an invalid or suffering from chronic disease or bodily defect
involving a diminution of his working capacity ;
(5) belongs to the working class or is in similar economic circumstances,
for example, a small farmer, a handicraft worker or other person
carrying on a manual trade;
(6) is of small means.
The sickness funds are authorised to accept for membership under special
terms persons who are over the age of forty ; persons so admitted are likewise subject t o compulsory invalidity insurance. Liability to compulsory
invalidity insurance ceases on the attainment of the age of sixty-two.
A written statement by the applicant is accepted as proof that the person
in question is not already an invalid, but in doubtful cases a medical certificate may be required. In Copenhagen the production of such a certificate
is compulsory. Persons who are fit for work but who suffer from a chronic
disease or an incurable bodily or mental infirmity and who are accepted by
the sickness fund with a full knowledge of the facts cannot be admitted to
invalidity insurance except by a special decision of the authorities.
The Minister of Social Affairs determines what persons shall be considered
as being of small means by fixing a maximum limit of income and capital.
According to the legislation, the limit of income must be so fixed as to correspond to the annual earnings of a skilled worker when fully employed. At
present the limits have been fixed by the Minister at 4,400 kr. for Copenhagen and the surrounding district, 4,000 kr. for other towns and centres
of over 2,000 inhabitants, 3,500 kr. for towns and centres with from 1,000 to
2,000 inhabitants and 2,900 kr. for other parts of the country. A sum of
300 kr. is added for each child under fifteen years of age. The limit of capital
has been fixed at 10,000 kr. for unmarried persons and 14,500 kr. for the
heads of families. Income is defined as being the sum on which the wage
earner is assessed for the purpose of income tax.
I t should be noted that every person employing apprentices is obliged to
insure them with a recognised fund, so that apprentices are compulsorily
insured against sickness and invalidity.
VOLUNTARY INSURANCE
Continued Insurance
When the insured person has exhausted the benefit due to him from the
sickness fund, he may still remain in the fund as a contributing member
and may under these circumstances continue to be insured against invalidity.
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A person who ceases to be of small means within the meaning of the
Act may also continue to be insured against invalidity if he remains in the
sickness fund as a contributing member or as a regular " well-to-do " member,
or if he becomes affiliated to one of the continuation funds attached to the
sickness funds.
If such persons who voluntarily continue to be insured against invalidity
later again fulfil the conditions for becoming regular members of small
means, they must be accepted by the sickness fund, irrespective of their
age, and thus again become liable to compulsory invalidity insurance.
Voluntary1 Insurance Proper.
No provision is made for voluntary invalidity insurance save in the case
of the regular " well-to-do " members of sickness funds and members of
continuation funds.
STATISTICS OF INSURED PERSONS
REGULAR MEMBERS OF SMALL MEANS OF SICKNESS FUNDS
Year
1922
1923
1924
1925
1926....
Number of members
1,296,500
1,306,300
1,331,500
1,366,800
1,400,400
Year
1927
1928
1929
1930
Number of members
1,419,900
1,431,500
1,469,500
1,513,800
§ 2.—Special C o m p u l s o r y I n s u r a n c e of Independent
Workers
Persons working on their own account form a very heterogeneous group, comprising brain-workers as well as manual
workers. Some have very small means a t their disposal and
have need of t h e protection of insurance, while others, whose
earnings or income are considerable, are quite able t o take their
own measures to cover their risks, whether by individual saving
or by private insurance. The economic consequences of invalidity, old age and death vary widely for different types of independent workers. Their age distribution is quite unlike t h a t of
employed persons. Hence it is very difficult t o carry out compulsory insurance for independent workers as well as for employed
persons within a single scheme to be managed by a single set of
institutions.
The establishment of a special scheme of compulsory insurance
t o cover all independent workers raises a series of difficult problems. I n the first place, ii; may not be certain t h a t the compulsory principle will find acceptance by the majority of the persons
concerned. Secondly, in fixing the provisions as t o contributions
COMPULSORY INSURANCE OF PERSONS OF SMALL MEANS
123
and benefits, regard must be had to the situation of the least
well-to-do; but in t h a t case there is the likelihood t h a t the scheme
will be of little value to persons enjoying a considerable income.
Thirdly, t h e verification of t h e existence of invalidity involves
a very careful investigation of the gainful activity of independent workers. Lastly, the collection of contributions may
meet with resistance which it will be difficult t o overcome in
the absence of the system of deduction from wages, universally
adopted in employed persons' insurance but impossible in independent workers' insurance.
Because of all these grave difficulties, there is b u t one country,
Czechoslovakia, which has drafted a scheme of compulsory
insurance against invalidity and old age for persons working on
their own account; the scheme, which appeared in 1925, has for
t h a t matter not yet been p u t into force.
CZECHOSLOVAKIA
Independent Workers' Insurance
Every person who carries on in the Czechoslovak Republic on his own
account an undertaking for the purposes of gain which is liable to the
general tax on trade profits or who is engaged in any other occupation liable
to the said tax or who for agricultural purposes utilises land which is subject
t o the land t a x or on whose account such activity is carried on is liable t o
insurance in so far as the said occupation or activity is not subsidiary or
casual.
If the gainful activities specified in the previous paragraph are carried on
by a general partnership or a limited partnership or company, the members
of the partnership or the personally liable members of the limited partnership
or company are liable to insurance ; in the case of a limited liability company,
the managing directors are not liable to insurance.
If there are two or more such persons in a partnership or company, only
the head of the family is liable to insurance in the case of husbands and
wives, brothers and sisters or persons related by blood in the direct line in
any degree or related by marriage to the second degree, provided that the said
persons are living in the same household.
The following persons are excluded from compulsory insurance :
(a) persons who are not resident in the territory of the Czechoslovak
Republic ;
(b) persons who have not attained the age of 18 and also persons who
have attained or passed the age of 60 at the date of the coming
into operation of the law or who do not become liable to insurance
until after having reached the age of 60 ;
(c) the wife of an insured person;
(d) persons related t o an insured person by blood in the direct line in
any degree or by marriage to the second degree and the brothers
and sisters of an insured person who live in the same household
with him, as well as persons who utilise a plot of land a s a part of an
estate reserved from transfer t o the heirs, provided that such reservation does not exceed the amount customary in the locality ;
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(e) persons in receipt of an invalidity or old-age pension under this law
or another social insurance law, unless they renounce such pension;
(f) persons liable to insurance against invalidity and old age under
other social insurance laws unless the occupation covered by this
law is their principal occupation.
§ 3.—Compulsory National I n s u r a n c e
Under national insurance, all the inhabitants of a country,
irrespective of their conditions of work, the branch of economic
activity in which they are engaged and the amount of their
means, are compulsorily insured, subject t o certain conditions
relating t o age, residence and nationality. The principal arguments which have been employed t o support or oppose compulsory national insurance are summarised below.
ARGUMENTS FOR COMPULSORY NATIONAL INSURANCE
The advocates of compulsory national insurance start from
the fact t h a t all persons are exposed t o the risks of invalidity,
old age and premature death and point out t h a t the economic
circumstances of individuals are not stable, since their means,
however considerable, aire liable to be lost, t h a t in the course
of their lives they may have need of the benefits of invalidity
and old-age insurance smd that, lastly, their dependants m a y
need the benefits of dea,th insurance. If every person has not
been obliged t o make provision by means of insurance during
his economically active life, he will later on become a charge
on the community if he should find himself without means,
even though he has wasted them. Hence it is both a right and
a duty for the community to make insurance compulsory even
for well-to-do persons.
To this affirmation of the need for universal compulsory insurance the protagonists of national insurance add a political
argument. I n their view the coercive power of the State should
be used in the general interest and not for or against a certain
social class. Class legislation of every kind must be avoided,
since it strengthens t h a t class feeling which is contrary t o the
unity of the State. I n particular, the establishment of a scheme
of compulsory insurance for employed persons crystallises or
strengthens class feeling among wage and salary earners and
exercises a disruptive influence on t h e nation.
COMPULSORY INSURANCE OF PERSONS OF SMALL MEANS
125
There are, moreover, other arguments based on the practical
application of insurance.
Insurance against invalidity, old age and death is a species
of long-term insurance involving estimates of the probable
movement of the insured population. The supporters of national
insurance point out in this connection t h a t statistics of the
general population, its distribution by sex and age, and its mortality, are regularly collected and published, whereas corresponding data for employed persons and occupied persons of small
means are imperfect. The data on which the estimates are
based will therefore be much sounder in the case of national
insurance, and it will be possible t o secure financial stability
with greater certitude t h a n in the case of insurance having a
restricted scope.
I n many countries employed persons represent b u t a small
fraction of the population and are scattered over a vast area,
so t h a t it is difficult and expensive to organise insurance institutions. National insurance, on the other hand, embraces the
population as a whole, and so it will always be possible in any
administrative area of a certain size to establish insurance institutions having a stable and sufficient membership.
I t will be easier to administer national insurance than insurance
for employed persons because it will be unnecessary to enquire
into the occupation and earnings of every person. Insurance
status will be continuous and unaffected by changes in the place
of residence or in the occupation of the insured, changes which
involve much complication in the administration of insurance
for employed persons.
National insurance, just because it brings in the whole population, rapidly reaches a position of stability as regards the
number of beneficiaries and the expenditure, and can, more
easily t h a n insurance on any other basis, be worked according
t o t h e method of annual assessment, a method which avoids
t h e necessity of building up actuarial reserves and immobilising
a large amount of capital, the management and investment of
which involve difficult problems and elicit the criticism of liberal
economists, employers and financiers. For t h a t matter, even if
large reserves should have to be accumulated, they could be
quickly and profitably utilised in the interests of national prosperity. For, contrary t o what is commonly stated, the investment
policy of social insurance institutions is not necessarily slow,
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rigid and unadaptable to the economic needs of the country.
One may even consider that, as experience has shown, insurance
institutions may base their investment policy on a rational
plan which is mainly directed to the general interest of the
country.
Lastly, in every country the Government and Parliament
should have regard to the voluntary provident institutions
which already exist and whose membership consists, sometimes.
to a large extent, of persons not belonging to the employed class.
Only by means of national insurance will it be possible not to
exclude from compulsory insurance persons who have already
given proof of their provident spirit.
ARGUMENTS AGAINST COMPULSORY NATIONAL INSURANCE
The idea of compulsory national insurance generally meets;
with considerable opposition. The extension of compulsory
insurance to a very large number of persons possessing sufficient
means, and able to cover their risks by individual thrift or private
insurance, is regarded as useless and as an abuse of the coercive
power of the State. It is considered that legislative interference
is excessive when it results in the imposition of a new obligation
upon millions of persons, because there are among them a minority who are improvident. It is admitted that a small number
of the improvident may become a charge upon Poor Law authorities in invalidity or old age, but that is not deemed to be a
reason sufficient to justify universal liability to insurance.
The opponents of compulsory national insurance point out
that the population of a country lacks homogeneity in all those
respects with which insurance is concerned : mode of life; amount
of means and ability to contribute; need of benefits and susceptibility to the different risks.
They go on to say that compulsory national insurance would
have to comprise large landed proprietors, persons of independent
means or independent craftsmen, shopkeepers, peasants, employed
persons and so on, so that it would be quite impossible to establish
a scheme of contributions; and benefits which would be satisfactory for all the persons concerned.
The rate of contribution under a scheme of compulsory national
insurance would have to be uniform and also low enough to be
borne by the least well-to-do insured persons. In that case,
COMPULSORY INSURANCE OF PERSONS OF SMALL MEANS
127
however, it would represent a negligible sum for the well-to-do
or rich insured persons.
To the uniformly low contribution there would naturally
correspond a uniformly low benefit which would be without
interest to insured persons in receipt of large earnings or
income.
If it were desired to adapt, at least to a certain extent, the
rates of contributions and benefits to the needs and capacities
of the insured, it would be necessary to draw up a scale of contributions and benefits corresponding to the earnings or incomes
of the insured, who would be grouped in classes. Such a classification, however, would deprive compulsory national insurance
of the very simplicity which is one of its merits. Investigations
would be necessary to determine the means of each person. No
doubt the insured would be required to make declarations, but
the experience of the finance departments which have had to
collect income taxes has shown that careful and laborious checking
is indispensable. Invalidity, old age and death are far from having
the same economic consequences for all individuals. Very
often the family of an employed person loses the whole or the
greater part of its resources when its breadwinner becomes
totally disabled or dies prematurely; in the same circumstances,
however, a person of independent means or a large landed proprietor and their families continue to receive their dividends or
the income from their property. The incapacity, even if total,
or the death of a small tradesman often leaves subsisting his
business, which, managed by the members of his family, continues to be profitable. To give to everyone the same benefits
would be obvious injustice, and would necessarily imply that some
would receive benefits when they had suffered no loss, and others
would be compensated for a portion, often very small, of their loss.
It would be more difficult to secure the payment of contributions
regularly and in full than under the insurance of employed
persons, where the employer deducts the contribution of the
insured person from his wages. If the contributor should fall
into arrears, the insurance institutions or the public authorities
would have to coerce him, and this frequent interference would
be likely to render national insurance unpopular.
Lastly, the reproach is made against national insurance that
by reason of the vastness of its scope a very large capital would
be immobilised and withdrawn from its proper destiny in com-
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mereiai enterprise. No doubt insurance institutions would
invest the capital in national business, but the investments would
be effected slowly and would be subjected to somewhat narrow
and rigid regulations. It is considered that the investment
policy of social insurance institutions can never attain such
elasticity and adaptability to the needs of the investment market
as is possessed by individuals and private insurance companies,
and that therefore national insurance would cause a slowing
up of the economic activity of the countries in which it was
applied.
Compulsory national insurance has been adopted only in
Sweden and in certain Cantons of Switzerland, namely, those of
Appenzell (Outer Rhodes), Basle Town and Glarus.
SWEDEN
National Insurance
COMI'ULSOBY INSURANCE
Every Swedish citizen resident in the country, irrespective of sex, is
liable for the payment of insurance contributions in so far as he is over
sixteen and not over sixty-six years of age, provided that he is on the national
register of taxpayers and not already an invalid. Foreigners are not compelled to pay contributions.
The following classes are excepted :
(a) civil servants and employees in the postal and telegraph service, the
State railways and the State water-power service who are entitled
t o a pension;
(b) members of the military forces covered by pension schemes;
(c) ministers of religion ;
(d) the wives of those enumerated above.
The Government may also exempt from compulsory insurance any
persons who are employed by the State and who have the right to expect
a pension.
According t o the Regulations in force up t o 1920, any persons entitled t o
a pension, even when not employed by the State, could be released from
compulsory insurance. In so far as such exemptions were granted up to
1920, they have been allowed, to remain in force.
VOLUNTARY INSURANCE
According to the legislation on national insurance, every Swedish citizen
who is not an invalid can insure against permanent loss of earning capacity,
in addition t o the provision, made by compulsory insurance. He is also
free t o become insured for an old-age pension, payable irrespective of his
earning capacity. The insured person himself may decide when the old-age
pension is to fall due, that is, for what length of time he wishes to be insured.
As a rule, he is not permitted t o claim his pension until he has completed
his fifty-fifth year. The payment of contributions can only be continued
up to the completion of the sixty-ninth year.
COMPULSORY INSURANCE OF PERSONS OF SMALL MEANS
129
STATISTICS OF INSUHED PEBSONS
(In thousands)
Year
1916
1918
1920
1921
1923
1924
1928
Registered as liable
Exempted
to insurance
from contributing
3,753.5
3,592.8
3,661.2
3,707.1
3,796.2
3,823.6
3,982.3
230.9
249.9
229.7
227.9
234.6
238.6
255.2
Compulsory
contributors
3,522.6
3,342.9
3,341.5
3,479.2
3,561.6
3,585.0
3.727.1
SWITZERLAND
Appenzell (Outer Rhodes)
Cantonal Insurance
COMPULSORY INSURANCE
Insurance is compulsory for all persons who have completed their eighteenth but have not completed their sixty-fourth year, provided they have
their legal domicile in the Canton of Appenzell (Outer Rhodes). Persons
entering the Canton after the Act came into force are liable to insurance
if they have not passed the age of fifty.
The legal domicile of the person is taken t o be the place where he settles
with the intention of residing permanently.
Insurance continues until death or until the insured person ceases to have
his legal domicile in the Canton. The payment of contributions is compulsory only until the insured person completes his sixty-fourth year. Any
person who had exceeded that age on the date when that Act came into
force is insured but is not liable for the payment of contributions.
VOLUNTARY INSURANCE
Any insured person who leaves the Canton can continue in insurance, but
he must pay contributions at a higher rate. The contribution must be paid
in January every year, without special notice being given, to the municipal
authorities with whom the insured person was registered when he ceased to be
domiciled in the Canton. If an insured person resigns or fails to pay his contributions, insurance ceases. In that case the insured person can claim the
refund of half the contributions paid by him without interest. This claim
must be lodged with the insurance institution within one year. Any person
who ceases to be insured when leaving the Canton, or whUe resident outside
the Canton, can continue in insurance after his return if he is not more than
fifty years old and if he pays up the contributions at the higher rate for the
period of his absence. If such persons have received a refund of their
contributions they must naturally pay back that sum.
Basle Town
Cantonal Insurance
COMPULSORY INSURANCE
Insurance is compulsory for all persons who have been continuously
resident in the Canton for two years and who have completed their twentieth but not completed their sixty-fifth year, provided that they were not
9
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over the age of fifty when they concluded their first two years of residence
in the Canton. Married women are liable t o insurance if their husbands
are. When the marriage is dissolved, the woman remains liable t o insurance,
irrespective of her age, if her husband is compulsorily insured. If this is
not the case, the woman is liable t o insurance only in so far as she fulfils
the normal conditions. A judicial separation for an indefinite period is
considered as being equivalent t o a dissolution of the marriage.
Exemption from insurance is granted :
(1) t o persons who have not been resident in t h e Canton for two years;
(2) t o persons permanently employed by the public administration of a
foreign country or by a foreign railway company;
(3) wives of persons not liable t o insurance;
(4) persons who are insured with a private fund organised by their
employer or by their occupational association, when such insurance
is equivalent t o the cantonal insurance scheme.
Membership of group insurance with a private insurance company, whether
organised by the employer or bjr an occupational association, is considered
as being equivalent if the insurance company in question is under the supervision of the Federal Council.
Insurance with one of the above funds is recognised by the Cantonal
Council only in so far as it accepts certain obligations as a substitute fund.
VOLUSÍTARY I N S U R A N C E
Continued Insurance
An insured woman who marries a man not liable t o insurance and who
therefore herself ceases t o be lisible may continue in insurance. The same
is true of persons who cease t o be resident in the Canton, but who are still
domiciled in Switzerland. Citizens of the Canton of Basle Town may retain
their membership of the fund even when they take u p residence abroad.
Voluntary Insurance Proper
Any person resident in the Canton of Basle Town who is not liable t o
insurance because he has not t e e n resident there for two years or, in t h e
case of a woman, because she is married t o a person not compulsorily insured,
is entitled t o become insured voluntarily between the ages of twenty and
fifty on production of a medical certificate of health. The same right is
granted t o persons who are exempt from insurance because they are employed
by a foreign public authority or railway company.
Glarus
Cantonal Old-Age and Invalidity Insurance
COMPULSORY INSURANCE
Insurance is compulsory for all persons who have completed their seventeenth but not completed their fiftieth year, provided that they have their
legal domicile in the Canton of Glarus. The compulsory payment of contributions ceases when t h e insured person completes his sixty-fifth year.
Exemption is granted t o pensons who are completely incapacitated when
they first become liable t o insurance or who become incapacitated during
the first five years of such insurance.
The Cantonal Councillor for Internal Affairs decides, in view of the personal circumstances of the individual and on the basis of a medical report
if necessary, whether a person is liable t o compulsory insurance or not.
The individual may appeal t o the Cantonal Council against this decision.
Insurance ceases t o be compulsory when the individual gives u p his legal
domicile in the Canton.
COMPULSORY INSURANCE OF PERSONS OF SMALL MEANS
131
VOLUNTARY INSURANCE
Continued
Insurance
Insured persons who leave the Canton of Glarus while liable for the payment of contributions may remain in insurance if they are still domiciled
in Switzerland. In this case they must pay contributions at a higher rate
and must make such payment without special notice during the month
of January t o the municipal authority with whom they were registered at
the time of giving up their domicile in the Canton. Insurance ceases if
contributions are no longer paid.
A person who takes u p residence abroad is released from the obligation
to pay contributions and has no right to an invalidity or old-age pension.
If, however, such a person returns to Switzerland within four years, he may
again become a member of the insurance fund if he produces a medical
certificate of health and pays the arrears of contributions at the higher
rate for his period of absence. In such a case he is considered not as a new
member but as continuing in insurance.
Voluntary Insurance Proper
The legislation empowers the Cantonal Council t o draw u p special provisions concerning voluntary insurance for persons of any age up to sixty
and, in particular, concerning pensions at higher rates or falling due earlier
than those provided under compulsory insurance.
In the case of old-age insurance, any person may insure who is not more
than fifty-nine years old; in the case of old-age and invalidity insurance
combined, any person may insure who has completed the age of seventeen and
has not reached the age of fifty-nine. The production of a certificate of
health signed by a doctor recognised by the Federation and resident in the
Canton of Glarus is required.
SECOND PART
RISKS COVERED AND CASH BENEFITS
INTRODUCTION
Unless he has exceptional resources at his disposal, the worker
cannot protect himself sufficiently, unaided, against all the risks
which threaten his person; and it is the duty of the social insurance
institutions to provide the worker himself and his dependants
with as complete a defence as possible against the economic
consequences of old age, invalidity and death.
National legislation must first of all exactly define the risks
which it desires to have covered, lay down rules for qualification
as an insured person and prescribe the conditions which insured
persons or their survivors must fulfil in order to be able to claim
payment of benefit.
Further, the methods by which benefits are calculated may
vary according to the very different views held of the extent to
which insurance should cover a given risk, and of the influence
which former earnings, length of the period of contribution,
family responsibilities, etc., should have on the amount of benefit.
The study of the question of cash benefits thus divides itself
naturally into three Chapters :
I. Risks covered.
II. Conditions of award of cash benefits.
I I I . Computation of cash benefits.
Chapter IV contains an analysis, by country and scheme, of the
legal provisions relating to risks covered and cash benefits.
CHAPTER I
RISKS COVERED
Compulsory insurance schemes generally cover the risks of
invalidity, old age and premature death, sometimes only those of
old age and death, and occasionally simply that of invalidity.
National legislation must define the risks it covers, and
prescribe : the condition which should give rise to the award of
an old-age pension ; the origin, nature, degree and duration of
disablement which gives the right to invalidity benefit; and the
consequences of the insured person's death—loss of income,
exceptional expenses, cost of adaptation to new conditions—
which justify the payment of compensation to his survivors.
A.—OLD AGE
§ 1.—Conceptions of Old Age
There are two conceptions of old age as a condition which
should give rise to the avrard of a pension : arrival at a certain
age marks the normal end of a worker's active career either
because he is regarded a-s having earned the right to rest or
because he is presumed to be no longer capable of working.
If each of these conceptions is given an extreme interpretation,
the divergence may be great; but a similar, if not an identical,
position is arrived at if the right to rest is placed at an age far
enough advanced to coincide with that at which invalidity is in
practice the normal condition.
THE RIGHT TO R E S T
The right to rest is the return for the efforts the individual
has made during the greater part of his life not only to earn his
own living, but also support others and accumulate capital,
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which may promote the general interest. A worker draws on
the product of his labour for the sum necessary to maintain his
family and face the many needs which he and they must satisfy ;
and he contributes directly or indirectly to the creation or the
upkeep of means of production. In exchange for the profit
which his efforts have brought to the community, the latter
guarantees him, from a certain age, freedom from the obligation
to support himself, and permits him to be supported in his turn
by its active members as a whole.
The right to rest is thus based on the solidarity of the interests
of individuals, and is justified as follows : during his career the
worker has contributed to the maintenance and development of
the means of production while providing, in part at least, for the
upkeep of persons incapable for some reason of supporting themselves ; the value of the goods consumed by him is smaller than that
produced by his labour, so that he has either effected an economy
and thus created new means of production, or permitted part
of his labour to enure to the benefit of others; and therefore,
at some moment, he becomes creditor to the community, and may
fairly require that it in its turn should support him.
The whole difficulty in the fixing of the age from which the right
to rest should be regarded as earned lies in the determination of
the moment at which the community's debt to the worker is
such that the latter may fairly expect to be supported for the
remainder of his life.
The problem may be solved by the calculation of the annuity
which any given annual savings would purchase in a certain
number of years. The age at which the person concerned began
his occupational career, and the amount to be regarded as saved
per year—that is, the proportion of the product of labour which
can be applied to the covering of the risk of old age—must first
be determined. The rules of annuity calculation then give the
amount which can be paid out as pension at any given age. The
age at which pensions are payable, the right to rest being regarded
as fully earned, thus depends both on the amount of annual
saving judged to be possible and on the standard of life at which
pensioners are to be maintained. Moreover, in the calculation
of the annuity, account must be taken both of the productivity
of the labour (and therefore of the saving regarded as possible)
and of the relation to be established between the length of the
period passed at work (period of accumulation) and that passed
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at rest (period of consumption of accumulated savings). The
influence of the increase in average longevity on the age at which
the right to rest is earned is thus, at least in theory, automatically
regulated.
The question of the age at which pensions are to become
payable may be answered more simply by examining statistics of
expectation of life and estimating the proportion of the population
to which pensions can be granted without an excessive, and in
the long run intolerable, burden being imposed on the rest of the
community.
The solutions arrived at by this means may, of course, be
adapted in order to take account of the influence of occupation
and sex on the age at which rest ought fairly to be accorded.
Women are generally regarded as capable of less resistance to
occupational fatigue than men, either because of their physique
or because of the family work and responsibility which they
undertake; and they are therefore regarded as entitled to rest at
a lower age.
Further, in accordance with the principles on which the right
to rest is based, account must be taken of the more or less arduous
character of various occupations, the importance of each to the
community, and their comparative social value ; and the right to
rest must be regarded as earned at different ages for different
occupational categories.
This object may be attained either by setting up special
insurance schemes for workers in occupations considered to be
specially arduous or especially important to the community, or
by establishing a fund, within a general scheme, for the benefit
of the categories to whom it is desired to give particularly advantageous treatment.
PRESUMPTION OF INVALIDITY
The other conception of old age as a condition which should
give rise to the award of a pension proceeds from the fact that
at a certain age weakness., due to the natural exhaustion of the
body combined with the results of various diseases, etc., makes
it difficult, if not impossible, for the worker to remain actively
engaged in his occupation. Pensions are thus granted at the age
at which invalidity may be presumed.
The pensionable age then is based, in theory at least, principally
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137
on an estimate of the resistance of the human body, and of its
power to adapt itself to the various and varying requirements of
occupational life. Here too the influence of sex and type of occupation on industrial fatigue is an important consideration, which
should perhaps be given greater weight than under the conception
of old age as the age at which right to rest has been earned.
The age at which invalidity is to be presumed would have to
be an average for large sections of the population. Such an
average, however, is not susceptible of calculation, and the determination of the pensionable age is therefore essentially arbitrary
and subjective.
Invalidity, as a condition characterised by the normal, and
therefore probable, decline of efficiency and by the difficulty of
finding employment, is a very vague conception, so that in fixing
the pensionable age as the age of onset of such decline or such
difficulty there must be a wide margin of error. In practice, the
age at which invalidity is presumed, like that at which the right
to rest is regarded as earned, is very largely determined by the
proportion of the population which the active workers can support
as pensioners; and the considerations which obtain when the
right to rest is to be fixed at a certain age apply unchanged when
an age for presumption of invalidity, theoretically determined, is
to be adjusted to economic and social possibilities.
The two conceptions of old age—the right to rest and presumption of invalidity—may thus lead to similar and even identical
practice; but there is nevertheless an essential difference in
principle between them, for if old age is the age at which invalidity is presumed, only those workers whose strength and skill
are deemed to be severely affected are entitled to pensions, while
if old age is the age at which the right to rest has been earned,
there is in theory no objection to a worker's receiving benefit
while his earning capacity is still not far removed from normal.
§ 2.—Respective Merits of the Two Conceptions
As has been seen, the object of the old-age pension may be
either to compensate for the loss of income resulting from a
presumed incapacity to earn due to natural exhaustion of the
human body, or to provide persons of a certain age with an
income permitting them to cease work wholly or partially and
so to enjoy rest before invalidity sets in. The age chosen is in
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RISKS COVERED AND CASH BENEFITS
the latter case regarded, not as that at which invalidity may be
presumed, but as that justifying the cessation of the obligation
to work.
It is argued that only senile invalidity should give rise to
benefit, because such a restriction permits benefits either to be
considerably higher, without; the cost of insurance being raised
to the same extent, or at iea.st to be maintained at their present
level, while the increase in expenses caused by changes in the
age distribution of the insured population is avoided.
There is indeed no doubt that the spread of measures for
hygiene and the prevention of diseases, due in the main to sickness insurance, has considerably increased the average length of
life ; consequently the number of aged persons as compared with
the total population, and especially with the working population,
has risen; and if the birth rate falls with the increase in average
longevity—the one phenomenon generally accompanies the
other—the age distribution of the population changes even more
rapidly. The proportion of old to young and middle-aged
persons is thus increasing progressively, and the granting of
old-age pensions at a certain age irrespective of earning capacity
means the imposition of a very heavy burden on the working
population. In some countries it has been discovered that the
number of persons over sixty-five years of age, which in 1890
was equal to 10 per cent,, of the number between fifteen and
sixty-five, had risen to 14 per cent, of that number in 1930, and,
in view of the fall in the birth rate, the effects of which will be
particularly noticeable during the next decades, is likely to reach
25 per cent, in 1975.
Certain economists consider that it is far too much to expect
every four occupied persons to support one aged person—that
is to say, to tax the production of 100 workers to the extent
required to provide the necessities of life for twenty-five old-age
pensioners; and they have therefore proposed that the right to
benefit at the expense of the community be limited to persons
actually disabled to the extent of incapacity to earn their living,
or of an age so great that such incapacity may be regarded as
certain. Each person would thus be bound, at least partially,
to satisfy his own needs by continuing to produce so far as his
strength permitted.
But the economies to be made on such lines are highly problematical, and the advantages to be obtained by the substitution
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139
of an insurance against presumed invalidity for one against old
age proper are, at least at present, confined to theory.
First of all, it is far from certain that longer life entails a corresponding lengthening of the period during which a man's strength,
skill and intelligence permit production for the satisfaction of
his needs. For almost every person the moment at which it
ceases to be possible to perform work requiring an appreciable
effort and having some exchange value now arrives hardly, if
at all, later than it used; life has indeed been lengthened, but
only by means of care and precautions such as are incompatible
with the exercise of most occupations.
Again, even supposing that from the physiological point of
view it were possible for the length of the working career to
increase with longevity, it by no means follows that employment
is actually available to a corresponding extent.
The position to-day is that in a large number of industries the
existing means of production, though they may not be capable
of providing more than is needed, are excessive when regard is
had to the possibilities of exchange. It cannot be said that
there is real overproduction in these industries, for the foodstuffs
and other commodities produced or produceable correspond to
real needs and could be consumed; but they find no buyers
because the persons who require them have nothing to offer in
exchange.
Further, in certain industries indeed real overproduction
exists, because the product has lost part of its market owing to
the substitution of another for it, as petroleum products are
substituted for coal, or as certain luxury articles, jewellery and
hand-made lace for instance, are in less demand as motor-cars
become more generally used.
This lack of equilibrium, whether it results from inequality
in the technical progress made in different branches of economic
activity, from real overproduction or from the loss of public
favour by certain products, is a formidable obstacle in the way
of the continued regular employment of workers over a certain
age. No doubt the restrictions thus imposed on the freedom of
exchange will disappear as national economic systems are adapted,
as certain trades disappear, as others develop and as prices
adjust themselves to demand; but the process will be a long
one, and in the meanwhile, if elderly workers are to find employment after they have ceased to earn enough in their former
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occupation, they must be transferred to another in which their
services can be profitably used. This problem of the transference of labour is one that concerns all the unemployed as well
as elderly workers ; but in the case of the latter it is particularly
difficult, for even where there is no marked physical or mental
weakness (senile invalidity) the difficulty experienced by a
worker in adapting himself to modern production conditions
naturally increases with age.
It is usually fairly easy for a young worker to adapt himself
to a new occupation even if he is affected by an infirmity, particularly one resulting from some functional defect; in such a case
less difficulty is presented by the technical problem of re-adaptation than by the economic problem of finding employment.
But the obstacles opposed to a change in occupation are far more
serious in the case of a person no longer young, even if he is still
in good health : there are psychological obstacles in the shape of
habits already formed in a different mode of life. Further, if an
industry is in a position to absorb a new supply of labour, it is no
doubt likely to call on the youngest, strongest and most adaptable workers it can find, particularly as industries so placed are
usually those which have been least affected by mechanical
production methods and therefore require the maximum of
physical effort, as, for instance, agriculture.
At present, and no doubt for a long time to come, the potential
production of foodstuffs and manufactured goods in nearly all
countries exceeds and will continue to exceed their consumption
to such an extent that unemployment is in some cases endemic;
it is therefore the aim of all public authorities to free the labour
market as far as possible from the competition of workers over
a certain age. The restriction of the idea of old age, as the risk
covered, to senile invalidity would run counter to this policy,
unless invalidity insurance were deliberately made to cover the
risk of unemployment arising out of economic far more than
physical conditions—a step which would abuse that insurance
and destroy its financial equilibrium.
In addition, it is in practice extremely hard, if not impossible,
to distinguish between real senile invalidity and unemployment resulting as much from economic objections to the
engagement of old workers as from physical causes. Benefit
can hardly be refused to persons whose invalidity is perhaps
technically doubtful but who, despite all their efforts, cannot
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141
find employment such as will enable them to satisfy their
needs.
The fact is that the worker's right to rest corresponds not only
to the economic imperatives of the moment, but also, and even
more closely, to the general conception of the functions of social
legislation. ' A portion of national production is therefore taken
for the support, under conditions regarded as suitable, either of
such workers as are incapacitated from earning their living,
whether for physical or for economic reasons, or of such as have
acquired the right to rest by long years of effort, irrespective
of their present earning capacity. Social insurance permits a
certain proportion of the national revenue to be distributed in
this way, in conformity with the demands of justice and with
the need for social peace.
Social insurance schemes supply insured persons incapable of
earning with a modicum of purchasing and consuming power.
The final incidence of the charge represented by the necessary
revenue varies from scheme to scheme : the charge is borne
either by the consumers if the selling price of the product is
increased, or by the workers if wages are lowered, or by the
employers if profits are reduced, or by some combination of the
above. However that may be, these schemes are certainly a
social necessity. This is particularly true of old-age insurance;
it would be by no means in the public interest for a section of the
population—the oldest persons—to be compelled to work unremittingly in order not to die of hunger, when they could easily
be supported by the labour of the younger generations.
Moreover, it is a mistake to suppose that the increase in the
financial burden is proportionate to that of the ratio of old-age
pensioners to occupied persons : correlation exists only between
the number of pensioners and the nominal cost of the system.
If old-age pensions are paid out of the capital which has
accumulated during the insured person's working life, and if the
actuarial forecast of the average rate of interest proves accurate,
an increase in longevity will cause a deficit, both because the
risk materialises more frequently (a larger number of insured
persons reach the pensionable age) and because of the increased
expense entailed by each pension (the average pensioner lives
longer than was expected). This deficit is proportionate to
the difference between actual longevity and the hypothetical
longevity on which the financial equilibrium was based. The
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RISKS COVERED AND CASH B E N E F I T S
hypothetical longevity may be adjusted fairly frequently—at
least every ten or twenty years—in accordance with the experimental data obtained from the working of the scheme , and the
deficit resulting from increased longevity may thus be closely
observed and rapidly counteracted by a suitable adjustment of
contribution rates.
If, on the other hand, the cost of old-age pensions is distributed
every year over all persons paying contributions, the increase
in charges resulting from greater longevity can only be met by
an annual adjustment in the contribution rates.
In both cases the nominal value of contributions is raised
gradually and carefully in accordance with the increase in actual
longevity; but it must not be concluded that this increase in
nominal value indicates a corresponding increase in the real
burden they impose. The function of a social insurance scheme
is nothing but the diversion, to a portion of the population, of
part of the national revenue, that is of part of the net value of
production including the balance of payments made abroad and
those made in the country from abroad otherwise than on account
of a transference of goods—freights, bankers' commission,
State debts, etc. During the last decades the value of production
has increased on the whole much more rapidly than the occupied
population, so that the average income per worker has greatly
increased; and it is not unreasonable to assume that such a
process will long continue. This rise in average income will
enable the nominal value of contributions to social insurance
schemes to be increased without rendering their real burden
heavier. If, to return to the example cited above of the ratio
of old persons to young, it is supposed that the average income
per occupied person to-day is 1,000 monetary units and that
in 1975 this will have doubled—no improbable assumption if
prices remain unchanged—and if it is supposed further that the
levy for the support of persons at the public charge is 200 units
and that it will have risen to 500 in 1975, then it will not be
true to say, at that date, that the charges are two and a half
times as high as they were, for every occupied person will then
have a net income of 1,500 units as against 800 to-day.
When estimating the real burden of the contributions required
for the support of certain members of the community, the
ability of insured persons to contribute must be taken into
account. This ability undoubtedly increases at a rate which
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143
is faster than the rise in the income on which contributions are
levied.
Quite apart from any increase in the national revenue and in
the volume of production resulting from a more rapid exchange
of commodities, it is only necessary, if the rise in the nominal
value of contributions is not to lead to a rise in their real burden,
for such a rise to be compensated for by an improvement in the
technique of production sufficient to maintain the quantities of
raw materials, foodstuffs and other goods available to the occupied
persons at a uniform level. In other words, in order that the
increase in the quantity of produce required for the support of
pensioners may not reduce the standard of life of the occupied
persons, each such increase must be accompanied by a technical
advance. It seems indubitable that the technical advances
made during the last decades have enabled the volume of produce
to be increased far beyond what was necessary to balance the
rise in insurance and relief charges and so to maintain the former
standard of living. The general increase in the average income
of occupied persons proves this to be the case.
It may therefore be stated that the increase in the ratio of
old-age pensioners to occupied persons naturally and almost
inevitably leads to a corresponding increase in the nominal value
of insurance contributions, and that in order to prevent this
latter increase from entailing a heavier real burden, it must be
compensated for by a greater volume of production, resulting
either from technical advances proper (new methods of manufacture, etc.) or from better organisation of undertakings.
Indeed, an increase in the real burden of contributions is only
likely if the full utilisation of the technical possibilities of production is hindered by the restriction of markets. The foodstuffs and other goods required by persons maintained at the
community's expense are not necessarily produced on the territory of the State in question, and even if they are produced there
it may be impossible or very expensive to increase their quantity
by technical methods. They must therefore often be imported
from abroad. Moreover, the foreign markets to which national
products have access may cease to expand, or may even contract;
and it will thus be impossible to exploit the technical advances
in order to balance the increase in insurance charges; but this
is an exceptional case, for it is very improbable that both home
and foreign markets will in practice be inelastic. It is, however,
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RISKS COVERED AND CASH BENEFITS
conceivable that the effect of insurance charges on prices might
be great enough to hinder exports, and, other things being
equal, to prevent their development, while the volume of imports
might grow in accordance with the requirements of pensioners.
Though this effect is conceivable and even for some countries
probable, it is nevertheless impossible to prove its existence,
since it cannot be measured.
The possibility of balancing insurance charges by progress in
production technique is thus incontestable if the world is considered as forming a single economic system, but cannot be so
clearly established in the case of national economic systems
individually.
§ 3.—Definition of Old Age in National Laws
National laws define old age only by fixing the age at which
pensions are payable. This age is determined by numerous
factors, and, taken alone, does not permit of a definite conclusion
concerning the conception on which it is based. It is in fact
the result of a compromise between several factors which are
often mutually contradictory but which must all be given weight.
An equilibrium must be maintained between income (production)
and expenditure (consumption); and account must be taken of
the need for rest, varying with the nature of the work, the sex
of the worker, and the length of his or her career; the development
of invalidity with age; and the difficulty experienced by elderly
workers in finding employment in view of the present state of
the labour market.
The effect of these factors is so complex that it is not possible
to say that a given law is based exclusively or even principally
on either of the two conceptions of old age—the right to rest
and presumed invalidity at a certain age. AH that can be stated
with certainty is that, apart from the real burden imposed by
old-age insurance and varying with the age distribution of insured
persons, the granting of pensions at a certain age accords both
with a conception of justice which is spreading and which public
authorities are gradually coming to accept, and with the need to
preserve social peace by saving large sections of the population
from poverty and want.
Legislators are thus induced to make a clear distinction between
the risk of old age and that of invalidity; old-age pensions are due
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145
from a certain age onwards, while invalidity is covered by term
insurance which ceases immediately the worker becomes entitled
t o an old-age pension.
The pensionable age is moreover not always rigidly fixed b y
law, certain schemes allowing the insured person to claim t h e
pension several years (five to ten at most) in advance or to
postpone his claim; this is t h e case for example in Austria (salaried
employees), Belgium (workers and salaried employees), Chile
(workers), France (employed persons) and Italy (employed
persons). I n Germany (salaried employees) premature claims
are admitted only if t h e insured person can show t h a t he has been
unemployed for at least a year, in which case the pension ceases
a t the same time as the unemployment. Similar provisions are
found in Yugoslavia (salaried employees in Slovenia and Dalmatian
I n exceptional cases the grant of an old-age pension may be
dependent upon t h e attainment of an age fixed by law and the
cessation of all work covered by insurance, this being so in
Argentina (bank staffs), Austria (salaried employees), Brazil
(staffs of public utility undertakings), Greece (tobacco workers),
Luxemburg (salaried employees) and the Netherlands (miners).
I n Czechoslovakia (workers) the pension is payable only if t h e
wages earned b y t h e insured person who continues to exercise
his trade are notably inferior to the wages usually paid to a wage
earner of sound mind and body employed in the same trade in
the same district.
There is no question in this case of any
restriction of the risk covered t o senile invalidity, as t h e insured
person is not required to prove t h a t he cannot work. The
voluntary cessation of an occupation liable to insurance and
adequately paid entitles t h e insured person t o a pension in t h e
same way as failure of earning capacity resulting from sickness.
I n some cases also the pensionable age varies with t h e sex of
t h e insured person, as in Austria (salaried employees), Belgium
(workers and salaried employees), Czechoslovakia (salaried
employees), Poland (intellectual workers) and the U. S. S. R., or
with t h e arduousness of the work, as in Belgium, Brazil (staffs
of public utility undertakings) and the U. S. S. R. (underground
workers in mines), or, again, with t h e length of the period of
membership, as under several occupational insurance schemes in
South America and in Yugoslavia (salaried employees in Slovenia
and Dalmatia).
10
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BISKS COVEEED AND CASH BENEFITS
The main provisions concerning the pensionable age are
summarised below, the legislation being classified according to
whether it relates to inter-occupational schemes or occupational
schemes.
Inter-Occupational Schemes
Austria : Workers : 65 years; the insured person may defer his claim
to a pension.
Belgium : Workers : 65 years for men, 60 years for women ; in unhealthy
industries : 60 years for men and 55 years for women ; the insured person
may claim the payment of his pension in advance, but not more than five
years before reaching the statutory pensionable age ; in such cases the pension is reduced in accordance with coefficients of reduction based on the
expectation of life 1.
Bulgaria : Employed persons : 60 years.
Chile : Workers : 55, 60 or 65 years at the option of the insured person.
Czechoslovakia : Workers : 65 years ; the payment of the pension is as a rule
dependent on the cessation of all gainful activities covered by any scheme
of compulsory insurance, but the exercise of such activities does not preclude
the payment of the pension when the wages usually earned are at least
50 per cent, less than those earned by a worker, sound in mind and body,
with similar training, employed in the same trade in the same district.
France : Employed persons : 60 years ; the insured person may claim the
payment of his pension up to a maximum of five years earlier or later,
when the pension is assessed by multiplying the sum normally payable at
60 years by coefficients based on the expectation of life.
Workers in Alsace-Lorraine : 60 years ; the insured person may claim the
payment of his pension in advance, but not more than five years before
reaching the statutory pensionable age ; in such cases the pension is assessed
by multiplying the sum normally payable at 60 years by coefficients based
on the expectation of life.
Germany : Workers : 65 years.
Great Britain and Northern Ireland : Employed persons : 65 years.
Hungary : Employed persons : 65 years.
Italy ; Employed persons : 65 years; the insured person may claim the
payment of his pension in advance, b u t n o t more t h a n five years before
reaching the statutory pensionable age, provided t h a t he has paid at least
240 fortnightly contributions ; in such cases the pension is reduced in accordance with coefficients of reduction based on the expectation of life.
Luxemburg: Workers: 65 years. Salaried employees: 65 years; the
insured person may claim the payment of his pension in advance from the
age of 60 provided t h a t he ceases to occupy a position as salaried employee
liable to insurance.
Netherlands : Employed persons : 65 years.
Poland : Workers in Western Provinces : 65 years. Workers in Upper
Silesia : 60 years.
Rumania : Employed persons and craftsmen : 65 years.
Spain : Employed persons : 65 years.
Switzerland : Cantons of Appenzell (Outer Rhodes), Basle Town and
Glarus : 65 years.
1
The coefficient of reduction is equal to the ratio between the immediate
pension from the given capital and the deferred pension which the same
capital would prodvice at sixty or sixty-five years of age, according to the
sex of the insured person.
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147
U. S. S. B. : Employed persons : 60 years for men, 55 years for women.
Miners working underground : 50 years ; surface workers : 60 years for men,
55 years for women.
Salaried Employees' Schemes
Austria : 65 years for men, 60 years for women; the payment of the
pension may be claimed by men from the age of 60 and by women from the
age of 55 when at least 120 contribution months have been completed. In
all cases the pension is payable only if the insured person ceases all work
liable to insurance.
Belgium : 65 years for men, 60 years for women; the insured person may
claim the payment of the pension in advance, but not more than ten years
before reaching the statutory pensionable age; in such cases the pension is
reduced in accordance with coefficients of reduction based on the expectation
of life.
Czechoslovakia : 65 years for men, 60 years for women; the insured person
may claim the payment of the pension in advance, but not more than five
years before reaching the statutory pensionable age provided t h a t he has
paid at least 480 monthly contributions to the insurance fund.
France : Salaried employees in Alsace-Lorraine : 60 years ; the insured
person may claim the payment of his pension in advance, but not more
than five years before reaching the statutory pensionable age ; in such cases
the pension is reduced in accordance with coefficients of reduction based
on the expectation of life.
Germany : 65 years ; the pension may be claimed from the 60th year if
the insured person has been unemployed for at least one year ; in such cases
the pension ceases if the beneficiary obtains fresh employment, and in no
case may it coincide with the payment of unemployment benefit.
Poland : Intellectual workers : 65 years for men, 60 years for women ;
the payment of the pension may be claimed in advance, but not more than
five years before reaching the statutory pensionable age, if the insured
person has paid at least 480 monthly contributions (420 monthly contributions in the case of women) ; payment may in all cases be deferred until
480 monthly contributions have been paid.
Yugoslavia : Salaried employees in Slovenia and Dalmatia : 70 years for
men, 65 years for women; not more than five years earlier for men if unemployed ; irrespective of age after 40 years of insurance for men or 35 years
for women.
Miners'1 Schemes
Belgium : 60 years for surface workers, 55 years for workers who have
had 30 years' service underground.
Czechoslovakia : 60 years if the insured person has paid contributions
for 15 to 30 years; 55 years if he has contributed during 30 years or more.
France : 55 years.
Germany : 65 years ; on application, the pension may be paid at the age
of 50 provided t h a t the claimant has completed 300 contribution months,
including 180 as a working miner, and is no longer capable of performing
work paid at the same rate as the best paid work performed by him otherwise than merely temporarily during his period of service.
Hungary : 65 years; 60 years after 40 years of mining work or 25 years
of underground work.
Netherlands : 60 years; the pension is, however, payable only if the
insured person ceases to work in a mining undertaking.
Bumania (Ardeal) : 65 years.
Yugoslavia : 55 years.
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Various Occupational Schemes
Argentina : Staffs of private undertakings of public utility : 50 years for
the normal pension. Nevertheless a pension may be claimed from t h e
age of 45 provided t h a t it is reduced by 5 per cent, for each year by which
the insured person is less than 50 years of age. Bank staffs : same conditions
as above, b u t t h e payment of the pension is always dependent on t h e cessation of all work liable to insurance.
Brazil : Staffs of public utility undertakings : 50 years when the insured
person has completed 30 years' service, 55 years after more than 20 but less
than 30 years' service, 65 years after more than 10 b u t less than 20 years'
service. The payment of pensions is dependent on the cessation of all work
liable to insurance. The pensionable age may be reduced to 45 years and the
minimum period of service to 25 years for persons working in unhealthy
occupations, such as cause a marked diminution of physical resistance, or
particularly arduous occupations.
Cuba : Seamen and harbour workers : (a) salaried employees : no condition
as regards age when the insured person has completed 30 years' service;
50 years when he has completed 25 years' service; 60 years when he has
completed 10 years' service, (b) Workers : no condition as regards age
when the insured person has completed 25 years' service; 50 years when
he has completed 10 years' service.
Greece : Tobacco workers : 55 years ; the pension is payable only if t h e
insured person ceases all work liable to insurance.
Uruguay : Bank and Stock Exchange staffs : 60 years. The insured person
may, however, claim t h e payment of his pension one year earlier for each
year of service in excess of 30. Staffs of public utility undertakings : no
condition as regards age.
B—INVALIDITY
§ 1.—Conceptions of I n v a l i d i t y
There are three ways of defining t h e invalidity risk covered by
insurance. The first way is t o define it in terms of t h e physical
inability t o carry on one's previous occupation or t h e difference
in o u t p u t in t h a t occupation before a n d after t h e appearance of
t h e infirmity (occupational incapacity). The second way is t o
define i t in terms of the possibility of finding fresh employment
for t h e invalid on t h e labour m a r k e t (general incapacity for work).
T h e third way is t o define it in terms of t h e degree of bodily
infirmity (physical incapacity).
I n fact all social insurance schemes base their legal definition
of invalidity either on occupational incapacity or on general
incapacity for work.
OCCUPATIONAL INCAPACITY
Occupational incapacity, which is t h e inability t o carry on any
given occupation, may in theory be comparatively easily determined b y studying experimentally t h e p a r t played b y t h e various
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149
functions or organs of the human body in a given trade or
occupation.
This conception of incapacity does not take into account the
possibility of rehabilitation and of finding fresh employment for
the incapacitated worker in some occupation or trade other than
that in which he was engaged previously to his invalidity. All
that is considered is the result of his infirmities in his previous
occupation.
This is a very serious objection to such a conception of the
risk, for the possibility of adopting a new occupation may markedly diminish the economic effects of an infirmity, effects which,
seen from the point of view of the former occupation only, were
serious. The growth of the use of machinery and the increase
in the proportion of unskilled to skilled workers mean that the
chances of adaptation are considerably greater. Moreover, the
community has the right to require the individual to adapt
himself and to use his remaining strength in contributing to
his own support, since it cannot assume the responsibility of
compensating for an injury which prevents an insured person
wholly or partially from supporting himself without having
examined his capabilities and without requiring him to make
the effort necessary for adaptation. The community's right in
this respect, though naturally limited by the efforts which an
insured person can reasonably be expected to make in this
direction, means that the latter must use every available possibility of finding employment in a new occupation.
These principles are violated if an insurance covers occupational incapacity, that is, if it undertakes to compensate for the
loss of earning power caused by the probable effect of an infirmity
on the exercise of a single trade or occupation. Such a policy
means that the community is called upon to provide compensation which could have been rendered unnecessary by judicious
organisation of the employment of infirm persons; and it is
therefore contrary to the interests of the community. Although
the nature of the habitual occupation plays an important part
in the determination of the degree of invalidity, particularly in
the case of elderly workers, it cannot be unreservedly accepted
as the sole basis for evaluation, for the infirm person ought to
make use of every existing chance of employment, even if doing
so entails changing his occupation.
The adoption of occupational incapacity as the risk covered
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EISKS COVEKED AND CASH BENEFITS
by special schemes for salaxied employees and miners is, however,
easily explained.
The salaried employees' schemes apply to groups of persons
following occupations which, though very varied, all have the
common characteristic of never, or very rarely, entailing manual
labour; and what is then meant by occupational incapacity is
incapacity to perform non-manual work. It is thus a question,
not of inability to carry out certain well-defined duties, but of a
general incapacity for non-manual occupations. A stenographer
or an accountant cannot be required to become a messenger or a
labourer, but the possibilities of finding new employment in
occupational categories not very different from the original is
always borne in mind. To this extent occupational incapacity
in the special salaried employees' schemes tends to approximate
to general incapacity for work, but the possibility of transferring
employees to another type of post is more limited in certain cases,
particularly when the occupation requires technical skill and
knowledge which the disabled person has obtained and which he
cannot easily exploit elsewhere. These are however exceptional
cases, rarely met with save in certain categories of technical
employees, foremen, etc.
In the case of miners, the idea of occupational incapacity
certainly puts much narrower limits to the possibility of finding
fresh employment for disabled persons. A miner, whether
engineer, overman or simple hewer, who is affected by infirmities
which make him incapable of continuing mining work, is disabled
in the eyes of the law, even if there is a possibility of employment
in some other occupation. The peculiar position of the miners
goes back to the origin of their special insurance schemes. The
importance of mining for the community is such that there have
for many years been schemes to cover the risks of invalidity more
or less completely, and. at a time when handicrafts were the
principal means of production it was hardly possible to require
that a person no longer capable of working in the mines should
adapt himself to another industry the exercise of which usually
presupposed a manual dexterity always difficult to acquire and
generally incompatible with infirmity. As long ago as the early
Middle Ages the miners' provident funds guaranteed support to
their members who lost their mining ability (Bergfertigkeit), and
the Decree on mining issued by King Wenceslas II of Bohemia
in September 1300 explicitly covers incapacity to continue work
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151
in the mines. The idea of occupational incapacity has survived
through the centuries despite economic and social changes, and
in the specially generous view of the risk covered the miner
receives some compensation for the particularly laborious and
exhausting nature of his work.
In any case occupational incapacity has no doubt the advantage of simplicity in evaluation, and it is at present very popular
in schemes covering only workers in a certain occupation, as
shown in the following list :
Austria (salaried employees); Belgium (miners); Brazil (staffs
of public utility undertakings); Cuba (seamen and harbour
workers) ; Czechoslovakia (salaried employees and miners) ; France
(salaried employees in Alsace-Lorraine); Germany (salaried
employees and miners); Hungary (salaried employees); Luxemburg (salaried employees); Netherlands (miners); Poland (miners
in Southern Provinces and Upper Silesia; intellectual workers).
Occupational incapacity is also the criterion applied in the
British and Irish schemes of insurance for employed persons
until it becomes clear that there is no reasonable prospect of the
patient again becoming able to resume his former work. It is
regarded as impossible or at least inexpedient to require an insured
person to change his trade or occupation if the affection entailing
incapacity is unlikely to be permanent ; but as soon as its probable
permanence is established, the insurance authority fixes the period
on the expiry of which benefit will not be continued unless there
is still general incapacity for work.
GENERAL INCAPACITY FOR WORK
The definition of the risk in terms of general incapacity to earn
a livelihood is based on the principle that the invalid, when
not completely helpless or suffering from some serious disease,
should take any opportunities at his disposal of finding fresh
employment and making use of his remaining working capacity.
The results of injuries are, therefore, not estimated from the
point of view of one occupation, but from the point of view of
the reasonable opportunities for work offered by the labour
market, taking into account the nature and gravity of the worker's
infirmities, his previous occupation, his age, and any other factors
which might influence his rehabilitation.
This idea finds expression in German legislation and legal
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practice (workers' insurance), where it is provided that loss of
earning capacity is covered when the insured person is no longer
capable of earning, in any employment suited to his strength and
ability which can reasonably be assigned to him in view of his
training and previous occupation, a given fraction of the sum
usually earned by a physically and mentally sound person of the
same kind with similar training in the same district. The present
earnings of the person concerned are only an indication, and not
a final and sufficient basis on which to work; according to legal
practice no account should be taken of the income which the
worker in question could obtain by making an exceptional effort,
in spite of his physical condition, to maintain himself.
Thus, when determining general incapacity for work, account
should be taken of the physiological consequences of the worker's
infirmities and the difficulties of finding a fresh situation on the
labour market, but the judgment should not be based solely on
his actual earnings as an invalid.
The criterion of pensionable invalidity adopted in the German
workers' scheme will be found also with slight variation in the
following systems of legislation :
Argentina (staffs of private undertakings of public utility and
bank staffs), Austria (workers), Bulgaria (employed persons),
Chile (workers), Czechoslovakia (workers), Denmark (persons of
small means who are regular members of sickness funds), France
(miners; workers in Alsace-Lorraine), Great Britain and Northern
Ireland (employed persons, in case of permanent incapacity),
Greece (tobacco workers), Hungary (workers and miners), the
Irish Free State (employed persons, in case of permanent incapacity), Italy (employed persons), the Netherlands (employed
persons), Poland (workers in Western Provinces and Upper
Silesia), Rumania (employed persons and craftsmen; miners in
Ardeal), Sweden (national scheme), and the U. S. S. B. (employed
persons).
Under the French scheme of insurance for employed persons,
pensionable invalidity is defined with reference to general incapacity for work. Until, however, a scale has been drawn up t o
guide the authorities in estimating the degree of incapacity, it
will be assessed on the basis of the scale used for determining the
incapacity of war victims. This latter scale merely gives the
average incapacity which may result from any given infirmity
in the case of workers belonging to various occupations. At the
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same time, t h e authorities are left with a certain margin which,
in some cases, is quite wide and which entitles t h e m to take
account of the effects of the development and state of the infirmities on the possibility of further employment for the worker
in question.
P H Y S I C A L INVALIDITY
Physical invalidity is a very vague conception. First of all
no compensation can give back physical integrity to a permanently disabled person. The object of insurance is to replace a t
least part of t h e worker's remuneration in case of incapacity t o
earn, whether in his own occupation or on the general labour
market. B u t t h e existence of a physical infirmity is by no means
necessarily accompanied b y pecuniary loss, and even if such
infirmity could be represented in terms of money, to give compensation for it except on account of the pecuniary loss entailed
would run counter to the basic object of social insurance. Moreover the amount of such compensation would in any case be purely
arbitrary for it is impossible t o fix a " just price " for t h e loss or
crippling of a limb or organ, or for a lifelong discomfort, and
still less for t h e sickness, diminished vitality or pain entailed by a
progressive infirmity.
Secondly, if a n infirmity is considered solely from the physical
point of view it is not possible t o gauge its importance in relation
t o the person's physical integrity. W h a t is complete disablement ?
Does it exist while a single organ or function is intact? Can a
blind or a n armless m a n be regarded as completely disabled?
How is it possible t o justify the assumption t h a t t h e loss of a n
arm is equivalent t o 60 or 80 per cent,, and t h a t of an eye t o
30 or 60 per cent., of total disablement?
No doubt it may be answered t h a t each organ or function of
t h e body can be represented by a figure corresponding t o its
physical importance. Complete disablement would then mean
the total loss of a function, not necessarily indispensable t o life,
b u t particularly important, such as the power t o walk, grasp
or see.
Yet it remains true t h a t the importance t o be assigned to the
various parts of the body and the definition of the organ or functions t h e loss of which can be said t o entail complete disablement
can only be based on ideas which are subjective a n d arbitrary.
Some authors consider t h a t t h e notion of pure physical disable-
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ment unrelated to any definite purpose is meaningless and is
nothing but medical metaphysics. There is no need here either
to enter into the controversy as to whether there is a practical
basis on which the physical invalidity resulting from the loss of
an organ or function may be measured apart from individual
circumstances, or to enquire whether so-called complete or absolute disablement can ever be defined; but it must be admitted
that in practice no legislative measure to provide for insurance
against or compensation for injuries or diseases has ever laid down
a clear and precise method of evaluating a detraction from physical
completeness. In a number of countries—Belgium, Canada,
France, Italy and Rumania and, in general, Great Britain and
South Africa—war pension legislation made physical infirmity
the fundamental criterion for the right to compensation; but the
appropriate Act in each of these countries gave a list of infirmities
of varying length and a schedule showing the degree of disablement
regarded as entailed by each. The figures thus laid down were
to apply to every case, at least in so far as well-defined injuries
were concerned; every injury of a given type was considered as
harming the person concerned to a uniform extent; the loss of
a foot, an eye or an arm was regarded as of the same importance
for a watchmaker, a bricklayer, a bookkeeper, a farm labourer
and a lawyer. Only the determination of the nature and degree
of development of the infirmity was left to experts, who had
thus, especially in the case of disease, a large margin for the
interpretation of the schedule ; but in every case, once the nature
and gravity of the harra had been established, the degree of
disablement was supposed to be fixed without regard to economic
and occupational considerations.
What is the disablement thus established? Does it really
measure the diminution in the physical value of the injured organ
or function? If so, on what grounds and by what method?
And how are the disablement schedules drawn up? It is hard to
reply to these questions, for the schedules are rarely accompanied
by explanation of the methods adopted. The introduction to
the Belgian schedule, however, provides some interesting indications on this point.
A perfectly sound person can co-ordiñate his faculties, strength
and movements and make the fullest use of them in view of work
in general; and perfect soundness should serve as the basis of
comparison when the harm done by infirmity or sickness is being
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evaluated. If t h e number 100 represents perfect soundness, its
complete loss means the loss to the extent of 100 per cent, of
capacity to work in general.
The French schedule of 1915 appears to have been drawn up
on the same lines as the Belgian, and the percentages of disablement given are no more t h a n the average percentages of loss
of earning capacity assessed by the courts in the case of industrial
accidents.
There are as many percentages of disablement corresponding
t o each infirmity as there are types of occupation; and the
military legislation has simply taken the average of the various
percentages. I n doing so it has drawn up a scale which pretends
t o give a physiological evaluation of infirmities, b u t which instead
is simply an average of the effects of industrial accidents on wages.
I t is absurd to give absolute value to percentages which have a
meaning only when applied to wage earners.
Thus the degree of disablement attached to each infirmity by
t h e Belgian and French schedules is simply an average of the
effects on earning powers seen to occur after industrial accidents ;
and no doubt the same is t r u e of t h e evaluations given in the
British, Canadian, Italian, South African and Rumanian schedules, though there is no mention of this in the text of the Acts
in question.
I t is difficult to see t h e meaning behind this arithmetical
average of actual incapacity to earn as established in a number
of individual cases. I n any case it is certain that, except by
coincidence, it is b u t remotely related t o the physical disablement
which it pretends t o measure. The fact is t h a t the evaluations
given in t h e schedules mentioned have reference not t o pure
physical disablement b u t to a presumed average incapacity t o
earn, which exists in theory only and which disregards individual
circumstances. Instead of general incapacity for work, varying
with t h e former occupation, the age and the personal peculiarities
of the insured person, a n abstract average incapacity is adopted
which is neither purely physical nor effectively economic and so
lacks t h e essential element of the former conception, namely t h e
recognition of t h e difficulty in the way of t h e industrial rehabilitation of partially disabled persons, whereby individual circumstances were taken into account and a practical meaning
given t o t h e definition of t h e risk.
Nevertheless, certain advantages attach t o the system of
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RISKS COVERED AND CASH BENEFITS
defining the risk on t h e basis of the diminution of physical
completeness : it is comparatively easy t o evaluate disablement
in accordance with a ready-made scale and disregarding personal
considerations; a n d the conformity of t h e action of the authorities required t o evaluate injuries with t h e rules laid down b y
law is easier t o check where there is a schedule of physical invalidity, based solely on the nature of the injury, t h a n where t h e
criterion is t h a t of general incapacity for work or occupational
incapacity. Many disputes are thus avoided, and those which
occur are easily settled.
The ease with which it may be applied, however, has never
been deemed a sufficient reason for adopting t h e criterion of
physical invalidity in connection with social insurance. The
provisional use, for the application of t h e French scheme of
insurance for employed, persons, of a schedule showing t h e
average degree of incapacity which results from a given infirmity
cannot be considered as indicating t h a t t h e scheme aims a t
compensating for the diminution of physical completeness. The
scale makes no a t t e m p t t o measure disablement in such a way;
and further, as has been seen, it leaves a wide margin enabling
account t o be taken of the probable effect of most infirmities on
the possibility of employment for t h e worker in question in his
own or some other occupation.
§ 2.—Degree of Invalidity entitling to P e n s i o n
Whether t h e risk covered is defined in terms of occupational
incapacity or general incapacity for work, t h e granting of a
pension for invalidity depends on the extent of the injury done
t o the worker. The mere fact of suffering a slight decrease in
his remuneration as a result of some minor infirmity is not
sufficient t o entitle an insured person t o a pension.
The amount of a pension is generally independent of the degree
of incapacity, b u t t h e pension is due as. soon as the loss of working
power exceeds a certain—usually rather high—level. I t is only
rarely t h a t invalidity insurance schemes grant a pension for any
incapacity of less t h a n 50 per cent., and t h e more usual figure
is 66 2 / 3 per cent.
An exception is sometimes made t o this rule, either by taking
into account the actual amount still earned by the pensioner and
limiting t h e amount of the pension accordingly (salaried em-
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ployees' insurance in Luxemburg, and salaried employees' and
miners' insurance in Czechoslovakia), or by permitting the insured
person to claim a pension when he reaches a certain degree of loss
of earning capacity, the partial invalidity pension being then
reckoned according to the percentage of incapacity as compared
with that which is considered as a complete loss of working
power. This latter system will be found in Argentina (staffs of
private undertakings of public utility) and Yugoslavia (miners).
With these few exceptions, the pension is not graded to take
account of the degree of incapacity, except in the U. S. S. R.
The degree of incapacity which is pensionable in the various
countries is as follows :
Schemes covering the Risk of General Incapacity for Work
Austria : Workers : incapacity of at least 662/3 per cent.
Bulgaria : Employed persons : incapacity of at least 50 per cent.
Chile : Workers : total incapacity due to chronic incurable disease.
Czechoslovakia : Workers : incapacity of at least 662/¡, per cent.
Denmark : Persons of small means who are regular members of sickness
funds : incapacity of at least 662/3 per cent.
France : Miners : incapacity of at least 662/3 per cent. Workers in AlsaceLorraine : incapacity of a t least 662/3 per cent.
Germany : Workers : incapacity of at least 662/3 per cent.
Great Britain and Northern Ireland : Employed persons : total incapacity
of a permanent or a t least prolonged nature.
Greece : Tobacco workers : incapacity of at least 662/3 per cent.
Hungary : Workers : incapacity of at least 662/3 per cent. Miners : incapacity of at least 50 per cent.
Irish Free State : Employed persons : total incapacity of a permanent or
at least a prolonged nature.
Italy : Employed persons : permanent incapacity of at least 662/3 per cent.
Luxemburg : Workers : incapacity of at least 662/3 per cent.
Netherlands : Employed persons : incapacity of at least 662/3 per cent.
Poland : Workers in Western Provinces and Upper Silesia : incapacity
of at least 662/3 per cent.
Rumania : Employed persons and craftsmen : incapacity of at least
662/3 per cent. Miners in Ardeal : incapacity of at least 662/3 per cent.
Sweden : National scheme : the law does not fix the degree of incapacity
entitling to a pension; in legal practice a pension is granted for incapacity
of at least 662/3 per cent.
V, S. S. R. : Employed persons : incapacity of atjleast 50 per cent.
Schemes covering the Risk of Occupational Incapacity
Austria : Salaried employees : it is left to the competent authority to
decide the degree of incapacity beyond which a pension is due.
Belgium : Miners : the law does not fix the degree of incapacity entitling
t o pension, but merely specifies t h a t no pension will be granted except in
the case of infirmity involving incapacity to work normally in any industry
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covered by the scheme ; the pension is decreased if the insured person earns
by his work more than 200 fr. a month and is withheld altogether when he
earns more than 450 fr. a month.
Brazil : Staffs of public utility undertakings : inability to continue to
carry out the work performed before invalidity began or any other work
compatible with the aptitudes or the occupational and intellectual training
of the insured person and bringing in a wage equal to that earned in his
former employment.
Cuba : Seamen and harbour workers : inability to continue the work
performed before invalidity began or any other employment compatible
with the aptitudes and training then acquired.
Czechoslovakia : Salaried employees : the law does not fix the degree of
incapacity entitling t o pension, b u t specifies t h a t if the invalid continues t o
work and receives remuneration which, with his pension, exceeds either his
average wage during the preceding 60 months or 30,000 Kc. a year, the fraction of the pension in excess of this figure will be withheld. Miners : the law
does not fix the degree of incapacity entitling to pension, but the practice
of the supreme arbitration court is to grant a pension when incapacity
amounts t o 40 per cent, in the case of an underground worker and 50 per
cent, in the case of a surface worker; when the pensioner continues to work
and receives remuneration which, with his pension, exceeds 75 per cent, of
the wages paid to workers in the category to which he belonged before
invalidity began, then the fraction of his pension in excess of this limit is
withheld.
France : Salaried employees in Alsace-Lorraine : incapacity of at least
50 per cent.
Germany : Miners : inability to perform mining work compatible with
his social position, physical condition and occupational training. Salaried
employees : incapacity of at least 50 per cent.
Great Britain and Northern Ireland : Employed persons : temporary total
incapacity.
Hungary : Salaried employees : incapacity of at least 50 per cent.
Irish Free State ; Employed persons : temporary total incapacity.
Luxemburg : Salaried employees : the law does not fix the degree of incapacity but specifies t h a t if the invalid continues to work and receives remuneration which, with his pension, exceeds his wage before invalidity began,
the fraction of his pension in excess of this figure will be withheld ; a pension
is paid for temporary incapacity in the same way as for permanent incapacity,
provided t h a t it lasts continuously for three months and t h a t the employer's
obligations by collective agreement or under legislation have ceased to cover
the risk.
Netherlands : Miners : inability to perform the mining work carried out
before invalidity began.
Poland : Miners in Southern Provinces : inability to follow the occupation
of miner by reason of sickness, industrial accident or old age. Miners in
Upper Silesia : inability to follow the occupation of miner. Intellectual
workers : incapacity of at least 50 per cent.
§ 3.—Establishment of Invalidity
The problems involved in establishing invalidity vary according
as the incapacity which has to be examined is due to inability
to exercise a particular occupation or occupations of a particular
type (occupational incapacity) or incapacity for any occupation
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159
or trade compatible with the knowledge, age and previous
training of the worker (general incapacity for work).
Whatever definition may be given of the risk covered, the
authority responsible for certifying that the event insured against
has actually happened must first of all verify the existence of the
infirmities to which the incapacity is attributed. It must then
determine the extent of the functional disturbances and the
degree of care and special attention required, and state whether
these infirmities are compatible with any remunerative employment. Finally, the authority must indicate the type of activity
which the worker is still capable of performing. This constitutes
the strictly medical part of the task of determining invalidity.
When that has been completed it is necessary, if the insurance
covers occupational incapacity, to decide whether the type of
activity recognised as compatible from a medical point of view
with the infirmity from which the worker suffers includes work
in the occupation or trade formerly exercised by the worker in
question. If so, the next question is to estimate the earnings
which the applicant may reasonably hope to receive in view of
his physical state and to compare them with those of healthy
persons of the same occupational training. When the insurance
covers general incapacity for work, and the infirmity is stated
by medical experts to permit certain kinds of work, it is necessary
to consider whether the type of work considered possible from
the medical point of view can in fairness be demanded of the
insured person in view of his previous type of activity. The
next question will be what fraction of the normal wage will most
probably be earned by the invalid worker from this activity.
This constitutes the economic and social side of the question,
in which individual factors, the age of the worker and his previous
trade play a predominant part in determining the occupational
consequences of his infirmity.
Theoretically, it might be possible on the basis of experience
to prepare scales showing the percentage of the reduction in
earning power among workers suffering from a given type of
infirmity after they had been retrained for some other post.
The ideal scale would have to be a complete dictionary, including every occupation and showing in each occupation all the
possible infirmities and the degree of incapacity which they
involve for that occupation. These figures would, moreover,
have to be corrected to allow for the age and skill of the individual.
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BISKS COVERED AND CASH BENEFITS
The preparation of such a scale would necessitate extremely
minute study for a long period, particularly in view of the
growing specialisation of industrial occupations. At the present
time only a single scale of this type, which is, moreover, simplified
to a considerable extent, is officially applied, but it relates to
industrial accidents. This is the scale of the State of California,
which takes account of the nature and gravity of the injuries
(267 types of infirmities), of the occupation (52 occupational
groups), and of the age of the victim (31 categories of from fifteen
to seventy-five years). The number of possible combinations
in this scale exceeds 12 million, but its application must obviously
be a very delicate matter, and its practical value is doubtful.
The various possible methods of composing the authorities
which have to establish the existence of invalidity will be sufficiently clear from an enumeration of the problems with which
they have to deal.
If the insurance covers occupational incapacity, the authority
which has to decide on the existence of such incapacity must
undoubtedly include persons belonging to the trade or occupation of the worker concerned, or at least persons fully acquainted
with its main characteristics.
If the insurance covers general incapacity for work, the task
of the authority will be to state whether the worker can be
transferred to some other occupation, and what will be the
probable result. Such a decision must be based on the opinion
of experts who are specially competent in the technical questions
of rehabilitation and vocational guidance.
According to the criterion adopted in defining the risk, the
authority which has to decide on the nature of the invalidity
must include one or more persons capable of judging either the
possibility of the worker's continuing his previous occupation or
trade (when occupational incapacity is covered) or the possibility
of transfer to another occupation (when the insurance covers
general incapacity for work).
The selection of the doctors required to decide on the existence
and consequences of the disablement, and the composition of the
body which decides on the granting of the pension or considers
appeals against such decisions, are usually such that expert
advice on re-adaptation, occupational capacity and wages is
available.
On submission of an application for benefit by the insured
KISKS COVERED
161
person or his representative, the sickness insurance doctor or the
doctor appointed by the invalidity insurance institution is
usually called on first; he gives his opinion on the existence and
consequences of the disablement, and only in very rare cases
may the insured person take the first step by sending in a certificate from a doctor selected by him (as in Germany, workers'
insurance scheme). The first medical opinion is transmitted to
the insurance institution, which examines the application and
collects the information necessary to enable it to decide whether
such application is well-founded; it may in every case call for
further expert advice, either on its own initiative or on the
application of the insured person or on the instructions of the
authority required to make a decision (subject to appeal) on the
granting of the pension.
Pensions are usually granted (or refused) by a committee or
the governing body of the insurance institution; refusal is subject
to appeal. Besides jurists and insurance experts, this body
always comprises persons—representatives of the insured persons
and their employers, for instance—particularly qualified to give
evidence concerning the effects which the infirmity may have on
the insured person's earning capacity. The institution is
moreover always entitled to call for further information on the
insured person's former occupation, the skill it required and the
reduction of such skill caused by the infirmity on which the
application is based. The Netherlands Act (employed persons),
for instance, explicitly prescribes the consultation of wage
experts.
Lastly, insured persons are entitled to appeal against the
decisions of the institution required to make a first decision on
the granting of pensions; the procedure and composition of the
appeal courts open new possibilities and give a further guarantee
that the question of incapacity on which the application was
based will be impartially examined.
§ 4.—Review of Invalidity Pensions
Apart from cases in which it is obvious from the outset that
the injuries which incapacitate the worker are incurable, the
pension cannot be granted for life immediately on the establishment of invalidity. The insurance institution must have the
possibility of verifying, at least until the injury has reached a
11
162
RISKS COVERED AND CASH BENEFITS
stage at which a final diagnosis is possible, whether the circumstances on account of which the pension was granted still exist
or not.
As a rule the pensioner has to be examined whenever the insurance institution thinks necessary, and such examinations may be
ordered at any time, unless the law prescribes a certain period
after which the pension must be definitively granted. Such
examinations naturally cease to have any meaning when the
invalid reaches the age prescribed for an old-age pension. This
system has been adopted in the following countries : Austria
(workers), Bulgaria (employed persons), Chile (workers), Cuba
(seamen and harbour workers), Czechoslovakia (workers, salaried
employees and miners), France (miners; workers and salaried
employees in Alsace-Lorraine), Germany (workers, salaried
employees and miners), Great Britain and Northern Ireland
(employed persons), the Irish Free State (employed persons),
Italy (employed persons), Luxemburg (workers), Netherlands
(employed persons), Poland (intellectual workers; workers in
Western Provinces and Upper Silesia), Rumania (employed
persons and craftsmen; miners in Ardeal), Sweden (national
scheme) and the U. S. S. R. (employed persons). In Bulgarian
legislation, however, it is provided that the insurance institution
cannot have the invalid examined to determine whether the
reasons for which the pension was granted still exist except at
the end of each period of three years after the invalidity was
first discovered.
In a few cases the legislation prescribes a period after which
the pension must be definitively granted. This is the case in
Argentina (staffs of private undertakings of public utility :
5 years; bank staffs : 10 years) and in France (employed persons :
5 years for consolidation of the provisional pension, and 10 years
for the granting of the final pension).
C—DEATH
§ 1.—Risk Covered
The risk to be covered in case of death is indicated by the
economic effects which the death of the breadwinner has
on his survivors; the insurance undertakes to compensate them
163
BISKS COVERED
for the material loss which they sustain.
follows :
This is composed as
(1) the exceptional expenses incurred for the funeral and by
the fact that the survivors must adapt themselves to
the new situation resulting from the death of the breadwinner;
(2) the loss of income, the more serious the younger the insured
person was at the date of his death and the higher the
proportion of his wages which he devoted to the support
his dependants; it varies thus with the amount of the
pecuniary aid which the dependants received and which
they would have continued to receive if the death of the
insured person had not occurred.
The gravity of the loss suffered therefore depends not only on
the earnings of the insured person, but also on his age, the number
of persons dependent on him, their age and their needs; and in
order to put such a loss into figures it must be known to what
extent the insured person supported each of these persons, and the
time during which he would normally have continued to do so.
An estimate of the probable duration of this period should
depend on the average number of years which persons of the age
of the insured person at death may expect to live and on the
ages of the survivors, the greatest probable duration occurring
in the case of the youngest insured person with a dependant
of the same age or younger.
The risk would be considered non-existent if the insured person
could not help to support his family, who were compelled to depend
on other resources than his wages or pension.
§ 2.—Definition of the Risk in National Laws
With two exceptions—the insurance schemes for employed
persons in France and Italy—all insurance legislation which
covers the risk of death provides for the granting of temporary
or life pensions as compensation for the presumed loss of income
entailed by the death of the insured person; these pensions are
at fixed rates, and are payable to certain categories of survivors
only.
A lump sum to cover, in part at least, the exceptional expenses
entailed by death, or to permit the survivors to adapt themselves
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BISKS COVERED AND CASH BENEFITS
to their new conditions, is usually payable only if the survivors
have no right to pensions, either because the insured person had
not fulfilled the conditions necessary to give them such a right,
or because they do not belong to the categories of persons entitled
to pensions, or, again, because a lump sum is the only method by
which the scheme in question covers the risk.
Certain schemes, however, provide for the payment of funeral
benefit in addition to survivors' pensions, thus supplementing
or replacing the benefit usually provided for in sickness insurance
legislation.
SURVIVORS' PENSIONS
The following insurance schemes cover loss of income resulting
from the death of the insured person by granting pensions to the
survivors :
Argentine : staffs of private undertakings of public utility; Austria :
salaried employees and workers ; Belgium : workers, salaried employees and
miners ; Brazil : staffs of public utility undertakings ; Czechoslovakia : workers,
salaried employees and miners; France: miners; workers and salaried
employees in Alsace-Lorraine; Germany : workers, salaried employees and
miners ; Great Britain and Northern Ireland : employed persons ; Greece :
tobacco workers ; Hungary : employed persons and miners ; Luxemburg :
workers and salaried employees ; Netherlands : employed persons and
miners; Poland : intellectual workers, workers in the Western Provinces,
and miners; Rumania : minéis in Ardeal; Switzerland : cantonal scheme in
the Canton of Basle Town; Uruguay : staffs of public utility undertakings
and bank and Stock Exchange staffs; U. S. S.R. : employed persons;
Yugoslavia : miners ; salaried employees in Slovenia and Dalmatia.
Although the loss of revenue resulting from the death of the
breadwinner, which is to be compensated for, is measurable both
by the extent to which the insured person supported his family
and by the period during which he would normally have continued
to do so, no scheme now in force fixes the amount of compensation
in accordance with the loss actually suffered.
First of all, the real extent to which the insured person supported his family is never considered when compensation is being
determined; and survivors'rights are even sometimes recognised
when he played no part whatever in their support. No distinction is made between the widow and children of a man who
already received a pension and who, not being able to support
his family, was even a charge on it, and the widow and children
of an insured person still at work shortly before his death.
In practice, compensation for the presumed support given to
his family by the insured person is granted in accordance with
BISKS COVEKED
165
uniform rules : either t h e support is regarded as having been t h e
same in all cases and a uniform pension is granted t o compensate
for it, or all survivors of a given category are presumed t o have
been economically dependent on the insured person t o the same
degree. This degree is expressed either in t h e form of a percentage of t h e pension which t h e insured person received or which
he would have been able to claim in case of invalidity, or in the
form of a percentage of the wages he earned, and this percentage
determines the benefit due.
Secondly, the amount of benefit usually varies with t h e length
of the period during which t h e insured person contributed. Other
things being equal, t h e longer the period of insurance, t h e greater
t h e benefit. The pension granted t o t h e widow and children
of an insured person who died young after, say, ten years of
insurance, is as a rule much smaller t h a n t h a t which the widow
of t h e same worker would have received after fifty years of
insurance, when the husband had been receiving an old-age
pension for a number of years.
Insurance benefit t h u s more or less closely resembles, in form
though not in nature, t h e restitution to survivors of t h e fraction
of t h e insured person's wages saved during his lifetime, since
benefit varies both with the rate and with the number of contributions.
Lastly, in determining the duration of benefit, account is in no
case t a k e n of t h e expectation of life of the insured person a t t h e
age when he died, or of his expectation, given his age, of being
able t o continue t o support his family for a further one, two,
three, or more years. Orphans' pensions are, it is true, of a
temporary character, b u t the limit p u t to them is based not on
the normal expectation of life a t t h e age when t h e insured person
died, b u t on t h e presumption t h a t a t a certain age t h e orphan
will be able to provide for itself and thus cease t o be entitled t o
a pension.
There are, indeed, strong psychological and still stronger sociological objections t o granting the widow of an insured person a
non-renewable temporary pension, expiring definitively after a
number of years, and t o basing its withdrawal on the difference
in t h e expectation of life of husband and wife a t t h e date of t h e
former's death. I n such a case the pension would probably cease
a t t h e very moment when the difficulties caused b y age (lack of
employment, etc.) made it most necessary. I n some cases,
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KISKS COVERED AND CASH BENEFITS
nevertheless, the difference in average expectation of life of the
husband and wife at the former's death affects the amount of the
widow's pension. In Belgium (workers, salaried employees and
miners) and in France (employed persons, voluntary arrangement
by the insured person), the greater the number of years by
which the wife was younger than the husband, the smaller
is the amount of her pension, which is constituted by paying
to her a fraction of the value acquired by the insured person's
contributions.
To sum up, none of the laws which undertake to compensate
for the loss of income resulting from the death of the insured
person attempts in fact to replace the actual loss, but provide for
a pension computed by a method which has usually no direct
relation with such loss. Insurance schemes may be divided into
two groups according to the method by which they determine
the amount of the pension.
In one group pensions are determined according to the presumed
degree to which the insured person supported his family, without
regard to the length of the period of insurance; the pension is
either uniform or equal to a fixed proportion of the insured person's
wages. The insurance schemes for employed persons in Great
Britain and Northern Ireland (uniform pension irrespective of
earnings) and in the Netherlands (pensions proportionate to the
insured person's earnings irrespective of the contribution period)
are the most typical of this group.
The schemes in which the pension increases with the rate and
number of contributions—that is, with the duration and intensity
of the effort made by the insured person for his survivors—are
much more numerous. The insurance schemes in Czechoslovakia,
France (workers and salaried employees in Alsace-Lorraine),
Germany, Hungary (employed persons), Luxemburg and Poland
(workers in Western Provinces) belong to this group.
A more complete classification of insurance schemes according
to the method of computing survivors' pensions will be found in
Chapter I I I of this Part.
FUNERAL BENEFITS
Provision for funeral benefit is comparatively rare in pension
insurance. It is, however, to be found in the following countries :
Czechoslovakia (salaried employees), Germany (miners), Greece
RISKS COVERED
167
(tobacco workers), Luxemburg (workers), Netherlands (miners),
Poland (miners), Rumania (miners), the U. S. S. R. and Yugoslavia (miners).
OTHER LUMP-SUM PAYMENTS
The payment of a lump sum to permit adaptation to new conditions is, on the other hand, frequently provided for when survivors
are not entitled to pensions, either because the insured person had
not completed a qualifying period and therefore had left them no
rights, or because the survivors do not fulfil the conditions
required. Such payments are provided for in the following
schemes :
Argentina : staffs of private undertakings of public utility and bank staffs ;
Austria : workers and salaried employees ; Belgium : workers and salaried
employees ; Brazil : staffs of public utility undertakings ; Czechoslovakia :
workers, salaried employees and miners; France : miners, and salaried
employees in Alsace-Lorraine; Germany: salaried employees; Greece:
tobacco workers; Hungary : employed persons and miners; Poland : intellectual workers and miners ; Switzerland : cantonal schemes ; Uruguay : bank
and Stock Exchange staffs; Yugoslavia : salaried employees in Dalmatia and
Slovenia, and miners.
Finally, in France (employed persons) and Italy (employed
persons) the risk is covered only by the payment of a lump
sum at death, and no life pensions for survivors are provided.
CHAPTER II
CONDITIONS OF AWARD OF CASH BENEFITS
Since the object of insurance is to guarantee to the employed
or independent workers belonging to the economically weak
sections of the population compensation for part at least of the
economic loss consequent upon the risks to which they are
exposed, all social insurance laws lay down rules restricting the
right to benefit to workers who have been engaged in an insurable
occupation for a specified minimum period, i.e. who have completed a qualifying period, and who, after completing this period,
are still of insured status in virtue of compulsory, voluntary or
free insurance (i.e. without payment of contributions) when the
event insured against happens. To balance his admission to
insurance at a rate of contribution corresponding to the average
risks borne by the insured population as a whole, as well as the
various advantages derived by the insured from financial resources
other than contributions, the insured person has to bear the risk
of forfeiting the credit for his own contributions should he fail
to comply with the statutory conditions of award.
These conditions as to the completion of a qualifying period
and the subsequent payment of contributions relate to the insured
person himself, but, as already explained in connection with the
risks covered, not all the surviving relatives of the insured person
are entitled to claim benefit even if they were dependent upon
him. Most social insurance laws define very strictly the categories of dependants who are entitled to claim the benefits which
they guarantee, or which they authorise the social insurance institutions to grant subject to the fulfilment of certain conditions.
Finally, the right to benefit may be forfeited if the insured
person is himself responsible for the occurrence of the event
insured against. In certain cases, too, benefit may be wholly
CONDITIONS OF AWARD OP CASH BENEFITS
169
or partly suspended in order to limit the effects of coincident
rights either to two or more social insurance pensions or to a
pension and some other form of income exceeding a specified
limit.
A.—CONDITIONS
RELATING
TO THE
INSURED
PERSON
§ 1.—Qualifying Period
PURPOSE OF QUALIFYING PERIOD
The purpose of the qualifying period differs in respect of
benefits under old-age insurance on the one hand and under
invalidity and survivors' insurance on the other.
The object of imposing a qualifying period in old-age insurance
is either to establish a certain ratio between the guaranteed
benefits and the contributions—that is, the duration and extent
of the insured person's provident effort—or merely to prevent
the affiliation of persons who do not exercise an insurable occupation as a genuine means of livelihood.
In invalidity and survivors' insurance the completion of a
qualifying period, the duration of which varies considerably but
generally lies between two and five years, is intended not for the
purpose of making the guaranteed benefits proportionate to the
contributions paid, since the benefits due after the completion
of the qualifying period generally exceed considerably the value
of the payments made, but merely in order to eliminate the
worst risks and, as in old-age insurance, to prevent affiliation, in
view of an impending emergency, for the sole purpose of acquiring
the right to benefit, without exercising an insurable occupation
as a genuine means of livelihood.
POINT OF OPERATION OF QUALIFYING PERIOD
Whatever the purpose of the qualifying period which must
elapse before the insured person may claim benefit, the provisions
relating to its point of operation always belong to one of two
main types :
(a) exercise of an insurable occupation for a specified period,
the completion of which by the insured person operates
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RISKS COVERED AND CASH BENEFITS
on his behalf, subject to the provisions relating to the
retention of the right to benefit described below, up to
the time when the event insured against happens, e.g.
in the Netherlands (employed persons);
(b) exercise of an insurable occupation during the period
immediately preceding the occurrence of the event insured
against, e.g. in France (employed persons, invalidity risk).
These two kinds of provisions may also be found combined.
The insured person is then required not only to have exercised
an insurable occupation for a specified time, but to have paid a
certain number of contributions during a prescribed period
immediately preceding the occurrence of the event insured against.
Invalidity insurance in Great Britain offers a clear example of
this combination.
In order to qualify for benefit under either of these two types
of provisions, or under a combination of the two, it is not, however,
always required that the contributions should actually have been
paid up by the insured person or his employer.
In the first place, where social insurance legislation applies
with retrospective effect to the persons covered as soon as it
comes into force, the lattei acquire their rights in the same way
as if the scheme had existed when they first entered employment.
The period of employment completed before the coming into
force of the law in question in an occupation which would have
been insurable if compulsory insurance had existed at the time
is deemed to be a contribution period and counts towards the
qualifying period. Periods of employment completed before and
after the coming into force: of social insurance legislation are thus
placed on the same footing in the U. S. S. R., France (miners,
invalidity risk) and Great Britain and Northern Ireland (employed
persons, old-age and death risks).
Secondly, a great many insurance schemes reckon as part of the
period of actual employment in an insurable occupation any
period of sickness or involuntary unemployment; in such cases
either the contributions of employer and worker are paid out of
a special fund (France : employed persons), or the additional
liability represented by the maintenance of rights without payment of contributions is borne by the persons or bodies whence
the insurance moneys are derived, i.e. employers, workers, and
in certain cases the public authorities (Germany : workers).
CONDITIONS OF AWARD OF CASH BENEFITS
171
QUALIFYING PERIOD IN OLD-AGE INSURANCE
Since the object of imposing a qualifying period is either to
establish a certain ratio between the benefits and the contributions paid, or to prevent affiliation on the strength of merely
occasional employment with the sole object of acquiring a right
to insurance benefits, the obligation to complete it may be waived
without difficulty where the guaranteed benefits correspond
exactly to the value acquired by the paid-up contributions.
This method of providing for benefits (which is a savings scheme
rather than insurance in the strict sense of the term) is met with
in the schemes which accumulate contributions in individual
accounts, as in Belgium, France (employed persons), Spain and
Sweden.
Exemption from the qualifying period has, moreover, but little
practical worth, as the value acquired by the contributions
standing in the name of the insured persons is proportional to
the length of the contribution period. In France (employed
persons), however, while no qualifying period is imposed in connection with old-age risks, the grant of the minimum pension is
restricted to insured persons who have completed thirty contribution years, each corresponding to 240 contribution days.
Apart from schemes which accumulate contributions in individual accounts, the only schemes which require no qualifying
period are found in the Netherlands, where risks are selected by
the conditions of affiliation, persons over thirty-five years
(employed persons) or forty years (miners) not being liable to
compulsory insurance.
In all other cases, where the guaranteed benefits do not correspond to the value acquired by the contributions paid in respect
of the insured person, the exercise during a specified minimum
period of an insurable occupation and the payment of a specified
number of contributions are essential conditions. This obligation is, however, frequently modified by treating certain periods,
such as illness or unemployment, when contributions are not
payable, as periods during which the insured person is deemed to
have exercised an insurable occupation and to have contributed
to insurance. This is the case in Chile (workers), Czechoslovakia
(workers, salaried employees and miners), France (employed
persons and miners; workers in Alsace-Lorrame), Germany
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EISKS COVEIIED AND CASH BENEFITS
(workers), Great Britain and Northern Ireland (employed persons),
Hungary (employed persons and miners), Italy (employed persons)
and Luxemburg (workers). In the U. S. S. R. (employed persons)
no stipulation is made concerning contributions, insured persons
being required merely to show that they have actually exercised
a trade liable to insurance.
Length of Qualifying Period in National Laws
Yugoslavia : Miners : 30 years' insurance.
Argentina : Staffs of private undertakings of public utility : 30 years'
service for full pension ; 10 years' for reduced pension.
Brazil : Staffs of public utility undertakings : 30 years' service for full
pension, irrespective of age; 20 years' for pension at age 55.
Cuba : Seamen and harbour workers : (1) Salaried employees : 30 years'
service for full pension, irrespective of age; 25 years' for full pension at
age 50; 10 years' for reduced pension. (2) Workers : 25 years' for full
pension, irrespective of age; 20 years' for full pension at age 50; 10 years'
for reduced pension.
U. S. S.B. : Employed persons: men, 25 years' employment; women,
20 years' employment.
France : Workers in Alsace-Lorraine : 1,200 contribution weeks.
Poland : Workers in Western Provinces : 1,200 contribution weeks.
Rumania : Employed persons and craftsmen : 1,200 contribution weeks.
Argentina : Bank staffs : 20 years' service.
Bulgaria : Employed persons : 1,040 contribution weeks when insured
person enters insurance before age 40; 520 after age 40 and before age 50;
260 after age 50.
U. S. S. R. : Underground workers in mines and persons in dangerous
occupations : 20 years' employment, including 10 years underground or in
dangerous occupations.
Germany : Workers : 750 weekly contributions.
Germany : Salaried employees : 180 paid-up monthly contributions.
Austria : Workers : 500 weekly contributions, of which at least 104 must
have been paid during the last ftve years and 52 during the last three years
preceding pensionable age.
France : Salaried employees in Alsace-Lorraine : men : 120 contribution
months : women, 60 contribution months; provided t h a t 60 monthly contributions have been paid under compulsory insurance; otherwise the qualifying period is extended by 30 months.
Luxemburg : Workers : 2,700 working days for which contributions were
paid or deemed to have been paid.
Greece : Tobacco workers : 2,700 paid-up daily contributions.
Uruguay : Bank and Stock Exchange staffs : 10 years' service covered
by insurance.
Italy : Employed persons : 240 contribution fortnights.
Hungary : Miners : 10 years' mining work; employed persons : 400 contribution weeks.
Rumania : Miners in Ardeal : 8 years' mining work.
Great Britain and Northern Ireland : Employed persons : 104 paid-up
weekly contributions and 5 years' continuous insurance from 60 to 65 years
of age.
CONDITIONS OF AWARD OF CASH BENEFITS
173
Austria : Salaried employees : 60 paid-up monthly contributions.
Poland : Intellectual workers : 60 paid-up monthly contributions.
Czechoslovakia : Salaried employees : 60 paid-up monthly contributions ;
miners : 60 paid-up monthly contributions.
Luxemburg : Salaried employees : 5 paid-up contribution years.
Poland : Workers in Upper Silesia : 200 contribution weeks, including at
least 100 in compulsory insurance; otherwise, 500 weeks.
Germany : Miners : 36 paid-up monthly contributions, including at least
24 in compulsory insurance ; 300 months for pension a t age 50.
Poland : Miners in Upper Silesia : 3 years' insurance.
Chile : Workers : 104 contribution weeks.
Czechoslovakia : Workers : 100 paid-up weekly contributions, including
at least 13 in compulsory insurance. Theoretically two weeks' voluntary
insurance are counted as one week's compulsory insurance.
Belgium : Workers : no qualifying period.
Spain : Employed persons : no qualifying period.
France : Employed persons : no qualifying period. The grant of the
minimum pension is, however, conditional on the completion of 30 contribution years, each corresponding to 240 contribution days. Miners : no
qualifying period. The grant of the minimum pension is, however, conditional on the completion of at least 15 years' mining work.
Netherlands : Employed persons : no qualifying period. Miners : no
qualifying period.
Sweden : National scheme : no qualifying period.
QUALIFYING PERIOD IN INVALIDITY
INSURANCE
By reason of its purpose, the obligation to complete a qualifying
period is found almost universally in invalidity insurance. The
pension due as soon as the insured person has acquired the right
to benefit always exceeds in some measure, and usually by a
considerable amount, the annuity which he might have obtained
from the value of the paid-up contributions. I t is therefore
essential to avoid the affiliation of members whose sole object
is to obtain the guaranteed benefits by the payment of a few
contributions over a very short period. The only exception to
this rule is found in the national scheme in Sweden : it is explained
by the method by which the benefits are constituted, one part
being proportional to the contributions paid, while the other
consists of a fixed sum awarded only if need can be proved, so
that it is the criterion of need and not that of the exercise of a
given occupation which determines the award of an essential
component of the pension.
Length of Qualifying Period in National Laws
Belgium : Miners : 10 years' mining work if invalidity begins under 40,
12 years' from 40 to 45,15 years' from 45 t o 50,18 years' from 50 to 55 and
20 years' over 55.
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RISKS COVERED AND CASH BENEFITS
France : Salaried employees in Alsace-Lorraine : men : 120 contribution
months ; women : 60 contribution months ; provided that 60 monthly contributions have been paid under compulsory insurance; otherwise the qualifying period is extended by 30 months.
Argentina : Bank staffs : 10 years' service t o be entitled to pension. No
qualifying period for a lump sum indemnity.
Cuba : Seamen and harbour workers : 10 years' service.
France : Miners : 10 years' mining work, subject to insured person's
right to opt for benefits under employed persons' scheme if he fulfils its
conditions.
Uruguay : Staffs of private undertakings of public utility : 10 years '
service.
Rumania : Miners in Ardeal : 8 contribution years.
17. S. S. R. :
Qualifying period
Age when invalidity
begins
U n d e r 20
20-25
25-30
30-40
40-50
O v e r 50
i
Workers
Salaried
employees
Years
none
2
3
5
7
8
Years
none
2
4
6
9
12
Greece : Tobacco workers : 1,800 paid-up daily contributions.
Germany : Salaried employees : 60 paid-up monthly contributions.
Austria : Salaried employees : 60 monthly contributions.
Poland : Miners in Southern Provinces : 60 paid-up monthly contributions.
Brazil : Staffs of public utility undertakings : 5 years' service.
Czechoslovakia : Salaried employees : 60 paid-up monthly contributions.
Italy : Employed persons : 120 contribution fortnights.
Luxemburg : Workers : nationals : 1,350 working days for which contributions were paid or deemed t a have been paid; aliens : 2,700 contribution
days.
Germany : Workers : 250 contribution weeks in compulsory insurance ;
otherwise, 500 weeks.
France : Workers in Alsace-Lorraine : 200 contribution weeks, including
at least 100 in compulsory insurance; otherwise, 500 weeks.
Hungary : Employed persons : 200 contribution weeks.
Poland : Workers in Western Provinces and Upper Silesia : 200 contribution weeks, including at least 100 in compulsory insurance; otherwise,
500 weeks.
Rumania : Employed persons and craftsmen : 200 contribution weeks.
Bulgaria : Employed persons : 156 contribution weeks.
Netherlands : Employed persons : 150 paid-up weekly contributions.
Germany : Miners : 36 paid-up monthly contributions.
Poland : Miners in Upper Silesia : 3 years' insurance.
Chile : Workers : 104 contribution weeks.
CONDITIONS OF AWARD OF CASH BENEFITS
175
Denmark : Persons of small means who are regular members of sickness
funds : 2 years' insurance with a sickness fund.
France : Employed persons : payments corresponding to 480 contribution
days during the 2 years preceding the beginning of the illness or accident
causing invalidity.
Austria : Workers : 104 weekly contributions paid during t h e last five
years, including at least 52 in compulsory insurance or 78 in voluntary
insurance during the last three years preceding invalidity.
Argentina : Staffs of private undertakings of public utility : salaried
employees : 1 year's service; workers : 2.
Great Britain and Northern Ireland : Employed persons : continuous
insurance for 104 weeks and payment of 104 contributions. The right to
normal benefit is dependent on the crediting to the insured person's account
of a minimum number of contributions actually paid-up or deemed to have
been paid during the contribution year (July-July) immediately preceding
the benefit year (January-January). The benefits are reduced when the
number of weekly contributions actually paid or deemed to have been paid
during the contribution year falls below 50. No benefits are granted when
the number is below 36. The insured person has, however, an opportunity
between the date of expiry of the contribution year and the beginning of
the benefit year, t h a t is to say during the six months from July to January,
of redeeming his right to full benefit by paying the sum necessary to bring
the number of contributions in his account up to the required figure.
Irish Free State : Employed persons : continuous insurance for 104 weeks
and payment of 104 contributions. The right t o normal benefit is dependent
on the crediting to the insured person's account of a minimum number of
contributions actually paid-up or deemed to have been paid during the
contribution year (July-July) immediately preceding the benefit year
(January-January). The benefits are reduced when the number of weekly
contributions actually paid or deemed to have been paid during the contribution year falls below 48. No benefits are granted when the number is
below 17. The insured person has, however, an opportunity between the
date of expiry of the contribution year and the beginning of the benefit
year, that is to say during the six months from July to January, of redeeming
his right to full benefit by paying the sum necessary to bring the number
of contributions in his account up to the required figure.
Czechoslovakia : Workers : 100 paid-up weekly contributions.
Sweden : National scheme : No qualifying period.
QUALIFYING PERIOD IN SURVIVORS' INSURANCE
The object of the qualifying period in survivors' insurance is
the same as in invalidity insurance, and its duration is usually
the same.
In Belgium and France, however, the qualifying period fixed
in the miners' schemes differs for the risks of invalidity and
death respectively. This is also the case in the employed persons' schemes in Great Britain and Northern Ireland and the
Netherlands.
In France (miners) the qualifying period, which is ten years
for invalidity, is raised to fifteen years for death. Whereas the
Belgian miners' scheme fixes a qualifying period of ten to twenty
176
KISKS COVERED AND CASH BENEFITS
years for the risk of invalidity, it lays down no condition as t o a
qualifying period in respect of survivors' pensions, a n d merely
states t h a t the widow cannot claim the guaranteed minimum
unless a t the time of death her husband was still a miner, or else
h a d been pensioned for invalidity. I n t h e Netherlands (employed
persons) t h e qualifying period is reduced t o forty contribution
weeks t o meet the risii of death, as compared with 150 for
invalidity.
I n Great Britain and Northern Ireland (employed persons),
where t h e risk of death is covered in connection with t h a t of old
age a n d not t h a t of invalidity, t h e conditions as t o continuity
of insurance also differ. For the payment of a survivor's pension
where t h e insured person has been insured without interruption
for over 208 weeks, t h e number of contributions paid or deemed
t o have been paid must represent on t h e average not less t h a n
twenty-six contributions a year in respect of each of the three
years preceding the death of the insured person or t h e d a t e a t
which he attained sixty- five years of age.
I n Belgium (workers and salaried employees) the two schemes
cover t h e risk of death, b u t not t h a t of invalidity, and these
require no qualifying period for the grant of a widow's pension.
The exemption in this case is due t o t h e fact t h a t the risk of
death is covered in connection with t h a t of old age, t h e widow's
pension being equal to a proportion of the annuity t h a t would
have been payable t o the insured person if he had been entitled
t o a pension at t h e time of death. Since this annuity is purchased out of the accumulated contributions paid into an individual account, no qualifying period is necessary. . F o r technical
reasons the law exempted t h e insured person from a qualifying
period in old-age insurance, and it was therefore considered
inadvisable t o lay down stricter conditions in respect of survivors'
insurance, although the benefits under t h e latter scheme are
constituted by a different method.
Finally, the qualifying period is often waived in regard to t h e
lump-sum payments made on death. These are in fact benefits
of minor importance and are unlikely t o lead to t h e affiliation
of workers who are not genuinely insurable. Such exemption
is granted in Argentina, Austria (salaried employees), Brazil,
Czechoslovakia, Greece (tobacco workers), H u n g a r y (miners),
Poland (intellectual workers and miners), Uruguay, t h e U . S. S. R .
and Yugoslavia.
CONDITIONS OF AWARD OF CASH BENEFITS
177
Inclusion of Periods of Sickness,
Unemployment, etc., in the Qualifying Period
Among the schemes for which a summary of the conditions
governing the qualifying period has already been given, only the
following make provision for the inclusion of periods of sickness,
unemployment, etc., in the qualifying period.
Bulgaria : Workers : periods of sickness, compulsory labour and military
service count towards the qualifying period up to a maximum of 40 weeks
a year.
Chile : Workers : periods of sickness and unemployment count towards
the qualifying period.
Czechoslovakia : Workers and salaried employees : periods of military
service and those during which the insured person contributed to other
systems of invalidity, old-age and survivors' insurance (miners, salaried
employees, public servants) are included in the qualifying perdiod. Miners :
periods of military service and periods of sickness for which benefit is paid
count towards the qualifying period; nevertheless, periods of sickness are
taken into account only after the first month.
France : Employed persons : periods of sickness are taken into account
in calculating the qualifying period for minimum benefits ; periods of unemployment are taken into account only for insured persons of French nationality and only up to a maximum of eighty contribution days a year.
Miners : periods of incapacity for work resulting from injury or sickness are
taken into account in calculating the qualifying period for minimum benefits ;
if the periods of incapacity are caused by injury, they are taken into account
up to the date of final diagnosis ; if they are due to sickness, they are taken
into account as long as the insured person is entitled to regular benefits
from sickness insurance. Workers in Alsace-Lorraine : periods of military
service and complete weeks during which the insured person has, in consequence of sickness, been temporarily incapacitated for work, are included
in the qualifying period without payment of contributions, but if sickness
lasts uninterruptedly for more than one year, the period in excess of one
year is not taken into account.
Germany ; Workers : periods of sickness not exceeding one unbroken
year count towards the qualifying period.
Great Britain and Northern Ireland : Employed persons : periods of
sickness and unemployment count as periods in old-age and widows' and
orphans' insurance and are taken into account in calculating the average
number of annual contributions prescribed during the period immediately
preceding the pensionable age or death, but they do not count as contribution periods for the purposes of the qualifying period of 104 weeks ; the
provisions are the same in invalidity insurance, save that periods of unemployment count only as to one-half as contribution periods.
Hungary : Employed persons : periods of sickness count as contribution
periods up to a maximum of fifty weeks for the whole qualifying period.
Miners : months of sickness count as contribution months provided that
each period of sickness does not exceed one unbroken year and that not
more than one year's sickness is included for every two years of insurance.
Italy : Employed persons : periods of sickness without wages count as
contribution periods provided they exceed seven days and do not exceed
twelve months.
Luxemburg : Workers : complete weeks of sickness count as contribution
periods.
U. S. S. B. : Employed persons : periods of sickness and unemployment
count toward the qualifying period.
12
178
RISKS COVERED AND CASH BENEFITS
§ 2.—Retention of Status of Insured Person
The maintenance of the status which the insured person
acquires by the completion of the qualifying period depends,
in principle, on the continuation, voluntary or otherwise, of the
payment of contributions until the happening of the event
insured against. An essential condition for the stability of the
insurance scheme, namely the payment of contributions on behalf
of the insured persons during the whole of their working life, is
thus guaranteed as far as possible in accordance with the basic
conditions laid down when the scheme was established.
This continuity in the payment of contributions is undoubtedly to be secured mainly by a strict and effective enforcement
of the principle of compulsion in insurance. Only those workers
who have ceased to be liable to compulsory insurance without
continuing their insurance voluntarily show a gap in the contribution record when they subsequently re-enter insurance.
Wherever the interruption of contributions entails the loss of
rights in course of acquisition, the insured person may still revive
his right to benefit by completing a fresh qualifying period in
insurance or, it may be, by making up the prescribed number of
contributions payable during the period immediately preceding
the occurrence of the event insured against. If, however, the
interruption of contributions entails the loss of credit for previous
contributions, and if the rate of benefit is wholly or mainly
dependent on the amount of paid-up contributions, re-admission
to insurance is not sufficient in itself to re-establish the rights
which have been allowed to lapse. If the cancellation of rights
in respect of contributions credited to the insured person's
account prior to loss of status were definitive, the cessation of an
insurable occupation would entail an irreparable loss for the
insured person, which could be avoided only by affiliation to
voluntary or, to be more exact, continued insurance. A compulsorily insured person who lost his insurance status at fifty-five
years of age after some forty contribution years would lose his
rights altogether, for even if he completed a fresh qualifying
period in an insurable occupation, only the contributions paid
during the latter period of insurance would be taken into account
in computing his pension.
The penalisation of an interruption in contribution payments,
even one of long duration, by the cancellation of rights in course
CONDITIONS OF AWARD OF CASH BENEFITS
179
of acquisition is, however, exceptional. It has already been
seen in the Part of this study dealing with the scope of insurance 1
that this rule is neither general nor, except in very rare cases,
absolute.
The question of rights in course of acquisition which will here be
considered afresh from a standpoint differing slightly from that
adopted in studying the scope of insurance, is in fact governed
by provisions prescribing their maintenance, either unconditionally, irrespective of the cause or duration of the interruption
of contribution payments, or provided that the worker concerned
was of insured status during the period immediately preceding
the occurrence of the event insured against, or, again, on condition only that the insured person had contributed sufficiently
regularly during the whole period from the date of his entry
into insurance until the occurrence of the event insured against,
or, finally, their recovery by the completion of a fresh qualifying
period.
UNCONDITIONAL RETENTION OF STATUS
In all schemes in which benefits are provided by accumulating
contributions in individual accounts, the rights of insured persons
are in no way prejudiced by interruptions in their contribution
payments, nor are they annulled by the cessation of payments.
This is the case in Belgium (workers, salaried employees and
miners : old-age risk) and France (employed persons : old-age risk).
The same is true, although the method of constituting the
pensions is different, in Italy (employed persons : old-age risk),
the Netherlands (employed persons) and the U. S. S. R.
RETENTION CONDITIONAL ON PAYMENT OF CONTRIBUTIONS
DURING THE PERIOD IMMEDIATELY PRECEDING THE
MATERIALISATION OF THE RISK
A number of insurance schemes merely stipulate that the
worker must be an employed contributor or deemed to be so
during the period immediately preceding the materialisation of
the risk; provided that this condition is satisfied, any interruptions of contribution payments are without effect. This is the
case in France (employed persons : invalidity and death risks),
where the rules governing the qualifying period lay down that
1
First Part, Chapter I, § 8.
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BISKS COVERED AND CASH BENEFITS
t h e insured person's status of employed contributor must be
attested by the entry of a prescribed number of contributions
t o his credit during a specified period preceding t h e materialisation of t h e risk. The same is undoubtedly true, although not
always expressly stated in t h e law, in Belgium (miners), France
(miners) and t h e U.S.S.R.
I n France (employed persons and miners) and t h e U.S.S.R.
periods of sickness and involuntary unemployment also count
as periods of employment during t h e period immediately preceding t h e materialisation of the risk.
R E T E N T I O N CONDITIONAL ON S U F F I C I E N T L Y R E G U L A R
P A Y M E N T OF CONTRIBUTIONS
Under a number of insurance schemes t h e rights resulting
from t h e payment of contributions may be maintained only on
condition t h a t contribution payments have been reasonably
regular from the date of entry in insurance until t h e occurrence
of t h e event insured against. I n Germany, for example, under t h e
workers' insurance scheme, maintenance of rights in course of
acquisition is conditional on the payment of a t least twenty
weekly contributions for each period of two years, raised t o forty
if t h e insured person has been in compulsory insurance for less
t h a n sixty weeks and contributes under voluntary or continued
insurance. Similar provisions are in force in other German
schemes (salaried employees and miners), and in Bulgaria, France
(workers and salaried employees in Alsace-Lorraine), Hungary,
Luxemburg (workers and salaried employees), Poland (intellectual
workers; workers in Western Provinces and Upper Silesia) and
Rumania. I n Argentina, Brazil, Chile, Czechoslovakia and Great
Britain and Northern Ireland rights in course of acquisition may,
in principle, be maintained only while the insured person remains
insurable, subject of course t o his right t o continue in voluntary
insurance.
I n practice, however, t h e condition relating t o regularity of
contributions is usually modified either by treating periods of
sickness, unemployment or loss of earning capacity for which
benefit is paid as contribution periods, or by extending t h e
insurance cover for a given period after t h e cessation of contributions for whatever cause (period of free insurance). I n all cases
t h e period during which a person remains covered after ceasing,
CONDITIONS OF AWARD OP CASH BENEFITS
181
even voluntarily, to be liable to insurance is added to the periods
of sickness or unemployment which are assimilated to contribution periods.
The free cover allowed to an insured person, even after his
voluntary retirement from insurable employment, is particularly
generous in Czechoslovakia, where it varies between eighteen
(workers) and thirty months (salaried employees). In Austria
(salaried employees), Germany (workers) and Poland (workers in
Upper Silesia) the duration of this period is equal to a third, and
in France (Alsace-Lorraine) to half of the period during which
contributions have been paid in respect of the insured person.
This is also the case in Great Britain and Northern Ireland,
where the right to benefits is maintained for a period varying
between eighteen months and two years in the event of voluntary
cessation of insurable employment, and between .two and a half
and three years in the event of involuntary unemployment.
Moreover, for the purposes of old-age and widows' and orphans'
insurance, the right to pension is maintained if the person concerned attains the age of sixty-five or dies during the twelve
months following the expiry of the period of free insurance.
RECOVERY OF STATUS BY COMPLETION
OF FRESH QUALIFYING PERIOD
Under all the schemes which impose the condition of regular
contribution, however this may be modified in practice, the
insured person is exposed to the risk of losing the credit for
his paid-up contributions should he fail to pay the required
number of contributions during the prescribed period or periods.
As the amount of the pension payable under such schemes is
proportional to the number of paid-up contributions, the final
loss of all credit for his previous contributions would be a very
serious matter for the person concerned. In order to prevent the
interruption of contributions from resulting in consequences of this
sort, most of the schemes which lay down the condition of regular
contribution prescribe that the insured person may be re-credited
with his previous contributions on completion of a fresh qualifying
period. Such is the case in Bulgaria, Czechoslovakia, France
(Alsace-Lorraine), Germany, Hungary, Luxemburg (workers and
salaried employees), Poland (intellectual workers ; workers
in Western Provinces and Upper Silesia) and Rumania. The
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RISKS COVERED AND CASH BENEFITS
workers' scheme in Czechoslovakia credits the insured person
with his previous contributions, only if the interruption has
not lasted for more than ten years, while the intellectual
workers' scheme in Poland does so only if the interruption has
not lasted more than fifteen years.
In Great Britain and Northern Ireland (employed persons,
old-age and death risks), if a person obtains insurable employment
within two years after the expiry of the period of free insurance,
he can recover his right to benefit by completing a short qualifying period of twenty-six weeks.
B.—CONDITIONS
RELATING
TO
SURVIVORS
The essential condition to be satisfied by survivors in order
to obtain a pension is that they should have been dependent on
the deceased. This is subject to the limitation, however, that,
without prejudice to the faculty, sometimes granted to the
insured person, of making provision for the award of more extensive
benefits, the state of dependency is recognised only in the case
of members of the family of the insured person belonging to
certain categories enumerated in the law—wife or husband,
children, and, in exceptional cases, parents or brothers and
sisters.
Moreover the definition of possible claimants also varies
with the nature of the statutory benefits concerned, i.e. whether
it is a question of lump-sum payments, such as funeral benefit
or a small sum to enable the survivors to meet the immediate
expenses or adapt themselves to the altered conditions consequent on the death of the family breadwinner, or, on the other
hand, of life or temporary pensions intended to provide wholly
or partly for the maintenance of the insured person's dependants.
The varying importance and object of these benefits involves the
adoption of different criteria in defining the circle of possible
beneficiaries.
Below is given, first, a summary of the rules defining the
persons entitled to the benefits that the insurance institutions
are bound or authorised to grant (survivors' pensions or
lump-sum payments at death), followed by an account of the
conditions laid down by certain schemes under which the insured
person may secure for his dependants the right to more extensive
benefits.
CONDITIONS OF AWAED OF CASH BENEFITS
183
§ 1.—Survivors' Pensions
WIDOWS
In every scheme, with one exception, the widow is included
among the persons who, if they satisfy the other conditions
required by law, can claim a pension. In France (employed
persons), however, the widow is excluded from the possible claimants unless her husband had voluntarily constituted a pension
for his wife by devoting to this purpose part of the contribution
normally intended to cover the risk of old age.
The personal conditions that the widow may be required to
satisfy in order to obtain a pension relate to :
(a) the existence of a state of dependency on the deceased;
(b) the date of the marriage.
Conditions relating to Dependency
The state of dependency of the widow with respect to the
insured person is often assumed automatically, at least in occupational insurance schemes. This is true of the schemes in Argentina (all schemes), Austria (salaried employees), Belgium (salaried
employees and miners), Czechoslovakia (salaried employees and
miners), France (salaried employees in Alsace-Lorraine), Germany
(salaried employees and miners), Hungary (salaried employees
and miners), Luxemburg (salaried employees), the Netherlands
(miners), Rumania (miners in Ardeal), and Yugoslavia (miners).
The position is the same in Belgium (workers) and Great Britain
and Northern Ireland (employed persons).
The other schemes require proof that the widow was actually
dependent on the insured person and could not support herself,
in that they fix certain conditions as to incapacity for work and
family responsibilities. The conditions are as follows :
Austria : Workers : loss of earning capacity of not less than 662/3 per cent.,
or attainment of age 65, or maintenance of two children who are under
18 years of age or else unable to support themselves owing to physical or
mental infirmity. These conditions are not required for the award of a
temporary pension for one year.
Czechoslovakia : Workers : loss of earning capacity of not less than 66 2 / 3 per
cent., or incapacity to perform her household duties, or attainment of age 65,
or maintenance of two children of the insured person.
France : Miners : attainment of age 55. Workers in Alsace-Lorraine :
loss of earning capacity of not less than 662/a per cent, or attainment of age 65.
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RISKS COVEKED AND CASH BENEFITS
Germany : Workers : loss of earning capacity of not less than 662/3 per cent.
or attainment of age 65.
Greece : Tobacco workers : invalidity or attainment of age 45, or maintenance of children under age; these conditions need not be satisfied t o
obtain a temporary pension for two years.
Hungary : Workers : loss of earning capacity of not less than 662/3 per
cent, or attainment of age 65.
Luxemburg : Workers : loss of earning capacity of not less than 66 3 / 3 per
cent, or attainment of age 65, or maintenance either of three children under
18 years of age or of one child entirely incapable of supporting himself
owing to infirmity.
Netherlands : Employed persons : loss of earning capacity of not less
than 662/3 per cent, or attainment of age 60.
Poland : Workers in Western Provinces : loss of earning capacity of not
less than 662/3 per cent. In Upper Silesia a widow is entitled to a pension
on attaining age 60.
V. S. S. R. : Total loss of earning capacity or attainment of age 55, or
maintenance of children under 8 years of age.
Conditions relating to Date of
Marriage
I n order t o prevent an. insured person who has become a n
invalid, or is already old, and perhaps even in receipt of a n
old-age pension, from establishing pension rights by a marriage
t h a t might only be a speculation on his early death, several laws
make t h e award of a pension dependent on certain conditions
as t o t h e duration and date of the marriage, which must b e
anterior t o t h e date a t which the husband reached a specified age,
or at which he was recognised t o be an invalid or granted an
old-age pension. The condition of anterior marriage is laid
down in the following laws in particular : Austria (workers a n d
salaried employees); Belgium (miners); Czechoslovakia (workers
and miners); France (miners); Great Britain and Northern
Ireland (employed persons); Hungary (miners); L u x e m b u r g
(salaried employees); Netherlands (employed persons); Poland
(intellectual workers; miners in Upper Silesia).
I n two countries, finally, there is no condition as t o the d a t e
of the marriage, b u t the marriage must have lasted a minimum
period. I n Rumania (miners in Ardeal) the period is one year.
I n Czechoslovakia (salaried employees) the period is six months,
but if t h e insured person was aged sixty or over, or pensioned a t
the time of the marriage, this period is raised t o one year; t h e
condition need not be satisfied if a child is born of t h e marriage
or legitimised by it.
The condition of anterior marriage, moreover, is often modified
by a regulation t h a t , whatever t h e date of t h e marriage, t h e
CONDITIONS OF AWARD OF CASH BENEFITS
185
widow may claim a pension if the marriage has lasted for a
specified period or if the death of the husband was due to an
accident or if there is a child born of the marriage.
I n Austria (workers) the marriage must have taken place
before t h e insured person attained t h e age of fifty-five years or
his invalidity had been recognised. This condition is not required
if the death of the insured person was due t o an accident subsequent t o the marriage or if a child was born of the marriage or
legitimised thereby. I n t h e salaried employees' scheme t h e
marriage must in every case have lasted for not less t h a n six
months, this period being raised to three years if the insured
person was over fifty years of age, or had already been pensioned
for invalidity or old age, a t t h e date of the marriage. No condition as to duration is required if the death of t h e insured person
was due to an accident, or if a child was born of the marriage.
I n actual fact, the condition is applied strictly only in t h e exceptional case of insured persons who entered into insurance after
fifty-five years of age, when t h e widow may make a claim only
if the marriage was contracted before insurance was entered into.
I n Belgium (miners) the marriage must have preceded the date
a t which the last contributions were paid by five years. This
condition is waived, however, if, on the death of the husband,
there is a child under sixteen years dependent on t h e widow.
I n France (miners) the widow must prove t h a t her marriage
preceded the date a t which her husband ceased t o contribute t o
t h e insurance by three years, b u t this condition is waived if the
husband's cessation of work is due to an accident or if there was
a child born of t h e marriage at the time he ceased work.
I n Great Britain and Northern Ireland (employed persons) the
condition is t h a t t h e marriage should have taken place before
t h e insured person reached t h e age of sixty years, b u t the widow
need not satisfy this condition if at the time of her marriage with
t h e insured person she was entitled to a widow's pension, or if
there are children born of t h e marriage, or if the marriage has
lasted not less t h a n three years.
I n Hungary (miners) the widow need not prove t h e anterior
date of the marriage if a child had been conceived before the
insured person was granted an invalidity pension and t h e husband
h a d recognised his paternity.
I n Luxemburg (salaried employees) the marriage must not
only have taken place before the insured person was awarded
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RISKS COVERED AND CASH BENEFITS
an old-age or invalidity pension, but it must have lasted for
not less than one year. The latter condition is waived, however,
if the death of the husband was due to an accident or a child
was born of the marriage.
In Poland (miners in Upper Silesia) the widow cannot claim
a pension if the marriage was contracted after the cessation of
compulsory or voluntary insurance. Her right to a pension is
maintained, however, if the marriage contracted after invalidity
has set in has lasted for not less than one year, and if the difference between the ages of husband and wife does not exceed ten
years. The scheme for intellectual workers requires, on the one
hand, that the marriage should have preceded the loss of status
as an employed contributor, and on the other that it should
have lasted not less than six months. The latter condition is
waived if the death of the husband was due to an event originating
subsequent to the marriage.
CHILDREN
All the insurance laws include the children dependent on the
insured person among the persons entitled to a pension, but the
definition of a dependent child varies sometimes considerably
from one scheme to another. As a general rule, children are not
entitled to a personal orphan's pension, or an additional allowance cannot be claimed in respect of them, unless, owing to
their age or the continuation of their studies, they are unable
to support themselves, or. unless at the date of their parents'
death they suffer from an infirmity which makes it impossible
for them to earn their living.
The difference in the definition of the term " dependent children "
turns essentially on the age at or conditions in which children
are deemed to be capable of earning their own living, and on the
treatment of certain categories of children as orphans proper.
The different definitions in the national laws are given below.
Definition of Child
The rules laid down by the various national schemes for the
definition of the children in respect of whom a pension or allowance
may be claimed may be reduced to three types :
(a) only legitimate, legitimised or adopted children are entitled
to benefit; ,
CONDITIONS OF AWAED OF CASH BENEFITS
187
(b) illegitimate children who have been recognised either voluntarily, or by a court of law, or in virtue of legislation.
making the declaration of the mother's identity compulsory when the birth is registered are treated as legitimate
children;
(c) under certain conditions the same treatment is granted to
all illegitimate children and foster-children (unrecognised
illegitimate children, for example).
Benefits Awarded only to Legitimate, Legitimised
or Adopted Children
Netherlands : employed persons ; Yugoslavia : salaried employees in
Slovenia and Dalmatia.
Benefits Awarded also to Legally Recognised
Illegitimate Children
Argentina : all schemes ; Austria ; salaried employees ; Brazil : staffs of
public utility undertakings ; Czechoslovakia : all schemes ; France : all
schemes ; Germany : all schemes ; Hungary : all schemes ; Poland : all schemes ;
Uruguay : all schemes ; Yugoslavia : miners.
In Austria (salaried employees), Czechoslovakia, Germany, Hungary and
Poland it is expressly provided that children of a former marriage and
grandchildren shall be treated as the legitimate children of the insured
person, provided t h a t they satisfy the conditions relating to dependency
described below.
Under all the schemes enumerated above, illegitimate children may be
looked upon as possible claimants to benefit only if they have been recognised either voluntarily or as the result of judicial proceedings. I t should
be noted, however, t h a t in countries where, barring cases of criminal abandonment, the identity of the mother is automatically established when the
child's birth is registered (e.g. in Austria, Czechoslovakia, Germany and
Poland), social insurance laws simply provide that the illegitimate child of
an insured woman shall enjoy the same rights as a legitimate child in regard
to the mother, whereas its rights in respect of the father depend on the
voluntary recognition of paternity by the latter or its establishment in a
court of law. The difference is obviously one of form only. The identity
of the mother being legally established by the fact of registration, the
child's rights on the mother's side are fixed beyond dispute, and the formality of recognition is therefore unnecessary. I t has therefore been assumed
t h a t in countries where the identity of the mother is established by the
fact of registration of the birth, children may always be looked upon as
having been legally recognised by the mother.
Benefits Awarded also to Certain Other Children
Living in the Insured Person's Household
Austria : workers ; Great Britain and Northern Ireland : employed persons ;
Luxemburg : all schemes ; U. S. S. B. : employed persons.
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RISKS COVEBED AND CASH BENEFITS
Conditions relating to Dependency
So far as legitimate children are concerned, the state of dependency on the insured person is nearly always assumed automatically. Nevertheless, under certain laws no pension is payable
in respect of the legitimate children of an insured woman unless
she contributed substantially towards their maintenance. Where
this is the case, proof must be submitted that the requisite
condition has been satisfied (France : workers in Alsace-Lorraine ;
Germany; Poland : workers in Western Provinces). On the
other hand, in the case of grandchildren, legitimate or illegitimate children of the wife or husband (e.g. children of a first
marriage) or foster-children, the law as a rule requires that
the child shall have been actually dependent on the deceased.
Such is the case in Czechoslovakia, France, Germany, Great
Britain and Northern Ireland, Hungary (miners), Luxemburg, the
Netherlands, Poland (intellectual workers and workers), Uruguay
and Yugoslavia.
It is, however, sometimes considered sufficient that the insured
person should have recognised the child or admitted it to his
household before acquiring his right to a pension. This is so in
Austria (workers), Hungary (employed persons) and Poland
(miners in Upper Silesia).
Conditions relating to Age
Regulations governing' the maximum age for the cessation of
the child's right to a pension fall into two groups : (1) those
fixing an unconditional limit to the pensionable age, irrespective
of particular circumstances ; and (2) those allowing exceptions in
Drder to continue a contribution towards the cost of maintenance
of children who, owing to the continuation of their studies or to
some infirmity, are unable to support themselves.
Laws Fixing an Absolute Limit
Belgium: workers: 16 years; salaried employees: 18 years; Czechoslovakia : workers : 17 years ;; France : salaried employees in Alsace-Lorraine :
18 years; workers in Alsace-Lorraine : 15 years; Germany : all schemes :
15 years; Hungary : salaried employees : 18 years; Luxemburg : workers :
18 years; Netherlands: employed persons: 14 years; miners: 16 years;
Poland : workers in Western Provinces : 15 years; workers in Upper Silesia :
18 years; miners in Southern Provinces : 16 years; miners in Upper Silesia :
16 years; Switzerland (Basle-Town ): 18 years; Uruguay : 18 years for sons
and 24 years for daughters, unless the latter marry before t h a t age; Yugoslavia : salaried employees in Slovenia and Dalmatia : 18 years.
CONDITIONS OF AWARD OF CASH BENEFITS
189
Laws Fixing a Limit Subject to Exception
Argentina : Staffs of private undertakings of public utility : sons : 18 years,
but if, owing to infirmity, a son is unable to earn his own living, the pension
is maintained for the duration of the incapacity; daughters and sisters :
the pension is maintained until marriage. Bank staffs : sons : 18 years;
daughters and sisters : the pension is maintained until marriage or 22 years,
whichever is earlier; if a child is unable to earn his own living, the pension
is maintained for the duration of the incapacity.
Austria : Salaried employees : 18 years; 24 years if the children continue
their studies and are therefore unable to earn their own living ; if, owing to
infirmity, the child is unable to earn his own living, the pension is maintained for the duration of the incapacity. Workers : 18 years ; children
suffering from an infirmity making it impossible for them to earn their
living are entitled to a pension for the duration of their incapacity.
Brazil : Staffs of public utility undertakings : 18 years; children suffering
from an infirmity making it impossible for them to earn their own living
are entitled to a pension for the duration of their incapacity.
Czechoslovakia: Salaried employees: 18 years; 24 years if the child
continues his studies or is unable to earn his own living. Miners : 16 years ;
there is no age limit if the child is unable to support himself owing to
physical or mental infirmity.
France : Employed persons : 13 years; children under 16 are treated as
if they were under 13 if proof can be shown that they have entered into a
written contract of apprenticeship or are engaged in study in a public or
private educational institution, or are infirm or suffering from an incurable
disease, unless they are treated in hospital at the cost of the State, a department or commune. Miners : 12 years, raised to 14 years if the child continues
to attend school until that age.
Great Britain and Northern Ireland : Employed persons ; 14 years, raised
to 16 years if the child continues his studies.
Greece : Tobacco workers : 16 years for boys, 18 for girls; the limit is
raised to 21 if the children continue their studies or, owing to infirmity,
are unable to support themselves.
Hungary : Workers : 15 years; this limit is raised to 18 years if the child
is unable to earn his living owing to infirmity or because he is continuing
his studies. Miners : 16 years, raised to 24 years if the child is continuing
his studies; children suffering from an infirmity making it impossible for
them to earn their living are entitled to a pension for the duration of their
incapacity.
Luxemburg : Salaried employees : 18 years, raised to 23 years if the child
continues his school or vocational education and is therefore unable to
earn his living; children who, owing to infirmity, are unable to support
themselves, are entitled to a pension for the duration of their incapacity.
Poland : Intellectual workers : 18 years, raised to 24 years if the child
continues his studies ; there is no age limit in the case of incapacity due to
infirmity.
V. S. S. B. : Employed persons : 16 years, raised to 18 years if the child
continues his studies ; there is no age limit if the child is incapable of work.
WIDOWERS
Numerous laws include widowers among the persons entitled
t o a pension, b u t under all such schemes the widower cannot
claim a pension unless he can prove t h a t he is actually unable t o
e a r n his living, and t h a t for this reason his wife h a d substantially
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RISKS COVERED AND CASH BENEFITS
contributed to his support. This is the case in Argentina (staffs
of private undertakings of public utility and bank staffs), Austria
(workers and salaried employees), Brazil (staffs of public utility
undertakings), Cuba (seamen, and harbour workers), Czechoslovakia (workers and salaried employees), France (workers and
salaried employees in Alsace-Lorraine), Germany (workers, salaried employees and miners), Hungary (employed persons), Luxemburg (workers and salaried employees); Poland (intellectual
workers; workers in Western Provinces and Upper Silesia),
Uruguay (staffs of public utility undertakings and bank and
Stock Exchange staffs), and the U. S. S. R. (employed persons).
PARENTS
If parents are included among the persons entitled to a pension,
they must always be able to prove that they were actually
supported by the insured person. They rank equally with the
widow under the following schemes : Argentina (staffs of private
undertakings of public utility and bank staffs), Brazil (staffs of
public utility undertakings), Cuba (seamen and harbour workers),
Poland (miners in Southern Provinces), Uruguay (staffs of public
utility undertakings and bank and Stock Exchange staffs),
U. S. S. R. (employed persons) and Yugoslavia (miners).
In Czechoslovakia (salaried employees) and Greece (tobacco
workers) parents can claim a pension only if there are no other
dependants.
BROTHERS AND SISTERS
In a few schemes, most of which fix the total pension payable
to the survivors as a whole, the brothers and sisters of an insured
person are in exceptional cases entitled to a pension if they were
actually dependent on him and satisfy the conditions as to age
or incapacity required of orphans.
In Argentina (staffs of private undertakings of public utility
and bank staffs) and Uruguay (staffs of public utility undertakings
and bank and Stock Exchange staffs) only the sisters of insured
persons are included among persons entitled to claim a pension.
In Brazil (staffs of public utility undertakings), Poland (miners
in Southern Provinces) and the U. S. S. R. (employed persons)
brothers of the insured person are also able to claim a pension.
Further, in Argentina (staffs of private undertakings of public
CONDITIONS OF AWARD OF CASH BENEFITS
191
utility) and t h e U. S. S. R. (employed persons) brothers and sisters
rank with other dependants, whatever t h e category of the latter,
provided t h a t the brothers and sisters were dependent on t h e
insured person and satisfy the required conditions as t o age
and incapacity. On t h e other hand, in Argentina (bank staffs),
Brazil (staffs of public utility undertakings), Poland (miners in
Southern Provinces), Uruguay (staffs of public utility undertakings and bank and Stock Exchange staffs) the brothers and
sisters of the insured person are entitled to pension only if he
leaves no widow or orphan.
§ 2 . — L u m p - S u m P a y m e n t s at Death
The definition of the dependants entitled t o a lump-sum
payment on t h e death of the insured person varies with the amount
and nature of t h e payment concerned.
I n t h e case of funeral benefit, t h e sum is payable either t o the
members of t h e insured person's household, widow or widower,
or, failing them, t o children, parents, or brothers and sisters
(e.g. salaried employees in Czechoslovakia and miners in Germany),
or t o a n y person or persons who have paid t h e funeral expenses
(e.g. Austria : workers; Greece : tobacco workers; Poland : miners
in Southern Provinces). I n the Netherlands t h e miners' scheme
limits t h e possible claimants t o t h e surviving wife or husband,
or, if there is none, t o children of under sixteen years.
I n t h e case of lump sums awarded, in commutation of pension,
possible claimants are always restricted to the widow or widower
or other members of the insured person's family who may be
assumed b y t h e closeness of t h e relationship t o have been dependent upon him.
Where this definition is most generously interpreted, it includes
not only the widow and orphans, but also, failing them, the parents,
brothers and sisters of the deceased, as in Austria (salaried
employees), Brazil, Czechoslovakia (workers), France (salaried
employees in Alsace-Lorraine), Germany (salaried employees) and
Uruguay.
I n Belgium (workers), Czechoslovakia (salaried employees),
France (employed persons), Greece (tobacco workers), Poland
(intellectual workers) and Yugoslavia (salaried employees in
Slovenia and Dalmatia) only parents may claim t h e lump-sum
payment failing a widow or orphans.
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RISKS COVERED AND CASH BENEFITS
I n Czechoslovakia (miners), France (miners), Hungary (miners),
Italy (employed persons) and the Netherlands (miners), a lump
sum at death is payable only t o the widow or orphans. The
Italian law, however, provides t h a t t h e invalid husband of an
insured woman may also claim payment of this sum.
The fact of relationship t o the deceased close enough t o warrant
the assumption of dependency does not, however, automatically
entitle the person concerned to the guaranteed payment.
I n the first place, such sums are in fact payable only in a n
order of priority prescribed by law as follows : widow, or, failing
her, orphans, and, failing claimants belonging to these two
categories, parents or brothers and sisters.
I n the second place, proof is sometimes required t h a t t h e
assumption of economic dependency on the deceased is in fact
justified. This condition, however, is exceptional in respect of
the widow and orphans. Thus, in Czechoslovakia (workers),
France (miners), Greece (tobacco workers) and the U. S. S. R.,
a widow must be elderly or disabled or burdened with family
responsibilities in order t o claim a pension, whereas her right
t o a lump-sum payment on t h e death of t h e insured person
is independent of these three conditions. I n Hungary (employed
persons), on the other hand, the award of a lump sum at death
is strictly governed by the criterion of need, however close t h e
relationship of the survivors t o the insured person. B u t as a
general rule proof of actual dependency on the deceased is not
required unless, failing widow and orphans, t h e sum reverts t o
grandchildren or foster-children, or t o t h e parents or brothers
and sisters of the deceased; such is the case in Austria (salaried
employees), Czechoslovakia (workers and salaried employees),
France (employed persons), Germany (salaried employees), Poland
(intellectual workers) and Yugoslavia (salaried employees in
Slovenia and Dalmatia).
Finally, a few laws merely stipulate t h a t parents or brothers
and sisters shall be entitled to benefit only if there are no widow
or orphans, b u t automatically assume dependency on the deceased
provided t h a t the survivors satisfy t h e required conditions of
relationship, e . g . Argentina (all schemes), Brazil (staffs of
public utility undertakings), France (salaried employees in AlsaceLorraine), Greece (tobacco workers), a n d Uruguay (bank a n d
Stock Exchange staffs).
Some representative examples of the various forms in which
CONDITIONS OF AWARD OF CASH BENEFITS
193
the conditions of award of lump-sum payments on death may be
combined are given below.
Czechoslovakia : Workers : a lump sum is payable if the insured person
leaves no survivors entitled to a pension, either because he dies before the
completion of the qualifying period or because the survivors do not fulfil
the personal conditions prescribed by law ; the lump sum is payable in the
following order of priority : widow or widower ; children (including grandchildren), children born out of wedlock, adopted children, foster-children
and stepchildren; parents, brothers and sisters. The parents or brothers
and sisters of the deceased have no right to the indemnity unless they were
mainly supported by the deceased.
France : Employed persons : the lump sum is paid t o the widow or widower,
or to the descendants, or, failing them, to the ascendants who were dependent
upon the insured person at his death.
Germany : Salaried employees : a lump sum is payable only to the survivors of an insured woman if the latter dies after having completed the
qualifying period, but before receiving an invalidity or old-age pension,
and without leaving survivors entitled to such pension; it is paid in the
following order of priority : husband, children, parents or brothers and
sisters living in the insured woman's household or to whose maintenance
yhe substantially contributed.
Italy : Employed persons : the lump sum is paid in the following order of
priority : widow or invalid widower; children under 15 years.
§ 3.—Benefits for w h i c h the Insured P e r s o n
H a s Voluntarily Made Provision
A number of laws under which the old-age pension is formed by
t h e system of accumulating contributions in individual accounts
leave t h e insured person t h e faculty of earmarking p a r t of t h e
contributions normally devoted t o covering the risk of old age
to cover t h a t of death.
Where t h e law gives t h e insured person this exceptional right
t o provide additional benefits for his dependants, it also allows
him, as a general rule, t o nominate the beneficiaries.
Under t h e employed persons' scheme in France, t h e insured
person is free t o have all contributions towards the constitution
of his old-age pension paid into a repayable account, thus ensuring
t h a t in the event of his death t h e worker's and employer's contributions standing to his individual credit shall be repaid without
interest t o his dependants. The insured person may, of course,
himself nominate the person to whom repayment is to be made,
subject only t o the restrictions laid down by law and judicial
practice in respect of t h e right of disposal by gift or will (Civil
Code, Book I I I , Title 2, sections 893 et sqq.). Should an insured
person who had contributed on t h e repayable capital system
die intestate, the capital reverts to his dependants in accordance
13
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RISKS COVERED AND CASH B E N E F I T S
with the provisions of the Civil Code (Book III, Title 1). Further,
any insured person claiming an old-age pension which has been
constituted on the alienated capital system may ask that the
accumulated capital be used to form a pension, 50 per cent.
of which reverts to his wife, should she survive him, on attaining
the age of fifty-five. The pension of an insured person taking
advantage of this provision is reduced by 10 to 20 per cent.
according to the age of the wife or husband at the date when
the pension is claimed. The reduction is final and irrevocable
even if the wife or husband dies during the insured person's own
lifetime.
In Chile and Spain, again, the insured person is allowed some
option in the disposal of his pension, but only in respect of the
payment of his personal contributions on the repayable capital
system.
In Belgium the option of contributing on the repayable capital
system is allowed only to insured women, who, if they are married,
may dispose of the capital thus reserved only in favour of their
husbands.
The number of schemes which allow the insured person to
reserve part of his insurance contributions in favour of dependants
nominated by himself is therefore very restricted, and, with the
exception of the provision of the French Act authorising the
constitution of an old-age pension 50 per cent, of which may
revert to the wife, the amount of the sums that may thus be
reserved is no less limited.
C—FORFEITURE, SUSPENSION
AND
OF RIGHT TO BENEFIT
LAPSE
The conditions for the forfeiture, suspension or lapse of the
right to benefit laid down in most social insurance laws fall into
five groups :
(1) Voluntary intervention of the insured person in the causation of the event insured against or attempt to defraud the insurance institution. A typical example of this is wilful self-injury,
although this is very rare in actual practice. Cases in which
the risk originated in the commission of some crime, misdemeanour
or particularly serious offence also fall under this head.
(2) Coincident rights to an invalidity, old-age or survivor's
pension and to benefit either under the accident compensation
CONDITIONS OF AWARD OF CASH B E N E F I T S
195
scheme or under another social insurance scheme. Coincident
rights to insurance benefits may be prohibited wholly or in part
if they have a common cause and object (e.g. compensation for
invalidity) or if the sum of such benefits would exceed the extent
of the loss which social insurance aims at compensating.
(3) Maintenance of the beneficiary at public expense. Insurance benefits are automatically suspended if the insured person
is admitted to an institution, since he is then no longer obliged
to support himself, but a part of the benefits continues to be paid
to the persons actually dependent on the beneficiary.
(4) Possession of an income exceeding specified limits. As a
general rule, insurance benefits are due irrespective of the presence
of actual need on the part of the beneficiary, and the financial
situation of claimants to pensions is investigated only in order
to confirm their dependency on the insured person (e.g. for the
award of a widower's pension). Nevertheless, a few laws make
the granting of part of the insurance benefits conditional on the
insufficiency of the insured person's private means and provide
for the partial suspension of benefit where such means exceed a
specified limit.
(5) Finally, the right to benefit may be forfeited or suspended
wholly or partly for failure to satisfy conditions as to nationality
or residence in the country responsible for payment.
As the latter case is to be dealt with in a separate volume,
only the first four groups are considered below.
§ l.—Responsibility of the Insured Person
for the Occurrence of the Event Insured against;
Attempts to Defraud the Insurance Institution
The provision that an insured person who is himself responsible
for the occurrence of the event insured against shall forfeit his
insurance rights is more or less general. As a rule, forfeiture is
prescribed in the event of fraudulent conduct towards the
insurance institution, e.g. wilful self-injury, or if invalidity is
due to the insured person's having committed some crime,
misdemeanour or very serious offence, but the definition of
the reasons for forfeiture vary greatly from one country to
another.
British legislation gives the insurance institution the right to
exclude entirely or partially any invalidity which is due to
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RISKS COVERED AND CASH BENEFITS
misconduct on the part of the insured person, such as drunkenness, foolhardiness or wilful self-injury.
In France (employed persons) no cash benefit is granted for
sickness, injuries or infirmities due to the wilful fault of the
insured person. In this case his rights are forfeited automatically, not because he voluntarily caused the event insured against
to happen, but because it did occur as a result of a premeditated
misdemeanour, that is, there was a deliberate and direct desire
to commit that misdemeanour. Benefits cannot be granted
when the sickness or infirmity is due to some crime or misdemeanour or to an offence which, while not coming within the scope
of the Penal Code, is still of a very serious nature.
In Germany no pension, in principle, is granted to an invalid
who has wilfully caused his infirmity. It is not necessary that
the insured person should have had the intention to do so;
he forfeits his rights if he wilfully exposed himself to the risk
by committing, for example, attempted suicide. The same rule
is applied in Czechoslovakia. Under the German law, nevertheless, benefits may be granted only after an enquiry and a
special decision by the insurance institution, if the infirmity is
due to some crime or misdemeanour; the insured person has the
right to appeal against a refusal. Similar provisions exist in the
Netherlands.
The forfeiture of the right to benefit in the case of fraud at the
expense of the insurance institution, with a view to illegally
obtaining or maintaining benefits, is generally provided for by
stating that if the insured person refuses to submit to a statutory
medical examination or declines without valid reason to undergo
curative treatment which might at least partly remove this invalidity, his pension will be withheld. In this case it is presumed
that there is intent to defraud the insurance institution and that
consequently the benefit hitherto paid may be withheld.
§ 2.—Coincident Rights
The total or partial suspension of benefit with a view to prohibiting or limiting coincident rights resulting from the occurrence
of several events covered by a single social insurance scheme or
of a single event covered by several schemes (e.g. loss of working
capacity entitling the victim to compensation under both accident
insurance and invalidity insurance) is governed by a somewhat
CONDITIONS OF AWARD OF CASH BENEFITS
197
complex series of provisions. Apart from some exceptional
situations, which are nevertheless met with in practice, the
prohibitions or limitations of coincident benefits may be classified
as follows :
In Germany (all schemes) and the U. S. S. R., when a beneficiary is entitled to claim benefit from the social insurance
institutions on several counts, only the highest benefit is payable.
In Luxemburg (workers) the benefits due on account of one
of the risks covered, i.e. old age, invalidity or death, may not
be paid simultaneously with those due on account of another
risk covered by the same insurance scheme, that is to say, a
widow's pension may not be awarded coincidently with an
invalidity pension.
This rule also applies where the same case of incapacity would
give rise both to compensation under accident insurance and to
a pension under invalidity, old-age and survivors' insurance.
Nevertheless, where an invalidity pension is granted on account
of one infirmity and compensation on account of another, which
would not by itself entitle to an invalidity pension, the pension
is payable in so far as, when added to the compensation, it does
not exceed seven times the basic amount in the case of an invalidity pension or three and a half times the basic amount in the
case of a survivor's pension.
In the Netherlands the employed persons' scheme prohibits
coincident rights arising out of several risks covered by that
scheme. There is, however, no restriction on the award of
benefits under the general invalidity, old-age and survivors'
insurance scheme concurrently with benefits due as a result of
an industrial accident.
Czechoslovak law allows the coincident payment of benefits
by more than one social insurance scheme within certain limits.
Under the workers' scheme the simultaneous payment of benefits
acquired under invalidity, old-age and survivors' insurance and
benefits from other social insurance schemes is permitted only
if the total of the sums granted does not exceed the average
wage earned by the beneficiary during the hundred weeks preceding the award of the pension. When the amount of the benefits
acquired under invalidity, old-age and survivors' insurance for
workers on the one hand and salaried employees', miners' and
accident insurance on the other exceeds the said wage, the reduction required to bring the total benefits within the legal limit
198
RISKS COVERED AND CASH BENEFITS
is effected in the workers' insurance pension, all the elements of
which undergo the same; percentage of reduction. The miners'
scheme allows the coincident payment of accident compensation
and of an invalidity pension only if the two benefits taken together
do not exceed two-thirds of the wage on which the accident
compensation is based, or 75 per cent, of the wage received by
workers of the same occupational group during the year preceding
the occurrence of the invalidity, whichever is the more favourable
to the insured person. Under the salaried employees' scheme
coincident rights to benefit and pensions due as the result of an
industrial accident are allowed only if the total amount of the
two pensions does not exceed the average salary earned by the
insured person during a period immediately preceding the occurrence of the event giving rise to benefit, fixed in principle at
sixty months.
In Italy (employed persons) and Luxemburg (salaried
employees) the pension paid for invalidity resulting from an
industrial accident which also entitles the victim to benefit
under accident insurance legislation is reduced by the amount
necessary to ensure that the two pensions together shall not
exceed the wage previously drawn by the insured person.
In France (workers in Alsace-Lorraine) the invalidity pension
is suspended if the pensioner receives an accident pension and
if the sum of the two amounts is more than seven and a half
times the basic amount of the invalidity pension; only that
fraction of the invalidity pension which exceeds that sum is
suspended. A widow's pension is suspended if the pensioner
receives an accident pension and if the two together exceed
three and a half times the basic amount of the invalidity pension.
The same applies to orphans' pensions, when the limit is three
times the basic amount.
In British legislation it is provided that if the compensation
due under the Workmen's Compensation Act is less than the
invalidity insurance benefit, the latter shall be payable to the
extent of the difference between it and the accident compensation.
If the compensation cannot be recovered because of the insolvency of the person responsible for payment, the victim regains
his full rights under invalidity insurance.
The French employed persons' scheme merely provides that
injury resulting from an industrial accident does not entitle the
worker to benefit under general invalidity insurance.
CONDITIONS OF AWARD OF CASH BENEFITS
199
§ 3.—Means Limit
As already stated, provisions for suspending the right to
benefit on account of the amount of the insured person's income
are quite exceptional and the withdrawal of benefit for this
reason is only partial.
Apart from schemes under which the right to benefit is conditional on the claimant's being in necessitous circumstances—a
condition usually required for the award of widowers' or parents'
pensions—the personal income of the pensioner may involve
reduction of benefit only in the following counties : Czechoslovakia (workers), Luxemburg (salaried employees), Sweden and
Switzerland (Basle-Town).
In Czechoslovakia the State subsidy provided for under the
workers' scheme is not payable if the income of the pensioner,
excluding social insurance benefits, exceeds the limit for exemption from taxation. This subsidy is also withdrawn if the pensioner is entitled on another count to an allowance out of public
funds, unless such an allowance is less than 500 Kc. a year.
In Luxemburg (salaried employees) an annual supplement is
paid out of State funds only to pensioners whose income does not
exceed 15,000 francs.
In Sweden, under the national scheme, the bonus payable
to an invalid in addition to the annuity resulting from the value
acquired by the paid-up contributions is reduced, in the case of
pensioners with an annual income exceeding 50 crowns, by
six-tenths of the excess.
In Switzerland (Basle-Town) the pension guaranteed by the
insurance institution is supplemented in order to bring it up
to 480 francs a' year in the case of pensioners whose monthly
income (excluding pension) does not exceed 125 francs a month,
if the person concerned lives alone, and 225 francs if the person
is married and lives with his wife.
§ 4.—Disappearance of Circumstances for which the
Pension Was Granted
The cessation of the condition on account of which benefit was
awarded, e.g. the removal of invalidity, invariably entails the
suspension of benefits. Similarly a widow's or invalid widower's
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(RISKS COVEBEE' AND CASH BENEFITS
pension ceases to be payable on remarriage. The only exception
is provided by Belgium, where the widow receives an annuity
purchased with a proportion of the accumulated value of the
contributions paid. This annuity is maintained even in the case
of a second marriage.
§ 5.—Maintenance of Beneficiary at Public Expense
As a general rule, benefits are suspended when the insured
person is maintained at public expense, since in such cases the
insured person is not required to support himself. Nevertheless,
part of the benefits continues to be paid to the persons dependent
on the pensioner. The provision that the benefits due to the
insured person may, when he is undergoing hospital treatment
for example, be paid to his dependants, is met with notably in
British, German and Czechoslovak legislation.
CHAPTER III
COMPUTATION OF CASH BENEFITS
The methods of computing cash benefits and their amount
naturally vary with the essential object of the insurance, which
depends on whether or not the legislature regards it as necessary
to connect the benefits accorded with the number of contributions
paid, that is, with the duration of the provident effort made by
the insured person.
According to one view, the object of insurance is to provide
the worker or his family with a standard of living equal to that
enjoyed prior to the materialisation of the risk. If such a
standard is to be maintained, the compensation given must be
equal to the income lost; in case of old age or complete invalidity
the pension must equal the insured person's occupational earnings
immediately before materialisation of the risk, and in case of
death the total pension paid to the widow, children and other
dependants of the insured person must equal that part of his
earnings which he would normally have continued to devote to
their support.
The economic consequences of the materialisation of the risk
would thus be fully compensated. This conception has, however,
never yet been put into practice. It is considered that its application would in the first place require such enormous resources
as to be out of the question, and in the second place lead inevitably to grave abuses, such as malingering and voluntary unemployment; for a person who received full and complete compensation for the loss he suffered would have no interest either in a
rapid cure or in finding employment, since his income would
be the same whether he were working or idle.
But these objections disappear if part of the loss entailed by
materialisation of the risk is borne by the party concerned. In
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RISKS COVERED AND CASH B E N E F I T S
this way the expense of benefits is kept down, and malingering
and voluntary unemployment are discouraged, while the insured
person or his survivors are maintained at a standard comparable
with that which they previously enjoyed. This is partial compensation, proportionate to the economic consequences of the materialisation of the risk. The proportion of the loss for which
compensation is given depends both on the available resources
of the insurance scheme and on the fraction of the risk which
it is considered advisable to allow the insured person to bear in
order that abuses may be prevented.
According to a second view, the object of insurance is to
guarantee the worker and. his family a certain standard of living,
not depending on earnings before materialisation of the risk, but
determined according to the needs which it is regarded as essential
to satisfy. Compensation is in this case not proportionate to the
loss suffered, but simply sdms at providing for the bare necessities
of life.
According to a third view, the amount of benefit should be
proportionate to the intensity and duration of the provident
effort made. Compensation is in this case proportionate to the
accumulated value of the contributions paid, and is thus equivalent to a postponed fraction of wages which has accumulated
on a strictly individual basis and is paid out on materialisation
of the risk.
Each of these views inspires a corresponding benefit system :
(1) benefits to compensate for the loss suffered : these are
computed according to the insured person's earnings,
which are the most tangible element in the loss; such
compensation may be complete or partial;
(2) benefits to guarantee the necessities of life : these are
fixed and uniform for all persons affected by the materialisation of the same risk;
(3) benefits proportionate to the intensity and duration of the
provident effort : these depend on the number and rate of
the contributions paid.
Whatever the principle on which benefits are based, their
amount may be influenced, to a degree varying with the nature
of the risk, by various secondary factors such as the insured
person's occupation, exceptional services rendered by him,
permanent dependency on the help of another person, family
COMPUTATION OF CASH BENEFITS
203
responsibilities, and the maximum benefit payable in respect of
one insured person.
The respective merits of the types of benefit corresponding to
the three above-mentioned views of the proper object of insurance
will be first discussed; the part played by the various types in
the compensation provided for in national schemes will be next
described; schemes will then be classed according to imethods
of computing benefits; and, lastly, the influence of secondary
factors (family responsibilities, etc.) will be dealt with.
A.—TYPES OF BENEFIT AND
RESPECTIVE
MERITS
THEIR
§ 1.—Fixed Benefits
It is argued in support of fixed benefits that they do not
remove the worker's incentive to save and sense of personal
responsibility, that they cost comparatively little, and that they
are easily administered. On the other hand, they have the
disadvantage that the compensation provided is not adaptable
to the loss suffered.
ENCOURAGEMENT OF THRIFT
If the statutory benefit covers only the primary and most
urgent needs, and if each person is free to insure more generously
in accordance with his personal wishes and resources, workers
whose earnings are appreciably greater than their expenses
sometimes obtain additional cover by private insurance, with
which the State is not concerned, and the benefits so provided
are added to the statutory benefits under the compulsory scheme.
But the same psychological effect should operate where the
compensation is proportional to the loss of earnings but only
partial. It would be interesting therefore to know the extent
to which insured persons use such supplementary schemes where
statutory benefits vary with former earnings, and where they are
fixed, respectively.
Social insurance schemes thus appear likely to keep alive and
even develop the spirit of thrift and the sense of personal responsibility; but the merit of doing so cannot be claimed exclusively
for fixed benefit schemes.
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BISKS COVERED AND CASH B E N E F I T S
SMALLER COST
The cost of schemes with uniform benefit rates depends on t h e
minimum standard of living which is t o be secured t o t h e insured
person. As such a standard cannot be higher t h a n t h a t of t h e
least skilled workers, it is obvious t h a t fixed benefit schemes cost
less. The low level of benefit means t h a t t h e importance of
pensions t o workers whose earnings are considerably higher t h a n
those of t h e unskilled workers is often correspondingly small.
Suppose t h a t the earnings of a skilled worker are three times as
great as those of the unskilled worker, and t h a t pensions are fixed
a t two-thirds of t h e latter's earnings; t h e n t h e unskilled worker
will be compensated for two-thirds of his loss, and t h e skilled
worker for less t h a n one-quarter only. The lower t h e earnings
of t h e worker concerned, the higher is t h e proportion compensated
for by the pension; and the more t h e worker's previous earnings
exceed t h e imaginary necessary minimum which is taken as basis
for the pension, the lower is t h e proportion compensated for. This
is t h e price which has to be paid for t h e smaller cost of fixed
benefit schemes.
I n t h e case of very low earnings, however, t h e pension compensates for a large proportion of t h e loss suffered; t h e danger of
abuse which arises whenever compensation approximates t o t h e
loss then returns, and frequent applications for benefits from
certain categories of workers m a y then markedly increase t h e
cost of t h e scheme.
E A S Y ADMINISTRATION
The existence of a uniform benefit rate undoubtedly simplifies
t h e administration of the scheme, firstly because it is not necessary t o follow all t h e fluctuations of insured persons' earnings,
and secondly because of the elimination of a factor of potentially great influence, which tends t o introduce uncertainty in
regard t o financial equilibrium.
I n schemes in which benefit varies with previous earnings, it
is necessary for t h e fluctuation of each insured person's earnings
t o be followed in order t h a t contributions may be checked and
benefits computed. There is no doubt t h a t t h e work of recording
wages, keeping the contribution cards or books up t o date and
COMPUTATION OF CASH BENEFITS
205
computing benefits complicates administration, and that the
variations—practically incalculable as they are—in the volume
of wages insured may gravely menace the financial equilibrium
of the scheme.
The ease with which fixed benefit schemes may be administered
is of particular importance where they are to be applied with
retrospective effect. In this case the period passed in employment before the scheme was introduced counts, for the purpose
of qualification for benefit, as a period of insurance; if benefits
are fixed, the very considerable difficulties involved in establishing the wages earned during long periods by workers benefiting
by the retrospective operation of the scheme are avoided.
LACK OF ADAPTABILITY TO BENEFICIARY'S NEEDS
The lack of adaptability of fixed benefit schemes to the needs
of insured persons and to the loss suffered clearly results from the
method employed in fixing pensions. Since, as has been said,
the latter are limited by the earnings of the lowest-paid group
insured under the scheme, they cannot exceed, or in practice
even equal, the wages of unskilled workers. The compensation
guaranteed by such schemes cannot therefore be more than
partial in the case of workers whose earnings exceed the minimum
taken as necessary for subsistence, and therefore as the basis for
compensation. The proportion of the loss compensated is thus
highest where wages are lowest, and the loss is covered in inverse
ratio to its size.
§ 2.—Benefits Varying with Wage Loss
Schemes in which benefit varies with the earnings lost are
often considered as preferable to fixed benefit schemes, firstly
because they make it possible to ignore the means of the insured
person or his survivors in granting pensions; secondly because
they enable benefit to be better adapted to the needs of the
recipients; and thirdly because, from the technical point of view,
they can be progressively improved until they provide the
fullest possible compensation for the economic consequences of
the materialisation of the risk.
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RISKS COVERED AND CASH BENEFITS
P A Y M E N T OF B E N E F I T I R R E S P E C T I V E OF B E N E F I C I A R Y ' S
MEANS
I t is true t h a t schemes in which compensation is proportionate
t o loss of earnings may in theory ignore t h e means of the recipient
of benefit ; b u t this advantage applies equally t o systems guaranteeing the bare necessities of life. I n each case compensation is
given for a loss, the reality of which is not affected by t h e degree
of need in which the insured person may find himself. When
benefit is computed by applying t o previous earnings either a
percentage of incapacity or the percentage of earnings presumed
to have been devoted lby the insured person t o the support of
his family, t h e object is t o measure the real extent of the loss for
which compensation is to be granted. When, on the other hand,
these percentages are applied t o t h e sum required to provide t h e
minimum standard of living, an imaginary minimum wage is
substituted for real earnings, and compensation is granted for
t h e loss t h u s measured, irrespective of its real extent. Whatever
t h e degree of need of the insured person may be, however, t h e
payment of benefit is justified, since the right t o benefit exists
independently of the rules by which t h e amount of benefit is
calculated. Thus it would be untrue t o state t h a t schemes which
proportion compensation t o wage loss permit benefit t o be paid
even if no actual need is present, b u t t h a t fixed benefit schemes
do not.
I n practice, however, all social insurance schemes make t h e
right to certain benefits (widowers' pensions, for instance)
dependent on the means of the claimant, whatever t h e method
of computation used.
ADAPTABILITY TO B E N E F I C I A R Y ' S
NEEDS
There is no doubt t h a t benefits varying with wage loss are
more easily adaptable t h a n others t o t h e needs of t h e insured
person, or, more exactly, t o the loss for which compensation is t o
be granted; t h e extent of this loss must depend on the wages or
income prior t o materialisation of the risk, though it is influenced
b y many other factors also. W h a t t h e disabled person or the
widow and orphans really lose is the total sum which would have
been earned and devoted to the support of the family concerned,
COMPUTATION OF CASH BENEFITS
207
if the risk had not materialised; and so, to gauge the full loss, the
future must be taken into account. This is never done. In
practice, the basis of computation is past wages—either those
received during a period immediately preceding the materialisation of the risk or those of the whole working career during
which contributions were paid; and these wages are the basis
for computing a pension payable either for life or, if an age limit
or the disappearance of the circumstances for which the pension
was granted put a term to it, for a certain period. There is
therefore an arbitrary element even in benefit computed according
to previous earnings. It so happens that this element makes for
better adaptation to the needs of the recipients. It has been
pointed out already that if the duration of a pension were limited
to the period during which the insured person would normally
have been able to draw his wages and support his family, the
right to such pension would often lapse at the very moment
when the recipient, because of his or her age, most needed it
(see above, p. 165).
It can, however, be held as an objection to benefits varying
with previous earnings that they sometimes mean the payment
of extremely small pensions to low-wage earners; pensions
which are not sufficient and which are lower than a fixed
benefit scheme at equal cost would have been able to pay.
A pension equal to half a high wage may indeed be of substantial amount and allow the recipient a livelihood, but the same
proportion of the lowest wage will hardly provide its recipient
with the bare necessities of life. On the other hand, a fixed
benefit scheme will, for the same expense, allow pensions equal
to two-thirds, or even three-quarters, of the lowest wage to be
paid in all cases.
These may be valid arguments, but it cannot be concluded
that the system of making benefits vary with earnings is and
must remain inferior. The disadvantages mentioned could be
overcome if pensions were made to contain a basic sum independent of earnings; and there is no reason why pensions should
not be computed on a sliding scale, the proportion of earnings
to be paid in benefit decreasing as earnings increase.
It seems indisputable that only schemes which give compensation in proportion to loss are, from a technical point of view,
capable of progressive improvement until they afford the fullest
and widest compensation possible for the economic consequences
208
RISKS COVERED AND CASH BENEFITS
of materialisation of the risk. On the other hand, under fixed
benefit schemes, the more the earnings of a worker exceed the
minimum of subsistence or the imaginary basic wage, the smaller
is the proportion of the compensation to his loss.
§ 3.—Benefits Varying with Length of Contribution
Period
Whatever the basis (minimum of subsistence or wages before
materialisation of risk) taken for their computation, benefits
may vary with the length of the contribution period. Some
restitution would thus be made to the individual for his participation, as a working member of the community, in the collective
effort to save and to provide support for others. The sum to be
restituted must obviously depend on the amount and duration
of the contributions made to cover the risk; and so the
importance assigned to the length of the contribution period
is justified.
Nevertheless, the practical value of this system depends on the
nature of the risk under consideration.
Of the three risks—old age, invalidity and premature death—
the first has a distinctive characteristic in respect of possibility
of materialisation. When a worker becomes insured undei
normal conditions, that is, at the outset of his occupational
career, he insures against a distant event, the occurrence o<
which cannot take him by surprise, since the date is fixed ir
advance.
Invalidity and premature death can, on the other hand, occui
at any moment in a worker's career, and in the case of a mai
with family responsibilities their results are likely to be the more
serious the younger he is.
Old-age insurance is thus somewhat in the nature of a saving!
scheme, in that the worker has the whole of his working life ii
which to prepare for the event. The object of covering this risi
by compulsory insurance is simply to oblige the worker, hi¡
employer or the public authorities to pay sums which will ulti
mately entitle the worker to claim a pension commensurate t(
some extent at least with the length of his service and the amoun
of contributions paid.
There is a great objection to applying this method to the
covering of the risks of invalidity and death. Persons who hav<
COMPUTATION OF CASH BENEFITS
209
been insured for short periods only are not sufficiently covered;
the small amounts they have contributed mean that the benefits
due to,them are more or less insignificant.
It is indeed essential, if there is to be sufficient cover for risks
which, by nature, may materialise regardless of age or period of
insurance, that the benefit—or at least a substantial part of it—
should not vary with the length of the contribution period. To
this end, the resources made available must be sufficient to cover
the risks of invalidity and death, either (as in private insurance)
by benefits completely independent of the period of insurance or
by benefits comprising a fixed basic sum, large enough in itself
to provide compensation worthy of the name, and an increment
varying with contributions paid.
The comparatively high level of benefits paid in case of premature invalidity or death would then make up for the possibility
that the insured person might, during his working life, pay a
considerable sum in contributions in order to obtain cover for
a risk which may materialise very late (death) or not at all
(invalidity).
It may be objected that such a system is onerous, and that its
benefits, being high and to, a large extent at least independent
of the period of insurance, will encourage abuses.
These two objections are not ill-founded, though the facts on
which they are based are inherent in all insurance of the type
under discussion. If it is desired to cover a risk satisfactorily,
and not to be content with nominal benefits, the price must be
paid; and there will always exist a marked inclination to take
advantage of high rates of benefit.
A well-organised prevention service will diminish the number
of instances of premature invalidity and death, which are already
infrequent, so that the increase in the cost of insurance entailed
by the covering of these risks regardless of the period of contribution can be reduced, and will be smaller than is generally
expected.
Moreover, the fact that the payment of large benefits irrespective of the period of contribution encourages abuse is not
alone a sufficient objection to the introduction of such a system.
By means of sufficiently strict supervision, it is quite possible
to reduce such abuses to a minimum—a course which, it is
hardly necessary to point out, is in the interests of the insured
persons.
11
210
RISKS COVERED AND CASH BENEFITS
B.—COMPUTATION
OF BENEFITS
IN NATIONAL
LAWS
The various types of benefit which have just been examined
and appraised may be combined in many ways. The individual
or combined influence of wages and contribution period varies
first of all with the respective definition of each of these factors
(wages may, for instance, mean either final or average wages,
and contributions may mean either the total paid or the total
paid plus interest) ; and such influence varies secondly with the
weight which the scheme concerned gives to each of these factors
in the computation of pensions. In most cases pensions are
composed of a fixed sum, the right to which is acquired on
completion of the qualifying period, and a fraction dependent
either on wages and period of contribution or on one of these
factors alone.
The part which wages, period of contribution, and fixed sums,
alone and in combination, play in the computation of pensions
is dealt with in the first place ; there follows an analysis of the
secondary factors which may also influence pensions; and lastly
lump-sum payments at death are classified according to the
method by which they are computed.
§ 1.—Influence of Wages
The wage taken into account in the computation of benefit
may be either the final wage or the average wage earned during
the period of insurance.
The drawback to basing pensions on the final wage lies in the
fact that this may, on account of the age of the insured person
or for other reasons, be considerably lower than the average
earnings on which contributions were paid. To meet this objection one scheme (Austria : salaried employees) which has adopted
this method provides that the pension granted to insured persons
over forty-five years of age must, if this is more favourable to the
beneficiary, consist of two parts, the one in proportion to the
time passed in insurance before forty-five years of age and the
wage earned at that age, the other in proportion to the period
passed in insurance after forty-five years of age and the final
wage.
The part played by wages in the calculation of the pension
COMPUTATION OF CASH BENEFITS
211
varies moreover according as wages are taken to mean actual
individual earnings, or individual earnings within certain fixed
limits, or an approximation to earnings resulting from the distribution of the insured persons into wage classes.
The fixing of a maximum basic wage (maximum earnings on
which benefit is to be calculated) sometimes has a considerable
effect on the importance of the wage factor in the assessment of
pensions, an effect which varies with the method by which the
maximum operates : thus the effect may be obtained by restricting the scope of insurance to persons whose wages do not exceed
a certain level as well as by restricting the wages taken into
account in calculating benefit, whether in conjunction with a
system of wage classes or otherwise.
When it is simply a case of setting an upper limit to wages
for the purposes of entry into, and continuation in, compulsory
insurance, the maximum itself cannot entail under-insurance. It
restricts the benefit of insurance to certain categories of workers.
It is therefore particularly important in connection with the
scope of the scheme, but if no other measure calculated to bring
insurable earnings below actual earnings (division of insured
persons into wage classes or fixing of a maximum for earnings
on which benefit is to be calculated) adds its effect to that of the
restriction on entry into, and continuation in, insurance, the
basic earnings for calculation of benefit will coincide with actual
earnings. Under-insurance is thus impossible, and earnings only
serve as a means of deciding whether a given person does or does
not come under the scheme.
If, on the other hand, the higher limit of the basic wage—a
limit fixed by law expressly or as the result of the distribution of
insured persons into wage classes—is approximately the same as
that earned by an unskilled worker, a large fraction of the insured
persons are grouped in the highest wage class or at the higher
limit of the insurable wage. In such cases under-insurance
takes place, and the very low maximum basic wage has the
same effect for a section of the insured persons as the fixing of
benefit at a flat rate.
Finally, apart from the method adopted for fixing the earnings
on which the computation of the presumed loss is based, the
effect of former remuneration on benefit depends on the proportion of such loss which is to be paid as compensation; this proportion may be invariable, whatever the size of basic earnings,
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BISKS COVERED AND CASH BENEFITS
or may decrease as they increase. For instance, in the latter
case all loss lying between 1,000 and 2,000 wage units would be
covered to the extent of 50 per cent., while a loss of the same size
lying between 10,000 and 11,000 wage units would be covered
to the extent of 10 per cent, only, as in Brazil (staffs of public
utility undertakings), Cuba (seamen and harbour workers) and
Uruguay (staffs of public utility undertakings).
Schemes in which Pensions Vary with Final Wage
Argentina : staffs of private undertakings of public utility and bank staffs ;
Austria : workers and salaried employees ; Brazil : staffs of public utility
undertakings ; Chile : workers, invalidity risk ; Cuba : seamen and harbour
workers; Uruguay : staffs of public utility undertakings, and bank and Stock
Exchange staffs : 17. S. S. R. : employed persons; Yugoslavia : miners.
Schemes in which Pensions Vary with Average Wage
during Contribution Period
Belgium : workers and salaried employees; miners (old-age and death
risks) ; Chile : workers, old-age risk ; Czechoslovakia : workers and salaried
employees; France : workers and salaried employees in Alsace-Lorraine;
employed persons ; miners (old-age risk) ; Germany : workers, salaried
employees and miners ; Hungary : employed persons ; Italy : employed
persons; Luxemburg : workers and salaried employees; Netherlands :
employed persons; Poland: intellectual workers; workers in Western Provinces and Upper Silesia; Rumania : miners in Ardeal; Sweden : national
scheme.
Schemes which Fix a Maximum for Insurable Earnings
By Dividing Insured Persons into Wage Classes
Austria : workers, agricultural workers and salaried employees ; Belgium :
workers, salaried employees and miners; Bulgaria : employed persons;
Czechoslovakia : workers and salaried employees ; France : employed persons ;
workers and salaried employees :in Alsace-Lorraine; Germany : workers,
salaried employees and miners; Hungary:
employed persons;
Italy:
employed persons ; Netherlands : employed persons ; Poland : intellectual
workers; workers in Western Provinces; miners in Upper Silesia; Sweden :
national scheme ; Yugoslavia : miners ; salaried employees in Slovenia and
Dalmatia.
By Limiting the Amount of Pensions
Argentina : staffs of private undertakings of public utility and bank
staffs; Brazil : staffs of public utility undertakings; Cuba : seamen and
harbour workers ; France : miners (maximum determined by wages on
which contributions were based) ; Uruguay : staffs of public utility undertakings and bank and Stock Exchange staffs; U. S. S. R. : employed persons.
§ 2.—Influence of Period of Contribution
The influence of the length of the contribution period varies
according as, on the one hand, the value attached to each contribution unit is constant and unaffected by the interval between
its payment and the date when the risk matures, or, on the
COMPUTATION OF CASH BENEFITS
213
other hand, this value changes with the length of time during
which the unit may accumulate at interest. In the second case
each contribution unit is generally multiplied by a coefficient of
accumulation depending on the rate of interest and the demographic statistics on which the financial equilibrium of the
institution was calculated, or by some other coefficient more or
less closely resembling the former. For example, at the 5 per
cent, rate allowed by the French National Old-Age Pension
Fund, the pension produced at sixty years by a given contribution is five times as great when the contribution is paid between twenty and twenty-one years as when it is paid between
forty-nine and fifty years. In the Swedish national scheme the
ratio between the benefits acquired by the payment of contributions at the same ages is a little lower, being roughly 4 : 1 . The
difference is much less in the case of the salaried employees'
scheme in Alsace-Lorraine, where the pension is equal to a quarter
of the first 120 monthly contributions, one-sixth of the next 120,
and one-eighth of the remainder, the ratio of the values attributed
to the first and to the last contributions thus standing at 2 : 1.
It is obvious that if the coefficient of accumulation is higher
in proportion as the period between payment of a given contribution and the materialisation of the risk is longer, contributions
paid at the beginning of the period of insurance will have the
greatest relative importance, despite the fact that at such an
early stage in the insured person's career his wages were probably
low.
Sometimes, however, e.g. in the miners' scheme in Germany,
the value attributed to contributions (and the fraction of the
pension acquired in respect of each) increases for a certain time,
then remains stationary, and finally decreases. The benefit
system under this scheme therefore gives less weight to the
earliest contributions, which are usually calculated on the basis
of very small earnings and correspond to the beginning of the
career; it gives most weight to contributions based on wages
during the period of full occupational activity, and less again to
contributions made during the last years of the career.
Schemes in which Each Contribution Unit has a Value
Irrespective of the Date on which it was Paid
Argentina : staffs of private undertakings of public utility and bank
staffs; Austria: workers and salaried employees; Belgium: miners, invalidity risk; Brazil: staffs of public utility undertakings; Bulgaria: em-
214
BISKS COVERED AND CASH BENEFITS
ployed persons; Chile : workers, invalidity risk; Cuba : seamen and harbour workers ; Ecuador : bank staffs ; France : workers and salaried employees
in Alsace-Lorraine ; Germany : workers, salaried employees and miners ;
Hungary:
employed persons; Italy:
employed persons; Luxemburg :
workers and salaried employees; Netherlands : employed persons, old-age
and invalidity risks ; Poland : intellectual workers ; workers in Western
Provinces and Upper Silesia; miners in Upper Silesia, Pszczyna fund;
Rumania : employed persons and craftsmen; miners in Ardeal; Uruguay :
bank and Stock Exchange staffs; V, S. S. R. : employed persons, invalidity
and death risks ; Yugoslavia : miners.
Schemes in which Each Contribution Unit
is Given its Accumulated Value
Belgium : workers and salaried employees ; miners, old-age and death risks ;
Chile: workers, old-age risk; France: employed persons, old-age risk;
miners, old-age and death risks ; Spain : employed persons ; Sweden :
national scheme.
§ 3.—Fixed Sums as Benefit
Except in the case of orphans' pensions, it is rare to find a
fixed sum comprising the whole of the pension; on the other
hand, many schemes provide that completion of the qualifying
period gives the right, on materialisation of the risk, to a pension
composed of a fixed sum unconnected with the number and rate
of contributions, and of a fraction varying with wages and the
period of insurance.
Schemes in which Pensimis Comprise a Fixed Sum Only
Belgium : workers, salaried employees and miners : orphans' pensions;
Denmark : persons of small means who are regular members of sickness
funds; France : employed persons : orphans' pensions; miners : invalidity
and orphans' pensions ; Great Britain and Northern Ireland : employed
persons; Greece: tobacco workers;; Irish Free State: employed persons;
Netherlands: miners: orphans' pensions; Poland: miners in Southern
Provinces ; miners in Upper Silesia : orphans' pensions ; Switzerland : cantonal
schemes in the Cantons of Appenzell (Outer Rhodes), Basle Town and
Glarus.
Schemes
in which Pensions Vary with Length of
Period but are Independent
of Wages
Contribution
Belgium: miners: invalidity pensions; Czechoslovakia: miners; Netherlands : miners; Rumania : employed persons and craftsmen; Spain :
employed persons.
Schemes in which Pensions Comprise a Fixed Sum and a Fraction
Varying with Wages and Length of Contribution Period
Austria: workers; Czechoslovakia: workers and salaried employees;
France: workers and salaried employees in Alsace-Lorraine; Germany:
workers, salaried employees and miners; Hungary: employed persons;
Italy: employed persons; Luxemburg: workers and salaried employees;
Poland : workers in Western Provinces and Upper Silesia; Sweden : national
scheme : invalidity pensions.
COMPUTATION OF CASH BENEFITS
215
§ 4.—Classification of Schemes according to Method
of Computing Pensions
The methods of computing pensions under the several schemes
represent a variety of combinations of fixed sums, and factors
varying with wages, length of contribution period, etc. The
schemes are classified below according to the combination they
employ.
I. Schemes in which Pensions Do Not Depend on Wages
or on Length of Contribution Period
(a) Old-Age Pensions
Great Britain and Northern Ireland : employed persons ; Greece : tobacco
workers ; Rumania : employed persons and craftsmen ; Switzerland : national
schemes in the Cantons of Appenzell (Outer Rhodes), Basle Town and
Glarus.
(b) Invalidity Pensions
Denmark : persons of small means who are regular members of sickness
funds ; France : miners ; Great Britain and Northern Ireland : employed
persons ; Greece : tobacco workers ; Poland : miners in Southern Provinces.
{c) Widows' Pensions
Great Britain and Northern Ireland : employed persons ; Poland : miners
in Southern Provinces,
(d) Orphans' Pensions
Belgium : workers, salaried employees and miners ; France : employed
persons and miners ; Great Britain and Northern Ireland : employed persons ;
Netherlands : miners ; Poland : miners in Southern Provinces and Upper
Silesia.
(e) Pensions for Survivors as a Whole
Greece : tobacco workers.
II. Schemes in which Pensions Consist of a Fixed Sum
and a Fraction Varying with Final Wage but Independent
of Length of Contribution Period
Old-Age and Invalidity Pensions
Austria : workers.
III. Schemes in which Pensions Vary with Wages
but are Independent of Length of Contribution Period
(a) Old-Age Pensions
Uruguay:
persons.
staffs of public utility undertakings; U.S. S.R.
: employed
216
RISKS COVEREI) AND CASH BENEFITS
(b) Invalidity
Pensions
Cuba : seamen and harbour workers ; Uruguay : staffs of public utility
undertakings.
(c) Widows' Pensions
Netherlands : employed persons.
(d) Orphans' Pensions
Austria : salaried employees ; Netherlands : employed persons.
(e) Pensions for Survivors as a Whole
Uruguay : staffs of public utility undertakings.
IV. Schemes in which Pensions Vary with Average Wages
and with Age of Entry into Insurance
France : employed persons.
V. Schemes in which Pensions Consist of a Fixed Sum
and a Fraction Varying with Length
of the Contribution Period, but Independent of Wages
(a) Old-Age Pensions
Czechoslovakia : miners.
(b) Invalidity Pensions
Belgium : miners ; Czechoslovakia : miners ; Rumania : employed persons
and craftsmen.
(c) Widows' Pensions
Czechoslovakia : miners.
(d) Orphans' Pensions
Czechoslovakia : miners.
VI. Schemes in which Pensions Vary with Length of
Contribution Period but, are Independent of Wages
(a) Old-Age Pensions
Netherlands : miners; Spain : employed persons.
(b) Invalidity, Widows' and Orphans' Pensions
Netherlands : miners.
VII. Schemes in which Pensions Vary with Wages
and Length of Contribution Period
The possible combinations of the various elements constituting pensions
under these schemes are divisible into two types : in the one, pensions are
composed of a fixed sum—or, it may be, a certain proportion of wages, the
right to which is secured on completion of the qualifying period—and a frac-
COMPUTATION OF CASH BENEFITS
217
tion varying either with the contributions paid or with the final wage of
the insured person and the length of the contribution period ; in the other
group, the whole pension varies with wages and length of the contribution
period.
Schemes in which pensions vary with wages and length of contribution
period will be classified according to these criteria.
in which pensions comprise a fixed
sum independent of wages and a fraction varying both with
the final wage of the insured person and the length of the
contribution period.
FIRST GROUP.—Schemes
Invalidity, Widows' and Orphans' Pensions
Austria : workers.
SECOND GROUP.—Schemes in
which pensions comprise a fixed
sum independent of wages and a fraction proportionate to
the amount of contributions paid.
Old-Age Pensions
Czechoslovakia : workers and salaried employees; France : workers in
Alsace-Lorraine ; Germany : workers, salaried employees and miners ;
Hungary : employed persons; Italy : employed persons; Luxemburg :
salaried employees ; Poland : workers in Western Provinces and Upper
Silesia.
Invalidity Pensions
Czechoslovakia : workers and salaried employees ; France : workers in
Alsace-Lorraine; Germany : workers, salaried employees and miners;
Hungary : employed persons; Italy : employed persons; Luxemburg :
salaried employees ; Poland : workers in Western Provinces and Upper
Silesia; Sweden : national scheme.
Widows' Pensions
Czechoslovakia : workers and salaried employees ; France : workers in
Alsace-Lorraine ; Germany : workers, salaried employees and miners ;
Hungary : employed persons ; Luxemburg : salaried employees ; Poland :
workers in Western Provinces; miners in Upper Silesia.
Orphans' Pensions
Czechoslovakia : workers and salaried employees ; France : workers in
Alsace-Lorraine; Germany : workers, salaried employees and miners;
Hungary: employed persons; Luxemburg: salaried employees; Poland:
workers in Western Provinces.
Parents' Pensions
Czechoslovakia : salaried employees.
T H I R D G R O U P . — P e n s i o n s comprising a fraction v a r y i n g w i t h
w a g e s b u t i n d e p e n d e n t of l e n g t h of c o n t r i b u t i o n p e r i o d ,
a n d a fraction v a r y i n g b o t h with wages a n d w i t h t h e
218
BISKS COVERED AND CASH B E N E F I T S
length of the contribution period (i.e. with amount of
contributions).
Old-Age Pensions
Austria : salaried employees ; France : salaried employees in AlsaceLorraine ; Luxemburg : workers ; Netherlands : employed persons ; Poland :
intellectual workers; Rumania : miners in Ardeal; Yugoslavia : miners.
Invalidity Pensions
Austria : salaried
in Alsace-Lorraine ;
employed persons ;
Ardeal; Ï7. S. S. R.
employees ; Chile : workers ; Prance : salaried employees
Hungary : miners ; Luxemburg : workers ; Netherlands :
Poland : intellectual workers ; Rumania : miners in
: employed persons; Yugoslavia : miners.
Widows'
PensionsAustria : salaried employees ; France : salaried employees in AlsaceLorraine ; Luxemburg ; workers ; Poland : intellectual workers ; Rumania :
miners in Ardeal ; Yugoslavia : miners.
Orphans' Pensions
France: salaried employees in Alsace-Lorraine; Hungary;
miners;
Luxemburg : workers ; Poland : intelleetual workers ; Rumania : miners in
Ardeal ; Yugoslavia : miners.
Parents' Pensions
Yugoslavia : miners.
Pensions for Survivors as a Whole
U. S. S. R. : employed persons.
comprising a fraction varying with
wages but independent of the length of the contribution
period, and a fraction varying with the length of the contribution period but independent of wages.
FOURTH GROUP.—Pensions
Old-Age and Invalidity Pensions
Bulgaria : employed persons.
F I F T H G R O U P . — S c h e m e s in which pensions v a r y with average
w a g e s a n d l e n g t h of c o n t r i b u t i o n p e r i o d (i.e. w i t h a m o u n t
of c o n t r i b u t i o n s ) .
Invalidity
Pensions
Poland : miners in Upper Silesia.
Widows'
Pensions
Poland : miners in Upper Silesia.
COMPUTATION OF CASH BENEFITS
219
in which pensions vary with length
of contribution period and final wages.
S I X T H GEOUP.—Schemes
Old-Age Pensions
Argentina : staffs of private undertakings of public utility and bank
staffs ; Brazil : staffs of public utility undertakings ; Cuba : seamen and harbour workers; Ecuador : bank staffs; Uruguay : bank and Stock Exchange
staffs.
Invalidity
Pensions
Argentina : staff of private undertakings of public utility and bank
staffs; Brazil : staff of public utility undertakings; Uruguay : bank and
Stock Exchange staffs.
Pensions for Survivors as a Whole
Argentina : staff of private undertakings of public utility and bank staffs ;
Brazil : staff of public utility undertakings ; Uruguay : bank and Stock
Exchange staffs.
in which pensions vary with t h e
accumulated value of contributions.
S E V E N T H GEOUP.—Schemes
Old-Age Pensions
Belgium : workers and salaried employees ; Chile : workers ; France :
employed persons and miners ; Sweden : national scheme.
Widows'1 Pensions
Belgium : workers and salaried employees; France : miners.
GROUP.—Schemes in which pensions comprise a
fixed sum independent of wages and a fraction varying with
the accumulated value of contributions.
EIGHTH
Old-Age and Widows'
Belgium : miners.
Pensions
§ 5.—Supplement w h e r e Constant Attendance
i s Needed
Invalidity or old-age may, apart from t h e loss of earning
capacity which it involves, force the pensioner to have recourse
t o t h e constant help of another person. I n order t o compensate
to some extent for the additional expenditure involved, certain
systems of legislation increase the amount of t h e pension paid
t o insured persons who cannot move, walk, or perform essential
actions without assistance.
220
RISKS COVERED AND CASH BENEFITS
Supplements in respect of the constant help of another person
are provided for as follows :
Austria : Workers : the invalidity pension is increased up to 50 per cent.
Czechoslovakia : Workers : the invalidity pension is increased up to
50 per cent., but this supplement is not a benefit which the insurance
institutions are obliged to pay. Salaried employees : the old-age, invalidity
and survivors' pensions are increased up to 50 per cent. Miners : the invalidity pension is increased up to 50 per cent.
Denmark : Persons of small means who are regular members of sickness
funds : 260 kr. a year.
Poland : Intellectual workers : a supplementary allowance brings the
pension u p to the level of the worker's basic wage.
17. S. S. R. : Employed persons : the invalidity pension is increased u p
to 50 per cent.
§ 6.—Family Bonuses
The usual object of granting bonuses to pensioners with familyresponsibilities is to enable them to support the persons who
were dependent on them before the risk matured. Under the
general scheme in France, however, the bonuses which may be
added to old-age pensions are of a different nature : they are paid
to any insured person who has brought up three children until
the age of sixteen, without regard to the actual family responsibilities of such person on materialisation of the risk. The object
of increasing the pension in this case is to provide partial compensation for the great expense entailed by the children and the
influence of this expense on the ability of the parents to save up
part of their earnings for their old age. In schemes which cover
both old age and invalidity, the bonuses for family responsibilities
are generally added in the same way both to invalidity and to
old-age pensions. Exceptions to this rule will be met with in
France (employed persons), Great Britain and Northern Ireland
and Sweden.
British legislation grants bonuses (wife's pension) to supplement
old-age pensions, but not invalidity pensions. In Sweden the
reverse is the case, bonuses for family responsibilities being added
to invalidity pensions but not to old-age pensions, and similarly
-in France (employed persons), where the bonus payable to invalidity pensioners varies only with the number of children.
Survivors' insurance must always take family responsibilities
into account, granting either bonuses for orphans in addition to
widows' pensions or special pensions to the orphans themselves;
there is, indeed, only a difference of nomenclature between such
COMPUTATION OF CASH BENEFITS
221
benefit and children's bonuses in old-age and invalidity insurance.
It will only be necessary here to examine the latter, since orphans'
pensions have been dealt with in preceding sections of this
chapter 1 .
PERSONS IN RESPECT OF WHOM BONUSES ARE PAYABLE
Schemes which Grant a Bonus for Each Child
Dependent on Insured Person at Materialisation of Risk
Austria : workers and salaried employees ; Czechoslovakia : workers, salaried employees and miners ; France : miners ; workers and salaried employees in Alsace-Lorraine; Germany : workers, salaried employees and
miners ; Hungary : employed persons ; Italy : employed persons ; Luxemburg : workers and salaried employees ; Poland : workers ; intellectual
workers; miners in Upper Silesia.
Schemes which Grant Bonuses in respect of Persons Other
than Dependent Children
Belgium : Miners : a bonus is payable to every married pensioner when
his wife reaches the age of 65 years.
France : Employed persons, old-age risk : a bonus is payable to every
insured person who has brought up three children to the age of 16, whether
or not they are dependent on him a t materialisation of the risk.
Great Britain and Northern Ireland : Employed persons, old-age risk :
a bonus equivalent to the old-age pension is payable in respect of a pensioner's wife when she reaches the age of 65 years.
COMPUTATION
OF B O N U S E S
Schemes in which Bonuses are Fixed Sums
Austria : salaried employees ; Belgium : miners ; France : miners ; Germany : workers, salaried employees and miners ; Great Britain and Northern
Ireland : employed persons; Luxemburg : salaried employees.
Schemes in which Bonuses are Proportionate
to Amount of Pensions
Austria:
workers; Czechoslovakia: workers and salaried employees;
France : employed persons, old-age risk; workers in Alsace-Lorraine; Hungary : employed persons; Italy : employed persons; Luxemburg: workers;
Poland : workers in Western Provinces ; intellectual workers.
1
See also Chapter I I , " Conditions of Award of Cash Benefits ", B . " Conditions relating to Survivors ".
222
RISKS COVERED AND CASH BENEFITS
§ 7.—Occupation and Services Rendered
Persons engaged in occupations of particular importance to
the community or of an arduous nature are often covered by
special insurance schemes, in which State subsidies and other
resources supplementing the contributions of insured persons
enable the benefits to be higher than those paid by general
inter-occupational schemes (e.g. Belgium : miners ; Brazil : staffs
of public utility undertakings ; France : miners ; Luxemburg :
salaried employees). Within inter-occupational schemes, occupations usually only influence benefits through the wage variations which they entail; but an exception is provided by the
U. S. S. R., where the normal old-age pension rate is increased
by 10 per cent, in the case of workers in basic industries—those
essential to the execution of the Five-Year Plan—and by
20 per cent, in that of workers engaged in underground or
unhealthy operations; while members of the " shock brigades "
enjoy an increase of as mueh as 3 per cent, for each year of
enrolment in such bodies.
§ 8.—Maximum Possible Total for Survivors'
Pensions
The object of fixing an amount which the sum of the survivors
pensions cannot exceed may be to prevent such pensions from
amounting to more than the insured person was normally able
to devote to the support of his dependants. The maximum is
then made equal either to a proportion of the wages earned by
the insured person or a worker of the same skill, or to a proportion of the pension which he received or could have claimed in
case, for instance, of invalidity.
In many schemes, however, this restriction seems principally
inspired by a wish to limit; the expense which may be entailed
by the death of any one insured person. In most cases the
maximum is equal to the invalidity or old-age pension to which
the insured person was entitled or would have been entitled if the
risk in question had materialised at the date at which he died.
Sometimes, however, as in Germany (workers, salaried
employees and miners), the two limits operate concurrently to
the total of the survivors' pensions. Such total cannot then
COMPUTATION OF CASH BENEFITS
223
exceed either a maximum fixed in relation to the earnings of the
insured or of a worker of like skill, on the one hand, or the pension,
including children's bonuses, which the insured received or could
have claimed.
Schemes in which Maximum is Related to Earnings of Insured
Person or Worker of Same Skill
Germany : Workers and salaried employees : 80 per cent, of wages of a
worker of the same skill as the insured person. MineTS (workers) : 80 per
cent, of basic wage in highest wage class in which insured person has contributed. Provided, in all cases, that the total of the survivors' pensions
does not exceed the pension which the insured person was receiving at the
date of his death or could have claimed if he had then become an invalid or
reached pensionable age.
U. S. S. R. : Employed persons : three-quarters of the final wage of the
insured person when at least one full orphan is left; in other cases, fourninths of such wage.
Maximum Fixed in Accordance with the Invalidity or Old-Age
Pension which the Insured Person Received or to
which He was Entitled
Argentina : Staffs of private undertakings of public \
utility and bank staffs.
f 59 p e r c e n t .
Brazil : Staffs of public utility undertakings.
> of the normal
Uruguay : Staffs of public utility undertakings and bank 1 old-age pension
and Stock Exchange staffs.
/
Greece : Tobacco workers : 50 per cent, of the pension to which the insured
person would have been entitled if he had qualified for an old-age or invalidity pension at his death.
Czechoslovakia : Miners : 75 per cent, of the pension to which the insured
person would have been entitled if he had qualified for a nold-age or invalidity pension at his death.
Austria : Workers.
\
Czechoslovakia : Workers and salaried employees.
Germany : Workers, salaried employees and
miners : Provided, in all cases, t h a t the total of the 100 per cent, of the
pension to which
survivors' pensions does not exceed a maximum
the insured person
fixed in relation to earnings of the insured or of a
worker of like skill.
I would have been
Hungary : Employed persons and miners.
[ ent *î?f ^ , ÍÍ ^ e **£?
Luxemburg : Workers and salaried employees.
I ^ f * 0 ^ ¿^aHdity
Poland : Intellectual workers; miners in Southern I pension at his death
Provinces.
Rumania : Miners in Ardeal.
Yugoslavia : Miners.
224
RISKS COVERED AND CASH BENEFITS
§ 9.—Lump-Sum Payments at Death
The methods of computing the lump-sum payments made at
death vary in the same way as in the case of pensions; part or
all of such sums may be fixed, part or all may vary with wages
and with the length of the contribution period or with both, and
the influence of these factors may be modified by that of secondary
considerations such as family responsibilities, degree of relationship of survivors, and place of residence.
Funeral benefit proper cannot always be clearly distinguished,
as far as composition and size are concerned, from sums intended
to permit the beneficiaries to adapt themselves to the new conditions resulting from the death of the insured person ; but the two
forms of compensation are treated separately below, the distinction being based on that made in national legislation, namely
that funeral benefit is due only to persons who are required to
bear the funeral expenses, while other sums are not made dependent on any condition of this sort.
FUNERAL BENEFITS
Schemes in which Funeral Benefits are Independent of Wages
and Length of Contribution Period
Brazil : staffs of public utility undertakings ; Greece : tobacco workers ;
Netherlands : miners ; Poland : miners in Southern Provinces and Upper
Silesia ; V. S. S. R. : employed persons.
In Poland the death of the insured person and t h a t of a person dependent
on him give rise to indemnities of different amounts. In the U. S. S. R . the
size of the funeral benefit varies with the place of residence.
Schemes in which Funeral Benefits Vary with Wages
Austria : workers ; Luxemburg : workers ; Rumania : miners in Ardeal ;
Yugoslavia : miners.
In Austria and Yugoslavia the benefit is equal to a multiple of the basic
daily wage and in Luxemburg it is equal to a fraction of annual earnings.
This multiple is expressly fixed by law in Yugoslavia and Luxemburg,
and determined indirectly through the invalidity pension rate in Austria.
In Rumania funeral benefits vary with the occupational category of t h e
insured person.
COMPUTATION OF CASH BENEFITS
225
Schemes in which Funeral Benefit? Vary with Wages
and Length of Contribution Period
Czechoslovakia : salaried employees; Germany : miners.
The indemnity is equal to a proportion of the pension to which the insured
person was or would have been entitled at his death. In Germany this
proportion varies according as the indemnity is payable to the survivor
on t h e death of t h e insured person or t o t h e insured person on t h e death
of a dependant.
OTHER LUMP-SUM PAYMENTS
Schemes in which Lump Sums are Independent of Wages
and Length of Contribution Period
France : miners; Greece : tobacco workers; Italy : employed persons.
In France t h e size of the lump sum varies with the family responsibilities
of the deceased insured person and with the frequency of his contributions
during a period immediately preceding the materialisation of the risk. In
Greece and Italy compensation takes the form of a fixed sum, payment of
which is spread over a certain period (Greece, two years; Italy, six months).
Schemes in which Lump Sums Vary with Length of Contribution
Period, but are Independent of Wages
Czechoslovakia : miners.
The contributions (not varying with wages) which have been paid are
refunded without interest.
Schemes in which Lump Sums Vary with Wages
Argentina : Staffs of private undertakings of public utility ; Austria :
salaried employees; Czechoslovakia : workers (payable if the insured person
died before completing the qualifying period) ; France : employed persons ;
Poland : intellectual workers ; Uruguay : bank and Stock Exchange staffs.
Lump sums varying with wages are usually equal to a multiple of monthly
wages (Austria, France, Poland, Uruguay). In Austria lump sums vary
also according as they are paid to the widow or t o orphans. In rare cases
lump sums are equal to a proportion of the wages on the basis of which the
insured person contributed (Argentina) or to a sum varying with the insured
person's wage class (Czechoslovakia).
Schemes in which Lump Sums Vary with Wages and Length
of Contribution Period
Argentina : bank staffs; Austria : workers (temporary benefit for widow
if insured person dies before completing qualifying period) ; Belgium :
workers and salaried employees ; Brazil : staffs of public utility undertakings
(payable t o survivors if the insured person dies before completing t h e
qualifying period) ; Czechoslovakia : workers (payable to survivors who do
not fulfil the personal conditions required, and so have no claim t o pensions
although the insured person had completed the qualifying period), salaried
15
226
RISKS COVEKED AND CASH BENEFITS
employees (payable to survivors who fulfil the personal conditions required
but are not entitled to pensions because the insured person died before
completing the qualification period) ; Greece : tobacco workers (payable if
the insured person has paid between 1,500 and 1,800 daily contributions);
Hungary : employed persons and miners.
The relation between the compensation guaranteed on the one hand and
wages and length of contribution period on the other derives either from the
fact that such compensation is a refund of contributions (Brazil; Greece;
Hungary, employed persons) or, more often, from the payment to the survivors of a fraction or multiple of a year's instalment of the pension which
the insured person received or to which he would have been entitled at
at his death (Austria; Belgium; Czechoslovakia, workers and salaried
employees ; Hungary, miners). In the salaried employees' scheme in Czechoslovakia the amount of the lump sum depends also on the relationship
between the insured person and the survivors in question. In Argentina
the lump sum is equal to as many times the average monthly wage on which
contributions were based as the employed person had contribution years
to his credit.
CHAPTER IV
LEGAL PROVISIONS AND STATISTICS RELATING
T O RISKS COVERED AND CASH BENEFITS,
BY COUNTRIES AND SCHEMES
INTBODUCTION
The three preceding Chapters contained a systematic comparative analysis of the problems connected with the definition of
the risk covered, the actual and possible solutions for these
problems and the conditions for and computation of cash benefits.
The present Chapter gives, by country and by scheme, a summary of the chief permanent legislative provisions and regulations
concerning the risks covered and the benefits, arranged as far
as possible according to a uniform plan.
ARGENTINA
Invalidity, Old-Age and Widows' and Orphans' Insurance
for the Staffs of Private Undertakings of Public Utility
1. R I S K S COVERED
(a) Old Age
The normal age for a pension is fixed at fifty, b u t the date at which it
falls due may be advanced or deferred by not more than five years.
No pension is granted until the pensioner ceases to work in an insurable
occupation.
228
BISKS COVERED AND CASH BENEFITS
(b) Invalidity
Definitimi of Invalidity
The insurance covers occupational incapacity.
When an insured person retains a fraction of his general working capacity
and is actually working, the pension is reduced in proportion to the remaining
capacity of the worker.
Establishment of Invalidity
The physical or mental causes of the incapacity must be defined in a
Teport prepared by the Department of Health or by the doctors appointed
b y the insurance fund for this purpose. The directorate of the fund may
order and supervise any enquiry which it considers necessary in order t o
establish invalidity.
Review of Invalidity Pensions
Invalidity pensions are temporary for the first five years during which
they are granted. In the course of that period pensioners must undergo
any examinations required by the directorate of the fund. When the
period of five years has elapsed pensions become permanent.
(c) Death
The loss of income resulting from the death of the breadwinner is covered
b y a life annuity or a temporary pension paid to certain categories of survivors.
The extra expenditure resulting from death is not covered by any special
indemnity except when the survivors are not entitled to a pension.
2. QUALIFYING P E R I O D
(a) Length of Service
The qualifying period to acquire the right to a normal pension is thirty
years' service; ten years' service is sufficient for a reduced pension.
(b)
Invalidity
When invalidity results from service no qualifying period is required.
In all other cases the qualifying period is one year for workers and two
years for salaried employees.
(c) Death
The conditions concerning the qualifying period are the same as for the
invalidity risk.
3. RETENTION OF STATUS OF INSUBED PERSON
The rights acquired by completion of the qualifying period cannot as a
general rule be maintained unless the insured person remains liable to
compulsory insurance; there is no voluntary insurance scheme, nor is provision made for the maintenance of rights by payment of a recognition fee.
The old-age pension must be claimed not later than five years, and the
invalidity pension not later than six months, after liability to insurance
ceased.
Nevertheless, an insured person who, after leaving insurable employment
without being entitled to a normal old-age or invalidity pension, later
lesumes work in an insurable occupation, irrespective of the length of the
interruption, may have all his years of service reckoned for the purposes
of his final pension, provided that when he first left the service he did not
claim the indemnity due for early departure, or t h a t he refunded t h a t
indemnity when re-entering the service.
LEGAL PROVISIONS AND STATISTICS
229
4. BENEFITS
(a) Length of Service
1. Normal pension at the age of fifty after thirty years' service : the
pension is reckoned on the average wage over the last five years and is
fixed at 95 per cent, of t h a t fraction of the wage not exceeding 1,200 pesos
a year, 80 per cent, of t h a t fraction between 1,200 and 3,600 pesos and
70 per cent, of the fraction between 3,600 and 12,000 pesos a year.
2. Reduced pension in case of voluntary departure after ten years' service
and at the age of fifty but before thirty years' service : 2 per cent, of the
normal pension per year of service.
3. Indemnity for voluntary departure before 10 years' service and at the
age of fifty : a capital sum equal to the contributions paid with compound
interest (at 5 per cent.).
4. Indemnities in case of dismissal for reasons other than invalidity,
irrespective of the age of the insured person :
for insured persons with less than ten years' service the indemnity is
equal to 5 per cent, of the wages from which deductions have been
made, with compound interest at 5 per cent. ;
for insured persons with from ten to twenty years' service, one month's
salary per year of service;
for insured persons with from twenty to thirty years' service, 2 per cent.
of the normal pension per year of service.
(b) Invalidity
The invalidity pension is equal to 5 per cent, of the normal old-age pension
for each year of service, but may not exceed the total of the old-age pension.
(c) Death
Amount and Allocation of the Pension
The total pension granted to all survivors, irrespective of their number,
is 50 per cent, of the old-age or invalidity pension which the insured person
received or which he could have claimed at the date of his death. Half
the pension is granted to the widow if there are children, sisters or parents
with equal claims; the other half is divided equally between these other
claimants. When there are no parents, sisters or children the whole pension
is paid to the widow.
Conditions Required of Survivors
The widow, parents, brothers and sisters of the insured person are entitled
to a pension only when they were economically dependent on him.
A widower is not entitled to a pension unless he is completely unfit for
work.
Illegitimate children who have been recognised or whose paternity has
been established in a court of law are entitled to a pension in so far as they
have the right to inherit under civil law.
The pension due to sons of the insured person ceases to be paid when
they reach the age of eighteen, unless they suffer from some infirmity which
prevents them from earning a living, in which case the pension is paid so
long as their incapacity continues.
The pension due to daughters or sisters of the insured person ceases when
they marry.
Lump-Sum Payments at Death
When the insured person dies without leaving survivors entitled to a
pension, the widow or invalid widower, or, failing them, the children or
collaterals of the deceased may claim a lump-sum indemnity equal to 5 per
cent, of the wages on which the insured person contributed.
230
RISKS COVERED AND CASH BENEFITS
5. STATISTICS OF CASH BENEFITS
Year
1924
1925
1926
1927
1928
1929
1930
1
Number
of insured
persons
at the end
of the year
27,437
32,746
36,275
39,158
41,481
41,908
44,329
Invalidity
and old-age
pension i
Survivors'
pensions x
Special
benefits for
voluntary
departure,
abolition
of post or
service
abroad 1
467,344
1,295,107
2,082,807
2,698,132
3,417,7:19
3,850,670
4,597,770
53,054
151,480
231,332
328,579
415,339
489,197
564,473
248,602
434,212
377,496
566,642
537,759
568,455
583,507
1
Total value
of all
benefits l
769,000
1,880,799
2,691,635
3,593,353
4,370,817
4,908,322
5,745,750
In pesos per year.
Invalidity, Old-Age and Widows' and Orphans' Insurance
for the Staffs of Banks
1. R I S K S COVERED
(a) Old Age
The normal age for the granting of a pension is fifty years, but the date
may be advanced or retarded by not more than five years.
A pension is not granted unless the worker ceases to be employed in an
insurable occupation.
(b) Invalidity
Definition of Invalidity
The insurance covers general loss of working capacity, which means
that the insured person, on account of his physical or mental condition, is
unable to continue his duties or to be employed in any other post compatible
with his aptitudes and his previous training and occupational situation.
Establishment of Invalidity
No invalidity pension can be granted until the doctor or doctors appointed
for the purpose by the directorate of the fund have made a report on the
causes and extent of the alleged physical or mental incapacity.
Review of Invalidity Pensions
An invalidity pension is not made permanent straightway unless the injuries for which it is granted are such t h a t the resulting incapacity is clearly
permanent.
In all other cases persons in receipt of an invalidity pension are re-examined
periodically at the discretion of the directorate of the fund. These examinations may take place at any time within a period of ten years from the
date when the invalidity pension is granted. When ten years have elapsed
the pension becomes permanent.
(c) Death
The decrease in income caused by the loss of the family breadwinner is
covered b y the granting of life annuities or temporary pensions t o certain
categories of survivors.
LEGAL PROVISIONS AND STATISTICS
231
The exceptional expenses entailed by the death of the breadwinner are
not covered by any special indemnity, except when the insured person
leaves no survivors entitled to a pension.
2. QUALIFYING PERIOD
(a) Length of Service
The qualifying period for acquiring the right to a pension for long service
varies according to the conditions under which the insured person ceases
to be employed. If he resigns voluntarily, the qualifying period is thirty
years' service for a normal pension and twenty years' service for a reduced
pension. When the insured person is dismissed through no fault of his
own, a reduced pension may be granted after fifteen years' service, and if
the insured person has not been insured for fifteen years his contributions
are refunded.
(b) Invalidity
When invalidity is due to service no qualifying period is required to acquire
the right to a pension. In all other cases the qualifying period is ten years.
(c) Death
The qualifying period is the same as in the case of invalidity.
3. RETENTION OF STATUS OF INSURED PERSON
The principles concerning the maintenance of insured status after completion of the qualifying period are the same as in the insurance scheme for the
staffs of private undertakings of public utility.
4. BENEFITS
(a) Length of Service
1. Normal pension at the age of fifty after thirty years' service : 75 per
cent, of the average wage for the last five years, up to 6,000 pesos a year,
70 per cent, of the same average wage between 6,000 and 12,000 pesos a year
and 65 per cent, of t h a t average between 12,000 and 18,000 pesos.
2. Special pension after the age of fifty and for more than thirty years'
service : Bonus equal to 1 | per cent, of the normal pension for each extra
year of service, provided t h a t the pension may not in any case exceed
90 per cent, of the average wage for the last five years.
3. Reduced pension in case of voluntary departure after twenty years'
service : 2 per cent, of the normal pension per year of service irrespective
of age.
4. Indemnity in case of dismissal. If the insured person has been
employed for less than fifteen years, his contributions are refunded with
interest a t 5 per cent, per annum. If he has been employed for more than
fifteen years, he receives 2 per cent, of the normal pension for each year
of service, provided he has been dismissed through no fault of his own.
(b)
Invalidity
When he has completed the qualifying period of ten years required by
the Act, the insured person may claim a pension equal to 3 | per cent, of
his final salary for each year of service, provided t h a t the pension may not
exceed this final salary. The final salary means the average salary for the
preceding five years.
When he has not completed the qualifying period, the insured person
may claim a lump-sum indemnity equal to the average monthly salary
for his whole period of service multiplied by the number of years served.
232
RISKS COVERED AND CASH BENEFITS
(c) Death
Amount and Allocation of the Pension
The total pension paid to all survivors, irrespective of the number of
parties concerned, is fixed at 50 per cent, of the old-age or invalidity pension
which the insured person received or which he could have claimed at the
date of death. Half the pension is paid to the widow when there are children
or parents with claims ; the other half is distributed equally among the other
claimants. Ascendants cannot claim a pension except when there are no
orphans, and sisters can claim only when there are no orphans and no
widow. The whole pension is payable to the widow if there are no children
or ascendants.
Conditions Required of Survivors
The widow's claim to a pension does not depend on her age, earning
capacity or means.
A widower is not entitled to a pension unless he suffers from an infirmity
which makes him incapable of work
• Parents and sisters must have been maintained entirely by the insured
person.
The sons of an insured person are entitled to a pension up to the age of
eighteen, daughters or sisters up t o the date of marriage and in any case
not later than the age of twenty-two, except in the case of children who are
completely incapacitated for work, in which case the pension is paid for the
whole period of such incapacity.
Illegitimate children who have been recognised, or whose paternity has
been established in a court of law, are assimilated to legitimate children.
Lump-Sum Payments at Death
When the insured person dies without leaving survivors who are entitled
t o a pension, the widow or invalid widower, or, failing them, the children
or brothers and sisters of the deceased, may claim a lump-sum indemnity
equal to as many times the average monthly wage on which contributions
were paid as the deceased had years of affiliation to the insurance scheme.
5. STATISTICS OF CASH B E N E F I T S
Year
1926
1927
1928
Number
of
insured persons
8,378
8,353
8,835
9,205
1930
Total
annual value
of benefits
(in pesos)
353
76,692
202,599
102,838
1,417,365
AUSTRIA
Invalidity, Old-Age and Widows' and Orphans' Insurance
for Workers in Industry and Commerce
1. RISKS COVERED
(a) Old Age
The pensionable age is fixed at sixty-five years.
LEGAL PROVISIONS AND STATISTICS
233
(b) Invalidity
The insurance covers general incapacity for work, which means that the
person in question is no longer capable of earning, in any employment suited
to his strength and ability which can reasonably be assigned to him in view
of his training and previous occupation, one-third of the sum usually earned
by a physically and mentally sound person of the same category with similar
training in the same locality.
Temporary invalidity is covered in the same way as permanent invalidity,
but only after the twenty-sixth week.
Infirmities intentionally caused by an insured person do not entitle him
to claim a pension. He is also debarred from a pension when the infirmity
results from committing a crime or misdemeanour for which the culprit
is sentenced by a final judgment. Sentences for certain offences (theft
or embezzlement) do not involve the forfeiture of pension rights.
A pensioner must submit to any examination which the insurance fund
considers necessary in order to determine whether the circumstances for
which the pension was granted have or have not ceased to exist. If he
refuses without reasonable grounds to submit to such an examination his
invalidity may be considered to have disappeared unless proof is brought
to the contrary.
(c) Death
The loss of income resulting from the death of the breadwinner is covered
by the granting of life annuities or temporary pensions t o certain categories
of survivors.
The extra expenditure incidental to the death is covered in certain cases
by a temporary allowance to the widow, or by funeral benefit.
2. QUALIFYING PERIOD
(a) Old Age
The qualifying period is completed by the payment of 500 weekly contributions, of which not less than 104 must have been paid during the five
years preceding the materialisation of the risk, and 52 during the three
years preceding t h a t date in the case of compulsory contributors, or 78 during
the three years preceding in the case of voluntary contributors.
(b) Invalidity
The qualifying period is ^completed by the payment of 104 weekly contributions during the last five years, of which 52 in compulsory insurance
or 78 in voluntary insurance must have been paid during the three years
preceding the materialisation of the risk.
(c) Death
The conditions concerning the qualifying period are the same as for
invalidity.
3. RETENTION OF STATUS OF INSURED PERSON
The retention of insured status is closely linked up with the completion
of the qualifying period, since the insured person is not considered to have
fulfilled the conditions of the qualifying period unless he has, in addition
to paying contributions for a certain number of weeks, made a certain
minimum number of payments during the period immediately preceding
the materialisation of the risk.
4. PERIODS ASSIMILATED TO CONTRIBUTION PERIODS
When the insured person has paid not less than 500 weekly contributions
and has reached the age of forty-five before the risk matures, periods of
sickness or unemployment occurring after the five-hundredth week are
reckoned as contribution weeks.
234
RISKS COVERED AND CASH BENEFITS
Periods during which the insured person was in receipt of an invalidity
pension withdrawn on the disappearance of the incapacity for which it was
granted are reckoned as contribution weeks, provided that they fall within
the five years immediately preceding the materialisation of the risk.
5. BENEFITS
(a) Determination of the Basic Wage
The basic wage means the average daily wage for'the 104 weeks preceding
the materialisation of the risk, or preceding the date at which the insured
person reached the age of forty-five, if this is more favourable for the insured
person.
When the risk insured against matures after the forty-fifth year, the
insured person may request that the wage taken as a basis for the calculation
of benefits should be the earnings on which contributions were paid during
the 104 weeks preceding the completion of his forty-fifth year.
An insured person who wishes to make certain of his right to take advantage of this provision must have a written statement drawn up as to his
basic wage during the period preceding his forty-fifth year ; this statement
must be obtained within five years of the date on which he reached the age
of forty-five.
(b) Old Age
The annual pension falls into two parts :
(1) a State subsidy of 72 schillings a year;
(2) 120 times the basic daily wage during the last 104 weeks, provided
t h a t this part of the pension: may not be less than 144 nor more than
1,008 schillings a year.
(e) Invalidity
The invalidity pension also falls into two parts :
(1) a State subsidy of 72 schillings a year;
(2) an increment proportional to the final wage and varying according
as the number of weekly contributions paid exceeds 500 or not.
When not less than 500 weekly contributions have been paid, the increment is equal to 120 times the basic daily wage, but may not be less than
144 or more than 1,008 schillings a year.
When the number of weekly contributions paid is below 500, the increment
is reduced by one-third.
The pension may also be supplemented by a bonus equal to 10 per cent.
of the basic pension for the first child, 5 per cent, for every subsequent
child, but shall not be less than 1.2 schillings a month for each chUd.
This bonus is paid up to the age of sixteen years (or eighteen years when
the child is incapable of supporting himself owing to an infirmity or owing
to his scholastic or vocational training).
An invalid who, On account of his infirmities, requires the constant help
of another person, is entitled to a i'urther supplement equal to 50 per cent.
of his pension.
(d) Death
Widows' Pensions
There can be no claim to a pension except in the following cases :
(a) so long as the widow has lost two-thirds of her earning capacity ;
(b) when she has attained the age of sixty-five ;
(c) so long as she has to maintain two children under eighteen years
of age, or a child who is incapable of work owing to physical or mental
infirmities.
These conditions are not required for the granting of a temporary pension
for one year.
LEGAL PROVISIONS AND STATISTICS
235
In addition, the marriage must have been contracted before the insured
person completed his fifty-fifth year or was certified to be an invalid. This
condition is not required when the death of the insured person is due to an
accident occurring after marriage, or when a child was born of the marriage
or legitimised thereby.
The widow's pension is equal to half the invalidity pension received by
the husband or which he could have claimed at the date of his death.
Widowers' Pensions
A widower is not entitled to a pension unless, when the insured person
died, he was actually incapable of earning and indigent, so that his wife
defrayed the whole or part of his maintenance out of her earnings. The
pension is granted only so long as these two conditions are fulfilled.
The method of reckoning a widower's pension is exactly the same as for
a widow's pension.
Orphans'1 Pensions
In order to be entitled to a pension, orphans must fulfil the following
conditions.
They must be legitimate children of an insured person. Illegitimate
children whose paternity has been judicially established are assimilated to
legitimate children, illegitimate children who have been recognised,
stepsons who are legitimate (legitimate children of a first marriage), and
children bearing the name of the insured person, as well as adopted and
foster children, are assimilated t o legitimate children only when their
recognition, the marriage of the insured person or the adoption or acceptance
of the charge of the children took place before the.infirmity which caused
death.
The age limit is eighteen years. Children suffering from an infirmity
which prevents them from earning their living are entitled t o a pension as
long as such incapacity continues.
An orphan who has lost one parent receives two-eighths, an orphan who has
lost both parents three-eighths of the invalidity pension which the insured
person received or could have claimed a t the date of his death.
Maximum for Survivors'
Pensions
The various survivors' pensions, taken together, may not exceed the total
of the pension t o which the insured person would have been entitled if the
old-age or invalidity risk had materialised at the date when he died.
Lump-Sum
Payments at Death
The indemnity which may be paid in case of death consists of two parts :
(1) A temporary allowance granted to the widow when the insured person
dies after completing the qualifying period. The amount of this allowance
is equal to half the annual invalidity pension which the husband received
or could have claimed. The payment of this allowance is distributed over
a period of one year.
If the insured person does not leave a widow, this temporary allowance
may be paid to his housekeeper.
(2) Funeral benefit, which is paid only in the case of an insured person
already in receipt of an old-age or invalidity pension. Funeral benefit can
be claimed by the following in the order stated : the widow; failing her,
the housekeeper, children of not more than sixteen years, parents maintained
by the insured person, or the persons who paid the cost of the funeral. The
funeral benefit is equal t o twice the annual pension due after 500 contribution
weeks, that is to say, it is equal to 240 times the basic daily wage and may
not be less than 288 or more than 2,016 schillings.
236
BISKS COVEKED AND CASH BENEFITS
6. SUSPENSION OR L A P S E OP PENSION RIGHTS
(a) Coincident Rights
When an insured person is entitled to more than one pension because of the
materialisation of several risks covered by the workers' insurance scheme,
only the higher pension is payable.
When invalidity insurance benefits are granted concurrently with an accident pension, the invalidity pension is withheld if it does not amount to
half the accident pension. If it equals or exceeds half the accident pension,
then 50 per cent, of the latter is withheld.
(b) Maintenance of Beneficiary at Public Expense
The pension is withheld when the pensioner is maintained at the public
expense, for example, when undergoing hospital treatment or a sentence of
imprisonment exceeding one month. When the pensioner was mainly or
entirely responsible for the maintenance of certain persons living within
the country, insurance benefits are continued in their favour.
(c) Disappearance of Circumstances for which the Pension Was Granted.
When the circumstances fo;r which the pension was granted cease to exist
(cessation of invalidity, remarriage of the widow, etc.), pensions are no
longer paid.
Invalidity, O l d - A g e a n d W i d o w s ' a n d O r p h a n s ' I n s u r a n c e
for A g r i c u l t u r a l W o r k e r s
1. R I S K S COVERED
The definition of the risks covered is exactly the same as in insurance
for workers in industry and commerce.
2. QUALIFYING P E R I O D
(a) Old Age
The qualifying period is completed by the payment of 500 weekly contributions, of which not less than 104 must be paid during the last five years
and 52 during the three years immediately preceding the materialisation
of the risk.
(b) Invalidity
The qualifying period is completed by the payment of 104 weekly contributions during the last five years and not less than 52 during the three
years immediately preceding the materialisation of the risk.
(c) Death
The conditions concerning the qualifying period are the same as for
invalidity.
3. RETENTION OF STATUS OF INSURED PERSON
The conditions are the same as in insurance for workers in industry and
commerce.
4. PEBIODS ASSIMILATED TO CONTRIBUTION PERIODS
The assimilation of certain periods t o contribution periods is carried out
in the same way as in insurance for workers in industry and commerce.
LEGAL PROVISIONS AND STATISTICS
237
5. B E N E F I T S
The basic wage is determined in the same way as for workers in industry
and commerce, but the method of calculating the pension is somewhat
different.
The old-age or invalidity pension always comprises two parts :
(1) a State subsidy of 72 schillings a year;
(2) an increment proportional to the final earnings and varying to some
extent according to the number of contributions paid.
This increment varies according as the insured person has or has not paid
500 weekly contributions. If not less than 500 weekly contributions have
been paid, the increment is equal to 120 times the basic daily wage and
may not be less than 144 or more than 720 schillings a year.
The bonuses for family responsibilities and the supplement for the constant
help of another person are identical with those in insurance for workers in
industry and commerce.
The pensions to survivors differ only in respect of the age limit up to
which children are considered as being maintained by the insured person.
This limit is fixed at sixteen years in the agricultural workers' scheme as
compared with eighteen years in the scheme for industrial and commercial
workers.
6. SUSPENSION OB L A P S E OF PENSION RIGHTS
The rules for this are the same as in insurance for workers in industry
and commerce.
Invalidity, Old-Age and Widows' and Orphans' Insurance
for S a l a r i e d Employees
1. R I S K S COVERED
(a) Old Age
The age for the granting of pensions has been fixed at sixty-five years
for men and sixty years for women, but the payment of the pension may
begin five years earlier in either ease, provided the insured person has paid
not less than 120 monthly contributions. The pension can never be paid
unless the insured person ceases to be employed in an insurable occupation.
(b) Invalidity
The insurance covers invalidity when the insured person, owing to physical
or mental infirmity, is permanently incapable of performing the duties of
his last post or of engaging in another employment which he might reasonably
be required to accept in view of his previous employment, practical training
and education.
Temporary incapacity is covered in the same way as permanent incapacity,
but only in the case of illness continuing for more than eighteen months.
This period is reduced to thirty or fifty-two weeks when the incapacity is
due to an industrial accident.
Benefits are not due when the insured person intentionally caused the
infirmities or when they were received while committing a crime or misdemeanour (excluding political crimes or misdemeanours).
Establishment of Invalidity
The incapacity which is alleged when claiming a pension must be proved
by a medical certificate, and the pension insurance carrier may appoint a
doctor to check this certificate if it so desires. The Central Institution is
entitled to request the competent insurance fund to make the necessary
examination. Any reasonable sums spent by the insured person in obtaining
certificates of incapacity are refunded if his application is granted.
238
BISKS COTEBED AND CASH BENEFITS
Granting of the Invalidity Pension
Invalidity pensions are as a general rule granted by the decision of the
committee attached to each insurance fund. This committee consists of
one representative of the persons insured with the fund, one representative
of their employers and one representative of the Central Institution. The
decisions to grant or refuse benefits are not valid unless unanimous.
When a unanimous vote cannot be obtained the decision rests with the
governing body of the pension insurance carrier, which consists of seventeen
members : the chairman of the institution, eight representatives of the
insured persons and eight representatives of their employers, elected by the
general meeting.
The pension committees and the governing bodies may order any necessary
steps to be taken for obtaining further information before arriving at a
decision.
When an invalidity pension is refused the claimant can appeal to the arbitration court set up at the headquarters of the insurance fund in each of the
Provinces.
(c) Death
The loss of income resulting from the death of the breadwinner is covered
by life annuities or temporary pensions granted to certain categories of
survivors.
A special indemnity to cover the extra expenditure entailed by the death
is granted only when the insured person dies without leaving any survivors
who are entitled to a pension.
2. QUALIFYING P E R I O D
The qualifying period is completed by the payment of sixty monthly
contributions.
3. RETENTION OF STATUS OF INSURED PERSON
The retention of the right to claim benefits acquired by the completion
of the qualifying period depends on the payment of contributions with
sufficient regularity to ensure, as a general rule, that three-quarters of the
" crediting period " is covered by the contributions paid. The " crediting
period " is taken to mean the whole period which elapses between the date
of entry into insurance and the materialisation of the risk, or, if this is more
favourable to the insured person, the period which has elapsed since the
insured person re-entered insurance after having lost his right to benefits
because the number of contributions paid did not cover three-quarters of
the period during which he was insured.
The following qualifications must be made to the above principle :
(a) periods of sickness or unemployment normally entitling the insured
person t o receive benefits and periods of military service are not
reckoned as periods of insurance and are therefore not taken into
consideration in calculating the crediting period;
(b) a supplementary period of eighteen months during which the insured
person retains his rights after ceasing to be liable to insurance is
added t o the period of insurance of which three-fourths must have
been covered by contributions (crediting period).
•I. BENEFITS
(a) Determination of the Basic Salary
When the risk covered materialises after the insured person reaches the
age of forty-five he may apply to have his pension divided into two fractions :
the one proportional to the time spent in insurance before the age of fortyfive and to the salary which he was earning at forty-five, and the other
fraction proportional to the time spent in insurance after t h a t age and to
his final salary when the risk matured.
LEGAL PROVISIONS AND STATISTICS
239
(b) Old Age and Invalidity
The annual pension consists of :
(1) thirty-five hundredths of the average salary for the last three years;
(2) one-twelve-hundredth of this average salary for every contribution
month which the insured person had to his credit before the risk
materialised or, in other words, 1 per cent, of his salary for each
contribution year.
The minimum salary taken into account is fixed at 80 schillings a month,
while the maximum is 400 schillings (or 800 when the insured person is
employed by a publishing firm, a pharmacy or an agricultural or forestry
undertaking). Rights acquired before the age of forty-five must be calculated on the salary received at t h a t age when this is more favourable to the
insured person (cf. (a) above).
In addition to the basic pension, a bonus may be granted at the rate
of 6 per cent, of the average salary for the last three years (with a minimum
of 90 schillings and a maximum of 180 schillings a year) in respect of each
child under the age of eighteen. This bonus is continued up to the age
of twenty-four when the child continues his studies or when, on account of
infirmity, he is unable to earn a livelihood.
An invalid who, on account of his infirmities, requires the constant
attendance of another person is entitled to a supplement equal t o 50 per
cent, of his pension.
(c) Death
Widows' Pensions
The widow is not entitled to claim a pension unless the duration of the
marriage was not less than six months, or three years in t h e case of an
insured person over the age of fifty or in receipt of an invalidity or old-age
pension at the date of the marriage. No condition as to duration is required
if the insured person died as the result of an accident or if a child was born
of the marriage. In actual fact the condition is applied strictly only in the
exceptional case of insured persons who entered insurance after the age
of fifty-five, when the widow may claim only if the marriage was contracted
before insurance was entered.
The widow's pension is equal to 50 per cent, of the pension paid to her
husband or the pension which he could have claimed in case of invalidity.
I t may not be less than 30 per cent, of the average salary for the last three
years if the widow is over fifty-five or requires the constant attendance of
another person.
Widowers" Pensions
The widower is not entitled t o a pension unless he is completely incapable
of earning and in indigent circumstances when the insured person dies.
The pension is granted only so long as these two conditions are fulfilled.
The method of reckoning the widower's pension is the same as in the case
of widows' pensions.
Orphans' Pensions
The conditions for the granting of orphans' pensions are as follows.
They must be legitimate children of an insured man or woman. Legitimised or adopted children, or illegitimate children who have been recognised,
or illegitimate children of an insured woman, as well as stepchildren who are
the legitimate offspring of a former marriage, and children bearing the
father's name are treated in the same way as legitimate children.
The age limit is eighteen years, or twenty-four years when the children
are still studying and are therefore not in a position to earn a livelihood.
When a child is incapable of earning on account of infirmity the pension
continues as long as the incapacity.
The pension for a child who has lost one parent is equal to 12 per cent.
of the average salary of the insured person during the last three years,
240
RISKS COVERED AND CASH BENEFITS
with a guaranteed minimum of 180 schillings a year. In the case of a
child who has lost both parents the pension and t h e guaranteed minimum
are double these figures.
Lump-Sum Payments at Death
A lump sum is payable at death when the insured person leaves no survivors entitled to a pension. The order of priority for receiving this lump sum
is as follows : widow, housekeeper, children under eighteen, ascendants or
orphaned collaterals.
The amount of the lump sum varies according to the time spent in insurance and the relationship between the insured person and the claimant.
The guaranteed minimum is 6.3 times the average monthly salary for the
last three years when the lump sum is payable to the widow and 3.6 times
t h a t salary when payable to orphans.
5. SUSPENSION OB LAPSE OF P E N S I O N RIGHTS
(a) Coincident Bights
The pension is suspended when an insured person, although ceasing to be
employed, is entitled to claim his full salary as indemnity for dismissal
under a private contract of employment.
(b) Maintenance of Beneficiary at Public Expense
The pension is suspended when the pensioner is condemned to imprisonment for a period of not less than one month, or during any period spent
in a reformatory or house of correction.
(c) Disappearance of Circumstances for which the Pension was Granted
The pension is withdrawn when the circumstances for which it was granted
cease to exist (cessation of invalidity, remarriage of the widow, etc.).
6. STATISTICS OF CASH B E N E F I T S 1
Old-age and invalidity
pensions
Year
1924..
1929..
1930..
Number
of insured
persons
Number
of pensioners
133,891
228,882 2
227,232 4
2,386
9,543 s
12,067 5
Amount
of pensions
(in Schillings)
2,012,785
24,032,136 3
27,117,171 6
Widows' a n d widowers'
pensions
Number
of
pensioners
3,575
7,748
8,894
Amount
of pensions
(in schillings)
1,752,526
10,683,614
10,392,051
...
Orphans' pensions
Year
1924..
1929..
1930..
Number
of
pensioners
2,499
2,993
3,150
Amount
of pensiDns
(in schillings)
620,070
1,677,342
1,646,548
L u m p sums
and various g r a n t s
(in schillings)
85,277
1,814,340
1,976,964
T o t a l cash
benefits
(in schillings)
4,470,659
38,207,432
41,132,734
1
Not including the statistics for special insuranoe institutions for salaried employees
in agricultural and forestry undertakings, pharmacies and publishing Arms. The number
of 2insured persons and pensioners is giver, for 31 December of each year.
3 Including 3,009 voluntarily insured persons.
4 Including 3,825 invalidity pensioners receiving 7,751,736 schillings during the year.
5 Including 6,463 voluntarily insured persons.
Including 4,647 invalidity pensioners receiving 9,535,628 schillings during the year.
LEGAL PROVISIONS AND STATISTICS
241
BELGIUM
Old-Age and Widows' and Orphans' Insurance
for Workers
1. R I S K S COVERED
(a) Old Age
The age for obtaining a pension is fixed at sixty-five years for men and
sixty years for women, but in unhealthy industries the age is five years
earlier in each case. An insured person is also entitled to claim the pension
five years before the statutory age, in which case the pension is reduced by
coefficients of reduction based on the expectation of life.
(b) Death
The loss of income caused by the death of the breadwinner is covered by
the granting of life annuities or temporary pensions to certain categories
of survivors. In addition, children or, failing children, relatives in the
ascending line may, when no widow is left, claim a fraction of the capital
value of the pension which a widow could have claimed.
2. QUALIFYING P E R I O D
As a general rule, the old-age pension corresponds exactly to the accumulated value of the contributions paid, and the insured person is not
required to complete a qualifying period. This exemption applies also for
the purposes of widows' and orphans' pensions.
3. BENEFITS
(a) Old Age
The pension, not more than 50 per cent, of which reverts to the widow,
is formed :
(a) by the accumulation in a personal account of the contributions of
the insured person and his employer. The amount of these joint
contributions varies from 5 francs to 25 francs a month according
to the wage class to which the insured person belongs ;
(b) by a State subsidy which increases by 50 per cent, the pension
acquired by the accumulation in the personal account, but is subject
to a maximum of 1,200 francs a year.
. (b) Death
Widows'' Pensions
The widow is entitled to a pension irrespective of any conditions concerning the date of the marriage, her age or her earning capacity.
The widow's pension is equal to a percentage of the old-age pension
which the insured person could have claimed if he had reached the retiring
age at the date of his death. This percentage varies : (1) with the age of the
insured person at the date of death, and (2) with the difference between the
ages of the husband and wife.
When the insured person and his wife are of the same age, the percentage
of the old-age pension which reverts to the widow varies from 35 per cent.
if the husband dies before the age of forty-one, to 50 per cent, when he dies
at the age of fifty-five or over.
Orphans'1 Pensions
Children maintained by the insured person are entitled, until the completion of their sixteenth year, t o a pension of 240 francs for half orphans, and
480 francs for full orphans.
16
242
BISKS COVERED AND CASH BENEFITS
Pensions for Other Survivors
The legislation guarantees; pensions only to the widow and orphans, but
women who are insured are permitted to assign, for the benefit of their
survivors, part of the contributions paid in respect of them.
Thus, when an insured woman is responsible for the maintenance of
certain persons, she may apply to have a fraction of her contributions set
aside for survivors' insurance, so that if she dies before receiving an old-age
pension, sufficient capital will have been accumulated to constitute an
annuity equal to 30 per cent, of the old-age pension to which she would
have been entitled if she had reached the age of sixty (or fifty-five in unhealthy industries). For the purposes of reckoning this capital sum the annuity
is computed as being for a person of the same age as the insured person a t
the date of her death.
An insured woman is not entitled to take advantage of this right until
she has reached the age of eighteen, and her decision does not take effect
until two years after the date on which she notified the insurance institution.
The details of the methods by which these operations are carried out and
the conditions under which the capital value of pensions can be converted
into annuities are determined by Royal Order issued after consultation
with the Superior Old-Age Pension Committee. This Order prescribes the
categories of persons who may be permitted to draw pensions in various
cases.
When the person designated by the insured person does not fall within
the list drawn up by the Royal Decree mentioned above, the Ministry of
Industry, Labour and Social Welfare takes a decision on the subject after
consulting the Superior Old-Age Pension Committee.
If an insured woman is married, this special insurance is permitted only
for the benefit of her husband. The insured person is entitled at any time
to cancel the instructions to assign part of the contributions for another
person.
Lump-Sum Payments at Death
When an insured person dies without leaving a widow, half the capital
value of the pension to which a widow would have been entitled is paid to
children under sixteen years of age, or failing them, to relatives in the
ascending line.
4. COMMUTATION OF PENSION FOE L U M P SUM
A widow may obtain the payment, in a lump sum, of not more than half
the capital value of the pension to which she is entitled, provided t h a t the
insured person died before commencing to draw an old-age pension.
The widow is not entitled to claim this lump sum as a right, but must
first have the permission of the Superior Old-Age Pension Committee. This
Committee requires the widow to state the purpose for which she wishes to
obtain the capital sum.
Old-Age and Widows' and Orphans' Insurance
for Salaried Employees
1. B I S K S COVERED
(a) Old Age
The pensionable age is sixty-live years for men and sixty for women.
The pension may be claimed not more than ten years earlier, in which case
it is reduced by coefficients of reduction based on the expectation of life.
(b ! Invalidity
The insurance covers permanent total incapacity for work.
LEGAL PROVISIONS AND STATISTICS
243
(c) Death
The loss of income resulting from the death of the breadwinner is covered
by the granting of life annuities or temporary pensions to certain categories
of survivors. In addition, children, or failing them relatives in the ascending
line, may, when the deceased leaves no widow, claim a fraction of the capital
value of the pension which a widow could have claimed.
2. QUALIFYING PERIOD
Normally the old-age pension corresponds exactly to the value of the
accumulated contributions, so t h a t no qualifying period is required. This
exoneration applies also in the case of survivors' insurance.
3. BENEFITS
(a) Old Age
The pension, a maximum of 50 per cent, of which reverts t o the widow,
is formed :
(a) by the accumulation in a personal account of the contributions of
the insured person and his employer, namely :
for the employee : 3 per cent, of his remuneration.
for the employer : 4 per cent, of this remuneration until 1960;
4 | per cent, of this remuneration from 1961 to 1975; 4f per cent.
of this remuneration from 1976 to 1990; 5 per cent, of this
remuneration as from 1 January 1991.
(b) by a State subsidy, which increases by 50 per cent, the pension
acquired by accumulation in the individual account, but is subject
to a maximum of 1,200 francs a year.
(b)
Invalidity
Invalidity benefits are of a transitional nature and are to be abolished
when legislation is passed for compulsory insurance against sickness and
invalidity. The rules for the granting of these benefits and the amount
are to be fixed by Royal Decree.
(c) Death.
Widows' Pensions
A widow's pension is equal t o a percentage of the old-age pension t o
which the insured person would have been entitled if he had reached the
retiring age at the date of his death.
This percentage varies (1) with the age of the insured person at the date
of death, and (2) with the difference between the ages of the husband and
wife.
When the husband and wife are of the same age, the percentage of the
old-age pension which reverts to the widow varies from 35 per cent, when
the husband dies before the age of 41 to 50 per cent, when he dies at the
age of fifty-five or over.
Orphans'
Pensions
The children of an insured man or woman are entitled, until the completion
of their eighteenth year, to a pension of 240 francs a year for half orphans,
and 480 francs a year for full orphans.
Pensions for Other Survivors
The provisions are the same as in the case of workers' insurance.
244.
RISKS COVERED AND CASH BENEFITS
Lump-Sum
Payments at Death
When an insured person dies without leaving a widow and before receiving
an old-age pension, three-sevenths of the capital representing the pension to
which a widow would have been entitled are paid to the children of the
insured, or, failing them, to parents, or, failing children or parents, to persons
designated by the insured person.
If the insured person is unmarried, widowed or divorced at the time when
this pension is awarded, and dies without marrying and without exercising
his power to use the three-sevenths of the capital representing the pension
to which a widow would have been entitled to increase his personal pension,
the capital is paid to the survivors in the following order of priority : children,
parents, persons designated by the insured person.
4. COMMUTATION OF P E N S I O N FOR L U M P SUM
Insured persons may, when they become entitled t o a pension, claim the
payment of not more than three-sevenths of the capital value of their
pension in a lump sim.
Invalidity, Old-Age and Widows' and Orphans' Insurance
for Miners
1 . RlHKS COVEBED
(a) Old Age
The age for the granting of pensions is fixed at sixty in the case of surface
workers and fifty-five for those who have worked for thirty years underground.
(b) Invalidity
The Act of 1 August 1930 provides t h a t any worker suffering from a
disease involving incapacity for normal employment in an industry covered
by t h e Act may apply for an invalidity allowance. I t also provides t h a t
invalids who are granted such an allowance may resume work provided t h a t
such work does not bring in more than 450 francs a month. If the remuneration for the occupation which they thus undertake is between 200 and
450 francs a month, the allowance is reduced by one-third.
The worker is obliged to prove that he is incapacitated for normal employment in mining work, either underground or a t the surface. The proof
required is a medical certificate stating the nature of the invalidity and its
consequences from the point of view of capacity for employment in the
undertaking where the worker was previously employed. The applicant
may be placed under observation and examined by a medical expert.
(c) Death
The loss of income resulting from the death of the breadwinner is covered
b y the granting of life annuities or temporary pensions to certain categories
of survivors.
2. QUALIFYING
PEBIOD
(a) Old Age
Normally, the old-age pension corresponds t o the value acquired by the
accumulated contributions, and no qualifying period is required.
LEGAL PROVISIONS AND STATISTICS
(b)
245
Invalidity
The length of the qualifying period varies according to the age of the
insured person at the date when the risk materialises, as is shown below :
Years ol mining
work
10
12
15
18
20
Age when
invalidity begins
Under 40
40-45
45-50
50-55
Over 55
(c) Death
No qualifying period is required for the granting of pensions to survivors.
3. RETENTION OP STATUS OF INSURED PERSON
(a) Old Age and Death
The right to benefits which may be acquired under old-age or survivors'
insurance by the payment of contributions is maintained until the risk
materialises without any condition concerning continuity of payments,
employment in mining work, etc. The widow of an insured person, however,
may not claim the guaranteed minimum unless when her husband died he
had retained his status as a miner or was in receipt of an invalidity pension.
(b)
Invalidity
In invalidity insurance, benefits are granted only to those who were
employed contributors during the period immediately preceding the materialisation of the risk.
4. B E N E F I T S
(a) Old Age
The benefits comprise :
(a) A pension, a maximum of 50 per cent, of which reverts to the widow,
constituted as follows :
(1) by the accumulation in personal accounts of the contributions paid
into the General Savings and Pension Fund, namely :
Wage
Pension
(francs per year)
(francs per year)
Under 4,800
25
4,801- 7,200
50
7,201- 9,600
75
9,601-12,000
100
12,001-14,400
125
14,401-16,800
150
Over 16,800
175
(2) by a supplement of 188 per cent., payable by the National Miners'
Pension Fund;
(3) by a State subsidy equal in principle to 50 per cent, of the total of the
pension acquired with the General Savings and Pension Fund, plus
the amount granted by the National Miners' Pension Fund, but which
in no case may exceed 1,200 francs a year. This subsidy is increased
by a third in the case of underground workers paid off at fifty-five
years of age.
(b) The provision, at the expense of the National Fund, of 3,400 kg. of
coal a year.
246
RISKS COVERED AND CASH BENEFITS
In addition to these benefits, a bonus may be granted to married pensioners when their wives reach the age of sixty-five. This bonus amounts
to 1,080 francs a year.
(b)
Invalidity
The annual invalidity pension comprises :
(1) a fixed allowance of 90 francs for each year of service, which is increased in the case of married workers. The amount of the allowance may
not fall below 1,800 francs, and may not in principle exceed 3,600 francs
for married workers, or 2,700 francs for widowers or unmarried men.
The allowance is increased, however, to 4,800 francs in the case of
married men who have been employed for thirty years in underground
work, and 3,600 francs in the case of widowers or unmarried men
with the same length of service ;
(2) the free supply of 86| kg. of coal for each year ¡of service, up to a
maximum of 3,400 kg.
In addition, and so long as invalidity continues, the National Miners'
Pension Fund pays into the General Savings and Pension Fund on behalf
of the workers concerned the minimum contributions stipulated in the
Workers' Insurance Act of 14 July 1930. Thus, from the age of sixty-five
onwards a miner suffering from invalidity receives the old-age pension
guaranteed to voluntarily insured persons under the general legislation.
The invalidity allowance is net entirely suppressed in the case of invalids
who receive an old-age pension under the* general legislation; an annual
allowance of 1,200 francs is still paid to them out of the National Fund.
If, however, the pension payable to an invalid in virtue of the contributions of the National Fund, and of the contributions in respect of any light
work in which he is permitted to engage, exceeds the normal pension prescribed in the general legislation, the allowance from the National Fund is
reduced so that the total amount of the pension and the allowance does
not exceed 4,800 francs in the case of a married man or 3,708 francs in the
case of an unmarried man.
(c) Death
Widows'1 Pensions
A widow is not entitled to a pension unless the marriage preceded the
date at which the last contribution was paid by five years. This condition
is waived, however, if on the death of the husband there is a child under
sixteen years of age dependent on the widow.
The widow's annual pension comprises :
(1) the free supply of 3,400 kg. of coal;
(2) a guaranteed minimum pension varying with the age of the pensioner;
(3) the difference, if any, between this minimum and a certain fraction
of the old-age pension to which the insured person would have been
entitled if he had reached this pensionable age.
The guaranteed minimum is fixed at 840 francs when the widow is under
the age of sixty ; it rises to 2,400 francs when she reaches the age of sixty,
and 2,940 francs at the age of sixty-five.
A certain fraction of the old-age pension reverts to the widow : when the
husband and wife are of the same age, it equals 35 per cent, if the husband
dies before the age of forty-one, and rises to 50 per cent, if he dies at or
above the age of fifty-five.
Orphans' Pensions
The legitimate children of the insured person or children adopted by
him are entitled to a pension up to the age of sixteen.
This pension is fixed at 360 francs for the first half orphan, 100 francs for
each further half orphan and 720 francs for each full orphan.
247
LEGAL PROVISIONS AND STATISTICS
5. STATISTICS OF CASH BENEFITS
Old age and invalidity
Number
of
insured persons 1
Year
1925
1928
1930
1Ô25..
1928..
1930..
1
2
3
24,441
29,618
32,285
245,698
236,188
225,781
Widows
Year
Number
of pensioners
Number
of
pensioners
7,735
13,400
15,276
Amount
of pensions 2
3
38,277,255
88,288,698
109,931,243
Orphans
Amount
oí
pensions 2 3
6,221,766
17,100,669
20,134,270
Number
of
pensioners
192
1,844
2,696
Amount
of
pensions 3
-
11,751
320,640
1,117,555
Total cash
benefits 3
44,510,772
105,710,007
131,183,068
Total number of accounts to which payments were made.
Including the value of the free supply of coal to pensioners.
In francs.
BRAZIL
Invalidity, Old-Age and Widows' and Orphans' Insurance
for the Staffs of Public Utility Undertakings
1. R I S K S COVEBED
(a) Old Age
No pension is granted unless the insured person ceases to be employed
in an insurable occupation.
An insured person may claim his pension at the age of fifty if he has
completed thirty years' service, at the age of fifty-five after twenty years'
service, and at the age of sixty-five after ten years' service. In no case
can the granting of the pension be postponed beyond the age of sixty-five.
The pensionable age may be reduced to forty-five years and the minimum
length of service to twenty-five years in the case of persons in an unhealthy
occupation (involving a substantial loss of stamina) or in a particularly
arduous occupation.
The undertaking employing the employed person may pension him off
at its discretion at the age of fifty, even if he has not completed thirty
years' service, if his working capacity has declined considerably.
(b) Invalidity
Definition and Establishment of Invalidity
A person is considered as being an invalid when he is no longer capable
of performing the duties of his position or of any other position which is
equally well paid and compatible with the normal working and mental
capacity of the insured person prior to his invalidity.
Complete permanent incapacity resulting from an industrial accident
entitles the insured person to an invalidity pension which may be paid
248
RISKS COVERED AND CASH BENEFITS
concurrently with the compensation due under the Workmen's Compensation Act.
The existence of occupational incapacity must be proved by an examination carried out by a medical board appointed by the insurance fund.
Review of Invalidity Pensions
The pension is subject t o review for five years from t h e date on which
it was granted. If the pensioner recovers his capacity for work and is
again employed in an insurable occupation, his pension lapses.
(c) Death
The loss of income resulting from the death of the breadwinner is covered
by the granting of life annuities or temporary pensions t o certain categories
of survivors.
The exceptional expenditure incidental t o the death of the breadwinner
is covered by a special allowance only when the insured person leaves no
survivors entitled t o a pension.
2. QUALIFYING PEKIOD
The qualifying period is completed by the payment of contributions in
respect of five years of employment in an insurable occupation since the last
entry into insurance.
3 . RETENTION OF STATUS OF INSURED P E R S O N
Interruptions in the payment of contributions invalidate t h e previous
service of the insured person : he can therefore only maintain his rights
by means of continued insurance.
When a worker is admitted t o compulsory insurance he may have his
previous service counted towards his pension if he pays t o the pension fund
the total contributions corresponding to such period of service.
4. B E N E F I T S
(a) Old Age and Invalidity
The pension is equal t o one-thirtieth of the basic wage for each year of
service. The basic wage means a fraction varying between 70 and 100 per
cent, of the average normal wage for the preceding three years. The
fraction which is taken as the basic wage by each pension fund is subject
to the approval of t h e Labour Council ; it is fixed for three years and applies
to all pensions falling due within that period.
The invalidity or old-age pension may in no case exceed 2,000 milreis
or fall below 200 milreis a month unless the insured person's wage was below
that figure, in which case t h e pension is equal t o his wage. When the pension is higher than 600 milreis a month, a t a x must be paid at the following
rates :
Gross pension
Tax
601-700 milreis a month
3 per cent.
701-800 milreis a month
5 per cent.
801-900 milreis a month
8 per cent.
901-1,000 milreis a month
10 per cent.
Over 1,000 milreis a month
15 per cent.
This tax, which goes t o the fund which pays the pension, is reckoned
only on t h a t fraction of the pension which exceeds 600 milreis.
(b) Death
Amount and Allocation of the Pension
The total pension granted to all survivors, irrespective of their number,
is equal t o 50 per cent, of the old-age or invalidity pension which the insured
LEGAL PROVISIONS AND STATISTICS
249
person received or could have claimed at the date of his death. The maximum is one thousand milreis a month.
When the insured person leaves a widow (or invalid widower) and children,
the widow receives half the pension and the children share the other half.
When the widow (or invalid widower) dies, the fraction which she received
is distributed among the children entitled to a pension.
Conditions Required of Survivors
Survivors may not claim a pension unless they were entirely dependent
on the deceased.
Subject t o t h a t condition, the following are considered as survivors
entitled to a pension : widow, invalid widower, legitimate or legitimised
children, illegitimate children whether recognised or not, and adopted
children.
Children are entitled to a pension only when they are under the age of
eighteen or invalids, in the case of boys, or so long as they are unmarried
in the case of girls.
If the insured person leaves no widow, invalid widower or children, an
invalid father, widowed mother, or unmarried sisters are entitled to claim
the pension.
Lump-Sum Payments at Death
When an insured person dies without leaving any survivors entitled to a
pension because he had not completed the statutory qualifying period, his
survivors are entitled to a refund of the contributions paid by the deceased,
with compound interest, in the same order of priority as for the granting
of pensions.
The funeral expenses of an insured person who dies without leaving
survivors entitled to a pension are paid by the pension fund up to a maximum
of 250 milreis.
5. SUSPENSION OR LAPSE OF PENSION RIGHTS
Pensions are suspended :
(a) when the insured person engages in an insurable occupation ;
(b) when the circumstances for which the pension was granted cease
to exist (cessation of invalidity, remarriage of the widow, etc.) ;
(c) in case of misdemeanour on the part of a pensioned survivor. If the
pension is suspended for this reason, the fraction of the pension paid
to a widow or widower reverts to the children.
6. STATISTICS OF CASH BENEFITS
(Scheme in force prior to 1 October 1931, and covering only railway
and harbour workers)
Year
Number
oí
insured persons *
140,435
1929
Year
Number
of survivors'
pensioners *
3,867
1
At the end of the year.
Number
of old-age
or invalidity
pensioners *
6,930
Annual amount
of survivors'
pensions
(in milreis)
2,877,133
Annual amount
of old-age or
invalidity pensions
(in milreis)
21,849,910
Total cash
benefits
(in milreis)
24,727,043
250
RISKS COVERED AND CASH BENEFITS
BULGARIA
Invalidity and Old-Age Insurance for Employed Persons
1. R I S K S COVERED
(a) Old Age
The pensionable age is fixed at sixty years.
(b) Invalidity
Definition of Invalidity
Invalidity within the meaning of the Act is taken to exist when a person
has permanently lost 50 per cent, or more of his working capacity in consequence of a disease or accident which was not of an occupational character.
Temporary incapacity is covered in the same way as permanent incapacity,
but only after nine months.
An insured person is not entitled to an invalidity pension if he has incurred
invalidity intentionally or through the commission of a criminal action
established by a judicial verdict.
Establishment of Invalidity
Invalidity must be established by a committee consisting of a factory
inspector as chairman, two doctors, one representative of the employers and
one representative of the workers.
Review of Invalidity Pensions
The pensioner must be re-examined every three years to determine
whether invalidity is permanent. The examination is carried out by a
pension board consisting of an official of the Department of Labour as
chairman, the director and accountant of the Social Insurance Fund, the
medical inspector of the Department of Labour, two doctors from the Superior Medical Council, two workers' delegates, two employers' delegates, and
one councillor from the court of appeal. An appeal against the decisions
of this board may be made to the Superior Administrative Court within one
month from the date on which the decision was notified to the insured
person.
(c) Death
The extra expenditure incidental to the death of a wage earner is covered
only if the insured person dies before drawing his old-age or invalidity
pension, and on condition t h a t he leaves survivors in a state of dependency.
2. QUALIFYING P E R I O D
(a) Old Age
The length of the qualifying period is as follows : 1,040 contribution weeks
when the insured person becomes in sured before the age of forty ; 520 weeks
when he becomes insured between the ages of forty and fifty, and 260 when
he becomes insured after the age of fifty.
(b) Invalidity
The length of the qualifying period has been fixed at 156 contribution
weeks.
(c) Periods Assimilated to Contribution Periods
Periods of sickness, compulsory labour and military service are reckoned
towards the qualifying period up to not more than forty weeks a year.
LEGAL PROVISIONS AND STATISTICS
251
4. RETENTION OF STATUS OF INSUBED FEBSON
The retention of the right t o benefits acquired by completing the qualifying period depends on the continuity of the insurance relationship. This
continuity is considered as maintained if the insured person has contributed
or is held to have contributed for twenty-four weeks each year either under
the compulsory or under the voluntary insurance scheme. If the contribution period does not reach this figure, the rights acquired are lost and
cannot be regained until a fresh qualifying period of 156 weeks has been
completed.
5. BENEFITS
(a) Old Age and Invalidity
The pension comprises :
1. A basic amount, varying with wages as follows :
Average daily wage
(leva)
Basic annual amount
(leva)
15 and under
1,500
16-30
2,400
31-45
3,000
46-60
4,800
61 and over
*.
6,000
2. An increment fixed at 1 leva for each contribution week after the
156th week in the case of old age, and 2 leva for each such contribution
week in the case of invalidity.
The old-age pension may not exceed 12,000 leva a year.
(b) Lump-Sum
Payments at Death
When the insured person dies before drawing his invalidity or old-age
pension, the descendants, under age, widow or widower, or parents may,
if their annual income does not exceed 6,000 leva, claim a refund of part
of the contributions paid by the insured person.
CHILE
Invalidity and Old-Age Insurance for Workers
1. R I S K S COVEBED
(a) Old Age
The insured person may claim the payment of his pension at the age of
fifty-five, sixty or sixty-five.
The age must be selected when insurance begins, but insured persons
whose pension falls due at the age of fifty-five may remain voluntarily
insured and thus obtain a higher pension after five or ten years of supplementary insurance.
(b) Invalidity
The insurance covers invalidity resulting from a chronic incurable disease
and involving a loss of earning capacity of not less than 66- per cent.
(e) Death
The risk of death is covered only when the insured person chooses to have
his old-age pension constituted by the system of repayable contributions
and on condition that he dies before commencing to draw that pension.
252
BISKS COVEREB AND CASH BENEFITS
2. QUALIFYING P E R I O D
(a) Invalidity and Old Age
According to the strict letter of the law, the qualifying period for an oldage pension is only seven contribution months, but according to the third
report on the working of the Act the qualifying period actually required is
two years in the case of old age and invalidity.
This means the payment of 104 weekly contributions or twenty-four
monthly contributions, according to the times a t which the insured person
is paid. The legislation sets no limit to the period during which this
minimum number of contributions must be paid.
No contribution is due for periods of sickness or for periods during which
the insured person was not in receipt of wages or of any income as an
employed person or independent worker, that is to say, during periods of
unemployment.
(b) Death
No qualifying period is required. The risk of death is covered by the
system of repayable contributions which the insured person is free to select.
3. R E T E N T I O N OF STATUS OF INSURED P E R S O N
When once the qualifying period has been completed, the insured person
is entitled to a pension provided t h a t he pays his contributions up to date.
An insured person retains his status so long as the circumstances rendering
him liable to insurance continue to exist or if he has been admitted to
voluntary insurance (continued insurance).
4. BENEFITS
(a) Old Age
The pension may b e constituted b y t h e system of repayable contributions
or the system of alienated contributions, at the choice of the insured person ;
the insured person's contributions (that is, the fraction which he himself
pays) are accumulated in a personal account. The fraction paid by the
insured person is 2 per cent, of the basic wage in the case of employed
persons, and 3.5 per cent, of income in the case of independent workers.
In the latter case, however, the fraction which is accumulated to meet the
risk of old age is also 2 per cent.
Unless the insured person definitely selects the system of alienated
contributions his pension is constituted under the system of repayable
contributions.
(b) Invalidity
The pension comprises :
(1) a guaranteed minimum acquired as soon as the qualifying period of
two years has been completed. This minimum is equal t o 50 per cent.
of the basic earnings ;
(2) a supplement varying according to the length of time spent in insurance.
If the insured person has paid contributions for more than five but less
than ten years, the guaranteed minimum is increased by half, so t h a t the
pension is equal to 75 per cent, of the basic earnings. If he has contributed
for ten years the guaranteed minimum is doubled, so t h a t the pension is
equal to the basic earnings.
The basic earnings mean the average earnings during the year preceding
the materialisation of the risk.
If an insured person, on account of sickness or unemployment, has had
no earnings during the year preceding the materialisation of the risk, it is
impossible to determine his basic earnings and therefore he receives no
pension.
LEGAL PROVISIONS AND STATISTICS
253
(c) Death
Where the insured opts for the system of repayable contributions, the
benefits granted to survivors in case of death are equal to the total personal
contributions of the insured person. This sum is divided equally between
the wife on the one hand and legal heirs (including illegitimate children) on
the other. If there are no heirs entitled to this sum in accordance with the
Civil Code, then the insured person may dispose of the amount of his personal payments by will.
5. SUSPENSION OR LAPSE OF PENSION RIGHTS
The only coincident rights which are prohibited by the legislation
are those to an old-age and an invalidity pension, which cannot be held
simultaneously.
6. STATISTICS OF CASH BENEFITS
Number of insured persons at the end of 1930..
1,231,057 x
(i) Invalidity Pensions
Number of pensions at 31 December 1930
Value of pensions being drawn
(ii) Old-Age Pensions
Number of pensions at 31 December 1930
Capital value of the pensions being drawn
220
266,080 pesos a year
443
88,667 pesos
Compulsory Provident Scheme for Salaried Employees
The salaried employees' provident scheme provides for two methods of
meeting the risks of old age, invalidity and death :
(1) membership of a provident fund;
(2) compulsory life insurance.
A.—PROVIDENT
FUND
1. R I S K S COVERED
The capital accumulated in the superannuation fund of each salaried
employee may be withdrawn when he satisfies certain conditions of length
of service or invalidity, or when he dies or ceases to be employed. The
conditions required are as follows :
(aJ length of service : thirty years' service or fifty years of age;
(b) invalidity : permanent incapacity to fulfil his duties in the post he
holds.
2. QUALIFYING PERIOD
(a) Length of service : no qualifying period is required if the insured
person has reached the age of fifty.
(b) Invalidity : five years' service.
(c) Death : no qualifying period.
(d) Cessation of employment : two years' service.
3. BENEFITS
The benefits are constituted by the payments made into the Provident
Fund, which include 10 per cent, of the remuneration paid t o the salaried
1
Provisional figure.
25é
RISKS COVERED AND CASH BENEFITS
employees, 25 per cent, of the bonuses paid to them, one-twelfth of each
salary increment, etc. All these are invested at compound interest.
The accumulated value of these is returned in full to the insured person
when he is entitled to claim them on account of length of service or invalidity.
In case of death, the sum standing to the insured person's account (superannuation fund) is divided equally between the surviving wife (or husband)
not permanently separated through her or his own fault and the other heirs
of the deceased ; in default of one of the survivors his share is added to t h a t
of the others.
When there are no heirs and no widow satisfying the required conditions,
the sum in question belongs to the persons designated by will ; any fraction
of which the salaried employee has not disposed by this means accrues to
the Provident Fund.
The salaried employee has not the right to transfer the sum standing to
his credit in his superannuation fund by an instrument inter vivos, nor can
this sum be inherited when the insured person dies intestate.
Apart from cases of retirement for length of service and cases of invalidity
or death, the sums accumulated in his superannuation fund may be placed
a t the disposal of the employee either in the form of a loan or definitively
if he ceases to be employed.
When an employee has paid contributions for more than two years and
then ceases to be employed, he may obtain as a loan, monthly and in arrears,
not more than 50 per cent, of the payments he had made during the first
year of such cessation of employment and not more than 30 per cent, during
the second year. These loans are suspended as soon as he resumes employment, and they must be refunded to the superannuation fund with interest
and by monthly payments which are deducted from the salary paid in his
new post. If the employee does not, for any reason, resume work after
two years he may demand the payment of the balance standing t o his credit
in his superannuation fund.
An employee may also, after receiving permission -from the Welfare
Council and complying with the provisions of the administrative regulations,
have the sums accumulated in his superannuation fund placed at his disposal
in whole or in part in order to acquire, repair or improve real property
belonging to him.
Persons who have made payments for more than two years and are not
indebted to the Provident Fund may apply for loans not exceeding 50 per
cent, of the total sum standing to their credit.
4. STATISTICS OF CASH B E N E F I T S
Salaried Employees'' Provident Fund
1929
Number of individual accounts .,
76,646
Total sums in individual accounts
133,284,000 pesos
Number of withdrawals
6,181
Capital withdrawn
9,306,100 pesos
Number of loans
9,494
Capital on loan
10,031,400 pesos
Auxiliary Provident Funds
Number of individual accounts (end of 1928).
7,705
Total sums in the insured persons' accounts.
30,112,000 pesos
B.—LIFE
INSUBANCE
A salaried employee included in the scope of the compulsory scheme
must, within six months of first being employed, take out a life insurance
policy for a capital sum of not less than 5,000 pesos. The premium must
be so calculated as to provide for the formation of actuarial reserves.
LEGAL PROVISIONS AND STATISTICS
255
Insurance is voluntary when the entire income of the insured person is
less than 4,800 pesos or when he has no wife or legal heirs. Kmployees
whose state of health is such that they cannot be admitted to insurance are
released from this obligation.
The insured capital sum and the actuarial reserves are inalienable and
immune from seizure.
The insurance premiums are deducted from the salary of each employee
and are paid by the employer in accordance with the provisions of the
administrative regulations.
When the risk materialises the amount for which the salaried employee
was insured is paid to the holder of the policy or to the person whom he
may designate. If there are no beneficiaries the sum in question accrues
to the Provident Fund.
CUBA
Invalidity, Old-Age and Widows' and Orphans' Insurance
for Seamen and Harbour Workers
1. R I S K S COVERED
(a) Length of Service
The rules concerning the pensionable age for long service differ for workers
and for salaried employees, the details being as follows :
(a) Salaried employees : no condition as regards age when the insured
person has completed thirty years' service; fifty years of age when he has
completed twenty-five years' service; sixty years of age when he has
completed ten years' service.
(b) Workers : no condition as regards age when the insured person has
completed twenty-five years' service; fifty years of age when he has completed ten years' service.
(b) Invalidity
Definition of Invalidity
The legislation covers invalidity which does not arise out of employment,
provided that the insured person is unable, as a result of his infirmities, to
continue his duties or those of any other post compatible with his normal
work and the training which he is known to have received.
Establishment of
Invalidity
The existence of invalidity must be established by two certificates, one
signed by a. doctor appointed by the insurance institution and the other
by the chief of the local health service.
Review of Invalidity
Pensions
The invalidity pension is always granted provisionally. The insurance
institution may at any time have the pensioner examined so as to determine
whether the circumstances for which the pension was granted still exist.
(c) Death
The loss of income resulting from the death of t h e breadwinner is covered
by the granting of life annuities or temporary pensions to certain categories
of survivors.
The extra expenditure incidental to the death is covered by a special
indemnity only in cases where the insured person leaves no survivors entitled
to a pension.
256
RISKS COVERED AND CASH BENEFITS
2. QUALIFYING P E R I O D
(a) Length of Service
The length of the qualifying period differs for workers and salaried
employees, being fixed as follows :
(1) salaried employees : thirty years' service for a normal pension irrespective of age; twenty-five years' for a normal pension a t the age of
fifty; ten years' for a reduced pension.
(2) workers : twenty-five years;' service for a normal pension irrespective
of age; twenty years' for a normal pension at the age of fifty; ten
years' for a reduced pension.
(b) Invalidity
and Death
The qualifying period is completed by ten years' service. There is no
condition concerning the qualifying period for the payment of a lump sum
at death.
3. B E N E F I T S
(a) Length of Service
(1) Normal pension acquired irrespective of age after twenty-five or
thirty years' service, or at age fifty after twenty or twenty-five years'
service, according as the beneficiary is a worker or salaried employee :
65 per cent, of the wage below 1,200 pesos a year
60
„
„
,, between 1,201 and 2,400 pesos
55
„
„
„
„
2,401 and 6,000 „
Since the pension cannot in any ease exceed 150 pesos a month, no
account is taken of wages in excess of 245.5 pesos a month.
(2) Pension in case of voluntary retirement at sixty years (salaried
employees) or fifty years (workers) : 3 per cent, of the normal pension for
each year of service.
(3) Pension in case of dismissal : 2 per cent, of the normal pension for
each year of service, irrespective of the beneficiary's age.
(b) Invalidity
The invalidity pension is equal to the normal retiring pension.
(c) Death
Amount and Allocation of Benefit
If the insured person dies while in receipt of a normal pension or while
entitled to such a pension, the total sum payable to all survivors, irrespective
of their number, is equal to the amount of that pension.
If the insured person dies after completing ten years' service but before
being entitled to a normal pension the total pension payable to survivors
is equal to 3 per cent, of the invalidity pension which the deceased could
have claimed for each year of service. Half this pension is payable to the
widow when there are chüdren, sisters or parents who can claim a share; the
other half is distributed equally among these other survivors. When there
are no parents, sisters or children, the widow receives the whole pension.
Conditions Required of Survivors
The conditions to be fulfilled by survivors are the following.
The widow is entitled to a pension, irrespective of her age or earning
capacity, provided that the marriage was contracted not less than one year
before the death of the husband if he was a pensioner at the date of his
death ; there is no condition concerning the duration of the marriage if death
occurred before the husband was in receipt of a pension. A widower may
not claim a pension unless he is incapacitated for employment.
LEGAL PROVISIONS AND STATISTICS
257
Legitimate children and illegitimate children who have been recognised
or whose paternity has been established in a court of law are considered as
being entitled t o a pension, provided they have not reached the age of
twenty-one and, in t h e case of girls, are unmarried. The pension due to
infirm children continues so long as they are incapacitated and unable to
maintain themselves.
Parents may not claim a pension unless they were entirely dependent on
the insured person. The same holds good with regard t o sisters of the
insured person.
Lump-Sum Payments at Death
When an insured person, not having completed the qualifying period, dies
and leaves survivors, the latter are not entitled to a pension but may
claim a lump sum equal t o 3 per cent, of the wages received b y the insured
person during the whole of his service.
4. SUSPENSION OR LAPSE OF PENSION RIGHTS
(a) Coincident Rights
The legislation prohibits two pensions granted under the Act from being
held concurrently. When an insured person can claim more than one
pension under the insurance schemes for seamen and harbour workers, he
must select whichever one he prefers.
(b) Disappearence of Circumstances for which the Pension was Granted
The pension is withheld when the circumstances for which it was granted
disappear (e.g. remarriage of the widow, cessation of invalidity, etc.).
CZECHOSLOVAKIA
Invalidity, Old-Age and Widows' and Orphans' Insurance
for Workers
1. R I S K S COVERED
(a) Old Age
The pension falls due at the age of sixty-five. As a general rule, the
granting of a pension depends on the cessation of all employment covered
b y any compulsory insurance scheme. Nevertheless, engaging in such
work does not prevent a pension from being granted if the insured person
earns less than 50 per cent, of the sum usually earned by a physically and
mentally sound person with similar training in the same occupation in the
same district.
(b) Invalidity
Definition of Invalidity
The insurance covers invalidity involving a loss of general earning capacity
of not less than 66| per cent. A person is deemed to be disabled within
the meaning of the Act if, as a result of sickness or other bodily or mental
infirmity not incurred intentionally,he is incapable of earning, in employment
suited t o his strength, ability, training and previous occupation, one-third
of the sum usually earned by a physically and mentally sound person of
the same kind with a similar training in the same district.
When invalidity is due to sickness, the right t o a pension is not granted
while the insured person can claim sickness insurance benefits, that is, for
a period of not more than fifty-two weeks.
Establishment of Invalidity
The application for a pension must be submitted t o the sickness insurance
fund with which the insured person is, or was last, insured. This fund must
17
258
RISKS COVEREID AND CASH BENEFITS
collect the necessary information for the Central Insurance Institution so
as to enable it to establish or reject the claim. This information includes
the length of the contribution period, the wage earned by the claimant
at the time of claiming, the normal wage of a physically and mentally sound
person of the same training, etc. In order to obtain information as to the
present employment and earnings of the claimant, the sickness insurance
fund must apply to the mayor of the commune in whose territory the
claimant resides.
The claimant is also examined by the medical adviser or the chief medical
officer of the nearest fund.
The medical report must contain not only a history and description of the
disease or infirmity in question, but also an estimate of the consequences
of the claimant's state of health, for his earning ability and an estimate
of the probable duration of invalidity.
The doctor entrusted with the examination may request t h a t specialists
be consulted or that the claimant be placed under observation in a hospital
or a university clinic. The examining doctor is not bound by any instructions whatsoever in carrying out his task.
The file prepared by the sickness fund is transmitted to the Central
Social Insurance Institution, the management of which decides, on the basis
of these documents or, if necessary, after a fresh medical examination,
whether the pension shall be granted or refused.
Review of Invalidity Pensions
In theory a pension can be reviewed a t any time, because the right to a
pension is dependent on the continuation of the circumstances for which
it was granted.
In practice the medical report shows whether the invalidity is permanent
or whether there is some probability of recovery or improvement. In the
former case, the pension is to all intents permanent, while in the second the
pensioner is periodically re-examined by the chief medical officer so as to
discover whether invalidity persists. Nevertheless, the right to a pension
is always subject to review, so that it never becomes an " acquired right ".
(e) Death
The loss of income resulting from the death of the breadwinner is covered
by the granting of life annuities or temporary pensions to certain categories
of survivors.
The exceptional expenditure incidental to the death is covered by funeral
benefit only when the insured person dies without leaving any survivors
entitled to a pension.
2. QUALIFYING P E R I O D
The qualifying period is completed by the payment of 100 weekly contributions, of which thirteen at least must be paid under compulsory insurance.
As a general rule, two weeks of voluntary insurance are reckoned as being
equal to one week of compulsory insurance.
Periods Assimilated to Contribution Periods
Periods of military service or periods during which the insured- person
contributed to other invalidity, old-age and widows' and orphans' insurance
schemes (for miners, salaried employees or public officials) are reckoned as
contribution periods for the purpose of the qualifying period.
3. RETENTION OP STATUS OF INSURED PERSON
Once the qualifying period has been completed, the insured person retains
his status, provided that he remains liable to compulsory insurance even
if there is an interruption in the payment of contributions.
LEGAL PROVISIONS AND STATISTICS
259
When the insured person ceases to be liable to compulsory insurance
he retains his status automatically for eighteen months as from the date
on which he ceases to be so liable. This period of eighteen months does
not include any period during which the insured person was in receipt of
sickness benefit or an invalidity or old-age pension, or any period during
which the payment of the invalidity pension was suspended, or periods of
curative treatment in place of cash benefits.
When a worker, having ceased t o be insured under the general scheme
and not becoming insured under a special scheme, again becomes liable to
compulsory insurance or is admitted to voluntary insurance, the time
previously spent in insurance is not credited to him unless the interruption
in his liability to insurance did not exceed ten years, or if it was due to the
granting of an invalidity pension. When the interruption was less than
five years the previous period is taken into account unconditionally. When
the interruption was for a longer period, previous liability is taken into
account only after a qualifying period of forty weeks has been completed.
4. BENEFITS
(a) Invalidity and Old Age
The pension consists of a fixed sum and a fraction which varies in proportion to the contributions paid.
The fixed part of the pension comprises :
(1) a basic amount of 550 Kc. a year;
(2) a State subsidy of 500 Kö. a year.
The State subsidy is not due :
(i) when the income of the pensioner, exclusive of pensions under the
social insurance Acts, exceeds the amount exempt from income t a x ;
(ii) in the case of an alien whose country of origin does not grant a
State subsidy to Czechoslovak citizens who are entitled to a pension
under the social insurance scheme in that country;
(iii) when the insured person is entitled t o other allowances out of public
funds under other legislation ; if these allowances are less than 500 Kd.
a year the excess of the State subsidy over these allowances is paid.
The increment varying with the contributions paid is as follows :
Monthly wage
(Ko.)
Annual Increments
for each weekly
contribution
(Kc.)
250 and under
0.60
250-350
0.85
350-550
1.15
550-712.50
1.40
712.50 and over
1.75
The following supplements are to be added to the basic pension :
(i) a bonus of 10 per cent, for each child under seventeen years of age
maintained by the pensioner. The child in question maybe legitimate,
illegitimate, an adopted child, a foster-child, a grandchild or a
stepchild ;
(ii) an optional bonus, granted a t the discretion of the insurance institution and equal to 50 per cent, of the pension, in the case of an
insured person requiring the constant help of another person.
(b) Death
Widows'1 Pensions
The widow is not entitled to a pension unless she is suffering from invalidity
involving general incapacity for work to the extent of not less than two-
260
RISKS COVERED AND CASH BENEFITS
thirds or is unable to attend to her household, or has reached the age of
sixty-ñve, or maintains not less ttian two children of the insured person.
The marriage must have taken place before the husband was in receipt
of an old-age or invalidity pension.
The widow's pension is fixed at half the State subsidy, the basic amount
and the increment constituting the pension which the husband received or
could have claimed in case of invalidity. The regulations restricting the
granting of the State subsidy apply equally t o widows' pensions.
Widowers'' Pensions
A widower is not entitled to a pension unless he is incapacitated at the
date when his wife dies, so t h a t the latter was mainly or wholly supporting
the family out of her earnings. The pension for an invalid widower is
reckoned in the same way as for a widow.
Orphans'' Pensions
The conditions to be fulfilled by orphans in order to claim a pension are
as follows :
(1) Definition of child.—Legitimate or legitimised children of an insured
man or woman. Illegitimate children are entitled t o a pension if their
mother was insured, on the same conditions as legitimate children. Illegitimate children are not entitled to »• pension on account of the insurance of
their father unless they were recognised or their paternity was established
in a court of law.
Adopted children are not entitled to a pension on the death of the adoptive
parent unless the adoption took place at least six months before the parent
obtained an invalidity or old-age pension.
Foster-children are entitled to an orphan's pension on the death of their
foster-parents on condition t h a t they were mainly dependent upon the fosterparents for maintenance and the latter had taken charge of them gratuitously
a t least six months before they obtained a pension or died.
Grandchildren and stepchildren are entitled to an orphan's pension if they
were mainly dependent on the deceased and the permissible maximum
amount of orphans' pensions is not previously exhausted by the children
of the deceased.
(2) Age limit.—Seventeen years'. The pension for half orphans is equal
to one-fifth, and t h a t for full orphans to two-fifths, of the pension (basic
amount, State subsidy and increment) which the insured person received
or could have claimed in case of invalidity. The rules concerning the
restriction of the granting of the State subsidy apply also in this case.
Maximum for Survivors'
Pensions
The total pensions which may be granted to survivors may not exceed
the amount of the pension which the insured person could have claimed if
the risk of old age or of invalidity had materialised at the date of his
death.
Lump-Sum Payments at Death
A lump sum is paid when the insured person leaves no survivor entitled
to a pension either because death occurred before the qualifying period was
completed or because the survivors do not satisfy the personal conditions
required by the legislation.
The lump-sum payment is made in the following order of priority : wife
or husband; children (including grandchildren, illegitimate children, adopted
children, foster-children and stepchildren); parents; and brothers and
sisters.
Parents and brothers and sisters are not entitled to a lump-sum payment
unless they were mainly dependent on the deceased for maintenance.
261
LEGAL PKOVISIONS AND STATISTICS
"When the insured person dies before completing the qualifying period, the
lump-sum payment is as follows in the different wage classes :
First class
Second ,
Third ,
Fourth „
Fifth
„ ..
550 Kö.
600 „
650 „
700 „
750 „
When the lump sum is paid in lieu of a pension because the survivors do
not satisfy the conditions required of them, although the deceased had
completed the statutory qualifying period, the indemnity granted is equal
to one year's amount of the invalidity pension which the insured person
received or could have claimed, with a minimum limit equal to the figure
mentioned above.
When a widow or widower, within two years of the death of the insured
person, receives a pension under the workers' invalidity, old-age and widows'
and orphans' insurance scheme this lump sum is deducted from the pension.
(c) Dowries
I n the event of marriage every insured woman who has completed the
qualifying period is entitled to a dowry of from 400 to 600 Kc. according
to the wage class to which she belongs. The payment of this dowry does
not involve any reduction in the rights acquired by the insured person.
In case of remarriage an insured woman is entitled to a further dowry
provided that she was insured for not less than five years before her second
marriage.
5. SUSPENSION OR L A P S E OF PENSION RIGHTS
(a) Coincident Rights
Coincident rights under the workers' invalidity, old-age and widows'
and orphans' insurance scheme and other social insurance schemes are
permitted only if they do not bring the total pension above the average
wage paid to the insured person during the hundred weeks preceding the
event entitling him to a pension under the former scheme. When the
total benefits which can be claimed under workers' insurance on the
one hand and accident insurance, miners' insurance or salaried employees'
insurance on the other exceed this average wage, the necessary reduction
to bring the sums within the statutory limits is made from the pension due
under the workers' scheme. The percentage reduction is the same for all
the different elements of t h a t pension.
(b) Maintenance of Beneficiary at Public Expense
Insurance benefits are suspended when the beneficiary is undergoing a
sentence of imprisonment for more than one month, or is placed in a compulsory labour institution or in any other institution specified by order of the
Government. When benefits are thus suspended any persons who have legal
claims for maintenance against the insured person are entitled to claim the
insured person's pension. If there are a number of such claimants the wife
and children take precedence of relatives in the ascending line and the
latter over other members of the family. The benefits are divided equally
among persons of the same group. In cases worthy of special consideration
the Central Insurance Institution may even direct t h a t part or all of the
pecuniary benefit thus withheld be paid in arrears under other conditions.
(c) Disappearance of Circumstances for which the Pension was Granted
When the circumstances for which the pension was granted disappear
(cessation of invalidity, remarriage of the widow, etc.) the pension ceases.
262
RISKS COVERED AND CASH BENEFITS
6. COMMUTATION OF PENSION FOR LUMP SUM
Pensions acquired under the workers' invalidity, old-age and widows' and
orphans' insurance scheme cannot be commuted for a lump sum. A widow
who remarries, however, receives, by way of commutation, a sum equal to
three times her widow's pension.
7. STATISTICS OF CASH B E N E F I T S
Number of insured persons :
Year
1929 : 2,305,959
1930 : 2,199,254
Number
of
pensioners
Annual amount
pensions m Kc.
1929
1930
1
11
2,317
15,784
1929
1930
604
6,062
470,795
6,277,644
1929
1930
1,007
3,399
415,808
1,916,924
Orphans 1
1929
1930
1,444
4,732
503,943
2,170,894
Lump sums at death . . .
1929
1930
4,042,310
5,037,108
1929
1930
10,742,350
19,252,300
Total cash benefits...
1
1929
1930
—
•
16,177,525
34,670,655
End of j'ear.
Invalidity, Old-Age and Widows' and Orphans' Insurance
for Salaried Employees
1. B I S K S COVEHED
(a) Olà Age
The age at which the pension falls due is fixed at sixty-five years for men
and sixty years for women. The date may, however, be advanced by five
years, provided that 480 monthly contributions have been paid into the
insured person's account.
(b| Invalidity
The insurance covers loss of occupational earning capacity.
The law does not fix the degree of incapacity which shall be binding on
the courts for the granting of a pension but specifies t h a t if the invalid
continues to work and receives remuneration which, with his pension, exceeds
either his average wage during the preceding 60 months or 30,000 Kc. a year,
the fraction of the pension in excess of this figure will be withheld.
LEGAL PROVISIONS AND STATISTICS
263
When it is not of a permanent nature the loss of occupational earning
capacity is covered only after the insured person's rights to sickness benefit
have been exhausted.
(c) Death
The loss of income resulting from the death of the breadwinner is covered
by the granting of life annuities or temporary pensions to certain categories
of survivors.
The exceptional expenditure incidental to the death is covered by funeral
benefit, and by the payment of a lump sum when death occurs before the
completion of the qualifying period.
2. QUALIFYING PERIOD
The qualifying period is completed by the payment of sixty monthly contributions.
Periods of military service or periods of contribution under other invalidity,
old-age and widows' and orphans' insurance schemes (for miners, salaried
employees or public officials) are reckoned as contribution periods for the
purposes of the qualifying period.
3. RETENTION OF STATUS OF INSURED PERSON
The rules concerning the retention of status are the same as in the workers'
insurance scheme, b u t the period during which these rights are maintained
unconditionally after the insured person has ceased to be liable to insurance
is fixed at thirty months in the salaried employees' scheme.
4. BENEFITS
(a) Old Age and Invalidity
The pension comprises :
(1) a basic amount of 3,600 Kc. a year;
(2) an increment varying with contributions and graded as follows :
Annual salary
(Kc.)
3.000
3.001
6,001
9,001
12,001
15,001
18,001
24,001
30,001
36,001
42,001
and under
to 6,000
" 9,000
" 12,000
" 15,000
" 18,000
" 24,000
" 30,000
" 36,000
" 42,000
and over
Annual increment
for each monthly
contribution
(Kc.)
2
6
10
15
20
25
30
35
40
45
50
This basic pension may be supplemented as follows :
by a supplement of 50 per cent., paid t o pensioners who, on account
of their infirmities, require the constant attendance of another person;
by a bonus equal to one-eighth of the pension for each child under eighteen
years of age. The bonus may be paid up to a maximum age of twentyfour when the child is incapable of supporting himself owing to an infirmity or because he is following a course of vocational or other studies.
264
RISKS COVERED AMD CASH BENEFITS
(b) Death
Widows'1 Pensions
The widow is entitled to a pension irrespective of any condition of age,
earning capacity or means.
The marriage must, however, have lasted for not less than six months;
or for one year when the insured person was sixty years of age or over or in
receipt of a pension when the marriage was contracted. This condition is
waived when a child is born of the marriage, or legitimised thereby.
The widow's pension is equal to half the pension which the husband
received or could have claimed in case of invalidity, the guaranteed minimum being 3,000 Kc. a year.
The pension of a widow who is obliged, on account of her infirmities, to
have the permanent assistance of another person is increased by half.
Widowers' Pensions
The pension of an invalid widower is governed by the same rules as apply
in the workers' insurance scheme.
Orphans'1 Pensions
In order to receive a pension orphans must fulfil the same conditions
as in the case of the workers' insurance scheme.
The age limit is fixed at eighteen years, but may be raised to twenty-four
when the child is unable to support himself on account of infirmity or because
he had not completed his studies.
The pension for half orphans :is 25 per cent., and that for full orphans
50 per cent., of the pension which the insured person received or could have
claimed in case of invalidity. The guaranteed minima are 1,500 Kc. and
3,000 Kc. a year respectively.
The pensions of orphans over fourteen years of age who, on account of
infirmity, are obliged to have the constant attendance of another person
are increased by half.
Parents'1 Pensions
Parents are entitled to a pension only when there is no widow, invalid
widower or orphan and provided that the insured person was mainly responsible for their maintenance.
The pension for a single parent is one-eighth, and for both parents a quarter,
of the pension which the deceased received or which he could have claimed
in case of invalidity.
Maximum for Survivors'1 Pensions
The total pensions granted to survivors may not exceed the amount of
the pension to which the insured person would have been entitled if the
risk of old age or invalidity had materialised at the date of his death.
Lump-Sum Payments at Death
The lump sums granted are the following :
(1) Funeral benefit paid to the survivors of any pensioner or insured
person who died after completing the qualifying period. For the purposes
of this indemnity the survivors comprise the widow or widower, children,
parents, grandparents and brothers and sisters of the deceased, and the
beneficiary is the one among them who defrayed the expenses of burial.
The amount of the funeral benefit is equal to one-fifth of the annual
pension which the insured person received or could have claimed in case of
invalidity.
(2) A lump sum paid by way of commutation to the widow, widower,
children or parents fulfilling the personal conditions required for the granting
of the pension but who cannot claim the pension because the insured person
died before completing the qualifying period.
LEGAL PROVISIONS AND STATISTICS
265
For the purposes of this allowance survivors are classified in the following
order of priority : widow or invalid widower; children; parents. When the
lump sum is payable to a widow, an invalid widower or to children, it is
equal to one and a half times the annual pension which the insured person
could have claimed if he had completed the qualifying period at the date
of death ; when paid to parents it is half as much.
(c) Dowries
In the event of marriage an insured woman who has completed the qualifying period receives a dowry equal to one annual instalment of the pension
which she could have claimed if the invalidity risk had materialised at the
date of her marriage.
When an insured woman who has received a dowry remarries, she is
entitled to the difference between the annual instalment reckoned as above
and the dowry originally paid.
5. SUSPENSION OR LAPSE OF PENSION RIGHTS
(a) Coincident Rights
Benefits may not be drawn simultaneously under salaried employees'
insurance and accident insurance unless the total pension from the two
sources does not exceed the average salary of the insured person during the
period immediately preceding the materialisation of the risk, which is,
as a general rule, taken to be a period of sixty months.
(b) Maintenance of Beneficiary at Public Expense ;
Disappearance of Circumstances for which the Pension was Granted
The rules which apply on these points are the same as in the workers'
insurance scheme.
6. STATISTICS OF CASH BENEFITS
Until 1929 bonuses for the fall in the value of the currency were paid
under the salaried employees' insurance scheme. The total amount of these
bonuses is known, but their distribution over the different categories of
pensioners cannot be definitely established.
From 1929 onwards, however, it is possible to evaluate the sums spent
on old-age pensions, invalidity pensions, parents' pensions and orphans'
pensions.
There will therefore be found below :
(1) the distribution of pensioners by categories and the total benefits paid
during the years 1920, 1925, 1928 and 1929;
(2) the distribution of pensioners and the sums paid to the various groups
of beneficiaries in 1931.
The figures given refer only to the Central Insurance Institution, excluding
the substitute funds, which at present have a membership of some 40,000
insured persons out of a total of approximately 360,000.
(a) 1920-1929
Year
1920...
1925...
1928...
1929...
Widows
Orphans
Total
expenditure
on benefits
(KÍ.)
2,434
4,467
6,814
8,201
2,953
3,625
4,215
4,454
3,043,091
54,804,768
91,256,244
172,028,915
Number of pensioners
Number
of insured
persons
Old age
143,000
203,580
265,070
293,917
11
270
756
3,901
Invalidity
735
3,446
6,708
8,098
266
BISKS COVERED AND CASH B E N E F I T S
(b) 1931
Number of insured persons
321,000
Number
oí pensioners
7,457
11,568
10,978
5,286
144
Annual amount
oí pensions (in KO).
55,383,873
77,662,598
37,045,971
10,349,202
236,138
Kc.
Dowries
Funeral benefit and lump sums a t death
Total cash benefits
,
20,936,878
4,054,913
205,669,573
Invalidity, Old-Age and Widows' and Orphans' Insurance
for Miners
1. R I S K S COVERED
(a) Old Age
The pensionable age is fixed at fifty years when the insured person has
contributed for between fifteen and thirty years, and at fifty-five years when
he has contributed for thirty years or more.
(b)
Invalidity
The insurance covers loss of occupational earning capacity,
The law does not fix the degree of incapacity entitling to a pension, b u t
the practice of the Supreme Arbitration Court is to grant a pension when
incapacity amounts to 40 pei' cent, in the case of an underground worker
and 50 per cent, in the case of a surface worker.
When the pensioner continues to work and receives remuneration which,
with his pension, exceeds 75 per cent, of the wages paid to workers in the
category to which he belonged before invalidity began, then the fraction
of his pension in excess is withheld.
The existence of invalidity is determined b y the doctor of the mining fund,
whose opinion is checked by the medical adviser of the Central Miners'
Benefit Society.
(c) Death
The loss of income resulting from the death of the breadwinner is covered
by the granting of life annuities or temporary pensions to certain categories
of survivors.
The exceptional expenses incidental to the death are covered b y a special
indemnity in cases where the insured person, not having completed the
qualifying period, leaves survivors with no claim to a pension.
2. QUALIFYING P E R I O D
As a general rule the qualifying period is completed by the payment of
sixty monthly contributions, but the right to reduced benefits can be
acquired when thirty-six monthly contributions have been paid.
Periods of military service and periods during which sickness benefit was
paid are reckoned towards the qualifying period, but periods of sickness are
taken into account only if the incapacity lasts more than one month.
LEGAL PROVISIONS AND STATISTICS
267
3. RETENTION OF STATUS OF INSUBED P E E S O N
The rights acquired by completion of the qualifying period are maintained
provided that the payment of contributions continues.
Nevertheless an insured person, after ceasing to be liable to insurance,
may maintain his rights by payment of monthly recognition fees. He does
not lose any rights if he fails to pay such fees during a period not exceeding
six consecutive months. If an insured person interrupts his payments for
less than three years and subsequently returns to insurance, the contributions
previously paid and invalidated on account of the interruption are again
taken into account after a special qualifying period of one year has been
completed.
These provisions apply also to insured persons who, after ceasing to be
liable to miners' insurance, enter an occupation covered by some other
insurance scheme or enter the civil service.
4. BENEFITS
(a) Old Age and Invalidity
The pension comprises :
(1) an annual basic pension of 900 Kc., the right to which is acquired
on completion of a qualifying period of five years ; this fraction of the
pension is reduced to 600 Kc. when the qualifying period has been
only three years ;
(2) an annual increment of 8 Kc. for every month during which insurance
contributions were paid.
The invalidity pension is increased by half when the pensioner suffers from
an infirmity obliging him to have the permanent assistance of another person.
(b) Death
Widows' Pensions
A widow is entitled to a pension irrespective of her age, earning capacity
or means. I t is provided, however, that the marriage must have taken
place before the date on which the husband first drew his pension.
The widow's pension is equal to half the pension which the husband
received or could have claimed if the invalidity risk had materialised at the
date of death.
Orphans' Pensions
The conditions for receiving an orphan's pension are as follows :
(1) Definition of child, (a) Fatherless legitimate or legitimised children
of an insured man. Illegitimate children are not entitled to a pension
on account of the insurance of their father unless they were recognised by
liim or their paternity was established in a court of law.
(b) Motherless legitimate or illegitimate children of an insured woman.
(2) Age limit. Sixteen years. There is no limit if the child is unable to
support himself owing to physical or mental infirmity.
The pension for half orphans is 25 per cent., and the pension for full
orphans 50 per cent., of the pension which the insured person received,
or could have claimed in case of invalidity, at the date of death.
Maximum for Survivors'' Pensions
The total pensions paid to survivors may not exceed 75 per cent, of the
pension which the insured person received, or could have claimed in case of
invalidity, at the date of death.
Lump-Sum Payments at Death
A lump sum is paid to the widow or children fulfilling the personal conditions required if they are unable to claim a pension because the insured
person died without completing the qualifying period.
268
RISKS COVERED AND CASH B E N E F I T S
This sum, which is equal to the total contributions paid in respect of
the insured person without interest, is distributed equally among all the
claimants.
5. SUSPENSION OK LAPSE OF PENSION RIGHTS
(a) Coincident Bights
No person may hold an accident pension and an invalidity pension simultaneously unless the total of the two pensions does not exceed two-thirds
of the wage on which the accident pension was calculated, or 75 per cent.
of the wage which workers in the same category received during t h e year
preceding invalidity, whichever is more advantageous to the pensioner.
(b) Disappearance of Circumstances for which the Pension was Granted
When the circumstances for which the pension was granted disappear
(remarriage of the widow, cessation of invalidity, etc.), the pension expires.
6. STATISTICS OF CASH BENEFITS
Year
Number
of
insured persons
Number
of invalidity
or old-age
pensioners
Annual amount
of invalidity
or old-age
pensions
Number
of widows'
pensions
1926...
1928...
1929. . .
137,063
135,801
140,340
42,417
43,318
43,051
Kc.
118,127,000
117,288,000
116,573,000
29,688
30,533
30,885
Year
1926...
1928...
1929...
Number
Annual amount
Annual amount
of
of
of
widows' pensions orphans' pensions orphans' pensions
Kc.
36,568,000
37,920,000
38,442,000
15,288
12,275
10,823
Kg.
6,354,000
5,209,000
4,669,000
Total amount
of
annual pensions
Kc.
161,049,000
160,417,000
159,684,000
DENMARK
Invalidity Insurance for Persons of S m a l l Means
Who are Regular Members of Sickness Funds
'
1. R I S K COVEBED : INVALID ITY
(a) Definition of Invalidity
Invalidity means a reduction in earning capacity such t h a t the person
concerned is no longer in a position to earn, by an employment suitable to
his strength and ability and such as he can be expected to undertake in
view of his training and former occupation, one-third of the customary
earnings of physically and mentally sound persons in the same district, in
the same age class and with a similar training.
Invalidity is considered to be serious when the invalid requires the
constant assistance of another person.
(b) Establishment of Invalidity
The establishment of invalidity for the granting of a normal pension
(simple invalidity) is entrusted to the Invalidity Insurance Court.
The Court consists of a chairman and five other members. The chairman
LEGAL PROVISIONS AND STATISTICS
269
is appointed by the Crown and must a t the date of his appointment satisfy
the conditions for appointment as a provincial judge. The Court also
includes two doctors, two regular members of sickness funds and an employer
who employs not less than six workers. The members of the Court, with
the exception of the chairman, are appointed for six years at a time by the
Ministry of Social Affairs.
The establishment of serious invalidity entitling the insured person to a
special supplementary pension is left to the municipal authorities of the
commune of residence.
The governing body of the sickness fund to which the insured person
belongs must prepare a file for the applicant which is transmitted to the
Invalidity Insurance Court. This file contains :
(a) an application by the claimant drawn up in accordance with a
prescribed model;
(b) a bona fide declaration signed by the applicant ;
(c) a certificate from the competent sickness fund;
(d) a medical certificate supplied by the applicant and paid for by him.
The file must also contain the requisite identity papers and certificates.
If the insured person is incapable of making an application in writing,
the accuracy of the information contained in the application must be
attested by two persons well acquainted with the facts, who if necessary must
be certified by the authorities as trustworthy.
In addition, the Invalidity Insurance Court is entitled to interrogate
witnesses and to require from the governing bodies of sickness funds,
communal authorities, employers, workers and other parties, as well as
from clinics, hospitals, medical practitioners in attendance, etc., any information which may bear on the case, including hospital registers and similar
documents. The Court may also require the insured persons to submit to
a medical examination, to be carried out by the medical adviser to the Court.
The insurance fund pays for medical certificates required by the Court.
(c) Granting of Pensions
The Invalidity Insurance Court is responsible for granting or refusing
the pension. The municipal authorities of the communes of residence are
responsible for granting or refusing the supplementary pension to persons
requiring the constant assistance of another person.
There is no appeal against the decisions of the Invalidity Insurance Court.
An appeal may be made against the decisions of the communal authorities
either by the insured persons or by the communes of settlement. The
appeal must be made to the magistrate of the area in which the commune
of settlement is situated. If the appeal is rejected, the decision of the
magistrate is final. If he allows the appeal, the case may be carried before
the Ministry of Social Affairs.
(d) Review of Invalidity Pensions
Invalidity pensions are always subject to review.
The application for the review of a pension may come from a pensioner,
from the governing body of the sickness fund or from the communal
authorities.
I t is compulsory for pensioners to notify the Invalidity Insurance Court,
through the governing body of the sickness fund, of any changes in their
condition which might increase their working capacity to such an extent
that they are no longer entitled to invalidity insurance benefits.
Similarly, the governing body of the sickness fund or the communal
authorities must make a report to the Invalidity Insurance Court when they
consider that any such change has taken place in the pensioner's condition.
The Invalidity Insurance Court, on receiving such notification, gives its
decision as to whether the pension shall continue. The Court is entitled
to send one or more experts to test the working capacity of the pensioner
on the spot or it may request the insured person to appear for examination.
270
RISKS COVERED AND CASH BENEFITS
2. QUALIFYING PERIOD AND RETENTION OF STATUS
The qualifying period is completed by membership of a sickness fund for
a period of two years. The retention of the status acquired by completing
the qualifying period depends on continuity of membership of a sickness
fund. These funds may maintain the rights of members who cease t o
pay contributions for a certain period, generally three months.
3. B E N E F I T S
The pension for simple invalidity consists of a fixed sum of 540 kr. a year.
When t h e invalid requires the constant assistance of another person, he is
entitled to a supplement of 260 kr.
4. SUSPENSION OR LAPSE OF P E N S I O N R I G H T S
(a) Coincident Rights
The pension is partially withheld when a husband and a wife are both
entitled to benefits at the same time; in this case, the pension paid to each
is reduced by one-quarter. The pension is also partially suspended when the
pensioner is in receipt of a retiring allowance or an annual grant out of
public funds or when he is in receipt of an invalidity pension under the
legislation on workmen's compensation. The fraction of the pension which
is withheld in such cases may not exceed two-thirds of the sum normally
due, one third being considered as a definite right.
(b) Disappearance of Circumstances for which the Pension was Granted
When invalidity ceases, the pension is withdrawn.
5. STATISTICS OF CASH B E N E F I T S
Year
1922
1925
1927
1929
1930
Number
of insured persons
at end ol year
Number
of pensioners
at end of year
1,298,118
1,371,134
1,425,496
1,478,153
1,525,738
3,641
14,946
19,839
23,256
25,230
Annual
expenditure
on pensions
(in kr.)
3,353,000
15,842,000
18,278,000
15,089,000
14,104,000
ECUADOR
Invalidity and Old-Age Insurance for the Staffs of Banks
1. R I S K S COVERED
(a) Length of Service
The pension for length of service falls due either after twenty-five years'
service, irrespective of the age of the insured person, or at the age of sixtyfive. In every case the insured person must cease to be employed in any
insurable occupation before the pension can be granted.
(b) Invalidity
The insurance covers only occupational incapacity : the infirmities in
question must have been contracted in the course of and as a result of the
insured person's services.
2. QUALIFYING P E R I O D
The qualifying period is completed when ten years' service has been
performed.
LEGAL PROVISIONS AND STATISTICS
271
3. BENEFITS
(a) Length of Service
The pension for length of service, irrespective of age, is equal to 2.5 per
cent, of the average salary for each year of service.
The pension paid to insured persons who have reached the age limit of
sixty-five is equal to 3.33 per cent, of the average salary for each year of
service.
(b) Invalidity
The invalidity pension is equal to 3.33 per cent, of the average salary for
each year of service in the case of complete incapacity and 2.83 per cent.
in the case of partial incapacity.
4. SUSPENSION OK L A P S E OF PENSION RIGHTS
(a) Coincident Bights
The legislation prohibits the holding simultaneously of two or more
pensions granted under its provisions. The insured person must therefore
choose whichever pension appears to him more favourable.
(b) Disappearance of Circumstances for which the Pension was Granted
When the circumstances for which the pension was granted disappear
(cessation of invalidity), the pension is withdrawn.
FRANCE
Invalidity, Old-Age and Widows' and Orphans' Insurance
for Employed Persons
A.—WORKERS
IN INDUSTRY
AND
COMMERCE
1. R I S K S COVERED
(a) Old Age
The normal pensionable age is fixed at sixty, but the insured person may
claim the payment of his pension up to a maximum of five years earlier or
later, when the pension is assessed by multiplying the sum normally payable
at sixty years by coefficients based on the expectation of life.
(b) Invalidity
Definition of Invalidity
Any insured person who, according to medical testimony, is suffering
from an infirmity which reduces his working capacity by at least two-thirds,
is entitled to an invalidity pension. No importance is attached to whether
the invalidity is of a permanent or temporary character provided that it
lasts beyond the period of six months prescribed as the duration of sickness
benefit, or whether the said incapacity results from an injury provided it
persists after the final diagnosis of the case.
Sickness, injuries or infirmity wilfully incurred by the insured person do
not give any right to cash benefits.
Establishment of Invalidity
The claim for a pension must be submitted by the insured person to the
fund to which he belongs.
The invalidity insurance fund obtains the opinion of the sickness insurance
fund to which the insured person belongs ; it then submits the claim file to
its examining doctor who gives his considered opinion on the case after
making a further examination of the claimant when he deems it to be
necessary.
The invalidity insurance fund must give a decision within two months
from the date of the receipt of the claim, and must fix the percentage of
272
RISKS COVERED AND CASH BENEFITS
incapacity of the insured person. The Act stipulates that in assessing the
degree of incapacity, the insurance fund must be guided by a schedule, and
t h a t pending the establishment of a schedule the degree of invalidity is to
be estimated provisionally on the basis of the schedule used in determining
war pensions, supplemented or modified by order of the Minister of Labour
after hearing the opinion of the Standing Committee of the Superior Insurance Council. This schedule gives, generally with a wide margin for
adjustment, the average incapacity which may result from any given
infirmity in the case of workers belonging to various occupations.
When the insured person is already in receipt of an accident pension, the
invalidity fund also decides whether the aggravation of his incapacity is or
is not due to the original cause which gave him the right to a pension. The
insured person and the sickness insurance fund are both notified of all such
decisions.
An insured person who contests the decisions of the invalidity insurance
fund may lodge a protest within fifteen days with the clerk t o the justice of
the peace. The latter must immediately convene a meeting of a technical
committee consisting of the doctor in attendance, a doctor nominated by
the fund and a doctor chosen by the justice of the peace. If it is a question
of permanent incapacity, the third doctor must be an expert nominated by
the president of the civil court. In case of abuse, the fund may sue for the
recovery of its costs. The same procedure is followed when the sickness
fund contests the decision of the invalidity fund.
In all cases a representative of the invalidity fund may be required to
appear before the technical committee.
The insured person, the sickness insurance fund and the invalidity insurance fund may appeal against the decision of the technical committee to
the Standing Committee of the Superior Insurance Council.
Appeals must be lodged within ten days after the notification of the
decision.
Review of Invalidity Pensions
Invalidity pensions are awarded in the first place provisionally for a
period of five years. During this period the beneficiary is subject to
constant medical supervision. He must submit to any medical examinations
which may be ordered by the insurance fund, but it is understood that all
travelling expenses thus incurred will be met by the fund. This supervision
allows the insurance authorities to ascertain whether the degree of invalidity
remains above the minimum rate fixed by the Act. As, however, the aim
of the Act is to ensure t h a t the beneficiary should continue to enjoy a pension unless a substantial improvement takes place in his health, a pension
is withdrawn only if the working capacity becomes higher than 50 per cent.
At the expiration of the provisional period of five years and after expert
medical advice, the pension is confirmed. However, after a further period
of five years the beneficiary must, a t the request of the insurance fund,
submit to a final expert medical examination.
If the beneficiary refuses to undergo a medical examination his pension is
suspended.
All decisions concerning the maintenance or suspension of invalidity
pensions may be contested before the technical committees referred to
above.
(c) Death
The death of an insured person gives rise to the allocation of :
(1) a temporary pension to the orphans;
(2) a lump sum intended to cover exceptional expenses resulting from the
death and to facilitate the adaptation of the dependants to their new
situation ;
(3) a capital sum or a reversionary pension voluntarily constituted, at
the option of the insured person, for his dependants.
LEGAL PROVISIONS AND STATISTICS
273
2. QUALIFYING PERIOD
(a) Old Age
As the benefits payable under old-age insurance normally correspond to
the value acquired by paid-up contributions, no qualifying period is required
in order to acquire the right to the guaranteed minimum retiring pension.
Any insured person who, at the time he retires, is able to establish t h a t
he has a certain number of contribution years, each corresponding to a
minimum of 240 working days, to his credit, is entitled to an old-age pension.
The number of contribution years is fixed at twenty-five when the insured
person claims his pension a t fifty-five years of age, and a t thirty when the
pension is taken between sixty and sixty-five years of age.
(b) Invalidity
In order to be entitled to an invalidity pension, an insured person must
have been registered for at least two years before the sickness or accident
and, consequently, have to his credit contributions corresponding to at
least 480 working days during the two years preceding the beginning of the
sickness or the accident.
(c) Death
In order to ensure that his dependants will receive benefit in case of death,
the insured person must have been registered for at least one year and have
completed sixty contribution days during the three calendar months preceding the accident or the beginning of the sickness resulting in death.
(d) Periods Assimilated to Contribution Periods
Periods of sickness are taken into consideration in calculating the qualifying period required under invalidity, old-age and widows' and orphans'
insurance. The inclusion of periods of sickness in the calculation of the
old-age pension is moreover guaranteed by the fact that the sickness insurance fund, in the case of illness entailing incapacity for more than fifteen
days, pays half the normal contribution towards old-age insurance.
In the case of workers of French nationality and those covered by a
treaty of reciprocity, periods of unemployment do not interrupt the qualifying period and are included in the minimum contribution period required
under invalidity, old-age and widows' and orphans' insurance. The period of
unemployment excused is, however, limited to a maximum of eighty days
a year, the joint contribution during unemployment being paid on behalf
of the person concerned under the " unemployment guarantee " provisions.
3. RETENTION OF STATUS OF INSURED PERSON
(a) Old Age
In old-age insurance the right to benefit results simply from the payment
of contributions and is acquired by the insured person without further
conditions.
(b) Invalidity and Death
The conditions governing the qualifying period required under invalidity
and widows' and orphans' insurance make the right to benefit conditional
on the payment of insurance contributions during a given period immediately preceding the materialisation of the risk.
4. BENEFITS
(a) Old Age
The old-age pension is constituted either on the system of repayable
contributions or on the system of alienated contributions; the fraction of
the contribution allocated to old-age insurance is accumulated in a personal
18
274
RISKS COVERED AND CASH BENEFITS
account. This fraction is net less than 2 per cent, of the basic wage for
persons under thirty years of age and not less than 3.6 per cent, for persons
of thirty years and over.
Any insured person who is able to show that he has paid the minimum
number of contributions at sixty years of age is entitled to the guaranteed
minimum old-age pension, which may not be less than 40 per cent, of his
average annual wages calculated in accordance with the compulsory contributions paid in respect of each year from the age of sixteen. If he is unable
to establish the required minimum of contributions, he is only entitled to the
annuity resulting from the accumulation of the contributions paid into his
personal account. In all cases the pension is increased by one-tenth for
every insured person who has brought up three or more children until the
age of sixteen.
(b) Invalidity
Rate of invalidity pension for insured persons registered before the age of
thirty : the pension is equal to not less than 40 per cent, of the average wage
on which compulsory contributions were paid each year from the age of
sixteen, if the insured person is over t h a t age. This rate is increased, up
to a maximum of 50 per cent., by 1 per cent, of the wage for each year
beyond the thirtieth during which at least 240 daily contributions were paid.
Rate of invalidity pensions for insured persons registered after the age of
thirty : the pension of at least 40 per cent, of the average annual wage is
reduced by one-thirtieth for each year or fraction of a year of age between
thirty and the age of entry; it may not fall below 1,000 francs, if the insured
person has contributed for at least six years. If the insured person has not
contributed for as much as six years, the minimum pension is reduced by
100 francs for each year or fraction of a year below six years but may not
fall below 600 francs and may not exceed two-thirds of the basic wage.
No year will be taken into consideration unless 240 daily contributions a t
least have been paid in the course of it.
The invalidity pension is increased by a bonus of 100 francs a year for
each child under sixteen years of age dependent on the insured person,
whether such child be legitimate, illegitimate, recognised or adopted.
For an insured person who has not thirty whole contribution years to his
credit and who has interrupted the payment of contributions for a year or
more, the invalidity pension is reduced by one-thirtieth per year of interruption or per total of fractions of a year which, when added together,
amount to one full year.
(c) Death
Life insurance makes provision for the payment of two classes of benefit,
namely, the compulsory benefit guaranteed by insurance and t h a t which
becomes payable to the survivors as a result of voluntary arrangements
made by the insured person with regard to the contributions paid by him
into his old-age insurance account.
The first group of benefits includes : the capital sum guaranteed by the
life insurance fund and orphans' pensions.
The second group comprises the repayable capital sum or the reversionary
pension constituted by the contributions paid by the insured person into
his old-age insurance account.
Compulsory Benefits
Orphans' pensions.—The widow of an insured person having at least
three children living (legitimate, recognised or adopted) of less than thirteen
years of age, who were dependent on the insured person and who remain
dependent on her, is entitled to a temporary orphan's pension for each child
of less than thirteen years of age beginning with the second. When the
children of an insured man or woman have lost both parents, each child
under thirteen years of age is entitled to a temporary orphan's pension.
Children under sixteen years of age are treated as if they were under
LEGAL PROVISIONS AND STATISTICS
275
thirteen years if proof can be shown t h a t they have entered into a written
contract of apprenticeship, or that they are engaged in study in a public
or private educational institution, or are infirm or suffering from an incurable
disease, unless they are treated in hospital at the cost of the State, a department or a commune.
The amount of the orphan's pension is fixed annually by decree and may
not be less than 120 francs a year in respect of each child.
Lump-sum payments at death.—The lump sum is paid to the widow or
widower or to the descendants or, failing them, to the ascendants who were
dependent upon the insured person at his death. I t is fixed at 20 per cent.
of the average yearly wage based on the compulsory contributions paid
every year up to sixteen years of age if the insured person has not attained
this age, and from sixteen years of age if he has passed it.
The sum paid may not be less than 1,000 francs in the case of an insured
person who has regularly paid his annual contributions, nor more than
two-thirds of the deceased person's yearly wage. I t is increased in all
cases by 100 francs for each child of over six weeks and under sixteen years
and not earning wages who was dependent upon the insured person, whether
these children be legitimate, illegitimate, recognised or adopted.
Benefits Voluntarily Provided by the Insured Person
Repayable capital sum.—The Act allows the insured person to pay his
old-age insurance contributions into a repayable capital account, and the
insured person who adopts this scheme thereby ensures that his dependants
will receive, at his death, the accumulated capital, with interest, formed by
the contributions paid into this account. The insured person is obviously
free to dispose of this sum as he thinks fit, subject only to the restrictions
imposed by legislation and legal practice governing wills and bequests.
When an insured person who has contributed towards a repayable capital
sum dies intestate, the sum in question is paid t o his dependants in accordance with the provisions of the Civil Code.
Reversionary pension.—An insured person who applies for the settlement
of his old-age pension under the alienated capital system may apply for the
utilisation of the capital value of the pension for the constitution of a pension
with reversion as to one-half thereof to the surviving widow or widower,
provided it is not payable to the latter before the age of fifty-five years.
In this case the pension is reduced from 10 to 20 per cent, according to the
age of the wife (husband) of the insured person when he applies for the
pension. This reduction continues to operate even if the wife (husband)
dies during the life of the insured person.
5. SUSPENSION OB L A P S E OF PENSION RIGHTS
(a) Coincident Rights
Benefits under the general social insurance scheme may not be granted
concurrently with those granted under the workmen's compensation
legislation. A person in receipt of a pension granted under the said legislation whose state of invalidity is aggravated by a cause other than that which
first gave him the right to benefit, may claim benefit under invalidity
insurance if the total degree of incapacity is at least equal t o two-thirds and
provided his accident pension is less than that to which he would have been
entitled under the general social insurance scheme. In this case the invalidity pension granted to the insured person is equal to the difference between
the accident pension and the normal pension due under the general scheme.
When the accident or injury sustained by the insured person does not
come under the workmen's compensation legislation, but is attributable to
a third party, the insurance fund ipso facto takes the place of the insured
person in his action against the responsible third party for expenses entailed
upon it by the accident or injury, without prejudice t o the full rights of the
insured person or of the dependants to sue for damages in respect of the loss
suffered, in accordance with the rules of the general law.
276
RISKS COVERED AND CASH BENEFITS
(b) Disappearance of Circumstances for which the Pension was Granted
The disappearance of the circumstances for which a pension was granted,
such as cessation of incapacity, entails the withdrawal of the pension.
6. COMMUTATION OF PENSION FOB L U M P SUM
An insured person who applies for the settlement of his old-age pension
under the alienated capital system may apply for the utilisation of the
capital value of t h a t part of his life annuity which exceeds 1,000 francs,
for the acquisition of a plot of land or a dwelling which will become
inalienable and exempt from seizure under the conditions laid down
b y the legislation concerning the establishment of a homestead exempt from
seizure. This use of the moneys is subject to the consent of the insurance
fund and must be effected under its supervision.
B.—AGRICULTURAL
WORKERS
1. R I S K S COVERED
(a) Old Age
The conditions for the award of an old-age pension are the same as those
prescribed in the case of workers in industry and commerce.
(b) Invalidity
The risk of invalidity is not covered in the special scheme for agricultural
workers.
(c) Death
The risk of death is included among those which must be compulsorily
covered by the insurance fund established for agricultural workers.
2. CONDITIONS OF AWARD AND COMPUTATION OF OLD-AGE PENSIONS
The conditions governing the qualifying period, maintenance of insurance
rights and the method of calculating pensions are the same as those prescribed
for industrial and commercial workers.
3 . PROVISION OF DEATH BENEFITS
The mutual benefit societies and the special sections of the departmental
funds to which agricultural workers are required to belong are given full
powers t o establish the methods of covering the risks which they insure,
in particular the risk of death, as well as conditions governing the benefits
which they are called upon to provide. The standard rules for agricultural
sections of mutual benefit societies published in the Journal officiel of
15 October 1930 fix at 800 francs the lump sum payable at death.
4. COMMUTATION OF P E N S I O N FOR L U M P SUM
Insured agricultural workers who apply for the settlement of their old-age
pensions under the alienated capital system may, like insured persons in
industry and commerce, apply for the utilisation of a part of the capital
value of their pensions for the acquisition of a plot of land or a dwelling.
Insured agricultural workers who cease to be liable to compulsory insurance
may obtain the surrender value of their old-age insurance policy, in order to
acquire, equip, transform or reconstruct the rural undertakings belonging
to them, provided that they are under forty years of age and medical examination shows them to be in good health.
LEGAL PROVISIONS AND STATISTICS
277
In return for the cancellation of the policy they receive six-eighths of the
sums accumulated in their individual old-age insurance accounts, oneeighth being left in the said accounts.
Invalidity, Old-Age and Widows' and Orphans' Insurance
for Miners
The scheme of insurance for workers and salaried employees engaged in
mining undertakings is based on two principal laws :
(1) the law of 25 February 1924 concerning miners' insurance;
(2) the law of 30 April 1930 establishing a general scheme of insurance
for employed persons.
Rules for co-ordinating the application of these two laws were laid down
in the sixth Decree of 30 June 1931.
These rules are based on the principle that in every case where a person
fulfils the conditions prescribed by the miners' insurance law, he and his
dependants shall be entitled to the benefits under t h a t law. Where, on the
contrary, the person does not fulfil those conditions, benefits can only be
claimed under the general scheme, the conditions of which must be satisfied
by him and his dependants. In certain cases, where the conditions of
both schemes are satisfield, the person concerned has an option.
The provisions of the co-ordinating Decree as regards invalidity benefits,
where they are especially important, are to the following effect.
In principle, the invalidity pension for workers and salaried employees
in mines is to be computed according to the rules laid down for the general
scheme. The only miners who remain entitled to the special benefits of
the miners' scheme are the following :
(1) workers and salaried employees with at least ten years' service in the
mines, but less than fifteen years', who satisfy the conditions required
both by the general scheme and by the special scheme and opt for
benefits under the latter ;
(2) workers and salaried employees with at least fifteen years' service in
the mines, who, if they fulfil the conditions of the miners' scheme,
benefit exclusively under t h a t scheme.
On the other hand, the following are to be subject to the general scheme
for the purposes both of entitlement to, and of the computation of, benefit :
(1) workers and salaried employees with less than ten years' service
in the mines;
(2) workers and salaried employees with at least ten years' service in
the mines, but less than fifteen years', who opt for benefits under
the general scheme ;
(3) workers and salaried employees with at least fifteen years' service in
the mines who, however, do not satisfy the conditions required by the
miners' scheme for entitlement to benefit.
The description which follows of the benefits of the miners' scheme must
be read in the light of the foregoing observations.
1. R I S K S COVERED
(a) Old Age
The pensionable age is fixed at fifty-five years.
(b) Invalidity
Definition of Invalidity
The right to invalidity benefit is conditional on the existence of general
incapacity for work to the extent of not less than 66| per cent. By this
provision it is understood that in order to be entitled to a pension, the insured
person must be incapable of earning, in any trade, a wage equal to more
278
RISKS COVERED AND CASH BENEFITS
than one-third of what he usually earned before he became incapacitated.
Temporary incapacity for work is covered in the same way as permanent
incapacity, but only after six months.
Sickness, injuries and infirmities intentionally incurred by the insured
person, or resulting from a crime or a misdemeanour committed by him,
are excluded from the risks covered.
Establishment of Invalidity
In the first place the doctor in attendance must draw up a certificate
showing the nature and the date of the beginning of the illness from which
the insured person is suffering; this certificate must also mention the consequences of the sickness or infirmity on the general working capacity of the
insured person, as well as the probable duration of the incapacity.
The certificate issued by the doctor in attendance is transmitted to the
medical adviser of the insurance fund, who then examines the claimant
and issues a report bearing on the same points.
The certificate and report, together with the opinion of the sickness insurance fund, are then transmitted to the Autonomous Miners' Pension Fund
and submitted to a medical referee, who, without any further examination
of the claimant, and in the light of the documents submitted to him, draws
up a report in which he states whether, in his opinion, the sickness or infirmity affecting the insured person entails the degree of incapacity required
by the Act for the granting of invalidity benefits. As a rule, the medical
referee must be guided in this work by a schedule fixing the degree of incapacity resulting from each infirmity 1 .
When the medical referee considers t h a t the information contained in
the files submitted to him is not sufficient to enable him to give a definite
opinion, the director of the Autonomous Fund may order a doctor to carry
out a supplementary enquiry.
When, as the result of fresh information submitted to him, the medical
referee considers, contrary to the conclusions of the sickness insurance
fund, t h a t the incapacity for mining or other work is less than two-thirds,
the insured person must be so notified; he is also asked to state whether
he desires to have his case examined by a third doctor, and when the answer
is in the affirmative, the latter is appointed by agreement with the doctor
nominated by the Autonomous Fund and a doctor chosen by the insured
person.
When the medical referee considers, contrary to the conclusions of the
sickness insurance fund, that the: degree of incapacity is equal to or more
than two-thirds, the sickness fund must be so notified; the fund is also
asked to state whether it desires that the insured person should be examined
by a third doctor, and when the answer is in the affirmative, the procedure
is the same as in the case of a similar demand by the insured person.
After examining the insured person, the third doctor submits a report
to the Autonomous Fund. The governing body of the Fund must then
decide, in the light of the report, whether the percentage of incapacity
is such as is required by the Act.
Review of Invalidity Pensions
Persons in receipt of an invalidity pension must submit t o any medical
examination ordered either by the sickness insurance fund to which they
were affiliated, or by the Autonomous Fund. Refusal to submit to this
rule entails the suspension or definitive withdrawal of the pension. Beneficiaries must also undertake to notify the Autonomous Fund or the sickness
fund if and when they begin to work again.
Finally, when persons in receipt of an invalidity pension reach fifty-five
years of age (the age at which an old-age pension becomes payable) their
case is examined anew, and, when necessary, revised. An old-age pension
may then be substituted for the invalidity pension.
1
The schedule has not yet been published.
LEGAL PROVISIONS AND STATISTICS
279
(c) Death
The loss of income resulting from the death of the breadwinner is covered
by the granting of life annuities or temporary allowances to certain categories
of survivors.
Exceptional expenses resulting from the death of an insured person are
covered by lump-sum payments made to the orphans or, failing these, to
the widow of the insured person.
2. QUALIFYING PERIOD
(a) Old Age
No qualifying period is required for the award of an old-age pension.
The minimum retiring pension is, however, granted only if the insured
person has completed at least fifteen years of mining work, each corresponding on an average to 264 contribution days.
(b) Invalidity
In order to be entitled to an invalidity pension, the insured person must
have been employed in mining work for at least ten years, representing not
less than 2,640 working days.
(c) Death
A pension is payable to the surviving dependants only if the insured
person has completed a t least fifteen years of mining work, each corresponding on an average to 264 contribution days.
(d) Periods Assimilated to Contribution Periods
Periods of incapacity for work resulting from injury or sickness are taken
into account in calculating the qualifying period for minimum benefits.
If the periods of incapacity are caused by injury, they are taken into account
up to the date of final diagnosis ; if they are due to sickness they are taken
into account as long as the injured person is entitled to regular benefits
from sickness insurance.
3. RETENTION OF STATUS OP INSURED PERSON
(a) Old Age and Death
The right to benefits or to the minimum pension acquired either by the
payment of contributions or the completion of the qualifying period is
maintained until the materialisation of the risk, and is not conditional on
the continuity of insurance or the fact that the insured person continued to
be employed as a miner during the period immediately preceding the materialisation of the risk.
(b) Invalidity
Under the invalidity insurance provisions the right to a pension is conditional on the completion of 500 working days during the three years preceding the beginning of the sickness or the occurrence of the infirmity or
accident which caused incapacity for work.
4. BENEFITS
(a) Old Age
The pension, 50 per cent, of which reverts to the widow, is formed :
(a) by the accumulation in a personal account of a part of the contributions of the insured person and his employer, namely :
for insured persons under thirty years of age : 2.5 per cent, of wages;
for insured persons of thirty years of age and over : 4 per cent. ;
280
RISKS COVERED AND CASH BENEFITS
(b) b y a supplement payable b y a solidarity fund, which may be claimed
only by workers who have completed at least fifteen years' work
in the mines. This supplement increases the annual pension to a
sum varying between 1,500 and 5,000 francs, according as the insured
person has completed from fifteen to thirty years' service.
When at fifty-five years of age the insured person has completed more
than thirty years of mining work, his pension increases by 60 francs for
each year of service after the thirtieth year.
(b) Invalidity
The invalidity pension is fixed at 3,600 francs irrespective of wages and
the length of the contribution period.
(c) Death
Widows' Pensions
To be entitled to a pension, the widow must prove that she has attained
her fifty-fifth year.
The widow must prove t h a t her marriage preceded the date at which
her husband ceased t o contribute to the insurance by three years, b u t this
condition is waived if the husband's cessation of work was due to an accident
or if there was a child born of the marriage at the time he ceased to work.
The widow's pension is fixed at 50 per cent, of the old-age pension to
which the husband was entitled or to which he would have been entitled
if he had reached the pensionable age.
Orphans' Pensions
The legitimate or recognised children of an insured man or woman are
entitled to a pension up to twelve years of age. This limit is raised to
fourteen years if the child continues to attend school until t h a t age.
The pension is fixed at 360 francs for each half orphan and at 720 francs
for each full orphan.
Lump-Sum Payments at Death
Lump sums at death are payable to the children under sixteen years of
age, or, failing them, to the widow of the insured person.
If the insured person dies in possession of the right to a proportionate
old-age pension, acquired after fifteen but less than thirty years of work,
or if he has had credited t o him, during the three years preceding the event
to which death was due, an annual average of 160 days of work or leave
for sickness or injury, the allowance is fixed as follows :
200 francs if there is one orphan only ;
250 francs if there are two orphans;
300 francs if there are three or more orphans ;
150 francs to the widow if there is no orphan.
If the insured person dies after completing thirty years of work in the
mines, or if 792 days of work or leave for sickness or injury have been credited to him during the three years preceding the event to which death
was due, the allowance is fixed as follows :
700 francs for the first orphan under the age of sixteen;
100 francs for each further orphan;
600 francs for the widow if there is is no orphan entitled to the
allowance.
5. SUSPENSION OB L A P S E OF PENSION RIGHTS
(a) Coincident Bights
The legislation relating to invalidity, old-age and widows' and orphans'
insurance for miners prohibits coincident rights to a pension granted for
an accident or industrial disease, and to a pension granted under the
miners' insurance scheme.
The possibility of the existence of coincident rights to a widows' pension
LEGAL PROVISIONS AND STATISTICS
281
and an invalidity or old-age pension under the miners' insurance scheme
is also limited by a provision which states that the total amount of the
two pensions may not exceed the amount of the retiring pension to which
the husband would have been entitled after thirty years' service^ or if he
had completed more than thirty years of mining work at fifty-five years
of age.
(b) Disappearance of Circumstances for which the Pension
was Granted
The disappearance of the circumstances for which the pension was granted
entails the withdrawal of the pension. This is the case when the beneficiary regains his working capacity or when a widow remarries. In the
latter case, however, the beneficiary receives a lump sum equal to three
times the amount of the annual pension.
6. STATISTICS OF CASH BENEFITS
N u m b e r of accounts
t o which p a y m1e n t s
were m a d e
Year
Number
of invalidity
pensioners 2
A m o u n t of
Invalidity pensions
and allowances 3
(in francs)
1919
250,559
23
1,365
1924
1926
1929
1930
392,469
408,596
124
667
982
1,143
159,403
1,102,693
2,490,967
3,212,248
Year
1919..
1924..
1926..
1929..
1930..
Year
1919..
1924. .
1926..
1929. .
1930..
388,000
Number
of
old-age
pensioners
2
Amount
of
old-age pensions 3
(in francs)
Number of pensioners : 28,958 4
Number of pensioners : 60,293 4
47,547
i 115,257,938
53,723
¡ 222,626,928
58,900
j 233,649,595
1
Number
of o r p h a nas '
pensions
,
5
5
2,715
4,150
4,707
Amount
of o r p h a n 3s '
pensions
(in francs)
5
5
1,083,222
1,501,079
1,719,162
Number
of widows"
pensions 2
Amount
of widows'
pensions 3
(in francs)
Amount of
pensions
24,136
27,267
28,248
14,309,503 4
75,398,577 i
29,643,793
56,596,119
58,296,473
Amount
| of lump sums
j
a t death
!
(in francs)
570,600
273,403
449,656
1,217,698
1,147,586
Total
cash benefits
(in francs)
6
14,881,468
75,831,383
147,537,302
284,432,791
298,025,064
1
T h e n u m b e r of accounts gives a n imperfect idea of t h e a c t u a l scope of t h e Act. On
31 August 1928, t h e n u m b e r of workers employed in mines and quarries, n o t including
allied undertakings, in t h e 87 d e p a r t m e n t s covered b y t h e Act in 1914, was a b o u t 394,792.
On 31 December 1929, t h e n u m b e r of workers was approximately 410,235
2 N u m b e r of pensioners a t end of financial year.
3
A n n u a l value of pensions in p a y m e n t a t 31 December of each year.
4
Aggregate figures for old-age pensions a n d widows' pensions.
5
O r p h a n s ' pensions were paid only after 1925.
6
A n n u a l value of pensions in p a y m e n t a t 31 December of each year a n d t o t a l expenditure
for l u m p sums during each year.
282
RISKS COVERED AND CASH BENEFITS
Invalidity, O l d - A g e a n d W i d o w s ' a n d Orphans' Insurance
.
in A l s a c e - L o r r a i n e
A.—WORKERS'
INSURANCE
I . R I S K S COVERED
(a) Old Age
The pensionable age is fixed at sixty years. The insured person may,
however, claim the payment of his pension in advance, but not more than
five years before reaching the statutory pensionable age; in such cases the
pension is assessed by multiplying the sum normally payable at sixty years
by coefficients based on the expectation of life.
(b)
Invalidity
Definition of Invalidity
A person is deemed to be incapacitated if he is no longer capable of earning,
in any employment suited to his strength and ability which can reasonably
be assigned to him in view of his training and previous occupation, onethird of the sum usually earned by a physically and mentally sound person
of the same kind, with similar training in the same district.
Sometimes the social insurance tribunals admit the claim to an invalidity
pension in the case of insured persons who from a strictly medical standpoint are not incapacitated to the extent stipulated in the Act, but who
in fact are unable to find employment in their district which allows them
to earn one-third of the sum defined in the Act. This is often so in the case
of insured persons who are obliged by injury or infirmity to change their
trade or who are affected by a contagious disease or a mental ailment.
Conversely, it may happen that from a medical standpoint the insured
person is incapacitated but is not entitled to a pension, this being so when
the wage earned by the insured person substantially exceeds the one-third
laid down by the Act, and corresponds to the actual working capacity of
the person concerned.
Temporary invalidity is covered in the same way as permanent invalidity,
but only after the twenty-sixth week, t h a t is to say, from the date the insured
person has exhausted his right to sickness benefit in cash.
Incapacity which is not due to a natural cause does not entitle the insured.
person to a pension, the Insurance Code stating that no pension will be
granted to an insured person who has wilfully incurred invalidity. I t is
not necessary that the insured person should have done so with a view to
obtaining invalidity benefit : it is sufficient that the infirmity resulting in
the reduction of working capacity has been intentionally brought about
b y the insured person, for example, through attempted suicide.
Part or all of the pension may be withheld if the insured person has incurred
invalidity in connection with the commission of an action characterised
by a criminal verdict as a exime or intentional misdemeanour (taking part
in a brawl, for example). In such cases, the insurance institutions concerned
may allot part or all of the: pension to the near relatives of the insured
person.
Establishment of Invalidity
Applications for an invalidity pension must be sent, accompanied by the
necessary documentary evidence, to the insurance office.
The chairman of the insursmce office is entitled to procure any information
necessary to elucidate the facts of the case.
LEGAL PROVISIONS AND STATISTICS
283
When the insurance office considers that the opinion of a doctor nominated by the insured person may affect the decision, the insured person
must obtain such opinion, if he desires it, at his own expense.
When the enquiries undertaken by the chairman of the insurance office
have been completed, the application is submitted for consideration to the
said office, unless the enquiries made show that the office and the applicant
are in agreement, in which case the chairman alone gives his opinion. In
the opposite case, the application must be discussed in the presence of an
employers' delegate and a representative of the insured persons. Prior
to such proceedings, the chairman may make local inspections, hear witnesses
and experts, even on oath, order the applicant to appear in person at the
proceedings, demand medical reports and official information of all kinds,
invite other insurance institutions to take part in the proceedings and, in
short, take all steps likely to promote the elucidation of the matter.
After the oral proceedings are completed, the insurance office draws up
a report dealing with all questions which in its opinion are likely to influence
the decision of the insurance institution. The report, together with a record
of the proceedings, is forwarded to the insurance institution.
Invalidity insurance benefits are assessed by the governing body of the
insurance institution.
When an application for benefit is disallowed, the applicant may demand
to be provided free of charge with a copy of the report issued by the insurance
office. He may also obtain copies of the records of the examination of
witnesses and experts, and copies of the medical reports if he is willing to
meet the cost of same.
When an application is approved or disallowed, a report must be made
stating the reasons for the decision taken.
When an application for an invalidity pension has been finally disallowed
for want of adequate proof of the presence of permanent invalidity, or if
such pension has been withdrawn because invalidity has ceased to be present,
a new application may not be made before one year after the notification
of the decision, unless it is certified that new circumstances have arisen in
the meantime which afford proof of invalidity.
Appeals against the decisions of the invalidity insurance institutions may
be lodged with the judgment chamber of the superior insurance office.
Review of Invalidity
Pensions
Persons in receipt of an invalidity pension must submit to all medical
examinations which the insurance institutions deem necessary to prove
t h a t t h e circumstances for which the pension was originally granted have
not ceased to exist. In case of refusal without good and sufficient reasons,
the state of incapacity may be deemed to have disappeared until proof of
the contrary.
(c) Death
The loss of income resulting from the death of the breadwinner of the
family is covered by the granting of life annuities or temporary allowances
to certain categories of survivors.
2. QUALIFYING PEHIOD
Under old-age insurance, the length of the qualifying period is generally
1,200 contribution weeks.
Under invalidity and widows' and orphans' insurance, the length of the
qualifying period is reduced to 200 contribution weeks, including at least
100 weeks in compulsory insurance; when less than 100 weeks have been
completed in compulsory insurance, the length of the qualifying period is
500 weeks.
284
RISKS COVERED AND CASH BENEFITS
Complete weeks during which the insured person has served with t h e
colours or has, in consequence of sickness, been temporarily incapacitated
for work, are included in the qualifying period without payment of contributions, These weeks are, however, included only for persons who, prior
to the event preventing the payment of contributions, were liable to
insurance.
3. RETENTION OF STATUS OF INSURED PERSONS
The completion of the qualifying period is not sufficient to maintain the right
of the insured person to benefit when one of the risks covered materialises.
The right to a pension is forfeited if, during the four years following t h e
issue of the card showing the payments made to the account of the insured
person, less than forty contribution weeks have been completed in compulsory insurance or in insurance continued voluntarily.
Here, as for the qualifying period, periods of sickness are included in the
contribution period provided that they do not exceed one uninterrupted
year.
This is also true for periods of compulsory military service, contribution
periods completed under the salaried employees' insurance scheme and
periods of incapacity during which the insured person received either an old-age
pension or an invalidity pension.
Moreover, an insured person retains his right to benefits, whatever t h e
number of contribution weeks completed during the last four years in insurance, if he has paid contributions during at least two-thirds of the period
between his entry into insurance and the materialisation of the risk. Thus,
a worker who has regularly paid his contributions during six years is covered
until the end of the ninth year following his entry into insurance, even when
he pays no contributions during the last three years. Complete weeks
during which the insured person has contributed compulsorily under either
the Act respecting workers' and peasants' pensions or the general social
insurance scheme, are assimilated, for the retention of status, to contribution
weeks under workers' insurance, but may not together exceed half of the
period for which insurance contributions were paid.
Rights which have lapsed as a result of the non-payment of the required
number of contributions during the last four years or during two-thirds of the
period between the entry into insurance and the materialisation of the risk,
may be revived by the completion of a new qualifying period of 200 weeks.
4. B E N E F I T S
(a) Old Age and
Invalidity
The pension consists of : (1) a State subsidy of 500 francs a year, and
(2) a fraction proportional to contributions paid.
The fraction proportional to contributions paid consists of :
(1) A basic amount varying with the wage class and always corresponding
to 500 contribution weeks. If .500 weekly contributions have not been paid,
the missing weeks are counted in the lowest wage class; if the number of
weekly contributions paid exceeds 500, the surplus lower contributions are
not taken into account.
The fraction of the basic amount corresponding to each contribution week
after 2 February 1931 is fixed as follows : when the insured person has
contributed on an annual wage of :
Franca
12,000
9,000
6,000
3,600
3,600
and over
to 12,000
to 9,000
to 6,000
and under
Francs
1.86
1.72
1.58
1.44
1.34
LEGAL PROVISIONS AND STATISTICS
285
(2) An increment varying with the number of paid-up contributions.
This increment is fixed as follows for contributions paid after 2 February
1931 : for each weekly contribution paid on an annual wage of :
Francs
12,000
9,000
6,000
3,600
3,600
Francs
and over
to 12,000
to 9,000
to 6,000
and under
1.28
1.00
0.72
0.46
0.24
A bonus equal to 10 per cent, of the pension is paid for each child under
fifteen years of age.
(b) Death
Widows'1 Pensions
The widow's pension is payable to the wife of the insured person if she
suffers from a loss of earning capacity of not less than 6 6 | per cent. The
widow's pension consists of : (1) a State subsidy of 500 francs a year and
(2) a fraction proportional to contributions paid.
This fraction is equal to two-fifths of the basic amount and increments
constituting the pension which the husband received or to which he would
have been entitled in case of invalidity.
Widowers'1 Pensions
The widower is entitled to a pension only if he can prove that he is actually
incapable of earning his living and that for this reason the insured wife
supported the family. He must also prove t h a t he is in a state of need and
a pension is paid only for the duration of such state.
The widower's pension is computed in the same way as the widow's
pension.
Orphans' Pensions
To be entitled to a pension orphans must fulfil the following conditions :
(1) Definition of child.—(a) Fatherless legitimate children of an insured
person and orphan grandchildren of an insured man, on condition, as regards
the latter, that they are in a state of need and the insured person was
responsible for their maintenance;
(b) Motherless illegitimate children of an insured woman;
(c) Motherless legitimate children of an insured woman if the father is
dead or unable to work or refuses to support his family.
In the last case the right to a pension exists only if the children are in a
state of need and if they were wholly or partly dependent on the insured
woman.
(2) Age limit.—Fifteen years.
The orphan's pension consists of : (1) a State subsidy of 250 francs a
year, and (2) a fraction proportional to contributions paid. This part is
equal to one-fifth of the basic amount and increments constituting the
pension which the insured person received or to which he would have been
entitled in case of invalidity.
Lump-Sum
Payments at Death
The amount of the lump sum which is paid to the widow or the orphan
instead of a pension when the latter cannot be granted on account of the
prohibition of coincident rights described below is fixed as follows :
286
RISKS COVERED AND CASH B E N E F I T S
Widow's lump sum : (1) State subsidy : 62.50 francs; and (2) payment
equal to the annual value of the widow's pension.
Orphan's lump sum : (1) State subsidy : 31.25 francs, and (2) payment
equal to eight-twelfths of the orphan's annual pension.
5. SUSPENSION OB L A P S E OP PENSION R I G H T S
(a) Coincident Rights
No person may simultaneously receive two pensions under the workers'
invalidity, old-age and widows' and orphans' insurance scheme.
On the death of an insured person his wife may not therefore claim a
widow's pension and an invalidity pension, even if she is herself insured :
only the invalidity pension is granted in such cases. Similarly an orphan
may claim only one orphan's pension even when the deceased parents were
both insured. In such circumstances the widow's or orphan's pension is
replaced by a lump-sum payment to the widow or orphan, both of which
payments are made in final settlement.
Again, only a part of the benefits granted under the workers' invalidity,
old-age and widows' and orphans' insurance scheme are payable simultaneously with accident compensation.
The invalidity or old-age pension is suspended when, together with accident
compensation, it exceeds seven and a half times the basic amount of the
invalidity pension. The wiclow's pension is suspended in the same conditions
if the aggregate amount of the two pensions exceeds three and a half times
the basic amount of the invalidity pension. The same rule holds good when
the orphan's pension exceeds three times the same basic amount. Coincident
rights are therefore admitted within the limits laid down above, b u t only
that fraction of the invalidity, old-age, widow's or orphan's pension which
exceeds the accident compensation is paid by the invalidity, old-age and
widows' and orphans' insurance institution.
(b) Maintenance of Beneficiary at Public Expense
When the beneficiary is serving a term of imprisonment exceeding one
month in duration or is interned in a penitentiary or in a reformatory his
pension is as a rule suspended. Nevertheless, in some cases the sums which
would normally have been due t o the beneficiary are paid t o his relatives
if they reside in the country and if they were supported wholly or partly
from the proceeds of the pension.
6. COMMUTATION OF P E N S I O N FOB L U M P SUM
As a rule pensions may not be commuted for a lump sum. Nevertheless
the insurance institution may pay to foreigners whose pension rights have
lapsed because they have voluntarily left the country a lump sum equal
to three times the annual amount of the pension.
A final payment of an equal amount may at the request of those concerned
be paid to foreigners who, while ceasing t o reside in the country, still retain
their pension rights.
287
LEGAL PROVISIONS AND STATISTICS
7. STATISTICS OF CASH BENEFITS
Year
Number
of
insured persons 1
1919
1925
1928
1929
1930
Number
of invalidity
pensions 2
260,613
410,738
435,049
438,031
528,000«
21,961
27,489
32,251
33,999
36,202
Amount
of invalidity
pensions
(in francs)
8,619,719
18,097,203
32,801,818
37,965,193
45,275,337
Year
Number
of old-age3
pensions
Amount
of old-age
pensions
(in francs)
Number
of pensioned
or assisted
widows 2
1919..
1925. .
1928..
1929..
1930..
4,357
6,379
9,635
10,563
11,498
1,146,380
4,107,529
10,575,007
12,555,946
15,257,976
2,079
5,194
8,182
10,493
12,503
326,388
2,310,068
3,868,934
6,385,002
8,610,410
Number
of orphans'
pensions 4
Amount
of orphans'
pensions 5
(in francs)
Total benefits
(in francs)
762,613
1,174,862
1,910,830
2,286,937
2,323,067
10,855,100
25,689,662
49,156,589
59,193,078
71,466,790
Year
1919
1925
1928
1929
1930
5,937
7,116
5,830
5,127
4,809
Amount of
widows' pensions
or allowances
(in francs)
1
Official estimates of the average number of insured on the basis of 47 contribution
weeks
a year.
2
Number of pensioners at end of financial year including temporary pensions for prolonged
sickness.
3
Number of pensioners at end of financial year.
4
Number
of pensioners at end of financial year including orphans receiving allowances.
5
Including the amount of the allowances.
6
Official estimate of average annual number.
B.—SALARIED
EMPLOYEES'
INSURANCE
1. R I S K S COVERED
(a) Old Age
The pensionable age is fixed a t sixty years. The insured person may
claim t h e payment of his pension in advance, b u t not more t h a n five years
before reaching t h e statutory pensionable age; in such cases the pension
is reduced in accordance with coefficients of reduction based on the expectation of life.
(b) Invalidity
An invalidity pension is paid to every insured person who, as the result
of physical or mental infirmity or disability, is definitively incapable of
following his occupation. Incapacity is deemed to be present, in t h e sense
of the preceding definition, when the working capacity of the insured person
288
RISKS COVERED AND CASH BENEFITS
is less than one-half of t h a t possessed by a physically and mentally sound
person of similar training and equivalent experience and ability.
Temporary incapacity is covered in the same way as permanent incapacity, but only after the twenty-sixth week.
(c) Death
The loss of income resulting from the death of the breadwinner is covered
by the granting of life annuities or temporary allowances to certain categories
of survivors.
Exceptional expenses resulting from the death of the insured person are
covered only if the deceased person has died without leaving his survivors
with pension rights.
2, QUALIFYING P E R I O D
The qualifying period is fixed at 120 contribution months for men and
sixty contribution months for women, provided, however, t h a t sixty monthly
contributions have been paid under compulsory insurance. Otherwise
the period is increased to 150 or 90 months respectively.
3. RETENTION OF STATUS OF INSURED P E R S O N
The maintenance of the status which the insured person acquires by
the completion of the qualifying period depends in principle on the payment
of eight monthly contributions EI year during the first ten years following
the entry into insurance and of four monthly contributions during each
of the succeeding years.
The condition respecting the continuity of insurance thus imposed by the
Act is, however, modified by the fact that after the payment of 120 monthly
contributions, t h a t is, after at least ten years in insurance, the retention
of acquired rights is guaranteed by the payment of a recognition fee of
6 francs a year.
The insured person always has the right to pay overdue contributions or
recognition fees within the two years following the time they fell due. The
payment of recognition fees due in this connection is alone sufficient to
re-establish the lapsed rights of the insured person.
Periods of compulsory military service, sickness, confinement, vocational
education, and periods during which contributions were paid under workers'
insurance or any special insurance scheme applicable t o salaried employees,
are considered, for the maintenance of the right to benefits, as contribution
periods under the Salaried Employees' Insurance Act.
When an insured person whose rights have been cancelled re-enters
insurance, all contributions previously paid and annulled can be re-credited
to him only on the completion of a new qualifying period of 48 contribution
months including at least six in compulsory insurance.
4. B E N E F I T S
(a) Old Age and Invalidity
The pension is equal to one-quarter of the first 120 monthly contributions,
plus one-sixth of the next 120 contributions, plus one-eighth of the remainder.
In the case of an insured person who has contributed for at least sixty but
less than 120 months, the pension amounts to one-fourth of the contributions
paid during the first 60 contribution months. At present the pension
includes a temporary supplement of 720 francs a year, the permanent incorporation of which in the pension is contemplated.
(b) Death
Widows' Pensions
The pension is granted to the widow of the insured person irrespective
of age or earning capacity.
The pension is fixed at four-tenths of the pension which the husband
LEGAL PROVISIONS
AND
289
STATISTICS
received or t o which he would have been entitled in the case of invalidity.
At present the pension includes a temporary supplement of 360 francs a
year, the permanent incorporation of which in the pension is contemplated.
Widowers' Pensions
The widower is entitled t o a pension only if he can prove t h a t he is actually
incapable of earning his living and that for this reason the insured wife
supported t h e family. H e must also prove that he is in a state of need,
and a pension is paid only for the duration of such state.
The widower's pension is computed in the same way as the widow's
pension.
Orphans' Pensions
In order to be entitled t o a pension, orphans must fulfil the same conditions
as regards relationship as under workers' insurance.
The age limit is fixed at eighteen years.
The pension for half orphans is fixed at one-tenth, and that for full orphans
a t one-sixth, of the pension which the insured person received or t o which
he would have been entitled in the case of invalidity. At present the
pension includes a temporary supplement of 120 francs a year, the permanent
incorporation of which in the pension is contemplated.
Maximum for Survivors' Pensions
The aggregate value of pensions granted t o survivors may not exceed
the amount of the invalidity pension which the insured person received or
to which he would have been entitled if he had been granted a pension at
the time of his death.
Lump-Sum Payments at Death
The lump sum is payable to persons dependent upon the insured women
who die after completing the qualifying period b u t before receiving an
old-age or invalidity pension and leave no relatives entitled to survivors'
pensions. I t is awarded in the following order of priority : husband,
children, parents and brothers and sisters who lived with her. As a transitional measure, provision is made for the award of a lump sum to the survivors of insured men who die before completing the qualifying period; in
this case the lump sum is awarded to the widow or, failing her, to the
children under the age of eighteen.
In all cases the lump sum amounts to 50 per cent, of the compulsory
contributions paid by the insured person.
5. SUSPENSION OB L A P S E OP PENSION RIGHTS
(a) Coincident Rights
The invalidity pension or the survivors' pension is in principle suspended
when the beneficiary is entitled to a pension under workers' insurance or
receives a salary, wage or income derived from a gainful occupation and
when the aggregate amount from the two sources exceeds the annual
remuneration corresponding t o an average of the sixty highest monthly
contributions paid in respect of him.
When sixty contributions have been paid in the highest wage class, the
basic monthly wage limiting the possibility of coincident payments is fixed
at 2,400 francs. Nevertheless no suspension or reduction of the pension
is permitted when the beneficiary is sixty years of age or over.
(b) Maintenance of Beneficiary at Public Expense ; Disappearance
of Circumstances for which the Pension was Granted
The conditions under which benefits may be suspended or withdrawn
either because the beneficiary is maintained at public expense or because
of a change in the circumstances for which the pension was granted are the
same as under workers' insurance.
19
290
RISKS COVERED AND CASH B E N E F I T S
6. STATISTICS OF CASH B E N E F I T S
Year
Number
of insured
persons
1921..
1925..
1928..
1929..
1930..
28,353
38,286
48,344
52,012
54,287
Year
1921
1925
1928
1929
1930
Year
1921
1925
1928
1929
1930
1
Number
of
invalidity
pensioners
Amount
oí invalidity
pensions i
(in francs)
Number
of old-age
pensioners
Amount
of old-age
pensions
(in francs)
26
189
369
452
514
23,431
97,080
214,015
283,496
746,802
10
348
688
786
888
31,812
238,967
524,660
627,656
1,338,114
Number
o:î
widows*
Pensions
Amount
of widows'
pensions
(in francs)
Number
of
orphans'
pensions
Amount
of o r p h a n s '
pensions
(in francs)
214
428
688
7614
843
22 ,785
74,535
163,279
192,005
508,554
119
174
234
235
365
4,420
9,263
18,319
19,281
67,759
Lump-sums and
r e p a y m e n t ot contributions
(in francs)
T o t a l cash benefits
(in francs)
70,471
189,017
328,928
303,806
331 974
152,919
608,862
1,249,201
1,426,244
2,993-20»
Including temporary pensions c a n t e d in cases of prolonged sickness.
GERMANY
Invalidity, Old-Age and Widows' and Orphans' Insurance
for W o r k e r s
1. R I S K S
COVERED
(a) Old Age
The pensionable age is fixed at sixty-five years.
(b) Invalidity
Definition of Invalidity
The insurance covers general loss of earning capacity; this is deemed to
exist if the insured person cannot earn, in any employment suited to his
strength and ability which can reasonably be assigned to him in view of his
training and previous occupation, one-third of the sum usually earned by a
physically and mentally sound person of the same kind with similar training
in the same district. The actual earnings of the insured person serve as
an indication only, and not as a sufficient basis for a definitive decision;
according to legal practice, account should not be taken of the income which
an insured person may obtain by expending exceptional energy to earn his
living despite his infirm physical condition.
LEGAL PROVISIONS AND STATISTICS
291
Temporary invalidity is covered, on the same basis as permanent invalidity,
from the end of the twenty-sixth week.
An insured person who has intentionally caused his disablement is not
entitled to a pension ; his right lapses also if he deliberately exposes himself
to risk, as for instance in attempting to commit suicide, without actually
intending to qualify for an invalidity pension. Benefit may also be refused
if the infirmity results from a crime or misdemeanour. Refusal to allow
benefit, whatever the cause, is subject to an appeal.
Establishment of Invalidity
An application for an invalidity pension must be submitted, with documentary evidence, to the insurance institution, which is then obliged to collect
the evidence necessary to judge the accuracy of the facts on which the
application is based. I t may, with this object in view, ask for the opinion
of the competent insurance office, as may also the applicant. The office
then examines the application and collects the necessary information, b u t
is not legally required to test the evidence offered by the insured person and
the institution. If the applicant considers that the opinion of a doctor
named by him can influence the office's decision, such opinion must be taken,
the expenses entailed being advanced by the applicant and refunded only
if the pension is granted.
During the enquiry the office may make an examination on the spot and
question witnesses and experts, putting them on oath if it thinks fit. I t
should, in the latter case, require the personal attendance of the applicant
and a representative of the insurance institution. I t may also call for
medical reports and official information of every kind,request other insurance
institutions to take part in the proceedings and, in short, take any steps
calculated to establish the facts.
When the enquiry is over the office forms its opinion on the case. Oral
proceedings are held only if the applicant or the institution requires them.
They are never public.
The office gives its opinion, after oral proceedings if any, on every point
which it believes may concern the institution's decision. This opinion is
transmitted to the institution with supporting documents.
The amount of benefit is fixed by the governing body of the institution.
The institution's decision, with reasons, is communicated in writing to the
applicant; in case of refusal, copies of the minutes concerning the evidence
of witnesses and experts and of the medical reports may, if the applicant
desires and it appears justifiable in his interests, also be sent him at his
own expense.
If an application for a pension has been finally disallowed failing proof
of permanent invalidity or if a pension has been withdrawn because of the
disappearance of the infirmity, the application may not be repeated within
a year of the notification of the decision unless it is accompanied b y documents showing that circumstances affording proof of invalidity have meanwhile arisen.
Appeal may be made to the judgment chamber of the superior insurance
office against decisions of insurance institutions.
Beviem of Invalidity Pensions
A pensioner is required to be examined whenever the institution considers
it necessary to verify the continued existence of the circumstances in respect
of which the pension was granted. If he refuses to do so without good
reason, the invalidity may be considered as having disappeared until proof
of the contrary. The procedure is then the same as when a pension is
applied for.
(c) Death
The loss of income resulting from the death of the breadwinner is covered
by the granting of life annuities or temporary pensions to certain categories
of survivors.
292
RISKS COVERED AND CASH BENEFITS
2. QUALIFYING P E R I O D
(a) Old Age
The qualification for an old-age pension is the payment of 750 weekly
contributions.
(b) Invalidity and Death
For invalidity and death the qualification is 250 weekly contributions if
all have been paid under compulsory insurance, and 500 weekly contributions in other cases.
(c) Periods Assimilated to Contribution Periods
Each period of sickness is counted as a period of contribution, in so far
as it does not exceed an unbroken year in duration.
3. R E T E N T I O N OF STATUS OF INSURED PERSON
The completion of the qualifying period does not suffice to guarantee
the payment of benefit on materialisation of the risk. In principle, the retention of the status of insured person depends on the payment of a t least
twenty weekly contributions every two years. This minimum is raised
to forty contributions every two years when the insured person has passed
less than sixty weeks in compulsory insurance and is contributing under
voluntary or continued insurance. Each period of two years is counted from
the date of issue of the card to which the contribution stamps are affixed.
As with the qualifying period, periods of sickness not exceeding one unbroken year in length are counted as periods of contribution. For the purpose
of maintaining the right t o benefit, periods in respect of which contributions
were paid under salaried employees' insurance are deemed to be contribution
periods under workers' insurance.
Further, the status of insured person is retained irrespective of the number
of weekly contributions paid during the last period or periods of two years
of insurance, if the person concerned has contributed for at least threequarters of the time between the date of entry into insurance and the materialisation of the risk. A person who has contributed for six years will
thus be covered until the end of the eighth year since he began to insure,
though he has made no contributions during the last two years. Periods
of sickness are, however, not counted as periods of contribution for the
retention of the status of insured person during a quarter of the time between
entry into insurance and the materialisation of the risk.
Lastly, rights lost because an insufficient number of contributions was
paid either during a period of two years or the time between entry into
insurance and the materialisation of the risk may be recovered if a new
qualifying period is completed.
The duration and condition's of the new qualification vary with the age
of the insured person on readmission : for persons readmitted to compulsory insurance when under sixty years of age, or to voluntary insurance
when under forty years of age the qualification is 200 weekly contributions ;
persons readmitted to voluntary insurance when over forty can only recover
the rights lost if they had already contributed for 500 weeks and now
contribute for a further 500 ; while persons over sixty years of age can only
recover the right if they had contributed for 1,000 weeks.
4. B E N E F I T S
(a) Old Age and Invalidity
The pension comprises :
(i) a State subsidy of 72 RM. a year ;
(ii) a fixed basic amount of 84 RM. a year;
(iii) a variable amount proportionate to the contributions paid, and
equal, for the period following 1 January 1924, to 20 per cent, of
such contributions.
A bonus of 90 RM. a year for each child under fifteen years of age is added.
LEGAL PROVISIONS AND STATISTICS
293
(b) Death
Widows' Pensions
The widow of an insured person is entitled to a pension if she is disabled
to the extent of at least two-thirds of her earning capacity or if she has
reached the age of sixty-five. Her pension is calculated as follows :
(i) a State subsidy of 72 RM. a year;
(ii) a fixed basic amount of 42 RM. a year ;
(in) a variable amount proportionate to the contributions paid, and
equal to 50 per cent, of the corresponding part of the pension
which t h e husband received or which he would have been able to
claim in case of invalidity (that is to say, 10 per cent, of the
contributions paid).
Widowers'' Pensions
The widower of an insured woman can only claim a pension if he can
show t h a t he is incapable of earning and that the insured person therefore
supported the family. He must also show that he is in need, and is granted
a pension only for the duration of such need.
Widowers' pensions are calculated on the same basis as those of widows.
Orphans' Pensions
In order to claim pensions, orphans must satisfy the following conditions !
(i) Definition of child :
(a) fatherless legitimate children of an insured man; or
(b) motherless legitimate children of an insured woman who contributed
to their upkeep.
Legitimised or adopted children, illegitimate children of an insured man
recognised by him or whose paternity has been established in a court of
law, and illegitimate children of an insured woman are always assimilated
to legitimate children.
(ii) Age limit : fifteen years.
The orphan's pension comprises :
(a) a State subsidy of 36 RM. a year;
(6) a fixed basic amount of 33.60 RM. a year ;
(c) a variable amount proportionate to the contributions paid, and equal
to 40 per cent, of the corresponding part of the pension which the insured
person received or would have been able to claim in case of invalidity.
Maximum for Survivors' Pensions
The total benefit payable t o survivors may not exceed 80 per cent, of
the earnings of a sound worker of the same occupational training as the
insured person and working in the same district, nor may it exceed the pension, including children's bonuses, which the insured person would have
been able to claim had the risk of old age or invalidity materialised at the
date of his death.
5. SUSPENSION OB L A P S E OF PENSION R I G H T S
(a) Coincident Rights
When an insured person is entitled to more than one pension by reason
of the materialisation of several of the risks covered by the workers' insurance
scheme (death of breadwinner and old age, for instance), only the higher
pension is paid.
Further, when a person entitled to a pension under the workers' insurance
scheme receives benefit under another insurance
scheme (sickness insurance,
salaried employees' or miners' insurance 1 , civil or military pensions
1
B u t see below, p . 299, for provision for coincident pensions in the case
of mining workers.
294
RISKS COVERED
AND CASH
BENEFITS
scheme, etc.), or under a war indemnity scheme, the workers' insurance
pension is only paid in so far as it exceeds that of the other scheme. In
the case of sickness benefit, however, the suspension of the workers' insurance
pension takes effect only when sickness benefit has been paid for more than
one month.
(b) Maintenance of Beneficiary at Public Expense
The pension is suspended when the pensioner is maintained at the public
expense (for instance, if he is in hospital or imprisoned for a term exceeding
one month) ; but if he is responsible for the whole or partial support of other
persons living in Germany the pension is payable to them.
(c) Disappearance of Circumstances for which the Pension was Granted
The pension is withdrawn when the circumstances for which it was granted
cease to exist (cessation of invalidity, remarriage of widow, etc.).
6.
COMMUTATION OF P E N S I O N FOB L U M P SUM
In principle, pensions may not be commuted for a lump sum, b u t the
institution may pay the capital, representing their pensions to aliens habitually residing outside Germany.
Further, widows who remarry are entitled to a lump sum equal to their
pension for one year in lieu of further benefit.
7. STATISTICS OF CASH B E N E F I T S
Year
Number
of insured
persons
contributing
1913..
1927..
1928..
1929..
1930..
18,100,0002
18,000,000s
18,000,0003
18,000,0003
18,000,000a
01d-a&'e and invalidity
pensions
Widows' pensions
Amount
Amount
Number
Number
of pensions
of pensions
of pensioners 1 (in
oí pensioners 1 (in
thousands
thousands
(in thousands)
(in thousands)
of RM.)
of KM.)
1,102.2
1,855.9
1,968.3
2,080.14
2,227.5
12.0
336.9
391.8
493.15
642.1
184,487
616,675
753,346
883,564
980,151
Orphans' pensions
Year
1913..
1927..
1928..
1929..
1930..
1
2
3
4
5
Amount
Number
of pensions
of pensioners 1 (in
thousands
(in thousands)
of EM.)
779.3
735.9
695.6
648.9
2,573
117,907
131,428
134,539
128,067
Total amount
of pensions
(in thousands
of RM.)
187,862
802,532
982,526
1,142,533
1,280,520
At 31 December.
Estimate for former territory.
Estimate.
38.6 per cent, of whom were under sixty-five years of age.
40.4 per cent, of whom were under sixty-five years of age.
801
67,950
97,752
124,430
172,302
LEGAL PROVISIONS AND STATISTICS
295
Invalidity, Old-Age and Widows' and Orphans' Insurance
for Salaried Employees
1. R I S K S COVERED
(a) Old Age
The pensionable age is in principle sixty-five years. A pension may,
however, be paid from the age of sixty onwards if the insured person has
been unemployed for a year at least ; but it is only paid while unemployment
lasts and cannot be received concurrently with unemployment relief.
(b) Invalidity
Definition of Invalidity
The insurance covers occupational incapacity, which is deemed to exist
when the insured person cannot, in his occupation, earn as much as 50 per
cent, of the normal remuneration of a mentally and physically sound person
of similar training and equivalent experience and ability.
Temporary invalidity is covered, on the same basis as permanent invalidity, from the end of the 26th week onwards.
(c) Death
The loss of income resulting from the death of the breadwinner is covered
by the granting of life annuities or temporary pensions to certain categories
of survivors.
The exceptional expenses resulting from death are covered by a funeral
indemnity in special cases only.
2. QUALIFYING PERIOD
The qualifying period is 180 months of actual contribution to cover the
risk of old age and 60 months to cover that of invalidity or death. If the
insured person was compulsorily insured for less than 60 months, the qualifying period for insurance against invalidity and death is increased to
120 months.
In order t h a t a month may count as a month of contribution for the
above purpose, contributions must have been paid at least for part of it.
3. RETENTION OF STATUS OF INSURED PERSON
Retention of the status of insured person acquired by completion of the
qualifying period depends in principle on the payment of eight monthly
contributions a year during the first ten years of insurance and of four
monthly contributions during each subsequent year.
Periods during which the person concerned contributes under the workers'
insurance scheme are counted as periods of contribution for retention of
status under the salaried employees' scheme.
The provisions for the retention of the status of insured person are the
same as under the workers' scheme, and if an insured person whose rights
have lapsed begins t o insure afresh, his rights may be regained on the
fulfilment of similar conditions.
4. BENEFITS
(a) Old Age and Invalidity
Pensions comprise :
(i) a fixed basic amount of 396 RM. a year;
(ii) a variable amount proportionate to the contributions paid and
296
RISKS COVERED AND CASH BENEFITS
equal, for the period beginning 1 January 1924, to 15 per cent, of
contributions.
A bonus of 90 RM. a year for each child under fourteen years is added.
(b) Death
Widows' Pensions
The widow of an insured person is entitled to a pension irrespective of
age or earning capacity. I t is fixed at 50 per cent, of the pension which
the husband received or which he would have been able to claim in case of
invalidity.
Widowers'1 Pensions
The widower of an insured woman is only entitled to a pension if he can
show t h a t he is incapable of earning and t h a t his wife had therefore supported
the family. He must also show Uiat he is in need, and receives a pension
for the duration of need only.
Widowers' pensions are calculated on the same basis as those of widows.
Orphans'" Pensions
I n order to claim pensions orphans must fulfil the following conditions :
(1) Definition of child : (a) fatherless legitimate children of an insured
man ; or (b) motherless legitimate children of an insured woman who had
contributed t o their support.
Legitimised and adopted children, illegitimate children of an insured man
recognised by him or whose paternity has been established in a court of
law, and illegitimate children of an insured woman are always assimilated
to legitimate children.
(2) Age limit : fifteen years.
An orphan's pension is equal to 40 per cent, of the pension received by
the insured person or which he would have been able to claim in case of
invalidity.
Maximum for Survivors'1 Pensions
The sum of all pensions payable to all survivors may not exceed 80 per
cent, of the remuneration of a sound employee of the same occupational
category as the insured person and working in the same district, nor may it
exceed the amount of the pension, including children's bonuses, which the
insured person would have been able to claim had the risk of old age or
invalidity materialised at the date of his death.
Lump-Sum Payments at Death
A lump sum is payable only to the survivors of an insured woman who
dies after completing the qualifying period but before becoming entitled
to an old-age or invalidity pension, and who leaves no survivors with pension rights. I t is paid in the following order : husband, children, parents,
and brothers and sisters, if they lived in the household of the insured person
or if she contributed substantially to their support.
The sum payable in these cases is equal to half the contributions paid
between 1 January 1924 and the death of the insured person.
5. SUSPENSION OB L A P S E OE P E N S I O N R I G H T S
The rules applicable in respect of coincident rights, the maintenance of
beneficiaries at public expense, and disappearance of the circumstances
for which the pension was granted, are the same as those obtaining under
the workers' insurance scheme.
297
LEGAL PROVISIONS AND STATISTICS
6. STATISTICS OF CASH B E N E F I T S
Old-age and invalidity
pensions '
Year
1925..
1927..
1929..
1930..
ofNumber
persons
contributing
2,400,0002
2,769,7302
3,400,0002
3,500,0002
Number
of pensioners
Amount
of pensions
(in thousands
of RM.)
38,730
60,926
98,611
125,566
26,348.9
47,865.2
92,507.9
122,869.3
Widows' pensions
Number
of pensioners
26,883
46,459
54,994
63,512
Amount
of pensions
(in thousands
of RM.)
10,196.52
16,128.02
23,084.02
31,049.02
Orphans' pensions
Year
Number
of pensioners
1925..
1927..
1929..
1930..
22,359
30,513
34,212
37,207
Refund of
Total cash
contributions,
lump sums,
benefits 1
Amount
etc.
(in thousands
oí pensions
(in thousands
of RM.)
(in thousands
of RM.)
oí RM.)
7,251.2 a
9,467.22
19,224.0 s
17,933.02
1,046.2
2,971.5
5,617.0
7,793.5
44,842.9
76,431.8
140,432.9
179,644.8
1
Excluding repayment to the workers' and miners' insurance schemes of that part
of pensions which is payable by the salaried employees' scheme to meet rights acquired by
insured
persons who have passed from one scheme to another.
2
Estimate.
Invalidity, Old-Age and Widows' and Orphans' Insurance
for Miners
A.—WORKERS'
INSURANCE
1. R I S K S COVERED
(a) Old Age
The pensionable age is fixed at sixty-five years, but, on application, a
pension may be paid from the age of fifty if the insured person has contributed for 300 months, 180 of which represent mining work, and if he is no longer
capable of employment equally remunerative with the most highly paid
work (excepting work of a temporary nature) which he has performed
during his career.
(b)
Invalidity
The insurance covers incapacity t o perform mining work consistent with
the social position, physical condition and occupational training of the
insured person.
Temporary invalidity is covered, on the same basis as permanent invalidity, from the date when the insured person ceases to be entitled to sicknes
benefit.
298
EISKS COVERED AND CASH BENEFITS
(c) Death
The loss of income resulting from the death of the breadwinner is covered
by the granting of life annuities or temporary pensions to certain categories
of survivors. The exceptional expenses caused b y death are covered b y
funeral benefit.
2. QUALIFYING PERIOD
The period of qualification for benefit is thirty months of actual contribution, at least twenty-four of which must have been passed under compulsory insurance. The period of qualification for a pension at fifty years
of age is 300 months.
In order that a month may count for the above purpose, contributions
must have been paid for at least a part of it.
3 . RETENTION OF STATUS OF INSUBED PERSON
In principle the retention of the status of insured person acquired by
completion of the qualifying period depends, during compulsory insurance,
on the payment of at least one monthly contribution a year, and subsequently on admission to a voluntary insurance scheme or payment of a
recognition fee.
Rights lost because none of the above conditions were fulfilled may be
recovered if the person concerned is readmitted to compulsory insurance
for at least six months. If he dies during this new period of qualification
his survivors are entitled to pensions as if he had completed it.
4. B E N E F I T S
(a) Old Age and
Invalidity
A pension comprises :
(1) a fixed basic amount of 84 RM. a year;
(2) a variable amount depending on the basic monthly wage and made
up as follows : i per cent, of the basic monthly wage for each of the
first 60 months; 1 per cent, for each of the next 60 months; 1.85 per
cent, for each month from 121 to 300 inclusive; and ì per cent, for
each month from 301 until the materialisation of the risk.
The basic monthly wage coincides with the upper limit of the wage class
in which the insured person contributes. This limit is fixed as follows :
Wage class
(RM. a month)
I.
II.
III.
IV.
V.
VI.
VII.
Up to 75
76-100..
101-125..
126-150..
151-175..
176-200..
Over 200
Basic monthly wage for
calculation of benefit
(RM.)
75
100
125
150
175
200
225
A bonus of 90 RM. a year for each child under fifteen years is added to
the pension as calculated above.
LEGAL PROVISIONS AND STATISTICS
299
(b) Death
Widows' Pensions
The widow of an insured person is entitled to a pension irrespective of
age and capacity to earn. I t amounts to 50 per cent, of the pension which
the husband received or which he would have been able to claim in case
of invalidity.
Orphans' Pension
To be able to claim pensions, orphans must fulfil the following conditions :
(1) Definition of child : (a) fatherless legitimate children of an insured
man; or (b) motherless legitimate children of an insured woman who
contributed to their support.
The legitimised or adopted children of an insured person, the illegitimate
children of an insured man recognised by him or whose paternity has been
established in a court of law, and the illegitimate children of an insured
woman are always assimilated to legitimate children.
(2) Age limit : fifteen years.
An orphan's pension is equal to 20 per cent, of the pension received by
the insured person or which he would have been able to claim in case of
invalidity.
Maximum for Survivors'
Pensions
The sum of the pensions payable to survivors may not exceed 80 per cent.
of the wages of a sound worker of the same occupational category as the
insured person and working in the same district, nor may it exceed the
pension (including children's bonuses) which the insured person would have
been able to claim had the risk of invalidity or old age materialised at the
date of his death.
•Funeral Benefit
Funeral benefit is due to an insured person on the death of a member
of his family (wife or child) and to the members of his household (widow,
parents, children, brothers and sisters) on his own death. Funeral expenses
must be met as a first charge on this indemnity, which is only paid if funeral
benefit of at least the same amount is not payable in virtue of sickness
insurance. On the death of an insured person the indemnity is equal to
three months' pension; on the death of his wife it is equal to §, and on that
of a child to |, of this amount.
5. SUSPENSION OR LAPSE OF PENSION R I G H T S
The rules applicable in respect of coincident rights, maintenance of the
beneficiary at the public expense, and disappearance of the circumstances
for which the pension was granted, are the same as those obtaining under
the workers' insurance scheme. Mining workers, however, are required
to contribute to the workers' insurance scheme as well as to the special
miners' insurance scheme, and benefits from the two may be drawn
concurrently, but the State subsidy under the workers' insurance scheme
is not payable again as part of the miners' insurance benefit.
6. COMMUTATION OF PENSION FOR L U M P SUM
Pensions may not be commuted for a lump sum. A widow who remarries, however, receives, in lieu of her pension, a lump sum equal to three
annual instalments of her pension. If she renounces her right to payment
of this sum, her right t o a pension revives if she becomes a widow a second
time.
300
EISKS COVERED AND CASH BENEFITS
7. STATISTICS OF CASH BENEFITS
1924
1927
Number of members
contributing
729,727 1
Old-age and invalidity pensions :
Number of pensioners
85.794 1 2
Amount of pensions
(inOOO'sofRM.)
46,842.6
Widows' pensions :
Number of pensioners
88,522 1
Amount of pensions
(in 000-s of RM.)
17,651.3
Orphans' pensions :
Number of pensioners
90,799 1
Amount of pensions
(in 000's of RM.)
4,940.5
Lump sums at death
(in 000's of RM.)
430.5
Other lump-sum payments (in 000's of
RM.)
110.4
Total cash benefits
(in 000's of RM.)
69,975.2
1929
1930
741,649 1
719,961 a
649,589 s
156,483 1 2
182,666 1 2
193,767!
127,932.6
140,328.0
146,484.5
92,716 !
96,76o 1
99,673 1
35,512.6
34,859.2
33,810.5
71,588!
63,327 1
57,592 !
4,856.7
2,828.4
2,726.4
1,831.1
2,112
1,830.9
803.3
708.1
779.5
170,948.3
180,835.7
185,632.8
1
2
Average of numbers as at 1 January and 31 December.
13,938 of whom were pensioned under the age of sixty-five in 1924, 28,929 in 1927
and 23,242 in 1929.
3 Annual weighted average.
B.—SALARIED
EMPLOYEES'
INSURANCE
1. RISKS COVERED
(a) Old Age
The conditions under which an old-age pension is payable are the same
as in the ease of mining workers.
(b)
Invalidity
The insurance covers loss of occupational earning capacity, which is
deemed to exist when the insured person's earnings in his occupation fall
below one-half of the normal remuneration of a mentally and physically
sound employee of similar training and equivalent experience and ability.
Temporary invalidity is covered, on the same basis as permanent invalidity, from the end of the twenty-sixth week.
(c) Death
The loss of income resulting from the death of the breadwinner is covered
by the granting of life annuities or temporary pensions to certain categories
of survivors. The exceptional expenses entailed by death are covered by
funeral benefit.
LEGAL PROVISIONS AND STATISTICS
301
2. QUALIFYING PERIOD
The qualifying period is thirty-six contribution months, at least twentyfour of which must have been passed in compulsory insurance. The qualifying period for a pension at fifty years of age is 300 contribution months.
3. RETENTION OP STATUS OF INSURED PERSON
The status of insured person, acquired by completion of the qualifying
period, is in principle retained by payment of one monthly contribution
a year during compulsory insurance, and subsequently by admission to a
voluntary insurance scheme or payment of a recognition fee.
For this purpose, periods during which contributions were made under
the salaried employees' insurance scheme count as periods of contribution
to miners' insurance.
If an insured person who has lost his rights to benefit re-enters compulsory insurance, such rights may be revived under the conditions described
with reference to mining workers.
4. BENEFITS
(a) Old Age and Invalidity
The pension comprises :
(1) A fixed basic amount of 396 RM. a year.
(2) A variable amount depending on the basic monthly salary and made
up as follows : \ per cent, of the basic monthly salary for each of the first
60 months; 1 per cent, for each of the next 60 months; 1.85 per cent, for
each month from 121 to 300 inclusive; and | per cent, for each month from
301 until the materialisation of the risk.
The basic monthly salary coincides with the upper limit of the salary class
in which the insured person contributes. This limit is fixed as follows :
Salary class
Basic monthly salary for
(KM. a month)
calculation of benefit
(RM.)
A. Up to 50
50
B . 50-100
100
C. 101-200
200
D. 201-300
300
E . 301-400
400
F . 401-500
500
G. 501-600
600
H . 601-700
700
I. 701-800
800
J . Over 800
900
A bonus of 90 RM. a year for each child under fifteen years of age is added
to the pension as calculated above.
(b) Death
Widows' Pensions
The widow of an insured person is entitled to a pension irrespective of
age and capacity to earn. I t amounts to 50 per cent, of the pension which
the husband received or which he would have been able to claim in case of
invalidity.
Orphans' Pensions
The rules respecting orphans' pensions are the same as obtain under the
mining workers' scheme, except that such a pension amounts to 40 per cent.
of the pension which the father received or which he would have been able
to claim in case of invalidity.
302
RISKS COVERED AND CASH BENEFITS
Maximum for Survivors' Pensions
The sum of the pensions payable to survivors may not exceed the pension
(including children's bonuses) which the insured person received or which
he would have been able to claim on the date of his death ; but the monthly
pension of a widow and one child may not be less than 90 RM., t h a t of a
widow and two children not less than 120 RM., and t h a t of a widow and
more than two children not less than 150 RM.
Funeral Benefit
The rules respecting funeral, benefit are the same as obtain under t h e
mining workers' scheme. The amount of indemnity may not be less than
300 RM. nor more than 450 RM.
5. SUSPENSION OB LAPSE OF PENSION RIGHTS
The rules for suspension or lapse of pension rights in respect of coincident
pensions, maintenance of pensioners at the public expense, and disappearance of the circumstances fo:r which the pensions were granted, are the
same as obtain under the mining workers' scheme.
6. COMMUTATION OF PENSION FOB. L U M P SUM
Pensions may not be commuted for a lump sum. A widow who remarries,
however, receives, in lieu of her pension, a lump sum equal to two annual
instalments of her pension. If she renounces her right to payment of this
sum, her right to a pension revives if she becomes a widow a second time.
7. STATISTICS OF CASH BENEFITS
Number of members
contributing
Old-age and invalidity pensions :
Number of pensioners
Amount of pensions
(in 000's of RM.)
Widows' pensions :
Number of pensioners
Amount of pensions
(in 000's of RM.)
Orphans' pensions :
Number of pensioners
Amount of pensions
(in 000's of RM.)
Lump sums at death
(in 000's of RM.)
Other lump-sum payments (in 000's of
RM.)
Total cash benefits
(in 000's of RM.)
1
2
1924
1927
1929
1930
49,017!
50,334 !
49,312 3
47,662 !
2,87112
10,364 1 2
12,472 1 2
13,46o 1
2,751.8
23,242.7
25,136.8
27,116.2
3,762
6,020
6,426
6,755
1,363.7
6,341.2
6,281.3
6,589.5
3,375
3,601
3,394
3,235
253.5
2,034.1
1,332.2
1,335.3
29.3
321.1
297.9
284.4
3.4
46.8
24.0
25.3
4,401.7
31,985.9
33,072.2
35,352.7
Average of numbers as at 1 January and 31 December.
289 ol whom were pensioned under the age of sixty-five in 1924, 1,014 in 1927 and 763
in 3 1929.
Annual weighted average.
LEGAL PROVISIONS AND
STATISTICS
303
GREAT B R I T A I N and NORTHERN IRELAND
Invalidity Insurance, and Old-Age and Widows' and Orphans'
Insurance, for Employed Persons
1. R I S K S COVERED
(a) Old Age
The pensionable age is fixed at sixty-five years.
(b)
Invalidity
The definition of the risk covered depends on whether or not the infirmity
affecting capacity to earn appears to be of a permanent nature.
In case of an infirmity which appears likely to be of short duration only,
the insured person is entitled to benefit if he cannot follow his ordinary
occupation without endangering his health; in that of an infirmity apparently permanent or likely to be of long duration, a pension is payable
only if the insured person is incapable of engaging in an occupation which
may reasonably be considered as suitable, regard being had to all the
circumstances.
In the latter case the approved society decides, subject to appeal, on
the period during which a temporary pension shall be paid to the insured
person to facilitate his adapting himself to a new occupation.
Invalidity benefit is payable from the end of the twenty-sixth week of
incapacity, that is to say, as soon as the right to sickness benefit expires.
Approved societies are at liberty to prescribe the complete or partial
exclusion, from the risks covered, of invalidity due to the misconduct of
the insured person (drunkenness, foolhardiness or self-inflicted injury).
Establishment of Invalidity
The approved societies determine whether benefits are to be paid in case
of invalidity, on production of medical and other certificates by the insured
person. The procedure followed in settling claims to benefits is fixed by
the rules of each society and should be notified to every member on admission.
The certificate of the doctor attending the insured person may be supplemented by the sick visitor's report and any other evidence or information.
If the society considers, on the strength of these indications, that a
second opinion is required, it has the insured person examined by the
regional medical officer, and usually abides by his decision.
The decisions of the approved society are subject to appeal in accordance
with the arbitration procedure provided for in the society's rules and appeal to
the Minister of Health may be made against the arbitration awards so
given.
Review of Invalidity Pensions
As long as a person is in receipt of an invalidity pension he must be
examined a t least every month by the insurance doctor responsible for his
care.
If the approved society considers it necessary, it may have the pensioner
examined by the regional medical officer, and is empowered to suspend
the payment of benefit whenever it thinks fit ; the insured person is entitled
to appeal.
(c) Death
The loss of income resulting from the death of the breadwinner is covered
b y the granting of life annuities or temporary pensions to certain categories
of survivors.
304
RISKS COVEREB AND CASH BENEFITS
2. QUALIFYING P E R I O D
(a) OU Age
Qualification consists in the payment of 104 weekly contributions, uninterrupted insurance for the five years preceding the materialisation of the
risk (that is, between the ages of sixty and sixty-five years) and ability
to show an average of thirty-nine contributions paid or deemed to have
been paid during each of the thxee years preceding the materialisation of
the risk 1 . This last requirement may however be dispensed with if the
person concerned was insured without interruption between the ages of
fifty and sixty.
(b) Invalidity
Qualification consists in uninterrupted insurance for 104 weeks and the
payment of 104 weekly contributions. Moreover, the right to normal
benefit depends on the entry of a minimum number of contributions (paid-up
or deemed to have been paid) to the credit of the person concerned during
the first twelve months (" contribution year ") of a period of eighteen months
ending in January of the year in which the risk materialises (" benefit
year "). Benefit is reduced if the number of weekly contributions paid
or regarded as paid during the above twelve months is less than fifty, and
is not paid if that number is less than thirty-six; but between the end of
the contribution year and the beginning of the benefit year, t h a t is, between
January and July, a person may recover the right to full benefit by paying
a penalty proportional to the number of contributions in arrear.
(c) Death
Qualification consists in the actual payment of 104 weekly contributions ;
but if the deceased person has been uninterruptedly insured for more than
208 weeks, the risk is only regarded as covered if the number of contributions
paid or deemed to have been paid averages at least twenty-six a year for
the three years preceding either the materialisation of the risk or attainment
of the age of sixty-five.
(d) Periods Assimilated to Contribution Periods
Periods of sickness and unemployment do not count as contribution
periods for the purpose of reckoning the qualifying period. On the other
hand, they count as periods of insurance, i.e. they do not interrupt that
continuity of insurance which must be maintained for several years before
the materialisation of the risk. In old-age and widows' and orphans'
insurance, periods of sickness and unemployment are deemed to have
entailed the payment of contributions throughout their duration. The
same is the case in invalidity insurance, save that contributions are deemed
to have been paid during one-half only of a period of unemployment, so
that the rate of the invalidity pension falls to be reduced in respect of the
half remaining unpaid, unless the arrears penalty is paid.
3. R E T E N T I O N OF STATUS OF INSURED PERSON
Interruptions in the payment of contributions do not break the continuity of insurance, and thereby invalidate the qualifying period already
completed, unless the interruption, where due to voluntary abstention from
insurable employment, lasts for a period of from eighteen to twenty-four
months (period of free insurance), or where due to involuntary unemployment, lasts for a further year (extended year). Again, continuity of insurance is maintained if an insured person reaches the age of sixty-five or dies
during the twelve months following the end of the extended year. If an
1
But see below, provisions relating to retention of status of insured person.
LEGAL PROVISIONS AND STATISTICS
305
insured person obtains employment within two years after the expiry of
the extended year, rights to old-age and widows' and orphans' pensions are
revived on the completion of a reduced qualifying period of twenty-six weeks.
4. BENEFITS
The benefit system is based on the co-existence of three schemes : sickness
and invalidity insurance covering incapacity to earn up to the age of
sixty-five; old-age and widows' and orphans' insurance guaranteeing a
pension until the age of seventy; and a non-contributory old-age pension
scheme, which is to be progressively amalgamated with the old-age and
widows' and orphans' insurance scheme, but which at present takes the
place of the latter in the case of persons over the age of seventy.
Since the rate of old-age pension is the same under the two last-named
schemes, and since pensioners pass automatically from the one to the other,
the co-existence of the two in no way affects the right to old-age and widows'
pensions ; old-age pensions are in effect for life, and the transformation of a
widow's pension into an old-age pension of the same amount at the age of
seventy is of no practical importance to her; only the fund to which the
pension is charged differs according as the pensioner is under or over the
age of seventy.
The substitution of old-age pensions for invalidity pensions at sixty-five
years also ensues automatically, and entails an increase in benefit, the old-age
pension rate being higher than that for invalidity.
(a) Old Age
The old-age pension rate is fixed at 10s. a week (£26 a year). A pension
of the same amount becomes payable to the wife of a pensioner when she
reaches the age of sixty-five years.
(b) Invalidity
The statutory invalidity pension (disablement benefit) is fixed at the
weekly rates of 7s. 6d. (£19 10s. a year) for men, 6s. (£15 12s. a year) for
unmarried women, and 5s. (£13 a year) for married women.
These rates may, however, be increased if the surplus disclosed at the
quinquennial valuation of an approved society so allows and the society so
desires, and, indeed, a substantial proportion of insured persons are thus
entitled to claim pensions at rates higher by one-third than the statutory rates,
If the number of contributions paid or deemed to have been paid during
the " contribution year " preceding the materialisation of the risk is less
than fifty, the rate of benefit is reduced as indicated in the following table :
Weekly benefit
Number
of contributions paid
in " contribution
year "
Women
Men
Married
48-49
46-47
44-45
42-43
39-41
36-38
3 5 or less
7s.
6s.
5s.
4 s . 6d.
4s.
3s.
4s.
4s.
3s.
3s.
2s.
2s.
6d.
6d.
6d.
6d.
Unmarried
5s. 6d.
5s.
4s.
3s. 6d.
3s.
2s. 6d.
N o benefit
When the pensioner reaches the age of sixty-five years, an old-age pension
automatically takes the place of the invalidity pension.
20
306
KISKS COVERED AND CASH BENEFITS
(c) Death
Widows'1 Pensions
Every widow is entitled to a pension, irrespective of her age, earning
capacity or means. A marriage giving the right to a pension must, in principle, have taken place before the insured person has reached the age of
sixty ; but this condition is waived if at the time of marriage the wife was
entitled to a widow's pension, or if children are born of the marriage, or if the
marriage lasts for at least three years.
The widow's pension is fixed a t 10s. a week (£26 a year); an old-age
pension automatically takes its place when a pensioner reaches the age of
seventy.
Orphans'1 Pensions
To qualify for pensions, orphans must fulfil the following conditions :
1. Definition of child : (a) fatherless legitimate children of an insured
man, being a married man or a widower ; (b) full orphans, whose widowed
mother was insured or a pensioner.
Stepchildren and legally a.dopted children of an insured person are
assimilated to the above, as aie also the illegitimate children of an insured
woman or insured man or his wife if they were living with the insured
person at the time of his or her death.
2. Age limit : fourteen years, except in the case of children remaining
at school, for whom it is sixteen years. In the case of fatherless children,
the rate of pension is 5s. a week (£13 a year) for the first child and 3s.
(£7 16s.) for each subsequent child. In the case of full orphans, the rate
is 7s. 6d. a week (£19 10s. a year) for each child.
S. SUSPENSION AND LAPSE OF PENSION RIGHTS
(a) Coincident Rights
In principle invalidity benefit may not be received simultaneously with
accident benefit; but, when compensation under the Workmen's Compensation Act is smaller than invalidity insurance benefit, the latter is paid
to the extent of the difference..
On the other hand, if the accident compensation is not recoverable owing
to the insolvency of the party responsible for its payment, the pensioner is
entitled to invalidity benefit in full.
(b) Maintenance of Beneficiary at Public Expense
When a pensioner is maintained a t public expense, the rules governing
the suspension of benefit vary. In the case of invalidity insurance, the
payment of benefit is postponed when a pensioner enters a convalescent
home, asylum, hospital, sanatorium, workhouse, etc., whether supported
by public or by private funds, and the accumulated instalments are paid
to the pensioner when he leaves the institution. If, however, the pensioner
has any dependants, all or part of the pension is paid to them during his
stay in the institution.
The right to an old-age pension is hot affected by admission to a charitable institution of a private nature or to a public hospital or similar establishment if the object of such admission is necessary medical attendance;
but the pension is suspended if the pensioner is admitted to a public assistance
institution for other than medical reasons.
(c) Disappearance of Circumstances for which the Pension was Granted
If the circumstances for which the pension was granted cease to exist,
benefit lapses. This is the case if invalidity ceases or if a widow remarries
before qualifying for an old-age pension on her own account.
307
LEGAL PROVISIONS AND STATISTICS
6. STATISTICS OF CASH BENEFITS
A.—Great Britain
19281
Number of insured persons (in
000's) 2 :
Invalidity insurance
Old-age and widows' and
orphans' insurance
Number of old-age pensioners (in
000's) 2
Total paid in old-age pensions
(in 000's of £)
Average number of invalidity
pensioners (in 000's) a Total paid in invalidity pensions
(in 000's of £)
Number of pensioned widows (in
000's) 2
Number of pensioned orphans and
other children (in 000's) a
Total paid in survivors' pensions
(in 000's of £)
Grand total paid in pensions (in
000's of £)
1
2
3
i
19291
1930 1
15,862
16,107
16,316
16,758
16,982
17,180
897
1,017
1,180
22,672
25,266
29,314
282
291
286
6,146
6,392
6,319
233
280
532
272
285
307
9,147
10,614
16,891
37,965
42,272
52,524
1929 !
19301
Calendar year.
At end of year.
Approximate number.
B.—Northern Ireland
1928 i
Number of insured persons (in
000's) 2
Number of old-age pensions (in
000's) 2
Total paid in old-age pensions (in
000's of £)
Average number of invalidity
pensioners (in 000's) 3
Total paid in invalidity pensions
(in 000's of £)
Number of pensioned widows (in
000's) 2
Number of pensioned orphans
and other children (in 000's) 2
Total paid in survivors' pensions
(in 000's of £)
Grand total paid in pensions (in
000's of £)
1
2
s
Calendar year.
At end of year.
Approximate number.
346
350
350
20
22
25
495
558
631
13
13
12
251
259
239
5
6
11
12
13
14
220
239
369
966
1,056
1,239
308
RISKS COVERED AND CASH B E N E F I T S
CJREEGE
Invalidity, Old-Age, and Widows' and Orphans' Insurance
for Tobacco W o r k e r s
1. R I S K S COVERED
(a) Old Age
The pensionable age is fixed at fifty-five years; b u t no pension is granted
if the person concerned continues to work in an insurable occupation.
(b) Invalidity
Definition of Invalidity
An insured person is regarded us in a state of invalidity if, as a result
of sickness, or of physical or mental infirmity not deliberately incurred,
he cannot, by work such as is consistent with his s'trength, skill, education
and previous occupation, earn one-third of t h e remuneration of a mentally
and physically healthy worker of similar training and category in the same
region.
Temporary incapacity is covered, on the same basis as permanent incapacity, b u t only after the sixth month.
Establishment of Invalidity
A person's incapacity to work is established by a committee of three
doctors, two nominated by the insurance institution and t h e third b y t h e
insured person. Their opinion, which is expressed in terms of a standard
scale, is of an indicative nature only.
(c) Death
The loss of income resulting from the death of an insured person is covered
by the granting of life annuities or temporary pensions t o certain categories
of survivors.
The exceptional expenses connected with death are only met b y special
benefit if the insured person has left no pension rights to his survivors ; b u t
on the death of a pensioner a funeral benefit is payable b y the insurance
institution.
2. QUALIFYING P E R I O D
Qualification consists in the payment of a minimum number of daily
contributions which varies with the risk covered (2,700 for old age and
1,800 for invalidity and death).
Insured persons who have paid at least 1,500 b u t less than 1,800 daily
contributions are entitled to the refund of part of their contributions if
they leave their employment on account of sickness, old age or infirmity.
If the insured person dies before such refund has been made his survivors
are entitled t o it.
Insured persons affected by tuberculosis are entitled to invalidity benefit
even if they have not completed the normal qualfying period.
3. RETENTION o r STATUS OF INSURED PERSON
The retention of the rights acquired by completion of the qualifying
period is in principle dependent on the payment of at least one contribution
during each year ; but persons whose average number of daily contributions
per year since they began to insure exceeds 130 are exempt from this obligation.
LEGAL PROVISIONS AND
STATISTICS
309
4. BENEFITS
(a) Old Age and Invalidity
The amount of the pension varies in principle with the number of contributions paid, the age of the insured person on beginning to insure, and t h e
length of the period of contribution.
At present, however, pensions are fixed at the uniform rate of 5,400 drachmas a year for men and 4,500 for women.
(b) Death
Amount and Allocation of the Pension
The sum of the pensions payable to the suivivors is fixed at half the
old-age or invalidity pension which the insured person received or which
he could have claimed at the time of his death; but if there is only one survivor entitled to a pension, he or she receives a third of such old-age or
invalidity pension.
Conditions Required of Survivors
The widow and orphans are not entitled to benefit if their earnings are
more than double the pension which they would have been able to claim.
Moreover, to claim a pension the widow must be incapable of earning,
or over forty-five years of age, or obliged to support children under fourteen
years ; but a temporary pension for a period of two years may be granted
without fulfilment of these conditions.
The widower of an insured woman is only entitled to a pension if he is
disabled and was dependent on his wife.
Orphans must fulfil the following conditions :
(1) Definition of child : (a) fatherless legitimate children of an insured
m a n ; or grandchildren (full orphans) of an insured man in need and formerly
dependent on him; (b) motherless illegitimate children of an insured woman;
(c) motherless legitimate children of an insured woman, in need and formerly
dependent on her, the father being dead, incapable of working, or having
evaded his family responsibilities.
(2) Age limit : fifteen years.
Failing a widow, disabled widower, and orphans, the pension is payable
to other survivors, who are classed for this purpose as follows : (a) parents :
father, if incapable of earning; mother; (b) descendants : grandchildren, if
full orphans ; (c) collaterals : brothers under sixteen years ; unmarried sisters
under eighteen years.
HUNGARY
Invalidity, Old-Age and Widows' and Orphans' Insurance
for Persons Employed in Industry and Commerce
A.—WORKERS'
INSURANCE
1. RISKS COVERED
(a) Old-Age
The pensionable age is fixed at sixty-five years.
(b) Invalidity
Definition of Invalidity
The insurance covers general loss of earning capacity; this is deemed to
exist if the person concerned cannot, by work corresponding to his strength
and ability, earn one-third of the average earnings of a healthy person with
similar training and skill.
Temporary invalidity is covered in the same way as permanent invalidity.
Establishment of Invalidity
A committee of not less than three hospital doctors examines the insured
person in the first place and reports on the existence and the consequences
310
RISKS COVEIIED AND CASH B E N E F I T S
of the infirmity on which the application for a pension was based. Their
opinion is transmitted to the Pension Assessment Board, which decides
whether a pension shall be allowed and, if so, what its amount and duration
shall be. The Board consists of equal numbers of representatives of the
insured persons and their employers, elected by secret ballot at a general
meeting. Its decisions are subject to appeal.
(c) Death
The loss of income resulting from the death of the breadwinner is covered
by the granting of life annuities or temporary pensions to certain categories
of survivors.
Failing survivors entitled to pensions, the insured person's parents may,
by special decision of the fund in exceptional cases, obtain a refund of part
of the contributions paid.
2. QUALIFYING P E R I O D
Qualification consists in the payment of a certain number of weekly contributions (in principle, 400 for old-age, and 200 for invalidity and survivors'
insurance). Complete weeks of sickness count as weeks of contribution up
to a maximum of thirteen weeks a year and of fifty weeks for the whole
qualifying period.
3. RETENTION OF STATUS OF INSURED PERSON
The status of insured person, acquired by completion of t h e qualifying
period, may be retained by the payment of a minimum of thirteen weekly
contributions per year. Complete weeks of sickness, which are regarded
as weeks of contribution for the purpose of qualification, are so regarded for
this purpose also.
The same applies to :
(1) periods during which the insured person has contributed t o a n insurance institution other than that for workers employed in commerce
and industry (miners' insurance, for instance) or was in receipt of a
pension or accident benefit equal t o a t least one-fifth of the full
pension guaranteed under t h e workers' scheme;
(2) periods during which the insured person was not able to pay contributions, either by reason oí force majeure or because he was an apprentice and so not qualified for membership.
Moreover, t h e status of insured person is retained, whatever the number
of weekly contributions paid during membership, if contributions were paid
during at least two-thirds of the period between entry into insurance and
the materialisation of the risk.
Rights lost because the number of contributions paid fell below the
minimum required are revived after 26 weekly contributions have been
entered to the credit of the insured person during the year following such
loss of rights, or if a sum equivalent to the missing contributions is paid
to his credit before materialisation of the risk, or, thirdly, if he completes
the qualifying period afresh.
4. B E N E F I T S
(a) Old Age
The annual pension comprises a basic amount of 120 pengö and a variable
amount equal to 24 per cent, of the contributions paid.
A bonus of 5 per cent, is payable in respect of each child under fifteen years
of age; children who continue their education, and are for t h a t reason incapable of providing for themselves, give t h e right to the bonus until they
reach the age of seventeen.
Bonuses for children may not exceed in all 20 per cent, of the pension.
LEGAL PROVISIONS
AND STATISTICS
311
(b) Death
Widows' Pensions
In order to claim a pension a widow must be sixty-five years of age or
disabled. A widow's pension is equal to 50 per cent, of the pension which
her husband received or which he would have been able to claim in case
of invalidity.
Widowers'1 Pensions
A widower can only claim a pension if he is wholly incapable of working
and if, for this reason, he had been mainly dependent on the insured person's
earnings for at least two years. A widower's pension is calculated in the
same way as that of a widow.
Orphans'' Pensions
In order to claim pensions, orphans must fulfil the following conditions :
Definition of children : they must be the legitimate or legitimised children
of an insured man or woman. Stepchildren are assimilated to the insured
person's own legitimate children, as are illegitimate children whose father
recognised them while still contributing or whose paternity has been established in a court of law.
Age limit : fifteen years, or eighteen years if the child is incapable of
earning its living by reason either of education or of infirmity.
A motherless or fatherless child receives a pension of 15 per cent., and a
full orphan one of 30 per cent, of the pension received by the insured person
or which he would have been able to claim in case of invalidity.
Maximum for Survivors' Pensions
The sum of all pensions payable to survivors may not exceed the pension
which the insured person would have been able t o claim if the risk of old
age or invalidity had materialised at the date of his death.
Lump-Sum Payments at Death
If an insured person dies after qualifying for a pension but without leaving
survivors entitled to it, relatives who are in need and either over sixty-five
years of age or infirm may obtain a refund of 90 per cent, of the contributions paid by or for him, if the institution considers it proper in exceptional cases. This sum is payable in the following order of priority : mother,
father, stepmother, stepfather.
5. SUSPENSION OR LAPSE OF PENSION RIGHTS
(a) Maintenance of Beneficiary at Public
Expense
A pension is withheld if the pensioner is undergoing a term of imprisonment exceeding one month ; but if there are persons living in Hungary
who depend wholly or mainly on the pensioner, the pension may be paid
to them.
(b) Disappearance of Circumstances for which the Pension was Granted
When the circumstances for which the pension was granted cease to
exist (cessation of invalidity, remarriage of the widow, etc.), benefits lapse.
A widow who remarries is, however, entitled to one year's instalment of
her pension in commutation thereof.
B.—SALARIED EMPLOYEES'
INSURANCE
1. R I S K S COVERED
(a) Old Age
As under the workers' insurance scheme, the pensionable age is fixed
at sixty-five years.
312
RISKS COVERED AND CASH BENEFITS
(b) Invalidity
Definition of Invalidity
The salaried employees' insurance covers, not, like the workers' insurance,
general loss of earning capacity, but occupational incapacity, that is to say,
the incapacity of an insured person to earn, by work corresponding to his
strength and ability, half the normal remuneration of an employee of the
same occupational category.
A person of the same occupational category means a person whose work
is mainly intellectual and whose skill and training are similar to those of
the insured person. In the case of journalists and actors the decrease in
occupational skill is judged by comparison with previous earnings.
Establishment of Invalidity.
The provisions are the same as under workers' insurance.
(c) Death
The risks covered are the same as under workers' insurance.
2. QUALIFYING P E R I O D AND RETENTION OF STATUS
The provisions are the same as under workers' insurance.
ci. B E N E F I T S
(a) Invalidity and Old Age
The annual pension comprises a basic amount of 120 pengö and a variable
amount equal to 19 per cent, of the contributions paid.
A bonus of 5 per cent, is payable in respect of each child under eighteen
years of age. Bonuses for children may not in all exceed 20 per cent, of
the pension.
(b) Death
Widows* Pensions
A widow is entitled to a pension irrespective of age or capacity t o earn.
The method of calculating this pension is the same as under workers'
insurance.
Widowers' Pensions
The provisions are the same as under workers' insurance.
Orphans'1 Pensions
The provisions are t h e same as under workers' insurance, except t h a t t h e
normal age limit is in this case eighteen years.
Maximum for Survivors'1 Pensions
The provisions are the same as under workers' insurance.
Lump-Sum Payments at Death
The provisions are the same as under workers' insurance.
4. SUSPENSION OR L A P S E OF PENSION RIGHTS
The provisions are the same as under workers' insurance.
Invalidity, Old-Age, and Widows' and O r p h a n s ' Insurance
for M i n e r s
1. R I S K S COVERED
(a) Old Age
The pensionable age is in principle sixty-five years; but after forty
years' mining work or twenty-five years' underground work a worker is
entitled to a pension from the age of sixty.
LEGAL PROVISIONS AND
STATISTICS
313
(b) Invalidity
Definition of Invalidity
The insurance covers occupational incapacity if it affects earning power
to the extent of at least 50 per cent.
Temporary incapacity is covered when its duration exceeds one year or
when the insured person ceases to be entitled to sickness insurance benefit.
Establishment of Invalidity
The principles governing the establishment of invalidity under the
workers' and salaried employees' schemes apply also t o miners ; in this case
however, the Pension Assessment Board decides after taking the opinion of
at least two hospital doctors, one being attached to the central insurance
institution. The Board has at least six members.
(c) Death
The loss of income resulting from the death of the breadwinner is covered
by the granting of life annuities or temporary pensions to certain categories
of survivors. A special indemnity t o cover the exceptional expenditure
involved by death is granted only when the insured person dies without
completing the qualifying period, and so leaves his survivors no right to
pensions.
2. Q U A L I F Y I N G
PERIOD
The qualifying period is ten years, which must be passed in mining employment falling under the insurance scheme.
Months of sickness are regarded as months of contribution, except in so
far as any uninterrupted period of sickness exceeds one year in duration
and as the sum of the periods of sickness exceeds one year for every two
years' membership.
No qualifying period is required for payment of special indemnity for the
exceptional expenses occasioned by death.
3. RETENTION OF STATUS OF INSURED P E S S O N
The status of insured person is retained automatically for six months
from the date of the last contribution.
At the end of six months the status of insured person is lost and can only
be recovered if, within three years, the person concerned contributes for a
further year at least ; but if he dies during the year his survivors are entitled
to benefit as if he had completed it.
Periods during which the insured person came under another insurance
scheme (that for persons employed in commerce and industry, for instance)
or was in receipt of an insurance pension or accident benefit equal to at
least one-fifth of the full pension guaranteed under the miners' insurance
scheme, are regarded as periods of contribution for the purpose of the
retention of status.
The same applies to periods during which the insured person was an
apprentice.
4. B E N E F I T S
(a) Old Age and
Invalidity
If the insured person has contributed for ten years, the pension is equal
to 20 per cent, of the basic wage plus 2 per cent, for each further year of
contribution up to a maximum of 80 per cent.
(b) Death
Widows'' Pensions
A widow is entitled t o a pension, irrespective of age or need, if she was
married before the date on which her husband became entitled to a pension ;
314
RISKS COVERED AND CASH BENEFITS
she is, however, exempted from this condition if a child, recognised by the
husband, was conceived before such date. The widow's pension is equal
to 50 per cent, of the pension received by her husband or which he would
have been able to claim in case of invalidity.
Orphans'' Pensions
In order to claim pensions, orphans must fulfil the following conditions :
Definition of children : they must be legitimate or legitimised children of
an insured man or woman. The illegitimate children of an insured woman,
and the illegitimate children of an insured man recognised by him or declared
his children in a court of law, are assimilated to legitimate children. The
same applies to adopted children, stepchildren, and grandchildren who had
been dependent on the insured person for a t least one year immediately
preceding his death and who have no relatives required and able to support
them.
Age limit : the age limit is in principle sixteen years, but is raised to
twenty-four years in t h e case of children who continue their education;
children who are prevented by infirmity from earning their living are entitled
to pensions for as long as their incapacity lasts.
The pension of a fatherless or motherless child is equal to 15 per cent.,
and t h a t of a full orphan t o 50 per cent., of the pension received by t h e
insured person or which he would have been able to claim in case of
invalidity.
5. SUSPENSION OR LAPSE OF PENSION RIGHTS
The provisions are the sa.me as under insurance for persons employed
in commerce and industry.
6. STATISTICS OF CASH B E N E F I T S
Number of insured
persons 1
Number of old-age
and invalidity pensioners
Total paid in oldage and invalidity
pensions (in pen-
go)
Number of pensioned
widows
Total paid in widows'
pensions (in pengö)
Number of pensioned
orphans
Total paid in orphans'
pensions
(in pengö)
Total cash benefits
(in pengö)
1
1ÍI27
192S
1929
35,913
36,669
43,995
41,718
4,126
4,166
4,300
—
1,348,487
1,424,519
1,814,833
—
3,536
3,591
3,735
—
500,783
519,726
665,701
—
2,187
2,297
2,212
—
106,929
110,950
130,837
—
1,956,199
2,055,195
2,611,371
—
Average n u m b e r during year.
1930
LEGAL PROVISIONS AND STATISTICS
315
IRISH FREE STATE
I n v a l i d i t y I n s u r a n c e for E m p l o y e d P e r s o n s
1. R I S K COVERED
Invalidity
The definition of the risk covered varies according to whether the infirmity
which has disabled the insured person for employment appears to be of a
lasting nature or not.
When disablement is due to an affection which is presumed to be of short
duration, the insured person is covered if he is unable to engage in his
ordinary occupation without danger to his health.
When the disablement seems likely to be permanent or of long duration,
the insured person is covered only when he is unable to engage in an occupation which might reasonably be thought to be suitable, regard being
had to all the circumstances.
The approved society must then determine, subject to the right of the
insured person to appeal, for what period the latter may be granted a temporary pension to assist in his occupational rehabilitation.
Temporary disablement is covered after the twenty-sixth week, t h a t is
to say, as soon as sickness insurance benefits cease to be paid.
The insurance institutions may, at their discretion, refuse to cover invalidity, altogether or partially, when such invalidity is due to the misconduct
of the insured person (drunkenness, foolhardiness or self-inflicted injury).
Establishment of Invalidity
The approved society decides whether benefits shall be granted in the
case of invalidity, after having seen the medical and other certificates
submitted by the insured person. The procedure to be followed for settling
claims is left to the discretion of each society, but every member of the
fund must be informed of the procedure when he joins.
The certificate of the doctor in attendance on the insured person is generally supplemented by a report from a sick visitor and, if necessary, by any
other evidence.
When the approved society, after having studied the information supplied
to it, considers t h a t the opinion of another doctor is necessary, it can have
the insured person examined by the medical referee for the district and
generally accepts his opinion.
Appeals may be lodged against the decisions of the approved society in
accordance with the arbitration procedure laid down in the rules of the
society, and an appeal against the arbitration award may be made to the
Insurance Commissioners.
Review of Invalidity Pensions
So long as an insured person is in receipt of an invalidity pension he must
be examined every week by a doctor and obtain a certificate of incapacity
from him.
When the approved society considers it necessary, it may have the
pensioner examined by the district medical referee. Subject to the right
of appeal of the insured person, the fund may suspend benefits whenever
it thinks fit.
2. QUALIFYING PERIOD
The qualifying period is completed when 104 weeks have been spent in
insurance and 104 weekly contributions have actually been paid. In order
to be entitled to the normal insurance benefits, the insured person's account
must contain a certain minimum number of contributions paid up, or
deemed to be paid up, during the first twelve months of the period of
eighteen months expiring in January of the year during which the risk
materialised. Benefits are reduced when the number of weekly contri-
316
BISKS COVERED AND CASH BENEFITS
butions paid or deemed to be paid during these twelve months falls below
forty-eight. No benefits are granted if t h e number falls below seventeen.
The insured person may, however, when t h e period of twelve months constituting the contribution year has expired and before t h e beginning of t h e
calendar year on which benefits are reckoned, t h a t is t o say, during the six
months from July to January, recover his right t o full benefits by paying
an arrears penalty proportional to t h e number of contributions in arrear.
Periods of sickness are reckoned as periods spent in insurance and are
taken into account in determining the annual average number of contributions during the period immediately preceding t h e materialisation of t h e
risk. Periods of sickness are not reckoned towards the qualifying period
of 104 weeks.
3. RETENTION OF STATUS OF INSURED P E R S O N
The risk is covered for a period of one year after t h e payment of contributions ceases, irrespective of t h e reason.
4. B E N E F I T S
The invalidity pension (disablement benefit) is fixed a t 7s. 6d. a week
(£19 10s. Od. a year). This rate may, however, be increased if the surplus
disclosed at the quinquennial valuation of the approved society so allows
and t h e society so desires. When the number of contributions paid, or
taken as paid, during the period immediately preceding t h e materialisation
of the risk does not reach the prescribed minimum, the benefits are reduced
as follows :
Number
of contributions paid
Weekly
benefit
45-47
42-44
39-41
36-38
33-35
30-32
26-29
17-25
7s.
6s. 6d.
6s.
5s. 6d.
5s.
4s. 6d.
4s.
3s.
5. SUSPENSION OK L A P S E OF PENSION RIGHTS
(a) Coincident Rights
As a rule, insurance benefits may not be received simultaneously with
workmen's compensation. Nevertheless, when the benefit due under t h e
workmen's compensation legislation is less than the invalidity insurance
benefit t h e latter is payable to t h e extent of the difference.
(b) Maintenance of Beneficiary at Public Expense
Insurance benefits are withheld when t h e pensioner is admitted t o a
convalescent home, asylum, infirmary, hospital or sanatorium supported
out of public funds or by a charity. I n this case, however, t h e approved
society may pay t h e whole or part of the pension t o persons maintained b y
the pensioner.
6. STATISTICS OF CASH BENEFITS
Year
1927
1928
1929
Number
of insured
persons
a t end
of year
(OOO's)
Average
number
of invalidity
pensioners
(OOO's)
Amount
of invalidity
pensions
(OOO's of £)
523
416
424
12
14
15
243
268
285
LEGAL PROVISIONS AND STATISTICS
317
ITALY
Invalidity and Old-Age Insurance for Employed Persons
1. R I S K S COVERED
(a) Old Age
The normal age for the granting of pensions is sixty-five, but the insured
person may claim his pension not more than five years earlier, provided that
he has paid not less than 240 fortnightly contributions. In this case the
pension is reduced by coefficients based on the expectation of life.
(b) Invalidity
Definition of Invalidity
An insured person is deemed to be incapacitated if his earning capacity
is permanently reduced to less than one-third of the normal earning capacity
of persons who in the same district are engaged in an occupation compatible
with the occupational training and previous standard of living of the insured
person.
Where the permanence of the incapacity is not considered to be sufficiently
established, in the opinion of the medical adviser of the insurance institution, the pension is awarded on a temporary basis, for one' or two years, or
else the insured person is placed under observation or given treatment, the
definitive decision being taken after a later medical examination.
Establishment of Invalidity
The application for an invalidity pension must be submitted in writing
and accompanied b y a medical certificate concerning the condition of the
insured person. The medical certificate, which is drawn up on a special
form by the doctor in attendance on the insured person, is submitted to
the medical adviser of the insurance institution, who may examine the
applicant if he considers it necessary.
The conclusions of the medical adviser are submitted to the committee
of the social provident institute which decides, in the first instance, whether
a pension shall be granted.
If the committee of the social provident institute considers that the
degree of invalidity has not reached the limit required by the legislation,
it must inform the insured person that his application has been rejected and
must state the reasons. The insured person may appeal against this decision to the National Social Insurance Fund. Such an appeal must be
lodged within 120 days of the date on which the insured person received
written notice of the decision of the social provident institute. The insured
person may also appeal against the decision of the executive committee of
the National Social Insurance Fund to the special legal bodies for the
purpose (arbitration boards of first instance). Each arbitration board of
first instance attached to the social provident institute consists of seven
members, namely, a chairman, who is a judge, two representatives of the
employers, two representatives of the insured persons and two medical men.
The appeal to these boards must be lodged within sixty days. Finally,
the insured person can appeal against the decision of this board to the
Central Arbitration Board, whose judgment is final. The Central Arbitration Board consists of nine members : the chairman, who is a magistrate,
two legal experts, two doctors, two representatives of the employers and
two representatives of the insured persons.
Review of Invalidity Pensions
The insurance institution may require the invalidity pensioner to be
medically examined whenever it desires. If the insured person refuses to
be examined, such refusal constitutes a sufficient legal motive for withholding
the pension.
318
RISKS COVERED AND CASH BENEFITS
(c) Death
The exceptional expenditure incidental to the death of the insured person
is covered by the granting of a monthly allowance for a short period if the
insured person dies before commencing to draw his pension.
2. QUALIFYING P E R I O D
(a) Old Age
240 contribution fortnights.
(b)
Invalidity
120 contribution fortnights.
(c) Death
No qualifying period is required for the payment of a lump sum in case
of death. This risk is covered as soon as the insurance relationship begins.
(d) Periods Assimilated
to Contribution
Periods
' Periods of military service or of sickness lasting not less than seven days
and not more than twelve months are reckoned as contribution periods,
provided t h a t the insured person was not in receipt of any remuneration
during such periods. The insured person's account is then credited with
t h e insurance contribution on the basis of the lowest wage class, namely,
1 lira a fortnight or 0.50 lira a week.
3. RETENTION OF STATUS OF INSURED PERSON
The status acquired by completing the qualifying period is retained
irrespective of any interruption in the payment of contributions. Nevertheless, for the purpose of entitlement to the lump-sum on the death of the
insured person, insurance status is only retained if there is no interruption
in payments exceeding two years.
4. B E N E F I T S
(a) Old Age and
Invalidity
The pension comprises :
(1) A State subsidy of 100 lire a year;
(2) A fraction varying according to the number of contributions paid and
including :
(a) a basic amount equal to five times the average compulsory annual
contribution during the whole period of insurance;
(b) an increment equal to three-tenths of the total amount of all contributions paid under compulsory insurance.
(b) Death
When an insured person dies before the payment of the pension begins,
his survivors are entitled to a fixed allowance of 300 lire, paid in instalments
over a period of six months. The order of priority for receiving this allowance is as follows : widow or invalid widower; children under fifteen years
of age.
5. SUSPENSION OR LAPSE OF P E N S I O N R I G H T S
(a) Coincident Rights
The prohibition of coincident rights exists only in the case of invalidity
pensions. If invalidity is due to an industrial accident for which compen-
LEGAL PROVISIONS AND STATISTICS
319
sation is paid, the invalidity insurance benefits are reduced so that, together
with the compensation paid under the Workmen's Compensation Act, they
do not exceed the previous annual earnings of the insured person.
(b) Maintenance of Beneficiary at Public Expense
The insurance benefits are suspended when the insured person is sentenced
by a court of law to imprisonment for a period exceeding one year. In this
case, however, the benefits are paid to the wife and children of the insured
person who are under age, or, failing them, to any persons maintained by
him.
6. STATISTICS OF CASH B E N E F I T S 1
J
Number of old-age pensions 2
Annual amount of old-age pensions (in lire)
Number of invalidity pensions 2
Annual amount of invalidity pensions (in lire)
Number of widows' pensions 2
Annual amount of widows' pensions (in lire)
Annual amount of lump sums at
death (in lire)
Total cash benefits (in lire)
1
2
1923
1928
1930
47,111
100,320
143,806
11,684,064
28,465
38,988,207
44,546
92,324,258
66,961
7,304,520
116
16,897,290
632
47,119,340
672
56,880
330,567
396,692
2,189,988
21,235,452
2,839,409
59,055,474
2,635,290
142,475,581
Compulsory and voluntary insurance.
At 31 December each year.
LUXEMBURG
Invalidity, Old-Age and Widows' and Orphans' Insurance
for Workers in Industry and Commerce
1. R I S K S COVERED
(a) Old Age
The pensionable age is fixed at sixty-five years, but the Government may
lower the age b y administrative regulations in the case of insured persons
engaged in particularly arduous or unhealthy occupations.
(b) Invalidity
Definition of Invalidity
A person is deemed to be disabled if in consequence of sickness or infirmity
he is not capable of earning, in any occupation suited to his strength and
ability which can reasonably be assigned to him in view of his training and
former occupation, one-third of the sum usually earned by physical and
mentally sound persons of the same kind and with similar training in the
same district.
Temporary invalidity is covered in the same way as permanent invalidity,
but only after the twenty-sixth week.
No pension can be claimed for self-inflicted injuries.
Benefits may also be refused after enquiry and after a special decision
lias been taken by the Insurance Institution when the infirmities are caused
by a crime or misdemeanour. An appeal is allowed against this decision.
If such a decision is taken the benefits may be transferred in whole or in
part to the family of the insured person if resident in the Grand Duchy and
if they were largely dependent on the insured person for their maintenance.
320
RISKS COVERED AND CASH BENEFITS
Establishment of Invalidity
The application for an invalidity pension may be submitted directly by
the claimant or through a public authority to the governing body of the
Insurance Institution. The application must be accompanied by a medical
certificate either from the sickness fund t o which the insured person is
affiliated or by the communal authority if the insured person is not a member
of any sickness fund or if he has exhausted his claim to sick benefit.
The governing body decides whether the application can be received, and
may for this purpose undertake any enquiry which it thinks desirable, hear
witnesses and administer oaths.
If the application is granted, the governing body immediately assesses the
amount of the pension and fixes the date from which it shall be due. I t gives
the pensioner a written copy of the decision showing how the benefits have
been calculated.
The claim cannot be disallowed unless a statement of the reasons for t h e
rejection accompanies the decision. The claimant must first be heard.
The claimant may appeal to the arbitration court against the decision to
reject his claim or against the amount of the pension. The appeal does not
effect a stay. The arbitration court gives a final decision on any sums not
exceeding 1,500 francs; when the amount at issue exceeds that sum, an
appeal is permitted to the Court of Appeal.
If an application for an invalidity pension is refused because it is not
proved that the worker is permanently incapacitated, he may not submit a
further claim until one year after the date on which he was finally informed
of the refusal. A claim is permitted, however, within t h a t date if a certificate can be produced to show t h a t in the meantime circumstances have
arisen which establish the fact t h a t the claimant is permanently incapacitated. If no such certificate is produced the governing body of the
Insurance Institution rejects the claim and no appeal is permitted.
Review of Invalidity Pensions
The pensioner must allow himself to be examined whenever the Insurance
Institution considers it necessary so as to determine whether the circumstances for which the pension was granted still exist. If he refuses without
valid reason to undergo an examination his invalidity may be considered
to have ceased until proof is brought to the contrary.
(c) Death
The loss of income resulting from the death of the breadwinner is covered
b y the granting of life annuities or temporary pensions to certain categories
of survivors.
The incidental expenditure is met in certain cases by funeral benefits.
2. QUALIFYING P E R I O D
(a) Old Age
The qualifying period consists of 2,400 working days for which contributions have been or are deemed to have been paid.
(b) Invalidity and Death
For nationals the qualifying period is 1,200 working days for which
contributions have been or are deemed to have been paid. For aliens the
number is 2,400 days.
(c) Periods Assimilated to Contribution Periods
Complete weeks of sickness are reckoned as periods of employment for
which contributions have been paid, provided that the worker is incapacitated for not less than six days. Periods during which the insured person
paid contributions in advance Eire also assimilated to contribution periods.
LEGAL PROVISIONS AND STATISTICS
321
3. RETENTION OF STATUS o r INSUBED PERSON
As a general rule, the right to benefits can be maintained only if not less
than eighty daily contributions have been paid during any period of two
consecutive years.
For the purpose of this provision the following periods are reckoned as
contribution days :
(1) days of sickness for which a certificate has been obtained and periods
during which the insured person was in receipt either of an accident
pension for disablement of not less than 20 per cent, or of an invalidity
or old-age pension, provided that he did not engage in any insurable
occupation during these periods.
(2) periods of contribution to salaried employees' insurance.
Rights which have been lost because an insufficient number of contributions was paid during any period of two years can be revived if a fresh
qualifying period of 600 working days or assimilated periods is completed.
4. BENEFITS
(a) Determination of the Basic Wage
The average annual wage taken as a basis for reckoning benefits is determined as follows :
(1) In the case of insured persons who contributed or are deemed to have
contributed for not less than 250 days on the average every year during
the whole period of insurance, the total wages for the period of insurance
are divided by the number of years in that period.
(2) In the case of insured persons whose annual average is less t h a n
230 days but whose average number of days in any given period did not
fall below the prescribed minimum for the retention of insured status, the
total wages are divided by the total number of days in the whole period and
multiplied by the average annual number of days for which the insured
person contributed or is deemed to have contributed during the whole period
of insurance.
(3) In the case of insured persons whose insurance was interrupted or
who paid only the minimum contribution necessary to retain their status,
years during which no contributions were paid or contributions were paid,
actually or on the average, for not more than forty days are left out of
account in reckoning the average wage and in reckoning the number of
days for obtaining a supplementary pension.
(b) Old Age and
Invalidity
The pension comprises :
(1) A fraction varying with wages and the duration of the contribution
period; this fraction is paid by the Insurance Institution.
(2) A State subsidy reckoned as follows :
Fraction paid
by Insurance Institution
(iranes)
Annual State
subsidy
(francs)
Under 2,000
800
2,001-3,000
700
3,001-5,000
500
5,001-8,000
250
The fraction of the invalidity and old-age pensions paid by the Insurance
Institution comprises a basic amount and possibly certain increments.
The basic amount, which is the same for invalidity and old-age pensions,
corresponds to four years, or 1,200 days, of employment and is equal t o
25 per cent, of the average annual wage.
2X
322
RISKS COVERED AND CASH BENEFITS
For each extra year of employment the rate is increased b y 0.8 per cent.
in the case of an invalidity pension and 0.6 per cent, in the case of an old-age
pension.
These increments are granted for every period of 300 days spent in insurance, subject t o the provisions relating t o the determination of the basic
wage; the total number of days is therefore divided by 300, any fraction
under 150 days being neglected and any fraction over 150 days being
reckoned as a complete year.
In addition to the invalidity and old-age pension, insured persons are
entitled to a bonus for any child under the age of sixteen maintained by
them. The same allowance is granted for children over the age of sixteen
if they are unable to earn a livelihood on account of physical or mental
infirmities.
This bonus consists of two parts, one of which is paid b y the Insurance
Institution and the other by the State.
The fraction of the bonus paid by the Insurance Institution is fixed a t :
10 per cent, of the pension for 1 child.
18
„
„
„
„ 2 children.
25
„
„
„
„ 3
5
„
extra for each child beyond the third.
The fraction paid by the Stsite consists of 120 francs a year added to each
invalidity or old-age pension in respect of each child under sixteen or suffering
from a infirmity who is maintained by the pensioner.
The Government is empowered by Ministerial Decree to adapt these
bonuses to the cost-of-living index figure.
(c) Death
Widows' Pensions
A widow is not entitled to a pension unless her earning capacity has been
reduced by at least 66| per cent., or unless she has completed her sixty-fifth
year or is responsible for the maintenance of three children under the age
of eighteen, or of one child suffering from an infirmity.
The widow's pension consists of two parts, one varying with wages and
the duration of the contribution period and paid b y the Insurance Institution, the other paid by the State and reckoned as follows :
Fraction paid
by Insurance Institution
(francs)
a.,4n
™V,„-J,,
« „™„% y
(traucs)
Under 1,000
500
1,001-1,500
400
1,500-2,500
300
2,500-4,000
200
The widow's pension payable by the Insurance Institution is equal to
half the pension which t h e husband received or could have claimed if he
had suffered from invalidity at the date of his death.
Widowers' Pensions
A widower cannot claim a pension unless he can prove t h a t he is actually
incapable of earning his living and that, consequently, his wife was responsible for the maintenance of the family. The method of calculating
widowers' pensions is identical with that for widows' pensions.
Orphans'1 Pensions
In order to be entitled to a pension, orphans must fulfil the following
conditions :
(1) Definition of child : (a) fatherless legitimate children of an insured
man and orphan grandchildren of an insured man on condition, as regards
the latter, t h a t they are in a state of need and the insured person was
323
LEGAL PROVISIONS AND STATISTICS
responsible for their maintenance ; (b) motherless illegitimate children of an
insured woman; (c) motherless legitimate children of an insured woman
if the father is dead or unable to work or refuses to maintain the family.
In the last case the right to a pension exists only if the children are in a
state of need and were wholly or partly dependent on the insured woman.
(2) Age limit : sixteen years.
The pension for each orphan is equal to 120 francs a year, paid by the
State, with a supplement paid by the Insurance Institution. This supplement is equal to 20 per cent, of the pension which the insured person received
or could have claimed in case of invalidity.
Maximum for Survivors' Pensions
The total pensions which can be granted to survivors may not exceed the
amount of the pension which the insured person could have claimed if the
risk of old age or invalidity had materialised at the date of death.
Funeral Benefit
If an insured person, having completed the qualifying period, dies without
being in receipt of an invalidity or old-age pension, his survivors are entitled,
in addition to any pension which they may claim, to funeral benefit equal
to one-fifteenth of the annual remuneration of the insured person but not
exceeding 800 francs or less than 500 francs.
5. SUSPENSION OR LAPSE OF PENSION RIGHTS
(a) Coincident Rights
When an insured person can claim a number of pensions because several
risks have materialised, such as, for example, old age and the death of the
breadwinner, only the higher pension is paid, and the lower one is therefore
suspended.
This provision applies also when the risk covered is the result of an
industrial accident, for which benefit is due under the workers' invalidity,
old-age and widows' and orphans' insurance scheme and under the accident
insurance scheme.
When an invalidity pension is paid concurrently with a pension paid in
respect of an industrial accident which does not itself entitle the worker
to an invalidity pension, the pension under the invalidity, old-age and
widows' and orphans' insurance scheme is suspended in so far as, together
with the accident pension, it exceeds a limit fixed a t seven times the basic
amount in the case of an invalidity or old-age pension and three and a half
times that sum in the case of a widow's, widower's or orphan's pension.
6. STATISTICS OF CASH BENEFITS
Number of insured persons
Number of old-age pensions
Annual amount of old-age pensions (in francs)
1 Number of invalidity pensions
Annual amount of invalidity pen1 sions (in francs)
Number of widows' pensions
| Number of orphans' pensions
Annual amount of Widows' and
orphans' pensions (in francs)
Total cash benefit (in francs)
1
1926
1927
1928
58,655!
1,306
63,185 !
1,363
ÔS^ÔI1!
1,423
900,714
1,872
1,017,358
2,123
1,175,310
2,620
1,376,059
114
172
1,632,865
265
381
2,368,241
575
704
51,615
2,328,388
171,881
2,822,104
485,721
4,029,272
Average number of insured persons affiliated to the sickness funds during year.
|
1
324
RISKS COVERED AND CASH B E N E F I T S
Invalidity, Old-Age and Widows' and Orphans' Insurance
for Salaried Employees in Industry and Cpmmerce
Ï. R I S K S COVERED
(a) Old Age
The age at which the pension falls due is fixed at sixty-five, but the insured
person may claim the payment of his pension in advance from the age of
sixty provided t h a t he ceases to occupy a position as salaried employee
liable to insurance.
(b) Invalidity
The insurance covers loss of occupational earning capacity. An insured
person is considered to be suffering from loss of oc cupational earning capacity when, as a result of infirmities or of a loss of physical or mental powers,
he is permanently unable to carry on his former occupation or t o fill any
other position which may reasonably be assigned to him in view of his
education, his practical training and his previous occupation.
The law does not fix the degree of incapacity, b u t specifies that if the
invalid continues to work and receives remuneration which, with his pension,
exceeds his salary before invalidity began, the fraction of his pension in
excess of this figure will be withheld.
A pension is paid for temporary incapacity in the same way as for permanent incapacity, provided t h a t it lasts continuously for three months and
t h a t the employer's obligations by collective agreement or under legislation
have ceased to cover the risk.
No invalidity pension is due when the insured person intentionally caused
his own invalidity or when it results from the commission of a crime. In
this case, however, the whole or part of the pension may be paid t o dependants of the insured person.
Establishment of Invalidity and Review of Pensions
The regulations on these points are identical with those in the workers'
insurance scheme.
(c) Death
The loss of income resulting from the death of the breadwinner is covered
by the granting of life annuities or temporary pensions t o certain categories
of survivors.
The extra expenditure incidental to the death is covered by a special
benefit if the insured person dies without leaving any survivors entitled
to a pension.
2. QUALIFYING P E R I O D
The qualifying period is completed by the payment of sixty monthly
contributions.
3. RETENTION OF STATUS OF INSURED PERSON
The status acquired by completing the qualifying period is maintained
so long as not less than eight monthly contributions are paid each year. An
insured person who ceases to pay contributions loses his rights twelve
months from the date of the last payment.
Periods during which an insured person is in receipt of an invalidity
pension or contributes t o the workers' insurance scheme are assimilated to
contribution periods for the purposes of retention of status.
Rights lost as a result of an. interruption in payments are revived when
the insured person again becomes liable t o compulsory insurance and pays
24 monthly contributions, if the qualifying period was already completed,
or 48 monthly contributions otherwise.
LEGAL PROVISIONS AND STATISTICS
325
4. BENEFITS
(a) Invalidity
and Old Age
The pension comprises :
(1) A basic amount of 3,600 francs a year.
To this may be added a State subsidy, paid to pensioners whose income
does not exceed 15,000 francs a year. This subsidy amounts to 500 francs
for pensions not exceeding 5,000 and to 250 francs for those between 5,000 and
8,000 francs.
(2) A fraction proportional to the contributions paid into the insured
person's account. This fraction is equal to 14 per cent, of these
contributions.
The basic pension is supplemented by a bonus fixed at 1,200 francs
a year for each child under eighteen years of age. The bonus is paid up
to the age of twenty-three if the child is unable t o earn his living because
he is completing his vocational or other studies; it continues indefinitely
if the child is unable to earn a living on account of physical or mental defects.
The total pension may in no case exceed the average salary for the five
years when the highest salary was paid or five-sixths of the highest annual
salary. When the pension would exceed this limit a reduction in the same
proportion is made from the State subsidy and from the fraction of the
pension paid by the insurance fund.
(b) Death
Widows' Pensions
A widow is entitled t o a pension irrespective of any condition of age,
earning capacity or family responsibilities, but the marriage must not only
have taken place before the insured person was in receipt of an old-age or
invalidity pension, but must also have lasted for not less than one year.
This latter condition is waived when the death of the husband is caused by
an accident or when a child is born of the marriage.
The widow's pension is equal to 60 per cent, of the pension which the
husband received or could have claimed in case of invalidity.
Widowers' Pensions
A widower is entitled to a pension provided he is unable to engage in
remunerative employment and if his wife was therefore largely or wholly
responsible for the maintenance of the family. The rules for calculating
widows' pensions apply also to widowers' pensions when the widower is
unable to work.
Orphans' Pensions
I n order to be entitled to a pension, orphans must fulfil the following
conditions :
(1) Definition of child : (a) fatherless children who were legally dependent
on an insured man ; (b) motherless children of an insured woman who was
wholly or partly responsible for the maintenance of her family.
(2) Age limit : eighteen years.
This limit is raised to twenty-three years if the child continues his scientific or vocational studies and is therefore unable to earn his living. Children
who, owing to infirmity, are unable to support themselves are entitled to
a pension for the duration of their incapacity.
The pension for a half orphan is fixed at 20 per cent of the pension which
the insured person received or could have claimed in case of invalidity;
for full orphans the pension is 40 per cent.
Maximum for Survivors' Pensions
The total pensions granted to survivors may not exceed the amount of
the pension which the insured person could have claimed if the risk of
invalidity or old age had materialised at the date of death.
326
RISKS COVERED AND CASH B E N E F I T S
Lump-Sum Payments at Death
When an insured person has not completed the qualifying period, so that
his survivors are not entitled to a pension, his widow and children are
entitled to receive a lump sum not exceeding the average annual salary of
the insured person. This lump sum may not exceed the total contributions
paid into the insured person's account.
When an insured person dies after completing the qualifying period but
without leaving a widow or child entitled to a pension, his survivors may
claim an allowance equal to the actual expenses of the funeral. This
allowance may not exceed one month's salary of the insured person, and is
paid to the person who can produce proof of having met t h e burial expenses.
5. SUSPENSION OH L A P S E OF P E N S I O N RIGHTS
(a) Coincident Bights
When an old-age or invalictity pension coincides with a pension due under
the accident insurance legislation, the pension is suspended in so far as the
total of the two exceeds twelve times the last monthly salary on which the
insured person contributed.
(b) Maintenance of Beneficiary at Public
Expense
The invalidity pension is wholly or partially suspended when an insured
person is undergoing hospital treatment in order t o restore his working
capacity. The pension is always suspended, irrespective of its nature,
when the pensioner is undergoing a sentence of imprisonment exceeding
one month. In this case, however, the pension must be paid t o any persons
for whose maintenance the insured person was responsible.
(c) Disappearance of Circumstances for which the Pension was Granted
If the circumstances for which the pension was granted cease t o exist
(cessation of invalidity, remarriage of the widow, etc.), the pension is
withdrawn.
6. COMMUTATION OF PENSION FOB L U M P SUM
In principle, pensions may not be commuted for a lump sum, b u t in
certain cases the insurance fund is empowered t o oblige a pensioner who
normally resides abroad t o accept the capital value of his pension by way
of full and final settlement.
NETHERLANDS
Invalidity, Old-Age and Widows' and Orphans' Insurance
for Employed Persons
1. R I S K S COVERED
(a) Old Age
The pension falls due at the; age of sixty-five.
(b) Invalidity
Definition of Invalidity
The insurance covers general loss of earning capacity when the insured
person is incapable of earning, by work corresponding to his strength and
ability which, in view of his training and former occupation, can reasonably
be assigned to him at the plaice where he last performed work, one-third
LEGAL PROVISIONS AND STATISTICS
327
of the customary earnings of a mentally and physically sound person of the
same kind.
Temporary incapacity is covered in the same way as permanent incapacity
if it lasts for more than six months.
Establishment of Invalidity
The claim for an invalidity pension may be submitted either b y the
insured person or on his behalf to the State Insurance Bank through the
labour council, which is a joint body. The labour council investigates
the claim and instructs one or two doctors t o examine the claimant. I t
may also invite one or two persons with a knowledge of local wage conditions
to take part in the examination as experts on wages. This examination is
not required if the council considers that the insured person is undoubtedly
disabled either because he has lost one or more limbs or because he is suffering from a disease which has continued uninterruptedly for not less than
six months. In the latter case, the council must make certain that sickness
benefit has been paid during the period of incapacity preceding the claim
and t h a t the pension is being claimed in respect of the same disease for
which sickness benefit was paid.
When the claimant is not certified as being disabled by the experts unanimously, he is notified of their opinion and is entitled to contest it by producing a medical certificate.
When the claim has been investigated it is sent with the necessary documents to the management of the State Insurance Bank, which decides what
action shall be taken. If a second examination is thought necessary it is
entrusted to a board consisting of three doctors and three wage experts, one
of each being nominated by the claimant if he so desires.
An appeal against the decision of the State Insurance Bank may be made
to the Central Appeal Council.
Review of Invalidity Pensions
I n principle, the labour council may have the pensioner examined at
any time, except in the case of a pensioner over sixty-five years of age or
over the age of sixty and in receipt of an invalidity pension for not less than
five years.
This examination is carried out by one or more doctors with the assistance
of one or more experts on wages, if required. When any one member of the
board considers that the insured person is no longer disabled and the insured
person contests this view the pensioner is re-examined in accordance with
the rules and procedure for determining invalidity.
The decision to maintain or withhold the pension rests with the State
Insurance Bank, which is not bound to accept the opinion of the experts.
An appeal against this decision may be made to the Central Appeal Council.
(c) Death
The loss of income resulting from the death of the breadwinner is covered
by the granting of life annuities or temporary pensions to certain categories
of survivors.
2. QUALIFYING PERIOD
(a) Old Age
No qualifying period is required for an old-age pension.
(b) Invalidity
The qualifying period is completed by the payment of 150 weekly contributions.
(c) Death
The qualifying period is completed b y the payment of forty weekly
contributions.
328
RISKS COVERED AND CASH BENEFITS
3. RETENTION OF STATUS OF INSUBED P E R S O N
Once the qualifying period has been completed, the insured person retains
his status irrespective of any interruption in the payment of contributions.
4. B E N E F I T S
(a) Old Age and
'
Invalidity
The annual pension comprises :
(1) a basic amount equal to 260 times the average weekly contribution
paid during insurance;
(2) an increment fixed at 11.2 per cent, of the total contributions paid
but not less than one-fifth of the basic amount.
In order to prevent the average weekly contribution paid during insurance
from being too low, certain contribution periods are excluded either automatically or at the request of the insured person. For instance, when an
insured person has held an invalidity pension which was later withdrawn
because of the disappearance of the circumstances for which it was granted,
no account is taken of weeks during which the pension was paid.
The insured person may always request t h a t any payments made during
the five years preceding the appearance of invalidity and payments made
after the age of sixty-five should be excluded when reckoning the average;
the same request may be made in respect of payments before the age of
sixteen, provided t h a t the insured person has paid not less than 150 contributions after t h a t age.
(b) Death
Widows' Pensions
A widow can claim a pension only if her husband was not already an
invalidity pensioner or over the age of sixty when the marriage took place.
If this condition is fulfilled, the widow must also prove either t h a t she
is suffering from incapacity of not less than 66| per cent, or t h a t she has
reached the age of sixty.
The widow's pension is equal to six-fifths of the basic amount of the
pension which the husband received or could have claimed, t h a t is, 260
X | = 312 times the average weekly contribution paid during insurance.
Orphans'1 Pensions
I n order to obtain a pension, orphans must fulfil the following conditions.
(1) Definition of child : (a) fatherless legitimate children of an insured
man; (b) motherless legitimate: children of an insured woman if they were
dependent on their mother.
Adopted and legitimised children are treated as legitimate children if
they were dependent on the insured person during the year preceding his
death or who are without support.
(2) Age limit : fourteen years.
The total pension paid to all orphans is equal to six-fifths of the basic
amount of the pension which the father received or could have claimed.
Maximum for Survivors' Pensions
The total pensions granted to survivors may not exceed the amount of
the pension which the insured person received or could have claimed if the
invalidity risk had materialised at the date of death.
5. SUSPENSION oit L A P S E OF P E N S I O N R I G H T S
(a) Coincident Bights
An accident pension may be held concurrently with a pension under the
invalidity, old-age and widows' and orphans' insurance scheme whether the
329
LEGAL PROVISIONS AND STATISTICS
latter be an old-age, invalidity or survivor's pension. On the other hand,
the law prohibits an invalidity pension being held concurrently with an
old-age pension.
(b) Disappearance of Circumstances for which the Pension was Granted
When the circumstances for which the pension was granted disappear
(cessation of invalidity, remarriage of the widow, etc.) the pension is
withdrawn.
6. COMMUTATION OF PENSION FOR L U M P SUM
In principle, a pension may not be commuted for a lump sum. In the
ease of survivors' pensions not exceeding 26 florins a year, however, the
insurance institution may pay a lump sum corresponding to the present
value of the pension.
7. STATISTICS OF CASH B E N E F I T S
1927
Number of insured persons
Number of invalidity pensions 2
Annual amount of invalidity pensions (in
florins)
Number of old-age pensions a
Annual amount of old-age pensions (in florins)
Number of widows' pensions 2
Annual amount of widows' pensions (in florins)
Number of orphans' pensions a
Annual amount of orphans' pensions (in florins)
Total cash benefits (in florins)
1
2
3
1930
2,198,908 1
18,445
2,679,3973
29,326
2,967,814
59,741
3,911,568
87,077
8,869,177
8,873
1,515,778
9,425
1,707,898
15,060,667
12,155,932
16,762
2,581,155
12,225
1,993,753
20,642,408
On 1 January.
On 1 July.
On 31 December.
Invalidity, Old-Age and Widows' and O r p h a n s '
I n s u r a n c e for M i n e r s
1. R I S K S COVERED
(a) Old Age
The old-age pension falls due at the age of sixty, provided that the insured
person ceases to be employed in any insurable occupation.
(b) Invalidity
Definition of Invalidity
The insurance covers loss of occupational earning capacity, that is, the
insured person must be incapable of performing mining work compatible with
his health and previous occupation.
Temporary invalidity is covered in the same way as permanent incapacity
b u t only after the fifteenth month, when sickness benefit ceases.
The medical adviser to the General Fund determines whether incapacity
as defined by the legislation exists in any particular case.
380
BISKS COVERED AND CASH BENEFITS
Review of Invalidity
Pensions
The pensioner must submit to any medical examination thought necessary
by the General Fund to determine whether the invalidity for which the
pension was granted still exists.
If it is proposed that the pension be suspended as a result of this examination the pensioner may appeal to a board of three doctors, one being
nominated by the governing body of the General Fund, the second by the
insured person and the third co-opted by the other two.
(o) Death
The loss of income resulting from the death of the breadwinner is covered
b y the granting of life annuities or temporary pensions to certain categories
of survivors. The extra expenditure incidental to the death is covered by
a lump sum paid from the invalidity, old-age and widows' and orphans'
insurance fund only if death occurs after the insured person began to draw
his pension.
2. QUALIFYING P E E I O D
The qualifying period is completed by the uninterrupted payment of
thirty-six monthly contributions. I n case of sickness the contribution is
paid by the sickness insurance fund, so t h a t periods of sickness are counted
towards the qualifying period.
3. RETENTION OF STATUS OF INSUEED PERSON
The right to benefits acquired by completing the qualifying period is
maintained only if the insured person continues to be a contributor. When
he ceases t o be covered by the JMiners' Insurance Act and does not pay a
recognition fee he ceases t o be a contributor, b u t if he subsequently returns
t o insurance, the contributions which were invalidated through the interruption in payments regain their full value when a fresh qualifying period
of thirty-six months has been completed.
4. B E N E F I T S
I
(a) Old Age and Invalidity
The pension is fixed a t as many times 0.95 florin as the worker has paid
monthly contributions.
(b) Death
Widows' Pensions
A widow is entitled to a pension without any condition of age, family
responsibilities or earning capacity. The widow's pension is equal to half
the pension which the husband received or could have claimed at the date
of his death. The pension ceases if the widow remarries.
Orphans'
Pensions
The children of an insured person are entitled to a pension up to the age
of sixteen. The pension for half orphans is 36 florins a year and for full
orphans 72 florins a year.
Lump-Sum
Payments at Death
When a pensioner or the wife of a pensioner dies, the insurance institution
pays to the surviving wife or husband, or failing them, t o children under
sixteen years of age, funeral benefit amounting t o 50 florins.
331
LEGAL PROVISION AND STATISTICS
5. STATISTICS OF CASH BENEFITS
1925
1928
1929
1930
•f
Number of insured contributors 1
Number of old-age pensions 2
Amount of old-age pensions (in
florins)
Number of invalidity pensions 2
Annual amount of invalidity pensions (in florins)
Number of widows' pensions 2
Annual amount of widows' pensions (in florins)
Number of orphans' pensions 2
Annual amount of orphans' pensions (in florins)
Amount of funeral benefit (in
florins)
Total cash benefits (in florins)
1
2
30,566
80
34,768
174
37,903
180
38,366
—
9,844
474
31,858
1,250
31,709
1,606
31,846
•—•
57,575 231,579 291,361 367,197
126
242
310
—
13,839
608
24,974
853
31,650
937
44,224
—
49,021
69,027
77,842
87,759
1,500
3,040
4,648
4,750
131,779 360,478 437,210 535,776
At the end of the year.
Average number during the year.
POLAND
Invalidity, Old-Age and Widows' and Orphans'
Insurance for Intellectual Workers
1. R I S K S COVERED
(a) Old Age
The old-age pension falls due at the age of sixty-five in the case of a
man and sixty in the case of a woman. The pension may be claimed five
years in advance if the insured person has contributed for not less than
480 months in the case of a man, and 420 months in the case of a woman.
I t can always be postponed until 480 monthly contributions have been
paid.
(b) Invalidity
The insurance covers loss of earning capacity of at least 50 per cent, in
his occupation, the word " occupation " being understood as including any
work compatible with the physical and mental state of the insured person,
his general and vocational training, the length of time during which he was
previously employed, and the nature of the work he performed.
Temporary incapacity is covered in the same way as permanent incapacity,
but no lump sum can be paid if the qualifying period has not been completed.
Establishment of Invalidity
Invalidity must be established by a doctor employed by the sickness
insurance fund, or by another medical man specially appointed for this purpose
by the intellectual workers' insurance institution. The institution is entitled
a t any time to have the pensioner re-examined by a doctor other than the
one who carried out the first examination.
Review of Invalidity Pensions
The pensioner may be re-examined at the request of the insurance institution in the same way as for the establishment of invalidity.
332
RISKS COVERED AND CASH BENEFITS
(c) Death
The loss of income resulting from the death of the breadwinner is covered
by the granting of life annuities or temporary pensions to certain categories
of survivors.
The extra expenditure incidental to the death is covered b y a lump sum
if the insured person dies without leaving any survivors entitled t o a pension.
2. QUALIFYING P E R I O D
The qualifying period is completed by the payment of sixty monthly
contributions.
3 . RETENTION OF STATUS O F INSURED P E R S O N
The status acquired by completing the qualifying period is in theory
maintained so long as contributions are regularly paid. Any interruption
in the payment of contributions for eighteen months or more invalidates the
previous contributions.
Periods of military service or assimilated periods, and periods of involuntary unemployment or loss of earning capacity as a result of sickness, as
well as periods of invalidity for which a pension was paid under the intellectual workers' scheme, are not considered as interruptions in the payment
of contributions.
When a fresh qualifying period is completed, the validity of previous
contributions is restored, provided t h a t the interruption did not exceed
fifteen years.
The fresh qualifying period is twelve months if the interruption was less
than five years, twenty-four months if it was less than ten years, and thirtysix months if it was between ten and fifteen years. An interruption of
fifteen years or more in the payment of contributions finally invalidates all
previous contributions; the same rule applies if the interruption is longer
than three years and the insured person is over the age of sixty when he
becomes insured for the second time.
4. B E N E F I T S
(a) Old Age and
Invalidity
The pension comprises :
(1) A basic amount equal t o 40 per cent, of the average basic salary
during insurance;
(2) An increment equal to one-sixth per cent, of the average salary for
each contribution month between the 120th and the 480th.
In each of the fourteen salary classes, the basic salary corresponds to the
lower limit of the class. Insured persons earning less than 60 zloty a month
are deemed, nevertheless, to earn t h a t amount and are placed in the lowest
class, while all those earning 720 zloty or more are placed in the highest
class.
Insured persons who are permanently disabled before completing the
qualifying period for acquiring the right to an invalidity pension, receive
a lump sum equal to the annual salary which would have been taken as a
basis ìbr reckoning their pension.
Children's Bonuses
The basic pension may be supplemented b y 10 per cent, for each child
under eighteen years of age, provided that the total pension does not then
exceed the basic salary. This bonus continues until the age of twenty-four
if the child continues its studies, or for an indefinite period if the child is
unable to earn a living on account of infirmity.
LEGAL PROVISIONS AND STATISTICS
333
Supplement where Constant Attendance is Needed
A pensioner who, as a result of his infirmities, cannot move, walk, or
perform any essential action without the assistance of another person, is
entitled to a supplement bringing the pension up to the basic salary.
(c) Death
Widows' Pensions
A widow is entitled to a pension irrespective of her age, earning capacity
or means. The marriage must have taken place before the husband
reached the age of sixty, or before he was in receipt of an invalidity pension,
and must have lasted for not less than six months. This last condition
is waived if the death of the husband is due to some cause occurring after
the marriage took place.
The widow's pension is equal to 60 per cent, of the pension which the
husband received or which he could have claimed in case of invalidity.
Widowers'1 Pensions
A widower cannot claim a pension unless he proves that he is unable to
earn his living, and t h a t consequently his wife was responsible for his maintenance. He must also prove t h a t he is in indigent circumstances, and the
pension is granted only for such time as he continues to be so.
The widower's pension is reckoned in exactly the same way as the widow's
pension.
Orphans'1 Pensions
In order to claim a pension, orphans must fulfil the following conditions :
(1) Definition of child : legitimate or legitimised children of an insured
man or woman; illegitimate children whose paternity has been established
in a court of law are treated as legitimate children. The illegitimate children
of an insured woman have the same rights on account of the insurance of
their mother as legitimate children. The illegitimate children of an insured
man have no right to a pension on account of their father's insurance unless
they were recognised and the father contributed to their support.
Adopted children are treated as legitimate children if the adoption took
place at least one year before the event entitling their adoptive parents to
an invalidity or old-age pension. Stepchildren and grandchildren are
treated as legitimate children only if they were actually supported by the
insured person for at least one year before the event entitling him to an
invalidity or old-age pension.
(2) Age limit : eighteen years, raised to twenty-four years if the child
continues his studies. I n the case of incapacity due t o infirmity, the pension
is maintained without an age limit.
The pension for half orphans is 20 per cent, and for full orphans 40 per cent.
of the pension which the insured person received, or which he could have
claimed in the event of invalidity.
Maximum for Survivors' Pensions
The total pensions granted to survivors may not exceed the amount of
the pension which the insured person could have claimed if the risk of old
age or invalidity had materialised at the date of death.
hump-Sum Payments at Death
A lump sum is paid when the insured person dies before completing the
qualifying period entitling him to a pension. I t is paid, in the following
order of priority : to the widow, irrespective of age or earning capacity,
or the invalid widower in indigent circumstances, to children under eighteen
years (twenty-four years if studying, and without any age limit if they are
infirm), or to parents maintained by the deceased.
Parents maintained by the deceased may also claim a lump sum if the
334
KISKS COVERED AND CASH BENEFITS
insured person dies after corapleting the qualifying period but without
leaving any survivors entitled to a pension.
In the case of a widow, widower or orphans, the lump sum is equal to one
year of the basic salary on which contributions were paid; in the case of
parents, it is equal to six months' salary.
5. COMMUTATION OF P E N S I O N FOR LUMP SUM
If the insured person so desires, the invalidity pension may be commuted
for a lump sum equal to its capital value.
Such commutation is always optional for the insurance institution, and is
subject : (a) to the consent of the commune which would have to maintain
the insured person if he were in indigent circumstances, and (b) t o the
existence of a presumption that the capital sum will be used for some reasonable purpose.
Invalidity, Old-Age and Widows' and Orphans' Insurance
for Workers in the Western Provinces and Upper Silesia
1. B I S K S COVERED
(a) Old Age
The old-age pension falls due at the age of sixty in Upper Silesia and
sixty-five in the rest of the territory covered.
(b)
Invalidity
The insurance covers general loss of earning capacity of not less than
66| per cent. x
Temporary invalidity is covered in the same way as permanent invalidity,
b u t only after the twenty-sixth week.
(c) Death
The loss of income resulting from the death of the breadwinner is covered
by the granting of life annuities or temporary pensions to certain categories
of survivors.
2. QUALIFYING P E R I O D
(a) Old Age
The length of the qualifying period is not the same in Upper Silesia and
in the Western Provinces. In Upper Silesia the qualifying period is
completed by the payment of 200 weekly contributions, of which not less
than 100 must have paid under compulsory insurance; otherwise the qualifying period is 500 contribution weeks. In the Western Provinces the
qualifying period is completed by the payment of 1,200 weekly contributions.
(b) Invalidity and Death
The qualifying period in respect of invalidity and death is uniformly
fixed at 200 weekly contributions, of which 100 must have been paid under
compulsory insurance; otherwise the qualifying period is 500 weeks.
3. R E T E N T I O N OF STATUS OF INSURED PEBSON
As a general rule, the right to benefits is maintained only if not less than
twenty weekly contributions have been paid in any period of two years;
the minimum number of contributions is forty in any two years if the insured
person is a voluntary contributor.
Periods of sickness and military service are assimilated to contribution
335
LEGAL PROVISIONS AND STATISTICS
periods for the retention of status. The same rule holds good with regard
t o any period during which the insured person received a parent's pension,
or an invalidity pension for not less than 20 per cent, incapacity, provided
that he did not engage in any insurable occupation during t h a t period.
I n Upper Silesia periods of involuntary unemployment are also assimilated
to contribution periods. In that district also the right to benefits is maintained irrespective of the number of contributions paid during the last two
years spent in insurance, provided t h a t the insured person has contributed
for not less than three-quarters of the whole period which has elapsed
between the date of entering insurance and the date at which the risk
materialised.
In Upper Silesia and in the Western Provinces rights which are lost
through failure to pay a sufficient number of contributions are revived if
a fresh qualifying period of 200 contribution weeks is completed.
When an insured person does not return to insurance before the age of
sixty, however, the fresh qualifying period does not restore the validity of
the contributions previously paid unless one thousand contributions at least
had been paid before the interruption in payment.
4. BENEFITS
(a) Old Age
Upper Silesia
The annual pension comprises :
(1) a fixed fraction : State subsidy : 100 zloty; basic amount : 160 zloty;
supplement of 10 per cent. = 26 zloty; total of fixed fraction : 286 zloty.
(2) an increment varying with contributions paid, as follows :
Annual wage
(zloty)
Annual increment for each
contribution week
(zloty)
660 and under
661-960
961-1,320
1,321-1,620
1,621-1,980
1,981 and over.
0.055
0.11
0.143
0.187
0.22
0.264
Western Provinces
The annual pension comprises the State subsidy and a fraction varying
according to the number of contributions paid.
State subsidy : 50 zloty.
The fraction of the pension varying with contributions paid consists of :
0.05 zloty a year for each weekly contribution on a wage of less than
500 zloty a year;
0.0917 zloty a year for each weekly contribution in the wage class
500-700 zloty a year;
0.117 zloty a year for each weekly contribution in the wage olass
700-900 zloty a year;
0.150 zloty a year for each weekly contribution in the wage class
900-1,200 zloty a year;
0.183 zloty a year for each weekly contribution on a wage of over
1,200 zloty a year.
No account is taken of contribution weeks after the 1,200th. If more
than 1,200 weekly contributions have been paid, no account is taken of those
completed in the lower wage classes.
(b) Invalidity
Upper Silesia
The pension comprises the same elements as for old age.
336
RISKS COVERED AND CASH BENEFITS
Western Provinces
The annual pension comprises a State subsidy and a fraction proportional
to the contributions paid.
State subsidy : 50 zloty.
The fraction of the pension varying with contributions paid consists of :
(1) A basic amount varying with the wage class and always corresponding
to 500 contribution weeks. If 500 weekly contributions have not been paid,
the missing weeks are counted in the lowest wage class ; if the number of
weekly contributions paid exceeds 500, the surplus lower contributions are
not taken into account. That fraction of the basic amount which corresponds to each contribution week is fixed as follows. When the insured
person has contributed on a wage of :
Zloty
Zloty
1,200 and over
900-1,200
700-900
500-700
500 and under
0.24
0.21
0.19
0.17
0.15
(2) An increment varying with the number of contributions paid : for
each weekly contribution, on a wage of :
Zloty
1,200 and over
900-1,200
700-900
500-700
500 and under
Zloty
;
0.14
0.12
0.10
0.07
0.04
(c) Children's Bonuses
The basic pension may be supplemented by 10 per cent, for each child
under the age of fifteen (or eighteen in Upper Silesia). The total bonuses
for children may not exceed half the basic pension.
(d) Death
Widows' Pensions
A pension is granted to the widow of an insured person if she is incapacitated to the extent of not less than 66| per cent.
In Upper Silesia, a widow may also claim a pension when she has reached
the age of sixty.
The widow's pension comprises : (1) a State subsidy of 50 zloty a year
(in Upper Silesia, 100 zloty) ; (2) three-tenths (in Upper Silesia, four-tenths)
of the basic amount and the increments forming part of the husband's
pension or the pension which he could have claimed in case of invalidity.
Widowers' Pensions
A widower cannot claim a pension unless he can prove that he is actually
incapacitated and that consequently his wife maintained the family. The
widower must also prove that he is in indigent circumstances, and the
pension is granted only so long as these circumstances continue.
The pension is reckoned in exactly the same way as the widow's pension.
Orphans' Pensions
In order to claim a pension, orphans must fulfil the following conditions :
(1) Definition of child : (a) fatherless legitimate children of an insured
man. Orphan grandchildren of an insured man are treated as his own
legitimate children if he was responsible for their maintenance and they
are in a state of need; (b) motherless illegitimate children of an insured
LEGAL PEOVISIONS AND STATISTICS
337
woman; (c) motherless legitimate children of an insured woman, if the
father is dead or unable to work, or refuses to support his family. In the
last case, the right to a pension exists only if the children are in a state of
need.
(2) Age limit : fifteen years ; in Upper Silesia, eighteen years.
The orphan's pension comprises : (1) a State subsidy of 25 zloty a year
(50 zloty in Upper Silesia) ; (2) 15 per cent, (in Upper Silesia, 20 per cent.)
of the basic amount and the increments forming part of the pension which
the insured person received or could have claimed in ease of invalidity.
5. SUSPENSION OB LAPSE OF PENSION RIGHTS
(a) Coincident Rights
Coincident rights are prohibited in the case of a husband and wife who can
both claim a pension. A widow who is entitled to pensions from two
different sources, through her own and her husband's insurance, receives a
lump sum in place of the latter pension. The same applies in the case of
orphans when both their parents were insured.
(b) Disappearance of Circumstances for which the Pension was Granted
When the circumstances for which the pension was granted disappear
(remarriage of the widow, cessation of invalidity, etc.), the pension is automatically withdrawn.
6. COMMUTATION OF PENSION FOB L U M P SUM
The lump sum which may be granted under the regulations concerning
the prohibition of coincident rights is equal to twelve times the monthly
pension which a widow could have claimed in the case of her husband's
death, or eight times the monthly pension which an orphan could have
claimed for the death of a parent.
7. STATISTICS OF CASH BENEFITS
During 1929 the average number of insured persons was about 870,000.
The expenditure for pensions was 31,464,124 zloty, on account of 72,743
old-age pensions and invalidity pensions, 20,129 widows' pensions and
37,418 orphans' pensions.
Invalidity and Widows' and Orphans' Insurance
for Miners in Upper Silesia
1. R I S K S COVEBED
(a)
Invalidity
The insurance covers loss of occupational earning capacity. The existence
of such incapacity is determined by the chief doctor of the insurance fund;
if the insured person contests his opinion the matter is submitted to another
doctor appointed by the fund. If the insured person is over the age of
fifty-two, the opinion of the chief doctor may at his request be submitted to
a confidential medical adviser assisted by a technical official of the mining
undertaking.
The pensioner must allow himself to be re-examined periodically to determine whether the loss of earning capacity for which the pension was granted
continues to exist.
(b) Death
The loss of income resulting from the death of the breadwinner is covered
by the granting of life annuities or temporary pensions to certain categories
of survivors.
22
388
RISKS COVERED AND CASH BENEFITS
The exceptional expenditure incidental to the death is covered by
a special benefit only if the sickness fund is not obliged t o pay funeral
expenses.
2. QUALIFYING P E B I O D
The qualifying period is completed by the payment of contributions
corresponding to three years' membership. Periods of military service,
but no other periods in respect of which contributions were not paid, are
assimilated to contribution periods.
3 . R E T E N T I O N OF STATUS OF INSUBED P E R S O N
Any interruption in payment of contributions or recognition fees for a
period exceeding twelve months involves the loss of the rights previously
acquired.
4. B E N E F I T S
(a)
Invalidity
The method of establishing the invalidity pension varies with the different
funds.
The pension guaranteed b y the Tarnowskie Gory F u n d comprises :
(1) a basic amount of 176 zloty a year ; (2) an increment proportional to the
amount of the contributions paid.
The annual pension guaranteed by the Pszczyna Fund is computed by
multiplying the number of contribution months in each wage class by the
basic factor for that class. The basic factors are as follows :
Wage class
Zloty
First
Second
Third
Fourth
Fifth
0.69
1.06
1.56
1.85
2.20
(b) Death
Widows' Pensions
A widow is entitled t o a pension irrespective of any condition of age,
earning capacity or means, provided t h a t the marriage took place before
compulsory or voluntary insurance ceased. Her right t o a pension is
maintained, however, if a marriage which took place after invalidity
occurred has lasted for not less than one year and if the difference in
age between the husband and wife does not exceed ten years.
The widow's pension is equal to six-tenths of the pension which the husband received or which he could haive claimed in case of invalidity.
Orphans'' Pensions
I n order t o claim a pension orphans must satisfy the following conditions :
(1) Definition of child : legitimate or recognised children of an insured
man or woman, if the date of birth satisfies the conditions defined below :
(a) if the claim is on account of the insurance of the father the birth must
have taken place before the award of an invalidity pension. Otherwise the
child may claim a pension only if the difference between the ages of his
parents was not over ten years (fifteen years in certain funds) and his father
was in receipt of an invalidity pension for not less than one year since the
marriage; (b) if the claim is on account of the insurance of the mother the
birth must have taken place before sihe ceased to be an employed contributor
or within 302 days of such cessation.
(2) Age limit : sixteen years; in certain funds 15 years.
The monthly pension for a half orphan is 7.50 or 11 zloty and that for
a full orphan 14.50 or 15 zloty, according to the fund.
339
LEGAL PROVISIONS AND STATISTICS
Lump-Sum Payments at Death
Funeral benefit is payable either to the insured person himself in case of
the death of his wife or child or to persons living with the insured person
in ease of his death (wife, children, parents or collateral relatives). This
benefit, which is intended in the first instance to cover the cost of the burial,
is payable only when funeral benefit of an equal amount is not due under
sickness insurance.
The amount of the funeral benefit varies with the different funds and
amounts to 50 or 52 zloty for the death of a child, 100 or 104 zloty for the
death of the wife or widow of an insured person, and 120 or 124 zloty for the
death of the insured person himself.
5. COMMUTATION OF PENSION FOR LUMP SUM
Benefits are paid in the form of annuities, but a widow who remarries is
entitled to a lump sum equal to two annual instalments of her pension in
final settlement of her claim.
6. STATISTICS OF CASH B E N E F I T S
1929
Average number of insured persons during year
Number of invalidity pensions
Annual amount of invalidity pensions (zloty)
Number of widows' pensions
Number of orphans' pensions
Annual amount of survivors' pensions (zloty)
Amount of funeral benefit (zloty)
Total cash benefits (zloty)
94,641
22,075
14,861,900
17, 111
12,091
6,835,992
188,500
21,886,392
1930
Total cash benefits (zloty)
23,339,708
Invalidity and Widows' and Orphans' Insurance
for M i n e r s i n t h e S o u t h e r n P r o v i n c e s
1. R I S K S COVERED
(a) Invalidity
Definition of Invalidity
The insurance covers invalidity when the insured person is unable to
carry on his occupation as a miner on account of sickness, occupational
accident or debility due to old age.
In principle, the right to a pension exists only when there is complete
occupational incapacity. The present practice, however, which is supported
by the decisions given in disputes, tends to grant an invalidity pension to
persons whose occupational earning capacity has fallen by not less than
60 per cent.
Establishment of Invalidity
The establishment of invalidity is left to the regional medical officer of the
insurance fund who, after having examined the claimant, reports in writing
on the result of the examination and expresses an opinion as to the degree
of occupational incapacity. This opinion must be accompanied b y a declaration by the insured person and an objective report on his state of health.
The opinion of the medical officer is submitted to the chief medical officer
of the mining fund, who, if he does not approve, may undertake a further
examination after having, if necessary, consulted a specialist in the disease
for which the pension is claimed.
340
RISKS COVERED AND CASH BENEFITS
Review of Invalidity
Pensions
An invalidity pension may be granted permanently, or for a given period,
after which the pensioner is re-examined. The result of this examination
determines whether the pension will be continued or withdrawn.
(b) Death
The loss of income resulting from the death of the breadwinner is covered
by the granting of life annuities or temporary pensions t o certain categories
of survivors. The exceptional expenditure incidental to the death is covered
by funeral benefit.
2. QUALIFYING P E R I O D
The qualifying period is completed by the actual payment of sixty monthly
contributions.
3. RETENTION OF STATUS OF INSURED P E R S O N
The status acquired by completing the qualifying period is retained so
long as contributions continue to be paid. Any interruption in payments
for more than twelve months involves the loss of the rights acquired.
If, however, an insured person is awarded an invalidity pension which
is later withdrawn because of a change in the circumstances for which it
was granted, the validity of the contributions previously paid is restored
provided the insured person again becomes a contributor within three years
of the date on which he ceased to receive his pension.
4. B E N E F I T S
(a)
Invalidity
The actual rate of pension varies according to the resources of the insurance fund; the minimum is fixed at 240 zloty a year.
(b) Death
Widows' Pensions
A widow is entitled to a pension without any condition as to age, earning
capacity or means. The widow's pension is fixed at 50 per cent, of the
pension which her husband received or could have claimed if the invalidity risk had materialised a t the date of death.
Orphans'' Pensions
In order to claim a pension, orphans must satisfy the following conditions.
(1) Definition of child : legitimate or illegitimate children of an insured
man or woman.
(2) Age limit : sixteen years.
The pension for half orphans is fixed at 25 per cent, of the pension which
the insured person received or could have claimed for invalidity, while for
full orphans the figure is 50 per cent.
Pensions to Parents, Grandchildren, Brothers and Sisters
The parents, brothers and sisters and grandchildren of the insured person
are entitled to a pension only if they are in indigent circumstances and were
dependent on the insured person at the date of his death.
Parents may claim a pension concurrently with the widow, but brothers,
sisters and grandchildren are not entitled to a pension except when the
insured person leaves no widow or orphans. The pension to brothers,
sisters and grandchildren is paid only until they reach the age of sixteen.
341
LEGAL PROVISIONS AND STATISTICS
The pension for each parent, brother, sister or grandchild is equal to
25 per cent, of the pension which the insured person received or could
have claimed for invalidity.
Maximum for Survivors'' Pensions
The total pensions granted to the widow and orphans may not exceed
the pension which the insured person received or could have claimed in case
of invalidity. The total pensions which may be granted to other survivors
may not exceed half the pension which the insured person received or could
have claimed.
Lump-Sum Payments at Death
Funeral benefit is payable either to the insured person himself in the
event of the death of a member of his family (wife or child), or to a widow
in the event of the death of an orphan, or to persons who pay the cost of
burial when the deceased leaves no widow or orphan. This benefit is equal
to 50 zloty for the death of the insured pensioner, his wife or widow, and
30 zloty for the death of a child.
5. SUSPENSION OB L A P S E OF PENSION RIGHTS
(a) Coincident Rights
The pensions guaranteed to survivors under the miners' insurance scheme
cannot be held concurrently with accident pensions granted under the
accident insurance legislation. Invalidity pensions, on the other hand, may
be held concurrently with accident pensions, provided that the two together
do not exceed two-thirds of the wage on which the accident pension was
calculated. When the total benefits exceed this limit the pension paid under
the miners' insurance scheme is reduced to within the above limit.
A widow's pension and an invalidity pension may be held concurrently
without any restrictions.
(b) Disappearance of Circumstances for which the Pension was Granted
If the circumstances for which the pension was granted cease to exist
(remarriage of the widow, cessation of invalidity, etc.), the right to benefits
ceases.
6. STATISTICS OF CASH BENEFITS
Í929
Average number of insured persons
Number of invalidity pensions
Annual cost of invalidity pensions (zloty)
12,035
2,705
838,158
RUMANIA
Until the Act of 18 May 1932 was passed, the legislation concerning
pension insurance in Rumania included :
(1) the Act of 1912 applying to the former Kingdom and Bessarabia,
which covered only the risks of old age and invalidity;
(2) the special Miners' Insurance Act in Ardeal (Transylvania), which
covered the three risks—invalidity, old age and death.
The Act of 18 May 1932, which paves the way for a uniform social insurance system, extends the 1912 Act to the whole territory of Rumania and
establishes the basis for complete co-ordination between the special miners'
scheme and the general invalidity and old-age scheme.
342
B.ISKS COVEAED AND CASH BENEFITS
Rights already acquired or in course of acquisition in mining funds are
maintained, and the miners and their employers pay not only the contribution to the general insurance scheme for workers b u t also a special contribution intended to cover the difference between the benefits granted under
t h a t scheme and t h e benefits granted under the rules of the mining funds.
Since the benefits of the miners' insurance scheme would thus seem to be
maintained, at least until such time as the system is completely co-ordinated,
the survey of Rumanian legislation has been divided into two parts :
(i) Insurance for persons employed in industry and commerce and for
craftsmen.
(ii) Miners' insurance in Ardeal.
Invalidity and Old-Age Insurance for Persons Employed in Industry
and Commerce and for Craftsmen
1. R I S K S COVERED
(a) Old Age
The pension falls due at the age of sixty-five.
(b)
Invalidity
The insurance covers invalidity involving a loss of general earning capacity
of not less than 66| per cent.
An insured person who is not permanently incapacitated b u t who, as a
result of sickness, is unable to earn a living for more than sixteen weeks
is entitled to an invalidity pension as from the seventeenth week for the
whole duration of such incapacity.
The existence and continuance of incapacity is determined by the doctors
of the National Social Insurance Fund.
2. QUALIFYING P E R I O D
(a) Old Age
The qualifying period is completed b y the payment of 1,200 weekly
contributions.
(b) Invalidity
The qualifying period is completed by the payment of 200 weekly contributions.
3. R E T E N T I O N OF STATUS OF INSURED PERSON
The right to benefit acquired by completing the qualifying period is maintained provided t h a t not less than sixteen weekly contributions are paid
annually, irrespective of whether they are paid in compulsory or voluntary
insurance.
4. BENEFITS
(a) Old Age
The pension is uniformly fixed at 6,000 lei a year.
(b)
Invalidity
The pension comprises : (1) a fixed fraction equal to 6,000 lei a year;
(2) a fraction varying with the length of the contribution period and equal
to as many times three lei as the insured person has paid weekly contributions beyond the first 200.
343
LEGAL PROVISIONS AND STATISTICS
5. SUSPENSION OR L A P S E OF PENSION RIGHTS
The pension is withheld when the pensioner is sentenced to imprisonment
for more than one month or when the circumstances for which the pension
was granted have ceased to exist.
6. STATISTICS OF CASH BENEFITS
(Former Kingdom and Bessarabia)
1920
Number of insured persons
Number of invalidity pensions l
Annual amount of invalidity pensions (lei)
Number of old-age pensions *
Annual amount of old-age pensions (lei)
Total cash benefits (lei)
1
1924
1929
122,057
252
180,209
547
220,302
2,700
85,809
380
2,000,753
410
15,190,635
795
116,151
202,050
1,360,534
3,361,287
4,399,681
19,590,316
At the end of the year.
Invalidity, Old-Age and Widows' and Orphans' Insurance
for M i n e r s In A r d e a l
1. R I S K S COVERED
(a) Old Age
The pension falls due at the age of sixty-five.
(b)
Invalidity
The insurance covers invalidity involving the loss of general earning
capacity of not less than 66| per cent. The degree of invalidity is determined by the medical officer of the district fund, whose conclusions may,
if necessary, be checked by the chief medical officer to the fund, assisted by
a second doctor.
An invalidity pensioner must submit to any medical examination required
by the insurance fund, so as to determine whether the circumstances for
which the pension was granted still exist.
(c) Death
The loss of income resulting from the death of the breadwinner is covered
by the granting of life annuities or temporary pensions to certain categories
of survivors.
The exceptional expenditure entailed by the death is covered by a funeral
benefit.
2. QUALIFYING P E R I O D
The qualifying period is completed by the accomplishment of eight uninterrupted years of mining work.
3 . R E T E N T I O N OF STATUS OF INSURED PERSON
The right to benefits acquired by completing the qualifying period is maintained only if contributions continue to be paid until the risk materialises.
For this purpose, however, periods of sickness, involuntary unemployment
344
RISKS COVERED AND CASH BENEFITS
or military service are assimilated to contribution periods. The same rule
applies if an insured person, after having been dismissed on account of a
reduction of staff, is again employed in an insurable occupation, provided
that he applies within six months of resuming work for permission to pay
his arrears of contributions in full.
4. B E N E F I T S
(a) Old Age and
Invalidity
As insured persons are classified in three occupational groups according
to the nature of their work, the pension consists of :
(1) a basic amount varying with each group;
(2) an increment varying with each fund, but proportionate to the contributions paid after the eighth year.
In some funds the total pension is as much as 35,200 lei a year.
(b) Death
Widows' Pensions
A widow is entitled to a pension irrespective of age, earning capacity
or means, provided that the marriage took place not less than one year
before the death of the husband.
The widow's pension is equal to 50 per cent, of the pension which the
husband received or could have claimed in case of invalidity.
Orphans' Pensions
Orphans are entitled to a pension up to the age of sixteen. The pension
for half orphans is 20 per cent., and for full orphans 40 per cent., of the
pension which the insured person received or could have claimed in case of
invalidity.
Maximum for Survivors' Pensions
The total pensions paid to all survivors may not exceed the pension
which the insured person could have claimed if the risk of invalidity or
old age had materialised at the date of his death.
Lump-Sum Payments at Death
The survivors of an old-age or invalidity pensioner are entitled to
funeral benefit varying according t o the occupational group t o which the
insured person belonged. This benefit is fixed as follows : first group,
4,000 lei; second group, 3,500 lei; third group, 3,000 lei.
5. COMMUTATION OF P E N S I O N FOR L U M P SUM
Pensions may not be commuted for a lump sum, b u t a widow who
remarries is entitled to two annual instalments of her pension in full settlement of her claim.
6. STATISTICS OF CASH B E N E F I T S
1929
Number of
Number of
Number of
Total cash
old-age or invalidity pensions
widows' pensions
orphans' pensions
benefits (in lei)
5,178
6,289
2,189
79,841,299
345
LEGAL PROVISIONS AND STATISTICS
SPAIN
Old-Age Insurance for Employed Persons
1. R I S K S COVEHED
(a) Old Age
The old-age pension falls due at the age of sixty-five.
(b) Invalidity
The present system of invalidity pensions is purely transitional, and the
risk is covered only in the case of insured persons who have made personal
voluntary payments for an uninterrupted period of not less than twelve
months with a view to increasing their old-age pensions. The amount of
these contributions may not be less than the supplementary premium
required in order to ensure t h a t the pension can be paid without any
reduction under the system of repayable contributions instead of under
the system of alienated contributions.
Invalidity is only covered, moreover, when an insured person suffers from
certain serious infirmities enumerated in the administrative regulations.
2. QUALIFYING PERIOD
(a) Old Age
As the benefits correspond to the accumulated value of the contributions
paid into the insured person's account no qualifying period is required.
(b) Invalidity
The length of the qualifying period is fixed at twelve uninterrupted
months of supplementary voluntary contributions under old-age insurance.
3. BENEFITS
(a) Old Age
The pension is equal to 365 pesetas a year for persons who insure before
the age of forty-five and who work uninterruptedly until the age of sixty-five.
Persons who insure after the age of forty-five receive the accumulated
amount of the payments standing t o their personal account.
(b) Invalidity
The invalidity pension paid to insured persons who have made the necessary supplementary voluntary payments under old-age insurance is fixed
at 365 pesetas a year.
The pension is constituted : (a) b y the old-age pension, reduced so as to
take account of the age of the invalid; (b) if necessary, by the payment of
the supplement required to bring the reduced old-age pension up to the
guaranteed minimum.
4. STATISTICS OF CASH B E N E F I T S
Number of insured persons
Number of individual
accounts
closed each year 1
Accumulated value of contributions in closed accounts (in
pesetas)
1
1922
1926
1930
838,598
2,378,074
3,618,709
499
6,305
13,132
16,129
825,414
2,321,945
Persons becoming insured after the age of forty-five.
346
RISKS COVERED AND CASH B E N E F I T S
SWEDEN
National Invalidity and Old-Age Insurance
1. R I S K S COVERED
(a) Old Age
The pension falls due at the age; of sixty-seven.
(b) Invalidity
Definition of Invalidity
The insurance covers invalidity when the insured person is unable t o
support himself by his labours by work appropriate to his powers and
qualifications.
Establishment of Invalidity
Invalidity is established by the pension committees set up in each district.
Each pension committee consists of a chairman and an even number of
members not exceeding six. The chairman of the committee or his substitute is appointed by the provincial representative of the Crown for a period
of four years. The members of the committee and their substitutes are also
appointed for a period of four years by a general meeting or by t h e council
of the commune or municipality.
The application for a pension must contain all the information necessary
for determining whether the insured person is entitled t o receive one, and
must be accompanied by a document signed by the insured person certifying
t h a t the information given is correct. If the applicant cannot himself make
such a statement, the accuracy of the information must be attested by two
trustworthy persons acquainted with his circumstances.
The legislation gives wide powers t o the pension committees t o collect
any information required for the establishment of invalidity. A medical
certificate is generally required, b u t this is not specified in t h e legislation.
The award of a pension lies with the Pension Board, which is not bound
to accept the decision of the committee which transmitted the application.
Whenever t h e Pension Board has doubts as t o t h e decision taken b y t h e
pension committee, it may refer the matter back t o t h a t committee for a
fresh examination.
Review of Invalidity Pensions
The insurance institution is entitled at any time t o have the pensioner
re-examined. The rules concerning the establishment of invalidity apply
also t o these re-examinations ; before deciding that a pension shall be reduced
or withheld the competent committee must permit the pensioner t o give
explanations.
2. QUALIFYING P E R I O D
The fraction of the pension to which the insured person is entitled irrespective of his financial situation is, as a general rule, proportional t o the
accumulated value of the contributions paid, so t h a t no qualifying period is
required in order t o claim benefits.
3. B E N E F I T S
(a) Old Age
The pension is equal t o a percentage of the contributions paid which
varies with the sex of the insured person and the age at which the payments
were made. The percentage is fixed as follows :
LEGAL PROVISIONS AND STATISTICS
347
Age when contribution paid
Men
Women
Per cent.
Per cent.
Years
70
60
50
40
30
20
15
56
48
40
32
24
16
12
16-19
20-24
25-29
30-34
35-44
45-54
55-66
(b)
Invalidity
The pension comprises :
(1) A fraction varying with the amount of the contributions paid and
depending on the sex of the insured person and the age at which the payments were made. The percentages of contributions which constitute this
fraction of the pension are the same as for old age.
(2) A fixed fraction (bonus) amounting to 225 kr. for men and 210 kr.
for women.
When the pensioner, in addition t o drawing a pension not exceeding
300 kr. a year corresponding to the contributions paid, also possesses an
income exceeding 50 kr. a year the bonus is reduced by six-tenths of the
fraction of the income exceeding this sum.
(c) Children's Bonuses
When the pensioner is unmarried, widowed or divorced, he or she may
be granted a bonus of 102 kr. a year in respect of each dependent child under
fifteen years of age. The full bonus is granted only to pensioners whose
annual income does not exceed 425 kr. in the case of men or 400 kr. in the
case of women, or 825 kr. if the pensioner and his wife live together, plus
in all cases 170 kr. for each child under the age of fifteen. When the income
exceeds the above limits the bonus is reduced by six-tenths of the difference
between the actual income and the limit fixed by the legislation.
4. STATISTICS OF CASH BENEFITS
1924
I Number of compulsory contributors
3,585,000
| Number of invalidity pensioners
a t end of year
288,078
, Annual amount 1 of invalidity benefits (in k r . )
38,361,635
1
2
3
No old-age pension is payable at present.
Figure for 1929.
Provisional figure.
1928
1930
3,727,100
3,759,000 2
329,681
327,998 3
52,194,071
54,128,475 »
348
RISKS COVERED AND CASH BENEFITS
SWITZERLAND
Canton of Appenzell (Outer Rhodes) :
Cantonal Old-Age Insurance
RISKS COVERED AND B E N E F I T S
(a) Old Age
The pension falls due at the age of sixty-five.
The amount of the old-age pension depends on the age of entry into
insurance and the age reached b y the pensioner; it also varies according
to sex.
When an insured person became insured between the ages of eighteen
and twenty-nine the pension is fixed as follows :
Amount of the annual pension
Age of insured person
Men
Years
65
66
67
68
69
70 and o v e r
Francs
200
240
280
320
360
400
Women
Francs
150
180
210
240
270
300
When the insured person first became insured between the ages of fortyfive and forty-nine the amount of the pension varies from 100 to 150 francs
for men and from 100 to 125 francs for women according to the age of the
pensioner.
No persons may be admitted to insurance after the age of fifty.
(b) Death
When an insured person dies before drawing a pension, his widow and
minor children may claim a refund of the paid-up contributions without
interest.
Canton of B a s l e T o w n : Cantonal Old-Age and W i d o w s '
and Orphans' Insurance
1. R I S K S COVERED
(a) Old Age
The old-age pension falls due at the age of sixty-five, but it may be
claimed not more than five years earlier by a person who is suffering from
incapacity of not less than two-thirds or by a widow whose husband died
after she had reached the age of sixty. The pensionable age cannot be
reduced except when the income of the claimant does not exceed 1,500 francs
a year in the case of an unmarried person or 2,700 francs in the case of a
married person.
LEGAL PROVISIONS AND STATISTICS
349
(b) Death
The loss of income resulting from the death of the breadwinner is covered
by the granting of orphans' pensions.
The exceptional expenditure entailed by the death is covered by funeral
benefit, which is payable to the widow.
2. QUALIFYING PERIOD
The risk of old age is covered only when a qualifying period of fifteen
years has been completed. The risk of death is covered when three years
have been spent in compulsory insurance or five years in voluntary insurance
during the period immediate preceding the materialisation of the risk.
3. BENEFITS
(a) Old Age
The old-age pension comprises : (1) a pension guaranteed by the insurance
scheme and varying with the length of the contribution period and the
sex of the insured person ; (2) a bonus which may be added to the guaranteed
pension when the pensioner is in particularly necessitous circumstances.
Guaranteed pension.—When an insured person has contributed for fortyfive years the annual pension is 720 francs in the case of a man and 600 francs
in the case of a woman.
These sums are reduced gradually, as the contribution period diminishes,
to minima of 180 and ISO francs respectively if the insured person has
contributed for not more than fifteen years.
The contributions of a married man entitle his wife to claim a pension,
as she is deemed to have contributed during the whole period for which
her husband paid contributions. When both husband and wife are entitled
to an old-age pension simultaneously, however, the wife's pension is reduced
by half. It returns to its normal rate if she becomes a widow or is divorced.
Insured persons with a sufficient income are entitled only to the annuity
corresponding to the accumulated value of their individual contributions.
Bonus.—When the total income (excluding pension) of the pensioner does
not exceed 125 francs a month in the case of a person living alone or 225 francs
a month in the case of a married person living with his wife, the pension
guaranteed by the insurance scheme is brought up to 480 francs a year.
This bonus, which is paid by the State, is granted only if the pensioner has
been continuously resident in the territory of Basle Town for five years
in the case of a person belonging t o that canton or for twenty years in the
case of a person belonging to some other canton.
(b) Death
Orphans'
Pensions
Orphans are entitled to a pension until they complete their eighteenth
year.
The annual pension amounts to :
300 francs
500 „
700 ,,
900 „
1,000 „
for
„
„
„
,,
a single orphan.
two orphans.
three „
four
„
five or more orphans.
Orphans can claim a pension only in respect of one parent, so that the
pension for full orphans is the same as that for half orphans.
350
RISKS COVERED AND CASH BENEFITS
Lump-Sum Payments at Death
When an insured person dies his widow receives 500 francs as funeral
benefit.
4. SUSPENSION OF LAPSE OF P E N S I O N RIGHTS
When an unmarried insured, person is undergoing a sentence of imprisonment for more than one mouth his pension is withheld during the period
of imprisonment.
Canton of Glarus : Cantonal Invalidity and Old-Age
Insurance
1. RISKS COVERED
(a) Old Age
The old-age pension falls due at the age of sixty-five.
(b)
Invalidity
The insurance covers invalidity involving loss of earning capacity lasting
for more than one year.
2. QUALIFYING P E E I O D
(a) Old Age
The qualifying period is completed when the number of contributions
paid is such that, if accumulated a t compound interest, they would represent
a value of 400 francs at the date when the pension falls due.
When t h e value of the paid-up contributions does not reach this sum t h e
insured person may pay the difference so as t o acquire the right t o complete
benefits.
(b) Invalidity
The qualifying period for invalidity is completed when five years have been
spent in insurance.
3. BENEFITS
The amount of t h e benefits varies according t o the age of the pensioner.
The first annual instalment of the invalidity pension is always fixed a t
150 francs, rising by 10 francs annually until the total pension reaches the
maximum of 300 francs.
The amount of the old-age pension is fixed as follows :
Age
of the pensioner
66
67
68
69
70 and over
Annual amount
of the pension
(francs)
180
210
240
270
300
When an invalidity pensioner reaches the age of sixty-six he may, if i t
is more favourable for him, continue to draw his invalidity pension; otherwise he is granted an old-age pension.
LEGAL PROVISIONS AND STATISTICS
351
URUGUAY
Invalidity, Old-Âge and Widows' and Orphans' Insurance
for the Staffs of Public Utility Undertakings
¡1. R I S K S COVERED
(a) Length of Service
The insurance does not prescribe any minimum age for granting a retiring
pension.
(b) Invalidity
The insurance covers the loss of occupational earning capacity, provided
it is of a permanent nature.
The establishment of loss of earning capacity is entrusted to doctors
appointed for this purpose by the directorate of the Superannuation and
Pension Fund, which may also carry out any enquiry which it considers
necessary to determine the reasons for the incapacity on which the claim
t o a pension is based.
2. QUALIFYING PERIOD
(a) Length of Service
The worker is entitled to a pension in case of voluntary departure after
thirty years' service; after ten years' service he is entitled to a pension if
he is dismissed for reasons not reflecting on his moral character.
(b) Invalidity and Death
Ten years' service.
3. BENEFITS
(a) Old Age and Invalidity
The pension due in case of invalidity or of voluntary departure after
thirty years' service, or of dismissal after ten years' service for reasons not
reflecting on the moral character of the insured person, is fixed at a percentage of the average wage for the last five years, which varies with the amount
of the wages earned as follows :
Limits of wage classes
Amount of pension
(pesos per mouth)
(pesos per month)
Upto50
Full wage
50-60
50.00 + 0.95 per peso
60-80
59.50 + 0.90
80-100
77.50 + 0.85
100-125
94.50 + 0.80
125-150
114.50 + 0.75
150-175
135.25 + 0.70
175-200
150.75 + 0.65
200-225
167.00 + 0.60
225-250
182.00 + 0.55
250-275
195.75 + 0.50
275-300
208.25 + 0.45
300-325
219.50 + 0.40
325-350
229.50 + 0.35
350-375
238.25 + 0.30
375-400
245.75 + 0.25
400-425
252.00 + 0.20
425-450
257.00 + 0.15
Over 450
260.75 + 0.10
All pensions under 100 pesos are subject to a deduction of 4 per cent,
of the total (sic).
352
RISKS COVERED AND CASH B E N E F I T S
(b) Death
Amount and Allocation of the Pension
The total pension payable t o all survivors, irrespective of their number,
is 50 per cent, of the old-age or invalidity pension which the insured person
received or could have claimed a t t h e date of his death. A widow (or an
invalid widower) is entitled t o a pension concurrently with the children of
the insured person or with the parents of t h e insured person when there are
no children.
Parents are entitled to a pension concurrently with the unmarried sisters
of the pensioner provided there are no children.
Conditions Required of Survivors
A widow is entitled t o a pension irrespective of any condition of age,
infirmity or means.
A widower is not entitled t o a pension unless suffering from an infirmity
which renders him incapable of earning his living.
Recognised illegitimate children or children whose paternity has been
established in a court of law are entitled to a pension in so far as they have
the right t o inherit under the Civil Code. The age limit is fixed at eighteen
years for sons and twenty-four years for daughters, unless they marry
before t h a t age.
Parents or unmarried sisters of the deceased are entitled t o a pension
only if they were maintained by him.
Invalidity, Old-Age and Widows' and Orphans' Insurance for
the Staffs of Banks; a n d the Stock Exchange
1. R I S K S COVERED
(a) Old Age
The pension falls due at the age of sixty, b u t an insured person may
claim his pension one year earlier for each year of service beyond the
thirtieth.
(b) Invalidity
The insurance covers loss of occupational earning capacity.
(c) Death
The loss of income resulting from the death of the breadwinner is covered
by the granting of life annuities or temporary pensions to certain categories
of survivors.
The exceptional expenditure incidental t o the death is always met by an
allowance, whether or not the survivors are entitled t o a pension.
2. QUALIFYING P E R I O D
The qualifying period consists of not less than ten years' service.
3. B E N E F I T S
(a) Old Age and Invalidity
The pension is equal to one-thirtieth of the last annual wage for each
year of service, b u t not exceeding the average wage for the last five years
or 4,800 pesos a year.
If the pension exceeds 960 pesos a year it is reduced by 15 per cent.
353
LEGAL PROVISIONS AND STATISTICS
(b) Death
Amount and Allocation of the Pension ; Conditions Required of Survivors
The provisions on these points are the same as in the insurance scheme
for the staffs of public utility undertakings.
Lump-Sum
Payments at Death
The lump sum due in case of death is paid to the widow or, failing her,
to the children of the deceased or, if there are no claimants in these two
categories, it is paid to parents or, failing them, to unmarried sisters.
When the insured person dies before completing the qualifying period the
lump sum is equal to one month's salary for each year of service. When he
dies after completing the qualifying period the lump sum is equal in every
case to six months' salary.
Ü.S.S.R.
Invalidity, Old-Age and Widows' and Orphans' Insurance
for Employed Persons
1. R I S K S COVERED
(a) Old Age
The old-age pension falls due a t the age of sixty for men and fifty for
women ; in the case of miners employed underground the pensionable age is
reduced to fifty.
(b) Invalidity
Definition of Invalidity
The insurance covers general loss of earning capacity.
The degree to which the risk is covered varies according t o the degree
of incapacity. Disabled persons are therefore divided into three categories :
(1) Persons having completely lost their earning capacity and requiring
the constant help of another person ;
(2) Persons having completely lost their working capacity both for their
own and for any other occupation;
(3) Persons incapable of working regularly in their own occupation but
able, after sufficient training, to use their remaining working capacity
in intermittent employment or for short periods, or in some occupation
less highly skilled than the one which they previously exercised.
Establishment of Invalidity
Invalidity must be established by the medical experts attached to each
insurance fund. In the R. S. P . S. R. (Russia proper) the board of medical
experts is constituted by the local representatives of the Commissariat for
Public Health after consultation with the insurance funds and the social
relief organisations.
Each board comprises : (1) a chairman appointed by the local trade
union; (2) three medical experts (a physician, a surgeon and a neurologist)
appointed by the Public Health Service after consultation with the insurance
funds and the social welfare organisations ; (3) a confidential medical adviser
to the insurance fund.
The board may co-opt other specialists or experts in an advisory capacity.
Where no board of medical experts exists in the place where the worker
23
354
RISKS COVERED AND CASH BENEFITS
is domiciled, he is examined by the board responsible for supervising the
benefits for temporary incapacity in t h a t district. The conclusions of this
body are submitted to the competent board of experts, which 'may require
the insured person to appear in person for examination.
The duties of the board of medical experts are as follows : (1) to establish
the existence of invalidity; (2) to determine the degree, nature and causes
of the invalidity; (3) to determine the means of restoring working capacity
by medical attention, re-training, etc. ; (4) to determine whether an artificial
limb is necessary; (5) to determine the connection between invalidity and
an industrial accident or occupational disease.
The causes of invalidity and its connection with an industrial accident or
an occupational disease must be determined because disabled persons who
have been the victims of an industrial accident or an occupational disease
are granted higher pensions under the Soviet insurance scheme than other
categories of disabled persons.
Review of Invalidity
Pensions
The review of an invalidity pension may be proposed in any particular
case by the insurance fund, by the board of medical experts or by the pensioner himself. The insurance fund and the pensioner are not as a rule
entitled to demand such a review more than once a year. If, however,
there is a sudden change in the state of health of the pensioner the fund
may, at his request, order him to be re-examined at any time.
When the insurance fund or the board of experts decides to undertake a
revision the pensioner must appear at the time specified by the institution
which convenes him. The: pension is withheld if the pensioner refuses
without valid reason to appear.
The right to a pension is finally lost if the pensioner refuses without
valid reason to appear for re-examination within one year of the date on
which he was convened or if he does not appear at the date fixed by a second
notice.
If the body responsible for examining the pensioner finds t h a t there has
been a change in his degree of working capacity he is classified in the category
corresponding to his new degree of incapacity and the amount of the pension
is altered accordingly.
(c) Death
The loss of income resulting from the death of the breadwinner is covered
by the granting of life annuities or temporary pensions to certain categories
of survivors.
The extra expenditure incidental to the death is covered by funeral
benefit.
2. QUALIFYING P E R I O D
(a) Old Age
The length of the qualifying period is fixed as follows : (1) for miners
employed in underground work or persons whose occupation is harmful to
health : twenty years of employment, of which ten years must have been
passed underground or on unhealthy work ; (2) for other employed persons :
twenty-five years of employment in the case of men and twenty years in the
case of women.
(b) Invalidity and Death
The length of the qualifying period depends on the age at the date when
the risk materialises and the nature of the insured person's occupation.
It is fixed as follows :
355
LEGAL PKOVISIONS AND STATISTICS
Age when the risk materialises
Workers
employed
underground
or in unhealthy
occupations
Other
categories
of workers
Salaried
employees
Years
Years
Years
Years
Up t o 20
20-22
22-25
25-30
30-40
40-50
50 and more
1
2
3
4
5
6
No qualifying period
2
2
2
2
3
4
5
6
7
9
8
12
1
(c) Periods Beckoned towards Qualifying Period
Periods of sickness and unemployment are reckoned towards the qualifying period.
3. RETENTION OF STATUS OF INSURED PERSON
The right to benefits acquired b y completing the qualifying period cannot
as a general rule be maintained unless the insured person continued to be
employed and insured during the period immediately preceding the materialisation of the risk.
Periods of involuntary unemployment, incapacity due to sickness, etc.,
are assimilated to contribution periods for the purpose of retention of
status.
4. BENEFITS
(a) Old Age
A pension depends on : (1) the average wage on which contributions were
paid for the last twelve months, it being understood that no wages in excess
of 300 roubles a month are taken into consideration; (2) the employment
in which the claimant was engaged.
For workers engaged on underground or unhealthy work, the pension is
equal to 60 per cent, of the basic wage. This percentage is reduced to 55
in the case of workers employed in basic industries and 50 per cent, in the
case of workers employed in other industries or salaried employees engaged
in production.
The pensions of members of " shock brigades " is increased b y 3 per cent.
for every year spent in t h a t capacity.
(b)
Invalidity
The pension depends on the basic wage, the duration of employment, the
occupation of the claimant and the degree of incapacity, as is shown in the
table on the following page.
(c) Death
Survivors'
Pensions
The amount of the total pension paid to all survivors depends on the
composition of the famüy and the amount of the invalidity pension which
Basic pension
Supplementary pension
Maximum amount
of pension
1st Group :
Normal pension acquired after a
Workers employed on underground or
qualifying period of 10 years'
unhealthy work :
employment or more :
Invalidity of the first category . . .
69 per cent, of wages
,,
„
second „
...
49
»
„
third
„
35
,,
,,
The pension is increased b y 2 per
cent, of wages for each year
spent in insurance from the
10th t o the 18th, and 3 per 100 per cent, of wages
cent, for each extra year from 80
t h e 18th to the 23rd.
66
2nd Group :
Normal pension acquired after a
qualifying period of 10 years'
Workers employed in basic industries :
employment or more :
invalidity of the first category . . .
68 per cent, of wages
,,
„
second „
...
48
„
„
»
„
third
„
34
,,
„
The pension is increased b y 1 per
cent, of wages for every year
of insurance from the 10th t o
the 18th, and b y 2 per cent, for
every year from the 18th to
the 25th.
3rd Group :
Normal pension acquired after a
Workers employed in other industries
qualifying period of 18 years'
and salaried employees engaged in
employment or more :
production :
Invalidity of the first category . . .
67 per cent, of wages
,,
„
second „
47
»
„
third
33
,,
,,
The pension is increased by 1 per
cent, of wages for every extra
year of insurance from the
18th to the 31st.
4th Group :
Normal pension acquired after a
Salaried employees not directly enqualifying period of 18 years'
gaged in production :
employment or more :
Invalidity of the first category . . .
67 per cent, of wages
,,
„
second „
...
„
„
third
„
33
„
„
The pension is increased b y
i/ a per cent, of wages for each
extra year of insurance from
the 18th to the 34th.
90 per .cent, of wages
70
56
„
„
80 per cent, of wages
60
46
„
„
75 per cent, of wages
55
,,
»
41
„
„
LEGAL PROVISIONS AND STATISTICS
357
the insured person could have claimed if he had been incapacitated as for
the second category of invalidity.
Number of survivors
entitled to pensions
1
2
3
4
Amount of the pension
Per cent.
50
75
100
125
\
of the pension which the
f deceased could have claimed
( if suffering from invalidity
;
of the second category
Conditions Required of Survivors
The conditions required of survivors concern : (1) the degree of relationship ; (2) the degree of economic dependency on the deceased.
Degree of relationship.—The wife (or husband), children, father, mother,
sisters and brothers are possible claimants. No pension is payable to other
persons maintained by the deceased, such as grandparents or grandchildren.
In the case of persons employed on peasant holdings, the categories of
survivors entitled to a pension are more limited ; a pension can be granted
only to the following categories : (1) children, brothers and sisters under the
age of fifteen (or eighteen in the case of persons studying in public educational institutions); (2) children, brothers and sisters having lost their
earning capacity before the age of fifteen (or eighteen in the case of those
studying in public educational institutions) ; (3) parents and wife (husband)
if incapable of work.
Degree of economic dependency.—Only persons who were actually maintained by the insured person are entitled to a pension. Children who were
maintained by both parents receive pensions in respect of the death of
each. Other members of the family, however, receive a pension only on the
death of the person principally responsible for their maintenance.
Children under the age of fifteen, and parents or a wife or husband who
have reached the age for an old-age pension or are responsible for the supervision of children under eight years of age are the only persons who are
presumed to have been maintained by the insured person.
Other survivors cannot claim a pension unless they are actually unable
to work on account of age or infirmity.
The pension may in no case be granted to survivors engaged in a trade or
occupation rendering them liable to an occupational t a x on their turnover
or to persons who employ labour for purposes of gain.
Funeral Benefit
Funeral benefit is payable on the death of contributors or persons in
receipt of insurance benefits or on the death of a member of their family
maintained by them : wife, children, parentSj brother or sister.
In the event of the death of an insured person, whether a pensioner or
not, the benefit is paid to the wife or, failing her, to parents, children or
collateral relatives. When one of the family dies the benefit is paid to the
insured person.
The amount of the funeral benefit varies from 20 to 40 roubles according
to the place of residence of the insured person ; it is reduced by 50 per cent.
for the death of a child under ten years of-age.
5. SUSPENSION OR LAPSE OF PENSION RIGHTS
The payment of a pension may be entirely or partially suspended either
for economic reasons or on account of legal proceedings.
Economic Reasons
The payment of a pension is suspended when the insured person : (1) resides
in an agricultural area and works on a peasant holding which is liable to the
358
RISKS COVERED AND CASH BENEFITS
agricultural t a x ; (2) exercises a trade for which an occupational t a x at a
fixed rate must be paid; (3) belongs to a co-operative selling society.
The amount of the pension is reduced when the pensioner : (1) is in receipt
of wages or other income ; the; reduction is such that the total pension and
other income does not exceed, the previous wage received by the pensioner
(no account is taken of income from agricultural holdings which are exempt
from the agricultural tax) ; (2) does not maintain the members of his family,
and is placed in a home for mentally deficient persons for a period of more
than six months; in this case the pension is fixed at 10 roubles a month.
Proceedings for Crime or Misdemeanour
The payment of the pension is suspended when the pensioner : (1) is
sentenced to imprisonment or banished by decision of a judicial or administrative authority; (2) is brought before a court of law for an offence
involving the suspension of his right to a pension—-in this case the pension
is paid if he is acquitted, but lie cannot claim in respect of arrears more than
six times the monthly pension which was provisionally suspended.
6. STATISTICS OF CASH BENEFITS
Year
1
Number of insured persons
(average during year)
(in thousands) 1
Year
Expenditure on cash benefits
(invalidity, old age and death)
(in millions of roubles)
1927-1928
1928-1929
204.8
263.4
1927
1928
8,742.0
9,233.9
1929
10,224.2
1930
318.8
1930
12,570.9
1931
353.6
Insured persons entitled to insurance benefits in case of permanent incapacity.
YUGOSLAVIA
Invalidity, Old-Age and Widows' and Orphans' Insurance
for Miners
1. RISKS COVERED
(a) Old Age
The old-age pension falls due when the insured person reaches the age
of fifty-five, provided that he has thirty years' service to his credit.
.(b)
Invalidity
The insurance covers general loss of earning capacity of not less than
6 6 | per cent.
(c) Death
The loss of income resulting from the death of the insured person is
covered by a pension paid to certain categories of survivors.
The exceptional expenditure incidental to the death of an insured person
or of certain members of his family is covered by funeral benefit.
2. QUALIFYING PERIOD
The qualifying period consists of five years spent in insurance.
LEGAL PROVISIONS AND STATISTICS
359
3. BENEFITS
(a) Old Age and
Invalidity
The annual pension comprises : (1) a basic amount equal to 20 per cent.
of the average basic wage for the last five years ; (2) an increment equal to
2.4 per cent, of t h a t wage for each year spent in insurance after the fifth.
(b) Death
Widows'1 Pensions
A widow is entitled to a pension irrespective of age, earning capacity or
means, but the marriage must have been contracted before the date on
which the husband was granted a pension.
The amount of the widow's pension is 50 per cent, of the pension which
the husband received or could have claimed in case of invalidity.
Widowers'1 Pensions
A widower is not entitled to a pension unless he can prove t h a t he is
actually unable to earn his living, and that consequently the insured person
contributed substantially to his maintenance.
Widowers' pensions are calculated in the same way as widows' pensions.
Orphans' Pensions
I n order to claim a pension orphans must fulfil the following conditions :
(1) they must be legitimate children or illegitimate children who were
legally adopted before the date on which the risk materialised; (2) the age
limit is sixteen years.
The pension for half orphans is equal to 25 per cent., and that for full
orphans to 33j per cent., of the pension which the insured person received
or could have claimed in case of invalidity.
Parents' Pensions
Parents cannot claim a pension unless they were actually dependent on
the insured person. I n this case they are granted a pension concurrently
with the widow and orphans, provided that the total of the pensions granted
to the widow and orphans does not exceed the maximum which may be
granted t o survivors.
The pension for parents is fixed at 25 per cent, of the pension which the
insured person received or could have claimed in case of invalidity.
Maximum for Survivors' Pensions
The total pensions granted to survivors may not exceed the pension to
which the insured person would have been entitled if the risk of invalidity
or old age had materialised at the date of death.
Funeral Benefit
Funeral benefit is paid to the insured person in the event of the death
of any member of his family (wife or children under sixteen), or in the event
of the death of the insured person it is paid to survivors who met the cost
of burial.
For this purpose the following are considered as being survivors : wife or
husband, legitimate or illegitimate children, parents, grandchildren and
brothers or sisters of the insured persons who were entirely maintained by
him. When an insured person leaves no survivors or when these survivors
did not pay the cost of burial, the sickness insurance fund meets the cost
up to a certain maximum, and receives the funeral benefit.
For the death of the insured person the funeral benefit is thirty times the
daily wage up to a maximum of 1,500 dinars; for the death of a child it
varies from 100 to 300 dinars, according to the age of the child.
360
RISKS COVERED AND CASH BENEFITS
Invalidity, Old-Age and Widows' and Orphans' Insurance
for Salaried Employees in Slovenia and Dalmatia
1. R I S K S COVERED
(a) Old Age
The age for granting an old-age pension is fixed at seventy years for men
and sixty-five for women. The pension may, however, be claimed not
more than five years earlier by a man who is unemployed.
The old-age pension also falls due, irrespective of age, if the insured person
has been insured for not less than forty years in the case of a man or thirtyfive in the case of a woman.
(b)
Invalidity
The insurance covers loss of occupational earning capacity without
determining the percentage of incapacity. The legislation specifies however
that if the invalid is in receipt of remuneration exceeding two-thirds of the
average basic wage for the sixty months immediately preceding the materialisation of the risk, the fraction of the pension exceeding t h a t sum will
be suspended.
A pensioner must undergo any examination considered necessary b y the
insurance institution in order to determine whether the circumstances for
which the pension was granted continue to exist. In theory such an
examination can be ordered at any time, for the legislation does not prescribe
a period after which the pension must be definitively granted.
(c) Death
The loss of income resulting from the death of the breadwinner is covered
by the granting of life annuities or temporary pensions to certain categories
of survivors.
The exceptional expenditure incidental to the death is covered by funeral
benefit if the insured person has :tiot completed the qualifying period and
therefore leaves his survivors no claim to a pension.
2. QUALIFYING P E R I O D
The qualifying period is completed by the payment of sixty monthly
contributions.
3. RETENTION OF STATUS OF INSURED PERSON
The right to benefits acquired by completing the qualifying period is
maintained only if contributions continue to be paid.
If the interruption in the payment of contributions does not exceed twelve
years the validity of the earlier contributions is automatically revived when
the person in question again becomes insured. If the interruption lasted
more t h a n twelve yeaTS the validity of previous contributions paid over a
period not exceeding five years is revised.
4. BENEFITS
(a)
Invalidity
The invalidity pension comprises : a basic amount equal to 1,800 dinars;
and an increment equal to : (i) 30 dinars for every 360 dinars paid by way
of contributions in excess of 21,600 dinars during the last 120 months;
(ii) the average contribution multiplied by ten; (iii) one-sixth of the contributions paid.
The minimum amount of the invalidity pension is 3,000 dinars a year.
361
LEGAL PROVISIONS AND STATISTICS
(b) OU Age
The amount of the old-age pension is equal to the invalidity pension
plus 10 per cent.
(c) Death
Survivors' Pensions
A pension is granted to the following : (1) a widow, irrespective of age,
earning capacity or means; (2) children of insured women and legitimate
or legitimised children of an insured man, provided that the marriage of
the parents did not take place during the period when they were in receipt
of an invalidity or old-age pension.
The children receive a pension up to the age of eighteen.
The amount of the survivors' pensions is as follows :
Widow's pension.—The widow's pension is equal to half the old-age or
invalidity pension which the deceased could have claimed; the minimum
pension is 1,800 dinars a year.
Orphans' pension.—The orphans' pension is a percentage of the old-age
or invalidity pension which the deceased could have claimed :
Number of children
Hail orphans
Number of children
Per cent.
Per cent.
1
2
3
25
35
40
45
Full orphans
1
2
3
4
50
75
85
90
95
The minimum pension for the first full orphan is 1,500 dinars a year.
Lump-Sum
Payments at Death
The lump sum granted in case of death is paid to the widow or children
of an insured person who dies before completing the qualifying period.
I t is equal to sixty times the last monthly contribution of the insured
person.
When the deceased does not leave a widow or children the lump sum is
paid to his mother if she was maintained by him. In this case the sum is
equal to thirty times the last monthly contribution.
THIRD PART
BENEFITS
IN
KIND
INTRODUCTION
Invalidity, old-age and widows' and orphans' insurance institutions do not remain passive in t h e face of the risks which, if they
materialise, will give rise t o claims upon them. Every effort is
made t o reduce the number and gravity of the risks they cover,
and steps are being taken on an increasing scale and in an increasing number of countries t o improve the general health of t h e
insured population and the hygienic conditions of their homes.
Curative treatment and preventive treatment are taking their
place in schemes of benefits side by side with pensions and cash
benefits. Insurance is thus striking out on a path of action
tending t o preserve t h e health of t h e workers and prevent every
avoidable waste of productive energy.
Nearly all recent insurance legislation authorises or even
requires insurance institutions t o play their part in protecting
and improving the health of their members. The intervention
of invalidity, old-age and widows' and orphans' insurance institutions in this sphere is extremely important, both for the individual and for the community. Provided t h a t he can find
employment, the worker who is maintained in, or restored to,
good health will have no need t o call on t h e community for
financial help, and the insurance institution will be saved the
necessity of paying out benefits or pensions which represent a
dead loss wherever human energies t h a t have been neglected and
left t o waste have been used up before their time.
Benefits in kind comprise treatment and care. Conceived as
preventive measures and systematically designed to combat the
illnesses prevalent among the classes of the population whose
364
BENEFITS IN KIND
means of livelihood are precarious, these benefits are intended
to increase resistance against disease and to raise the biological
standard. The insurance institutions often assign a specific
object to their activities, that of restoring earning capacity and
preventing or at least retarding invalidity. But over and above
the preventive treatment granted to persons whose earning
capacity is in jeopardy, and in addition to the care provided for
the disabled, measures of assistance to individuals may include
any other benefits required by the insured persons or pensioners
in the interests of their health. The conditions for the granting
of assistance to individuals and its nature and scope are described
in Chapter I.
Curative and preventive measures take on a character of particular urgency and call for a special organisation of the methods
of detection, diagnosis and treatment whenever it is a question
of combating social diseases, so called because the frequency and
gravity of their occurrence among the socially weak sections of
the population point to the conclusion that they are conditioned,
or at least aggravated, by a low general standard of living.
Chapter I I will therefor«; be devoted to the question of
assistance to individuals ir. connection with the principal social
diseases.
By providing benefits in kind over and above those granted
in individual cases, social insurance offers its contribution to the
general measures adopted to preserve the strength and increase
the powers of resistance of wide sections of the population. These
measures are general, in the sense that they are planned for the
community as a whole, without fore-knowledge of the particular
individuals who will benefit by them. They aim at fortifying and
conserving the health of the workers and rendering them immune
to the germs of disease, thereby reducing the number of cases
in which insurance institutions are obliged to assist individuals
already suffering from serious maladies. Chapter I I I will therefore deal with the general contribution of insurance to the
protection of public health.
*
*
*
The scope of the present report is confined to the benefits
provided by invalidity, old-age and widows' and orphans' insurance. Of all the medical benefits provided by social insurance,
INTEODUCTION
365
only those connected with invalidity, old-age and widows' and
orphans' insurance call for description here, whether they are paid
for and organised by this branch of insurance or are confined
solely to the recipients of pensions or allowances. The distinction is, no doubt, an artificial one, but it is nevertheless that
on which, for reasons of financial and administrative technique,
the legislation and practice of many countries are based. While
duly observing it, the fact will not be left out of account that
even in countries where sickness insurance and invalidity insurance
do not form a single branch the benefits granted by the latter
are often only a continuation of the care provided by the former.
Still less will it be forgotten that all the curative and preventive
activities of insurance institutions are nothing but a contribution
—although, it is true, in most social insurance countries a capital
one—to the work of health protection to which the efforts of
the medical profession, the public health services, and the social
assistance organisations are alike devoted.
The restrictions imposed by the scope of this report will at
least have the advantage of throwing into bolder relief the task
and place to be allotted to invalidity, old-age and widows' and
orphans' insurance in any general plan to integrate all the various
forms of activities for the promotion of public health.
CHAPTER I
MEASURES OF ASSISTANCE TO INDIVIDUALS
Curative and preventive treatment, varying extensively both
in quantity and quality from country to country, are provided :
(a) by the great majority of general insurance schemes, notably
in Austria, Chile, Czechoslovakia, France, Germany, Great
Britain and Northern Ireland, Hungary, Italy, Luxemburg, the
Netherlands, Rumania and the U. S.S.R., and also by the
invalidity insurance scheme in Denmark;
(b) by nearly all the special insurance schemes for salaried
employees, particularly in Austria, Czechoslovakia, Germany,
Luxemburg, Poland and Yugoslavia;
(c) by a large number of occupational schemes, e.g. miners'
insurance in Czechoslovakia, France, Germany, Hungary, the
Netherlands and Poland; public utility workers' insurance in
Brazil; tobacco workers' insurance in Greece.
This list, though incomplete, is long enough to show that
invalidity, old-age and widows' and orphans' insurance has resolutely set itself to the task of protecting the health of the insured
population.
The present Chapter begins with an account of the beneficiaries
of assistance to individuals and the conditions under which it is
granted, proceeds to a consideration of compulsory and optional
benefits in kind, and terminates with a description of the nature
and scope of assistance to individuals.
§ 1.—Beneficiaries
It would be highly desirable that every insured person and
every pensioner should be entitled at any time to the benefit of
the medical care demanded by his state of health. Not all
MEASURES OF ASSISTANCE TO INDIVIDUALS
367
national legislation has yet reached this stage of development;
in certain countries, however, it was attained some time ago, and
others have even gone further, having extended certain benefits
in kind t o the families of insured persons and pensioners.
The conditions for the granting of medical assistance vary in
most countries according t o t h e category t o which t h e person
concerned belongs, i.e. whether an insured person, a pensioner,
or a member of an insured person's or pensioner's family.
CONDITIONS OF B E N E F I T FOB, I N S U E E D P E R S O N S
The mere fact of being insured—i.e. of membership of an
insurance fund or employment in an insurable occupation—may
in some cases be a sufficient title t o benefit. I n other cases, the
completion of a specified qualifying period is required, but then
a person who was formerly insured may retain his right t o benefit
even after he has ceased t o be employed in an insurable occupation
or to belong t o an insurance fund. Below are given the rules
in force in the general insurance schemes and in t h e special
schemes introduced in various countries for salaried employees.
I n Great Britain and Northern Ireland the mere fact of insurance carries with it the right to medical benefit, regardless of
the period of membership or the number of contributions paid.
Since sickness and invalidity insurance constitute a single branch,
medical assistance is granted without limit of time and for as
long as it is required by the patient who is employed or incapacitated. A worker who has ceased to be employed in an insurable occupation retains his right t o medical benefit for a period
of 18 t o 24 months (30 t o 36 months for the genuinely unemployed),
dating from his last weekly contribution. A person who was still
insured at the age of 65 retains this right until his death.
I n countries where sickness insurance and invalidity, old-age and
widows' and orphans' insurance are administered separately, the
medical assistance granted by the invalidity fund may be connected with t h a t granted by the sickness fund in either of two ways :
the invalidity fund may continue to supply medical and pharmaceutical benefits to insured persons who have exhausted their
rights under sickness insurance; or, alternatively, it may substitute
for the benefits of sickness insurance, before the latter have been
exhausted, measures more specifically suitable to prevent or
retard invalidity. I n either case a qualifying period may be
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BENEFITS IN KIND
stipulated, but this is particularly inadvisable once the prevention
of invalidity has been recognised as the purpose for which the
invalidity fund intervenes.
I t is precisely in order that invalidity insurance institutions
may at any time be able to direct their action towards the prevention of invalidity that in a number of laws no qualifying period
is laid down, so that the insured person is qualified to benefit
by preventive measures at once. This is the case in Austria
(salaried employees), Czechoslovakia (workers and salaried
employees), Denmark (invalidity), Hungary (employed persons),
Italy (employed persons), Luxemburg (workers and salaried
employees), the Netherlands (employed persons), and Yugoslavia
(salaried employees).
The absence of any qualifying period does not, however, mean
that all insured persons have equal rights in respect of benefits.
It will be seen from a consideration of the German and British
legislation that the period of membership of the insured person
is, in fact, taken into account.
In Germany a number of new principles were laid down in
September 1931 with the object of effecting the economies in
workers' invalidity insurance made necessary by the reactions
of the depression on insurance finance. Except for young
workers, whose health is regarded as an especially important
asset, assistance may in principle be granted only to insured
persons who have completed a qualifying period (250 weekly
contributions) and have retained the rights to which it entitles
them by the payment of at least 20 weekly contributions in the
case of compulsory insurance, or 40 in the case of voluntary
insurance, during each period of two years. The salaried
employees' insurance institution in turn restricts the granting of
preventive treatment, except in cases of tuberculosis necessitating
medical treatment, to insured persons who have twelve monthly
contributions to their credit, preference being given to those who
have not already received preventive treatment.
In Great Britain, additional treatment benefits, granted over
and above the medical benefit which is the legal right of every
insured person, are reserved for persons who have belonged for
three years to an approved society which during that period has
accumulated a surplus large enough to enable it to assume responsibility for benefits exceeding the statutory minimum. These
additional benefits comprise payment by the approved society
MEASURES OF ASSISTANCE TO INDIVIDUALS
369
of all or part of the cost of dental treatment, maintenance and
treatment in hospitals or convalescent homes, optical treatment,
home nursing, artificial limbs and appliances, etc.
In other countries, i.e. France, Poland and Rumania, invalidity
insurance funds grant assistance only to insured persons who have
completed the specified qualifying period.
Thus, under the French general insurance scheme, a person
who is not cured within six months and has exhausted his right
to sickness insurance benefits may continue to receive treatment
only if he fulfils the necessary conditions for the receipt of invalidity insurance benefits, that is, if he has been a member of the
fund for at least two years before the invalidity set in, has paid
a minimum of 480 daily contributions during that period, and is
unable to return to his work.
In Poland (salaried employees) the medical treatment of a
person who has exhausted his sickness insurance rights is continued
by the invalidity insurance institution on condition that he has
completed the specified qualifying period (60 monthly contributions). Similarly, preventive treatment for the purpose of
averting threatened invalidity is reserved for members who have
completed the qualifying period, although exceptions may be
allowed in respect of affections of the respiratory organs, diseases
of the internal organs, and nervous complaints where there is a
genuine chance of recovery.
Similarly, in the general insurance scheme in Rumania, preventive treatment is granted by invalidity insurance to insured
persons whose sickness insurance claims have expired and who
have paid at least 200 weekly contributions.
CONDITIONS OF BENEFIT FOR PENSIONERS
In a number of cases there may appear to be a possibility of
removing, or at least, mitigating, by means of suitable therapeutic
treatment, the infirmity on account of which a pension was originally granted. For this purpose most laws authorise insurance
institutions to apply what is known as rehabilitation treatment
to persons drawing invalidity pensions. In countries in which
pensions are granted to widows suffering from premature invalidity it may be to the interest of insurance institutions to extend
such treatment to recipients of widows' pensions.
But quite apart from the reason for which the pension was
24
370
B E N E F I T S IN K I N D
granted, medical and pharmaceutical assistance may be required
by any pensioner, whether drawing an invalidity, old-age, or
widow's or orphan's pension. The question t h e n arises whether
such assistance shall be secured t o the pensioner by law or shall
be made subject t o t h e payment of a special contribution.
Medical attendance and drugs are legally guaranteed t o pensioners in Czechoslovakia (salaried employees), France and Great
Britain.
The Czechoslovak Salaried Employees' Insurance Act confers
t h e right t o medical assistance on all pensioners, whether they
receive old-age or invalidity pensions or widows', orphans' or
parents' pensions, for t h e whole period for which t h e pension is
granted.
The French law gives recipients of temporary invalidity
pensions, i.e. those granted for the first five years of invalidity,
t h e right t o medical a,nd pharmaceutical benefits, not only for
t h e t r e a t m e n t of the complaint t o which invalidity is due, b u t
also for any other form of sickness or infirmity. Once the temporary invalidity pension has expired, t h e express legal right t o
such benefits also lapses, b u t the law provides t h a t the Augmentation and Joint Business F u n d shall contribute within t h e limits
of its resources towards t h e cost of medical and pharmaceutical
benefits granted t o invalidity pensioners of over five years' standing and t o old-age pensioners. Old-age pensioners are not
entitled t o maintain their sickness insurance rights, either personally or in respect of their wife or husband, except on payment
of a minimum contribution fixed b y t h e law.
I n Great Britain and Northern Ireland, medical assistance is
provided under t h e Health Insurance Act t o insured persons in
receipt of disablement benefit and old-age pensions. Such
assistance is not limited t o curative treatment for t h e removal
of t h e infirmity for which t h e benefit was granted.
Under most of the other schemes t h a t provide for the granting
of benefits in kind t o pensioners, the specific object of such
measures is to reduce the degree of invalidity and restore earning
capacity. This is the case in Austria (salaried employees),
Czechoslovakia (workers), Denmark (persons of small means who
are regular members of sickness funds), Germany (workers and
salaried employees), Hungary (employed persons), I t a l y (employed
persons), Luxemburg (workers and salaried employees), the
Netherlands (employed persons), Poland (salaried employees) and
MEASUE.ES OF ASSISTANCE TO INDIVIDUALS
371
Yugoslavia (salaried employees). This purpose is clearly brought
out by the stipulation that any grant of rehabilitation treatment
must be preceded by an examination to ascertain if there is a
genuine chance of removing the infirmity from which the
pensioner is suffering.
Under certain schemes rehabilitation treatment is confined
solely to invalidity pensioners, i.e. the general schemes in Denmark, Italy and the Netherlands, and in salaried employees'
insurance in Czechoslovakia, Poland and Yugoslavia. Others
again, e.g. Austria (salaried employees), Czechoslovakia (workers),
Germany (workers and salaried employees), Hungary (employed
persons), and Luxemburg (workers and salaried employees) grant
assistance designed to restore the patient's capacity for work
not only to persons in receipt of invalidity pensions, but if necessary to pensioned widows and orphans also.
CONDITIONS or BENEFIT FOE, DEPENDANTS
Certain laws show special consideration for the members of
insured persons' families by extending to them also the benefits
of assistance. Such measures aim in particular at providing
the uninsured wife or husband and children of an insured person
or pensioner, and if necessary non-pensionable widows, with
assistance that sickness insurance institutions are unable to grant
them.
A few examples will suffice to illustrate the general nature of
such family benefits.
In Austria (salaried employees) members of the family of an
insured person or pensioner may be granted so-called extended
curative assistance, which comprises home nursing, treatment in
a sanatorium, and maintenance in curative homes and in the
country, provided that the insurance institution does not bear
more than half the expenses. The persons entitled to such
assistance are the wife or husband, legitimate, legitimised or
adopted children, an insured woman's illegitimate children under
18 years of age, grandchildren up to the same age, parents and
grandparents living in the insured person's household whom he
is legally bound to support.
In Czechoslovakia curative assistance granted by the Central
Insurance Institution may extend not only to the insured person,
but also to the wife or husband if such treatment appears likely
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BENEFITS IN K I N D
to prevent or retard invalidity. Under the salaried employees'
insurance scheme every pensioner is entitled, in case of sickness,
to medical assistance for himself and his family.
In France the wife or husband of an old-age pensioner is granted
medical and pharmaceutical assistance by the sickness insurance
fund, on condition that the pensioner pays an extra contribution,
fixed by the law at a minimum of 15 francs a month.
In Germany (workers) preventive treatment may be granted
even to widows who are noi; in receipt of a pension, and preventive
and curative assistance is provided for the children of insured
persons who have completed the qualifying period. The salaried
employees' insurance institution extends sanatorium treatment
to members of an insured person's family suffering from incipient
tuberculosis, and contributes towards the cost of medical treatment for the children of insured persons and pensioners, and for
orphans, under 16 years of age and suffering from, or threatened
with, tuberculosis.
In Italy sanatorium treatment is the legal right of members
of the family of an insured person who has paid at least twelve
fortnightly contributions during the past two years. The following are deemed to be members of the insured person's family :
wife or husband of the insured person, invalid husband of an
insured woman, legitimate and illegitimate children, and sisters
and brothers of the insured person, living in his household and
maintained by him, up to the age of 15 years.
In Poland (salaried employees) members of the family of insured
persons and pensioners may be admitted to establishments for
treatment and cure belonging to the insurance institution or
administered by it.
§ 2.—Compulsory and Optional Benefits in Kind
The question next arises whether the granting of medical assistance to the insured persons or pensioners who fulfil the necessary
conditions is compulsory, or whether the granting of the benefits
in kind required by the circumstances of the individual case are
left to the option of the insurance institution. The answer to
this question varies from country to country, but is always
dictated by the purpose underlying the granting of assistance to
individuals.
MEASURES OF ASSISTANCE TO INDIVIDUALS
373
COMPULSORY B E N E F I T S
If t h e legislature wishes t o guarantee t h a t the insured person
shall be able to have recourse to the insurance medical service
whenever necessary, it gives him the right t o medical and pharmaceutical benefits under the general conditions and within the
general limits of the medical service at the disposal of t h e insured
population. Such assistance is not limited t o the treatment of
an infirmity to which invalidity is due, nor to measures designed
t o prevent incapacity for work, nor need it even be directed
towards or specifically adopted t o the prevention of invalidity or
the restoration of earning capacity.
The legislation of Czechoslovakia, France, Great Britain and
Northern Ireland, Italy and Poland recognises a specific right t o
medical assistance under certain conditions.
I n Czechoslovakia salaried employees' insurance guarantees all
pensioners of t h e fund and members of their families free medical
and pharmaceutical benefits. I n France an insured person who
has been granted a temporary invalidity pension retains his right
t o the medical and pharmaceutical benefits provided by sickness
insurance for the first five years of his invalidity. Under the
British sickness and invalidity insurance scheme, the insured
person is entitled t o medical and pharmaceutical assistance as
long as he is employed, and retains this right for as long as he
continues to draw cash benefits and for a period of 18 to 24 months
(30 t o 36 months for t h e genuinely unemployed) after he has
ceased to be employed in an insurable occupation. Under the
Polish salaried employees' insurance scheme an insured person
who is still sick after having exhausted his rights t o sickness
insurance benefits is entitled to claim medical assistance under
t h e invalidity, old-age and widows' and orphans' insurance
scheme. Finally, under the special scheme for tuberculosis
insurance in Italy an insured person who has paid at least
12 fortnightly contributions during the last two years is entitled
t o treatment either in a sanatorium or in a nursing institution
approved as suitable for the purpose for himself and for the
members of his family.
All these laws provide, moreover, t h a t benefits other t h a n those
just mentioned may be granted by the insurance institutions.
No express obligation is stipulated; b u t power is given t o grant
t h e m under specified conditions.
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BENEFITS IN KIND
OPTIONAL B E N E F I T S
The law may also lay down t h a t certain benefits in kind may
be granted voluntarily by funds t h a t can show a surplus after
meeting their liabilities for t h e statutory minimum pensions and
allowances which are t h e specific right of every insured person
and must always take precedence of additional or optional
benefits.
Certain benefits in kind are organised in this way under t h e
general schemes of France and Great Britain.
I n France t h e recipients of permanent invalidity pensions and
old-age pensions have no express legal right to medical and
pharmaceutical benefits, b u t t h e law provides t h a t t h e Augmentation and Joint Business F u n d shall contribute, within the limits
of its resources and in a proportion t o be fixed each year b y decree,
t o t h e medical and pharmaceutical expenses incurred on behalf
of invalidity pensioners of more t h a n five years' standing and of
old-age pensioners.
I n Great Britain and Northern Ireland, any approved society
t h a t shows a surplus may be authorised t o devote a specified
portion of it t o t h e provision of additional benefits chosen b y t h e
society itself from a list prescribed by law and subject t o official
approval. Once t h e scheme of benefits has been approved, t h e y
become the legal right of every insured person who has belonged
t o his society for a minimum of three years, for t h e period for
which the approval is valid, generally five years.
Other laws, notably those t h a t attach primary importance
only t o treatment capable of preventing invalidity or rehabilitating t h e disabled, leave the decision as t o t h e t r e a t m e n t and
preventive measures t o be adopted in each individual case t o
the discretion of the insurance institution. The insured person
or pensioner has no legal claim t o such assistance, even if he has
fulfilled all t h e conditions for obtaining it laid down in the rules
of his fund.
The insurance institution is solely responsible for its decision,
which in principle is final. Although such decisions are discretionary they must not be arbitrary, b u t must be inspired by t h e
aim of obtaining the best possible return from t h e available
resources. Within the limits of t h e sum set aside in its budget
for curative and preventive assistance t h e insurance institution
must direct its action towards cases which, both from the medical
MEASURES OF ASSISTANCE TO INDIVIDUALS
375
and the social standpoint, call for preventive treatment capable
of averting threatened invalidity, or show definite prospect of
recovery through the application of therapeutic methods capable
of removing the infirmity to which invalidity is due.
These are the conditions under which insurance institutions
may and must grant preventive and curative treatment under
the following schemes : Austria (salaried employees), Czechoslovakia (workers and salaried employees), Denmark (persons of
small means who are regular members of sickness funds), Germany (workers and salaried employees), Hungary (employed
persons), Italy (employed persons), Luxemburg (workers and
salaried employees), the Netherlands (employed persons), Poland
(salaried employees), Rumania (employed persons), and Yugoslavia (salaried employees).
§ 3.—Nature and Scope of Assistance
I t is the duty of the insurance institution to keep itself informed
of the state of health of each of its members, so that it may
provide for the care of the sick and of persons threatened with
serious complaints as soon as the premonitory symptoms appear.
Every case notified to the insurance authorities is examined,
with a view to determining the curative and preventive measures
that would be at once necessary and sufficient to obtain lasting
results. For the application of these measures the authorities
have at their disposal a medical service that provides the members
with attendance by duly qualified doctors adequately equipped
to render effective assistance.
DETECTION AND EXAMINATION
It is to the interests of the insurance fund to have the cases
that call for its intervention brought to its notice at the earliest
possible date, and the insured person who is conscious of the
mission of insurance and of his own duty to look after his health
will resort to the medical service of the fund of his own accord.
One of the principal tasks of the fund is to facilitate recourse to
doctors. All the laws that provide for benefits in kind allow the
insured persons to apply for curative treatment and preventive
care.
The insurance fund cannot, however, rely entirely on the
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BENEFITS IN KIND
initiative of the interested persons; if it is to intervene in time,
it must try to detect diseases while they are still in their earliest
stages or even when they are latent.
Periodical medical inspection of all insured persons and their
families would obviously be the most reliable method of detection ;
but as far as is known no national insurance institution has yet
been in a position to organise regular examinations of this kind
on a comprehensive scale.
Failing their own organisations for the detection of disease,
the invalidity, old-age and widows' and orphans' insurance institutions of a number of countries have had to seek the collaboration
of public and voluntary social assistance institutions, which are
required to notify them of any individuals or families whose
condition appears to involve danger for themselves or for their
environment. This collaboration between insurance and social
assistance institutions in the work of detection—a collaboration
that is reciprocal, since the insurance fund in turn brings to the
attention of the social assistance institution any case within the
competence of the latter—is generally organised on a local basis
and for the purpose of certain specified complaints, but may later
be extended and become general. I t marks the first stage in a
system of closer co-operation, culminating in the joint use, and
sometimes even the pooling, by the insurance and assistance
institutions of the staff and raaterial resources of the medical
and social services at their command.
Where sickness insurance and invalidity, old-age and widows'
and orphans' insurance are administered separately, such co-operation becomes absolutely essential between sickness funds and
invalidity funds in respect of complaints that presage invalidity at a
future date. The sickness fund is in closer touch with its members,
with whose means of livelihood and social position it is frequently
acquainted, and can give an account of their state of health.
In nearly all countries therefore the collaboration of sickness
funds with invalidity funds for preventive purposes is organised
either by law or by means of agreement between the interested
funds or groups of funds.
Within the limits of its resources a sickness insurance fund must
itself take all suitable measures to prevent invalidity; but it is
required to notify to the invalidity fund all cases of specific
diseases or of complaints which if prolonged beyond a certain
period may eventually produce invalidity or which appear to
MEASURES OF ASSISTANCE TO INDIVIDUALS
377
require special care, e.g. treatment in a curative or preventive
establishment, t h a t the sickness fund is not able t o provide out
of its own resources. The invalidity fund may, and in some
cases must, then undertake t o provide such treatment wherever
there is reason t o expect prompt and beneficial results from it,
even if t h e patient has not yet exhausted his rights under sickness
insurance.
Cases notified t o the invalidity insurance fund are subjected
to examination for the purpose of diagnosing the complaint and
ascertaining t h e stage it has reached. I n order t o provide t h e
information necessary for the planning of a systematic cure, the
diagnosis must take account of the patient's constitution and
powers of resistance; t h a t is, the objective diagnosis must be
brought into relation t o the individual case, the personality of the
patient. At t h e same time, it should also have a social character
in t h e sense t h a t it should make allowance for t h e family situation,
means of livelihood, occupation, housing conditions and other
factors determining the patient's standard of life. With the help
of a diagnosis of this kind a course of treatment may be planned
on medico-social lines, bearing not only on the disease itself and
on its seat, b u t also on the patient as a psychological and physical
unit situated in specific social conditions.
The selection of the cases t h a t call for and justify t h e application
of treatment reserved for invalidity insurance, in countries where
this is separate from sickness insurance, is a task of the greatest
delicacy, and the doctors to whom it is entrusted must be able
to command the widest possible facilities for diagnosis. Diagnostic centres, either general or specialised in particular diseases and
maintained by social assistance or insurance institutions, are
likely t o be of assistance in this work. The medical and social
particulars necessary to determine the curative and preventive
measures to be adopted would have additional value if a social
service were attached t o the centre or in regular collaboration
with it, with a view to supplying the social assistance necessary
for t h e success of t h e treatment.
As a general rule the patient is bound to abide by the results
of the examination and t o submit to the prescribed treatment.
An insured person or pensioner who fails without valid reason
to undergo a form of treatment t h a t would in all probability have
prevented his invalidity or restored his capacity for work may be
refused p a r t or all of his pension; t h e same applies t o any insured
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BENEFITS IN KIND
person whose conduct makes it impossible t o hold the preliminary
medical examination, who interrupts a course of treatment
already begun, hinders its continuation or intentionally delays
its effects. Usually, however, t h e pension may be withheld only
temporarily.
TREATMENT AND CARE
Where medical assistance is a legal right, its standard must
necessarily be fixed by the law itself.
Thus, under the sickness and invalidity insurance scheme of
Great Britain t h e patient may claim t h e services of a general
practitioner, b u t not treatment implying greater skill and experience t h a n general pi'actitioners as a class can reasonably be
expected t o possess. A practitioner who considers t h a t t h e
patient's state of health requires treatment t h a t is outside t h e
scope of general experience need only inform him of the steps
he should take in order to procure such treatment. The benefits
guaranteed by the insurance fund include neither t r e a t m e n t by
specialists, laboratory service, nor even dental t r e a t m e n t ; nor is
hospital treatment a statutory benefit. I t is only under specified
conditions and as additional benefits t h a t the insurance fund may
bear all or p a r t of the expenses of hospital treatment or maintenance in a convalescent home, dental treatment, optical treatment, etc.
Under t h e other invalidity insurance schemes t h a t provide for
t h e continuation of medical assistance t o persons whose sickness
insurance claims have expired, e.g. the general scheme in France
and salaried employees' insurance schemes in Czechoslovakia and
Poland, the assistance granted to pensioners and insured persons
is more extensive than under the British scheme. Thus, in France
the insurance covers the cost of general and specialist medical
attendance, pharmaceutical expenses and t h e supply of appliances,
treatment in a hospital or curative establishment and the expenses
of conveyance and of necessary surgical treatment. As regards
artificial teeth, the institution is bound t o supply appliances
needed for functional and therapeutic reasons or t o enable t h e
patient t o follow his occupation.
Under the schemes t h a t leave it t o the insurance institutions
themselves t o decide on the necessity for providing curative or
preventive treatment, e.g. Austria (salaried employees), Czechoslovakia (workers), Germany (workers and salaried employees),
MEASURES OE ASSISTANCE TO INDIVIDUALS
379
Hungary (employed persons), Italy (employed persons), the
Netherlands (employed persons), and Yugoslavia (salaried
employees), t h e institution also has the faculty of fixing the nature
and scope of t h e treatment t o be granted in each individual case.
The law neither lays down a limit nor imposes an obligation t o
provide benefits of specified quality or quantity. The interests
of the community and of t h e sick person alike require t h a t the
measures adopted shall wherever possible have prompt and
lasting effects. Within the framework of an organisation formed
for social purposes the insured or pensioned person obviously cannot lay claim t o a form of medical assistance entailing expenses
out of proportion t o t h e nature and gravity of his complaint. H e
may not demand more t h a n the necessary treatment, b u t he may
insist t h a t it shall be proper and sufficient. The insurance fund
will see t o it t h a t no useless or superfluous benefits are granted.
I t will measure its benefits by the yardstick of efficacy and economy, may refuse to undertake forms of treatment t h a t are
specially costly and have not yet proved their worth, and if
confronted with alternative and equally effective forms of treatment will decide on t h e least expensive.
As regards duration, t h e medical assistance provided by invalidity insurance institutions is not limited in advance; assistance
is provided for as long as it is needed and until some result is
obtained. Here again, however, the absence of any categorical
rules governing t h e grant of purely optional benefits makes it
possible for the insurance institutions t o introduce certain restrictions by fixing a maximum period of duration for certain forms of
treatment, which may be exceeded only if it can be established
t h a t the improvement obtained would be jeopardised were the
treatment to be interrupted.
ORGANISATION OF ASSISTANCE
According t o t h e country concerned, the invalidity fund may
have to bear p a r t or all of the expenses of medical assistance,
or on the other hand may have to place at the patient's disposal
t h e services of duly qualified medical practitioners and all other
resources necessary for the provision of proper assistance.
An invalidity fund responsible for providing benefits in kind
may either have recourse t o the sickness fund or may organise
a medical service of its own. Where assistance is provided by
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BENEFITS IN KIND
the invalidity fund to insured persons who have not yet exhausted
their sickness insurance rights, the sickness fund is required to
refund the expenses that it would have incurred if it had. provided
such assistance itself, within the limits laid down by its rules.
Generally speaking, the patient must attend the consulting
room during the hours fixed by the invalidity insurance fund or
by the practitioner in agreement with the fund. Only patients
who are unable to go out without endangering their health still
further may demand that the doctor shall attend them at their
home. Home nursing with the help of visiting nurses may be
granted, but only in exceptional cases where hospital treatment,
although desirable, is impracticable or where there are special
reasons for allowing the patient to remain in his own home.
The curative and preventive measures adopted with a view
to preventing invalidity or restoring the patient's earning capacity
frequently include special treatment such as treatment by ultraviolet rays, diathermy, or galvanic and faradic currents. From
this standpoint the collective organisation of the medical
service presents undoubted advantages. The development and
extension of medical treatment is giving increasing importance
to clinics, which are rapidly becoming centres for actual
treatment and cure. In a number of countries the invalidity
insurance funds only allow out-patient treatment for mild
complaints, all other cases hieing handed over to institutions,
either general or for the treatment of special diseases.
If necessary, the insured persons may and must be granted
maintenance and treatment in hospital at the expense of the fund.
The substitution of maintenance and treatment in a hospital
for medical attendance at a doctor's consulting room or at the
patient's home is provided for by almost all invalidity insurance
legislation, though no definite rules are laid down for judging the
need for admission to a hospital. Hospital treatment may be
necessitated by the nature of the complaint, the attitude of the
patient, or the material and family conditions of his home life.
Failing medical institutions of its own, the invalidity fund
places its members in public or private establishments with which
it has contracted. In a great many countries, owing to the
elementary condition of their general medical equipment, the
law allows insurance institutions to provide themselves with the
essential services and establisliments for the proper treatment of
their patients. As a result of this permission, the insurance funds
MEASURES OF ASSISTANCE TO INDIVIDUALS
381
of such countries have set up medical institutions such as nursing
homes, clinics, centres for special treatment and convalescent
homes.
I n France, Great Britain and Italy the patient may not be
placed in a hospital against his will, whatever t h e nature of his
complaint. I n other countries the invalidity fund may place the
insured person or pensioner in a hospital or convalescent home
if it considers such a course necessary or advisable. If the
patient is married or has a home of his own, his consent is
necessary, unless the complaint calls for treatment or care t h a t
cannot be supplied a t home, or is contagious, or t h e condition
or conduct of the patient calls for constant supervision, or the
patient has repeatedly disobeyed medical instructions.
P a y m e n t of any pension or allowance to which t h e patient
may be entitled is generally suspended, either wholly or in part,
for the duration of hospital treatment with full board. Members
of the patient's family who live in his household and are mainly
supported b y him are, however, entitled to a fraction, which
may vary from one-quarter to three-quarters, b u t is usually fixed
at one-half, of the pension or allowance previously drawn by the
patient or to which he would have been entitled in case of invalidity. This family allowance is not granted while the insured
person continues to draw his wages or salary.
As a measure of social assistance, as distinct from curative and
preventive assistance proper, a number of laws provide t h a t the
recipients of invalidity, old-age, widows' or orphans' pensions
may, at their own or their guardian's request, be placed in a
home for the disabled or the aged, and t h a t wherever possible
orphans shall be placed in an orphanage or other educational
establishment. The pension is suspended for as long as the recipient receives board and lodging.
CHAPTER II
ROLE OF INSURANCE SCHEMES IN COMBATING
SOCIAL DISEASES
In every country the wage earners belong to that section of the
population which is most exposed to the ravages of social diseases.
These diseases are notable for their frequency as shown in their
mortality statistics; they are due in great part to social and
economic conditions, and they also react on these conditions;
they occupy a place apart in social pathology. Social diseases
vary from one country to another, and their nature and intensity
change in the course of time. Notwithstanding the improvements made in most countries during the last few decades, they
are still the greatest scourge of humanity.
Individual medical treatment is inadequate and ineffective for
dealing with social diseases. Those diseases, such as tuberculosis, rheumatism, cancer and venereal diseases, cannot be overcome or prevented merely by medical treatment; they demand
prophylactic action systematically applied on a large scale and
supplemented by social and economic relief. For a long time,
steps have been taken in every country, although by different
methods, to organise the campaign against social diseases.
The essential aim is collective prevention which reaches out
beyond the individual who is suffering from or threatened by the
disease and deals with the family, those coming in contact with
the patient and eventually the whole community. The action
taken against these diseases is of a dual nature : it is on the one
hand direct, aiming specifically at the disease and its seat; it is
indirect when it seeks to protect the family and other persons
who are in danger, to improve conditions of housing and nutrition and to increase the resistance to infection. The purpose of
this dual action is to detect all affected or threatened cases, to
discover whether they require assistance, to grant such medical
ROLE OF INSURANCE SCHEMES IN COMBATING SOCIAL DISEASES
383
attendance and social relief both curative and preventive, as
may be found necessary, and to consolidate the results obtained.
The chief phases in the struggle against social diseases are detection and diagnosis, therapy, prophylaxis.
The social insurance system, t h e purpose of which is to protect
the lives and the health of the workers, is inevitably drawn into
the struggle against social diseases. The poorer classes of the
population are most exposed to infection and most severely
affected by loss of earning capacity. The cash benefits paid by
t h e insurance scheme are in themselves an important factor in
combating social diseases, b u t they alone are not enough. I n
order to reduce the expenditure on pensions and allowances and
prevent serious loss of producing power, invalidity, old-age and
widows' and orphans' insurance schemes in an increasing number
of countries are trying t o make their special contribution to the
struggle against social diseases in the fields both of prevention
and cure. By reducing the number and seriousness of the risks
for which it would have to pay benefits, the insurance schemes
improve the standard of health of the community as a whole.
The present Chapter will deal with the part played by invalidity,
old-age and widows' and orphans' insurance schemes in combating
social diseases. The machinery for dealing with tuberculosis,
cancer, venereal diseases, etc., has never been constructed in a day;
it has always been built up gradually, each part being intended
to meet certain aspects of t h e task. Insurance, which cannot
and should not be alone responsible for the whole work of fighting
these social diseases, is nevertheless an integral part of t h a t
machinery. The degree of its activity varies from country to
country according to t h e progress made with t h e general public
health system. I n order to bring home to the reader the background of the action of the insurance schemes in this field, a very
brief outline will be given of the pathology, methods of detection
and diagnosis, treatment and prevention of some of t h e more
important social diseases : tuberculosis, rheumatism, cancer and
venereal diseases. The intention is not to give a complete description of these diseases b u t merely to show what means of defence
t h e insurance schemes can adopt in collaboration with other
organisations for t h e same purpose. Tuberculosis, which is still
the most serious social disease, will be taken as an example to
show how these means are adapted to the special pathological
characteristics of t h e disease in question.
384
BENEFITS IN KIND
§ l.—The Campaign against Tuberculosis
The campaign against tuberculosis is based on the present
state of our knowledge concerning the individual and social
pathology of the disease. Tuberculosis is a disease which spreads
by contagion. It is chronic and insidious, and may be either
latent or virulent. Its pathological features demand special
methods of detection and diagnosis; they also determine the
therapeutic, and prophylactic measures to be adopted.
INDIVIDUAL PATHOLOGY
Among adults, pulmonary tuberculosis is the commonest form
of the disease. The larynx may be contaminated by sputum.
The less frequent but equally serious forms are tuberculosis of
the bones, joints, viscera and, among children particularly, tuberculosis of the glands and tuberculous meningitis. Lupus is a
special type of cutaneous tuberculosis. Since the discovery of
the bacillus of tuberculosis by Robert Koch (1882), the aetiology
of all these diseases is known : there can be no tuberculosis
without tubercle bacilli. The bacillus cannot multiply outside
the human body, but. as it is encased in sufficient protective
matter it remains virulent and contagious long after it has left
the organism.
The chief source of infection is the person suffering from tuberculosis, who spreads bacilli when coughing, spitting or speaking.
Since the disease generally becomes chronic, every case of open
tuberculosis remains for a long number of years a danger to his
family and to persons working with him. Contagion occurs
through the bacilli contained in the sputum, which are spread
by air and dust. Objects used by the sick person, such as his
clothes, underclothing, table utensils, etc., may all contain bacilli.
Dwellings which lack sunlight or which are badly ventilated or
neglected particularly favour the spread of bacilli.
There is another form of tuberculosis which is dangerous for
human beings : bovine tuberculosis which may be contracted from
milk, not sufficiently pasteurised, from infected animals. The
part played by the bovine bacillus in the pathology of tuberculosis has not yet been exactly determined.
The danger of contagion from an open case of tuberculosis
depends on the mass and virulence of the bacilli given off. When
ROLE OF INSURANCE SCHEMES IN COMBATING SOCIAL DISEASES
385
an individual is contaminated, the seriousness of the disease
would seem to be determined in the first instance by the frequency
of contagion, t h e number of infections. Successive infections
have the effect of repeated doses of a poison which weakens and
destroys the organism.
The origin and development of tuberculosis take the form of a
constant struggle between the attacking bacilli and the power of
resistance of t h e body, on which depends its general and local
immunity. This resistance may be inborn, b u t it can also be
acquired, for example, b y a slight infection which has been overcome b y the individual in question, and it can also be reduced
by a number of factors such as growth, puberty, anaemia, diabetes,
malnutrition a n d overwork. A person is predisposed t o contagion when his organism lacks means of defence against infection.
When tuberculosis attacks a body which is still young and has
little power of resistance, or when it attacks a constitution which
has been weakened b y unhealthy conditions of life, it finds a
favourable breeding ground.
s
The development of tuberculosis therefore depends chiefly on
t h e degree of immunity of t h e human body. There are, however,
certain typical forms assumed by tuberculosis. I t is generally
agreed to-day t h a t in most cases contamination occurs during
childhood; at t h a t age, it shows itself b y a special sensitiveness
of the organism such as is revealed by Pirquet's cutaneous
reaction. A very high proportion of children below school age
or of school age give a positive reaction. I t appears t h a t t h e
infection spreads with age and t h a t at the end of the period of
childhood half, if not two-thirds, of the children in towns are
infected. The infection contracted during childhood generally
settles in t h e lungs, from which it spreads t o t h e lymphatic
glands. As a rule, the process stops there. The infection is
definitely limited in its scope and does not cause any serious
general disturbance in the system. I t is for t h a t reason t h a t
it is often not diagnosed. If, however, the primary focus does
not subside, the infection degenerates into an acute form of
infantile tuberculosis, with fatal results in four-fifths of the cases.
The infection contracted b y t h e child may be developed b y
further infections a t a later age. I n the case of an adult who has
not been contaminated during childhood, the bacilli find fresh
ground in t h e lungs and are all the more dangerous on t h a t
account. The infiltration may remain latent, but it may also lead
25
386
BENEFITS IN KIND
to the formation of cavities and create other foci. Chronic tuberculosis in adults generally proves fatal, death occurring when the
indispensable respiratory surface is destroyed by the bacilli.
SOCIAL PATHOLOGY
Tuberculosis is such a widespread phenomenon that it can be
recorded only by statistics, but at present the only reliable
information that is available comes from mortality statistics.
Tuberculosis is most common among persons whose standard of
living is near the bare subsistence leveh Conditions of family
and social life, more especially wages and housing, are to a large
extent the determining factors for the capacity to resist infection,
and tuberculosis itself has a detrimental effect on those conditions.
The social pathology of the disease is too complex for all its
aspects to be dealt with here.
Mortality from Tuberculosis
In European countries every eighth, ninth, or tenth death is due
to tuberculosis. In 1930, out of 100 deaths, 7.1 could be attributed to tuberculosis in Germany, 7.8 in England and Wales,
9.27 in France (1929) and 10.3 in Switzerland.
The general mortality for all forms of tuberculosis is shown
in table I, which contains figures for seventeen countries.
TABLE I.—GENERAL MORTALITY FOR ALL FORMS OF TUBERCULOSIS
Deaths from tuberculosis
Country
Australia
Belgium
Czechoslovakia
Denmark
England a n d Wales
Scotland
Finland
France
Germany
,
Greece
Italy
Lithuania
New Zealand
,
Norway
,
Sweden
Switzerland
United States
Year
1930
1929
1930
1930
1931
1930
1929
1929
1930
1928
1930
1929
1930
1930
1931
1930
1929
Number
Per 10,000
inhabitants
3,258
7,764
23,705
2,502
35,818
4,286
9,083
68,470
50,646
10,446
45,619
3,334
5.1
9.7
16.1
7.1
9.01
8.8
25.0
16.8
7.9
16.8
11.1
14.3
4.6
15.0
12.5
12.5
7.6
4,197
7,663
5,056
86,885
BOLE OF INSURANCE SCHEMES IN COMBATING SOCIAL DISEASES
387
In estimating the importance of these figures, account must be
taken of the distribution of the population by age and by sex,
for the two sexes do not offer the same resistance to tuberculosis
infection.
The mortality by sex for all forms of tuberculosis and for
pulmonary tuberculosis alone is shown in table I I .
TABLE II.—MORTALITY B Y SEX FOR ALL FORMS
OF TUBERCULOSIS A N D FOR PULMONARY TUBERCULOSIS
Deaths per 10,000 inhabitants
Country
Year
Pulmonary tuberculosis All forms of tuberculosis
Men
Women
Men
1930
England
Wales 1
1
Women
5.8
4.3
9.8
9.5
19.4
8.6
14.8
7.7
8.2
14.4
7.2
15.0
and
1931
1930
1929
1930
1930
7.8
6.8
16.7
7.2
6.0
5.8
12.2
6.1
Standardised figures.
As was mentioned above, the mortality varies very much with
age, as will be seen by the examples given in table I I I for England
and France.
Every age has its peculiar form of tuberculosis, and special
measures must be taken to suit these various forms.
TABLE III.—MORTALITY B Y AGE FOR ALL FORMS OF TUBERCULOSIS
PER 1 0 , 0 0 0 INHABITANTS I N ENGLAND AND WALES
AND FRANCE, 1 9 2 9
Age groups
0-4
5-9
10-14
15-19
20-24
25-34
35-44
45 - 5 4
55-64
65 - 7 4
England and Wales
France
Men
Women
Men
Women
9.35
3.01
2.78
7.87
12.25
12.98
15.90
18.19
14.48
9.86
4.11
7.62
2.93
3.84
11.56
14.72
11.72
8.40
6.69
5.55
4.81
2.90
8.31
4.11
3.30
13.13
22.77
27.49
29.08
19.36
22.47
13.92
7.17
7.18
4.74
5.51
21.34
28.60
23.05
16.55
11.70
9.64
8.05
5.85
388
BENEFITS IN KIND
During recent years the mortality from tuberculosis has fallen
in most countries, but it would not appear t h a t the number of
cases of contagion has also decreased. Children of school age
show a relatively small degree of mortality, b u t t h e proportion
of children giving a positive reaction t o t h e Pirquet test is very
high, being from 50 t o 70 per cent, in towns and about 25 per
cent, in rural districts.
While there can be no doubt t h a t in a great number of countries there has been a decrease in the mortality from tuberculosis
over t h e whole population, tuberculosis still remains a deadly
disease in spite of the progress in therapeutic methods for prolonging t h e life of victims. I t is by no means proved t h a t t h e morbidity rate for tuberculosis has fallen. N o adequate statistics of
morbidity are available, and failing t h e m one must have recourse
t o estimates : it has been estimated t h a t for every death from
tuberculosis, there are 21.5 cases of open tuberculosis or five cases
of tuberculosis of every kind.
Tuberculosis and Social
Conditions
Tuberculosis is most severe among individuals and families
with small incomes whose conditions of housing and food are
unsatisfactory and who have no acquaintance with hygiene. The
campaign against tuberculosis is an economic and social problem
just as much as a medical question.
Tuberculosis and Family
Conditions
Within the family, tuberculosis is so highly infectious t h a t it
has sometimes been thought to be hereditary. Family life naturally facilitates contagion. I n large families tuberculosis can
spread all the more easily because a large p a r t of t h e family
income is of necessity devoted to rent and clothing at t h e expense
of nutrition, which is of capital importance in preventing tuberculosis. Nevertheless, the children of tuberculous parents can
be sheltered from infection if the disease is discovered in time.
Obviously the first condition for preventing infection within
the family is t o train the parents in the elementary rules of
health.
ROLE OF INSURANCE SCHEMES IN COMBATING SOCIAL DISEASES
389
Tuberculosis and Income
The standard of living is determined chiefly by income, and it
is a well-known fact t h a t poverty and tuberculosis go hand in
hand. Numerous enquiries carried out before t h e war proved
t h a t infection a n d the development of t h e disease were strongly
influenced by the income of t h e individuals or families exposed
t o contagion. The statistics of occupational mortality compiled
in England for the years 1921-1923 and containing standardised
figures (the standardised mortality for all occupied and retired
workers being taken as 1,000) showed a figure of 978 for all
forms of tuberculosis amongst skilled workers (974 for pulmonary
tuberculosis) and a figure of 1,375 (1,401) for unskilled workers,
while for t h e upper and middle class the figure was only 508 (489).
Similarly, the report of theBritish Ministry of Health for 1927-1928
showed t h a t mortality from tuberculosis, cancer and bronchitis
varied inversely with the standard of living. I n the low income
classes t h e mortality from tuberculosis was greatest at the age
of forty-five, so t h a t t h e average life of persons in these classes
is considerably shortened b y tuberculosis.
Persons in t h e liberal professions suffer less severely from tuberculosis t h a n wage earners, a n d t h e difference in the standard of
living is certainly n o t unconnected with this fact.
Any decrease in income affects first of all t h e quality and then
t h e quantity of food. A diet which is lacking in calories or in
vitamins reduces the resistance t o infection. Persons suffering
from tuberculosis require a diet which is richer in carbohydrates
and albumen if malnutrition and loss of weight are to be avoided.
The interdependence between mortality from tuberculosis and
t h e calorific value of food has been clearly established. During
the war years in Germany t h e increase in t h e mortality from
tuberculosis was found t o be in inverse proportion t o the calorific
value of the food rations.
Tuberculosis and Housing
Insufficient accommodation and lack of sunlight reduce the
resistance of persons t o infection, and in cramped accommodation
the rules of hygiene can scarcely be observed. The slums are t h e
favourite breeding-ground for tuberculosis, b u t tubercular or
pre-tubercular cases removed from the slums and transferred to
390
BENEFITS IN KIND
houses which are satisfactory from t h e point of view of hygiene
rapidly recover and aquire a greater power of resistance. I n
overcrowded dwellings contagion spreads more quickly t h a n in
ample dwellings where the patient can be given a private room
or at least a bed for himself. Numerous enquiries have confirmed
this inter-relationship. Mention may be made of the results
of the enquiry carried out in Charlottenburg in 1910-1911, which
gave the following figures pei1 1,000 inhabitants for each t y p e of
house mentioned below :
Number
of habitable rooms
in the house
1
2
3
4
5
Deaths
in general
Deaths
Irom pulmonary
tuberculosis
Deaths
from pulmonary
tuberculosis
per 100 deaths
27.94
18.36
16.73
15.04
13.03
2.78
2.41
1.48
0.86
0.57
10.0
13.1
8.7
5.7
4.2
Before closing this brief survey, mention may be made of t h e
influence of t h e occupation a n d t h e influence of industrialisation
on tuberculosis.
Infection in t h e course of one's occupation is a subject t h a t has
not yet been fully studied. Certain occupations, such as those
of doctors, nurses, teachers, waiters, etc., involve a special risk
of contagion. I n other occupations where there is no direct
contact with open cases of tuberculosis t h e power of resistance
depends largely on t h e physical effort required, which in t u r n
depends on t h e hours of work and its intensity. E x t i n c t foci
may be revived by overwork, night work or malnutrition. The
influence of occupational fatigue is reduced b y t h e selection
which experience shows t o be exercised at t h e moment of choosing
an occupation : young persons of robust constitution will select
occupations requiring great physical effort, while the less strenuous
occupations will generally be sought b y weaker individuals.
The spread of industry has 'Created large centres of population.
Until t h e war t h e mortality from tuberculosis was definitely
higher in towns, b u t this difference has rapidly decreased during
recent years, and in rare cases the mortality in towns is even
below t h a t in rural areas, as is shown in table IV.
Of 10,000 persons living in towns and in rural areas the number
of deaths registered was as follows :
KOLE OF INSURANCE SCHEMES IN COMBATING SOCIAL DISEASES
391
TABLE IV.—MORTALITY FROM TUBERCULOSIS IN URBAN
AND RURAL AREAS
Country-
Germany :
\
City of Berlin 1
and Province of
[
Brandenburg..
)
)
(
(
)
)
[
i
)
)
(
1
urban areas
rural areas
Deaths In urban areas as
percentage
of deaths in
rural areas
1913
1927
1928
18.3
10.9
10.3
12.4
9.5
9.2
148
115
112
1911-1915
1916-1920
1921-1925
1926-1930
1927
1928
1929
1930
1911-1915
1916-1920
1921-1925
1926-1930
25.1
23.9
20.1
16.2
11.4
11.1
11.0
10.2
24.0
21.1
15.9
13.6
23.0
22.0
20.4
16.1
8.3
8.0
7.5
7.4
17.8
16.9
14.4
12.9
109
109
99
101
137
139
147
138
135
125
110
106
Year
or
years
Deaths per 10,000 In
Since 1927, Berlin with additional boroughs.
At first the spread of industry helped greatly to increase the
spread of tuberculosis. Low wages, the employment of children
and young persons, unhealthy conditions in workplaces, excessive
hours of work, etc., reduced the power of resistance to infection.
Now that the most serious abuses have been removed by social
legislation and advances made in the pathology of labour, industrialisation is not proving an obstacle to the decrease of mortality
from tuberculosis. This mortality has fallen even though industrialisation has become more intense.
This fact can be explained in two ways : on biological and on
economic grounds. The attack of tuberculosis is more dangerous
for a population which has hitherto not been infected than for
a population already infected. Persons from the country who
settle in towns are therefore particularly exposed to infection.
Citizens of highly urbanised countries acquire a natural immunity,
and as soon as the rural exodus ceases the mortality from tuberculosis begins to fall. While accepting this as an explanation,
it would be rash to place too much trust on natural immunity,
which may at any time be overcome by virulent infection on a
large scale. The economic explanation is based on the gradual
392
BENEFITS IN KIND
improvement in the living conditions of workers. The curve of
mortality falls as progress is made in the nutrition and housing
of the masses of the people. The workers, and particularly those
in industry, share in the general advance of civilisation and
technical progress. Industrialisation is accompanied, fortunately
for the health of the people, by an improvement in social conditions, always provided that any dangerous developments are
prevented or compensated by social legislation and social insurance.
Thanks to our precise knowledge of the social pathology of
tuberculosis, the campaign against this disease has passed from
the bacteriological to the social stage. During the earlier period
the campaign consisted chiefly in disinfection and the isolation of
open cases. The social stage places in the foreground the protection of healthy persons and the increase of their powers of resistance to infection, while not neglecting the treatment of victims,
more especially as a preventive measure.
Detection
The success of the campaign against tuberculosis depends first
of all on systematic detection of the disease and early diagnosis,
for the sufferers must be treated as soon as the earliest signs
appear and those who are threatened must be protected against
contagion.
Systematic detection of tuberculosis cannot be completely
effective unless the bulk of the population realise the purpose
and importance of the campaign. A long and sustained effort
is necessary to bring home to the population that tuberculosis is a
contagious disease and that early treatment offers considerable
hopes of cure. They must also be taught what are the responsibilities of those who are suffering from or exposed to the disease
and what preventive measures must be observed at home and in
public places. Failure to observe the most elementary rules of
hygiene is still, even at the present time, very frequently a cause
of contagion which might have been avoided. This work of
popular education, begun at school, should be continued in every
type of educational institution and during all periods of vocational
training.
In a great number of countries the social insurance institutions
help to carry out this work of education. Working in close
ROLE OF INSURANCE SCHEMES IN COMBATING SOCIAL DISEASES
393
contact with the masses of the insured persons they try to make
them comprehend and practise the rules of health which are
necessary for the prevention of tuberculosis. This forms an
integral part of the general measures taken by social insurance
institutions to create favourable conditions for the granting of
curative or preventive benefits. When we come to deal with
these general measures reference will be made to the extent and
nature of the educational work in matters of hygiene undertaken
by the insurance institutions.
Compulsory Notification
The detection of tuberculous or pre-tuberculous cases is
greatly facilitated when it is compulsory for medical practitioners
to notify all cases of open or active tuberculosis. Among the
various laws which make notification compulsory, however, there
are some which refer only to cases of death, whereas what is
really necessary is to notify not only cases in which the disease is
diagnosed but cases where the disease is suspected. Moreover,
notifications of death lose all their value if the cause of death has
not been definitely established. Notwithstanding the imperfections inherent in the practice of compulsory notification, there
seems little doubt that countries which have experience of this
system have no intention of abandoning it. When rules making
it compulsory for medical practitioners to notify cases of tuberculosis do not exist or are inadequate, the various bodies engaged
in the campaign against tuberculosis in a number of countries
have agreed to notify each other within a certain period (quite
apart from any notification which may be compulsory by law)
of any cases of death and any cases where the disease is proved
or suspected to exist. This service makes it easier to trace cases,
to remove dangerous cases from their surroundings and to protect
those who might be exposed to the disease.
Voluntary Collaboration in the Work of Detection
When the symptoms of tuberculosis are more widely known
persons who are suffering from or threatened by the disease appear
voluntarily before the doctor or in the dispensary for purposes of
examination. The reader may obtain some idea of the value of
this voluntary collaboration when it is mentioned that in certain
394
BENEFITS I N KIND
German cities as many as 16 per cent, of the total number of new
cases registered during the year were discovered by voluntary
visits to tuberculosis dispensaries.
Preventive Detection
If it is to be fully effective the work of detection must trace the
infection to its source. The sooner the source is discovered the
greater will be the chance of cure and the more effective will be
the preventive measures. The fundamental principle of social
medicine must be applied to tuberculosis : we must not wait
until the disease has taken hold of the organism and become
firmly established; we must forestall infection by discovering all
those who are exposed or predisposed to the disease. Pulmonary
tuberculosis must be discovered while it is still in its closed state,
even before the victim realises his condition. However well the
system of detection may be organised it is scarcely probable that
every case of pulmonary tuberculosis will ever be discovered in
time. Nevertheless a systematic programme of preventive work
such as has been applied in many countries for a number of years
helps to discover the majority of cases of pulmonary tuberculosis
before the invalid becomes a danger for those who are in close
contact with him.
Preventive Examination of Persons Exposed
to or Suspected of Having the Disease
An ideal system of detection would involve an X-ray examination of the whole population at regular intervals. These general
examinations would reveal the first symptoms of infection and
would remove the fears of those who mistakenly thought their
health was in danger. Notwithstanding the obvious advantages
of periodical examinations for everyone, the system has not been
applied in any country because the cost of X-ray examinations,
even on such a large scale, is; still rather high. These examinations are usually limited to persons exposed to contagion or in
whose case there are grounds for suspecting infection. The
persons considered to be exposed to contagion are : members of
the family of a person suffering from tuberculosis or living in his
household or frequently visiting him; persons working in proximity to open cases of tuberculosis; nurses. Suspected cases are
BOLE OF INSURANCE SCHEMES IN COMBATING SOCIAL DISEASES
395
those suffering from certain chronic diseases, more particularly
influenza—out of a hundred cases of " influenza " there may be
as many as eight which are tubercular in origin—diseases of the
respiratory organs, anaemia or malnutrition.
Periodical Examinations of Certain Social Groups
The periodical examination of those groups of the population
which are seriously threatened by tuberculosis is more effective
than the mere examination of exposed or suspected cases. These
examinations cover whole groups who, on account of their living
conditions, nutrition, occupation or mode of life, offer a favourable
field for the spread of tuberculosis.
Organisation of Detection
This organisation depends in the first place on the availability
of the staff and equipment necessary for a rapid and strictly
reliable diagnosis. Among the methods of diagnosis to which
reference will be made later radiology takes a very important
place. Radiological examinations do not make other methods
Of diagnosis superfluous, but they are the surest and most rapid
means of discovering practically every case of tuberculosis which
escapes detection by other methods. The employment of radiological methods is only one of the arguments in favour of having
special centres for the detection and diagnosis of tuberculosis.
The tuberculosis dispensary is already in a large number of
countries the main line of defence against tuberculosis. This
dispensary is specialised and suitably equipped for its work and
is generally accessible to every group in the population.
Contribution of Social Insurance Schemes to the Work
of Detection
However its medical service may be organised, the aim of the
insurance scheme must be to guarantee to every insured person
access to a medical adviser. The insured persons gradually
realise the value of their health and have recourse to the medical
service placed at their disposal by the insurance scheme. The
doctors' consulting rooms and the dispensaries of the sickness
funds attended by insured persons render very valuable assistance
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in the detection of tuberculosis. In order to appreciate the importance of their contribution one need only recall that in countries
which extend sickness insurance to all their wage earners a fraction of from one-third to two-thirds of the population is under
regular medical supervision—freely accepted and even sought
after by the insured persons. In view of the social conditions
under which tuberculosis most frequently occurs it is just this
section of the population which stands most in need of systematic
examination for the detection of the disease.
In countries which have a general system for combating tuberculosis the collaboration of the social insurance schemes is regulated by the State or by agreement between the various bodies
taking part in the campaign against tuberculosis.
The British health insurance scheme provides an example of a
central and uniform system of regulations. The tuberculosis
officer who receives the compulsory notifications and the insurance
practitioner work together in detecting tuberculosis. When the
tuberculosis officer is notified of a case of tuberculosis otherwise
than through the normal, medical attendant of the insured person
he must inform the latter, so that a consultation can take place
as to the therapeutic and prophylactic measures to be taken.
The insurance practitioner, on the other hand, must inform the
tuberculosis officer of all cases of tuberculosis which he discovers.
Notification is not compulsory for suspected cases where there has
been no positive diagnosis, but the insurance practitioners are
recommended to report such cases to the medical officer so as
to obtain his diagnosis and enable the insured person, if necessary, to obtain the special benefits of the anti-tuberculosis
organisation.
The German insurance institutions collaborate in a greater
variety of ways in the work of detection. The sickness funds,
which in 1929, just before the depression, covered about twothirds of the total population, effect through their medical
service, to which nine-tenths of German medical practitioners
belong, a selection enabling them to find out those who are exposed
to or suspected of suffering from, tuberculosis and to submit
them to a more careful examination. There is close contact
between the sickness funds and the tuberculosis dispensaries,
quite apart from the cases in which notification of the disease
is compulsory, in certain States of Germany. As early as 1895
the invalidity funds realised the necessity for a systematic policy
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397
for combating and preventing tuberculosis, and they play a very
active part in the committees which have been set up for collaboration between social insurance and social assistance institutions for t h e special purpose of t h e discovery and treatment of
tuberculosis.
I n Italy the work of detecting tuberculosis is entrusted to
dispensaries attached t o the provincial tuberculosis associations.
There is a division of labour between the tuberculosis insurance
scheme, which is compulsory for all persons insured against
invalidity and old age, and the tuberculosis associations. The
provincial associations, with the financial support of the tuberculosis insurance scheme, are responsible for organising dispensaries and carrying out general prophylactic work.
Many other examples might be given of the collaboration—
medical, administrative and financial—of insurance schemes in
organising t h e detection of tuberculosis. I n countries where no
such general organisation exists the invalidity insurance funds
often take the initiative in establishing closer co-operation between
all the social institutions for the prevention of tuberculosis.
DIAGNOSIS
The organisation of a system for detecting tuberculosis has one
single aim, namely, to enable a diagnosis to be established as
early as possible. The campaign against tuberculosis is based
on the principle t h a t every case of infection must be discovered
as soon as possible while it is still in the initial stage. Only an
early diagnosis can reduce t h e number of persons who are contaminated without knowing it and who, simply as a result of this
ignorance, constitute a danger for those who come in contact with
them. An early diagnosis also enables those persons to be discovered who have noted symptoms of tuberculosis in themselves
b u t who avoid consulting a doctor so as not t o be condemned to give
u p their work and expose their families t o privation. The proportion of cases which escape medical notice through the wilful
silence of the sufferers is still very high, even in countries which
have for a long time possessed a public anti-tuberculosis service
accessible t o all. That fact clearly shows t h e necessity for close
collaboration between medical relief work and economic relief;
t h e two cannot really be dissociated from each other. Until t h e
victims can be certain t h a t during the course of treatment, which
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must necessarily be long, their existence and that of their family
will be safeguarded, there can be no hope of having an early
diagnosis in every case. The enormous importance of the cash
benefits of the social insurance system in the campaign against
tuberculosis (sickness benefit, temporary or permanent invalidity
pensions, relief to the families of insured persons in hospitals or
sanatoria) is sufficiently obvious not to require any proof. These
benefits in themselves are an essential part of the struggle against
tuberculosis, particularly when they enable the invalids and their
families to maintain or even improve their conditions of housing
and nutrition.
The Medical Attendant
The early diagnosis must in the first place be the business of
the general practitioner as the doctor in charge of the case and
family doctor. There can be no prevention of tuberculosis
without the vigilant assistance: of the doctor. Tuberculosis is an
infectious disease which can be transferred from one person to
another, and only the normal medical attendant who knows the
social conditions and family conditions of his patients can appreciate where the infection is likely to spread. He also knows to
what extent persons coming in contact with the invalid are in
danger. In this field also social insurance, and more especially
sickness insurance, can make a very important contribution to the
campaign against tuberculosis by the facilities which it grants to
insured persons for receiving medical advice. The practitioner
whose consulting room is frequented by insured persons participates directly in combating tuberculosis. This is particularly
true when the members of insured persons' families are also
granted medical attendance at the expense of the insurance
scheme. The more fully acquainted the medical practitioner is
with the special methods of diagnosis for tuberculosis the more
effective will be his assistance and the greater will be the benefit
for the community at large. The assistance of the general
practitioner, invaluable as it is and unlimited as are its possibilities in itself, is nevertheless restricted by developments in the
technique of diagnosis. Whenever the diagnosis of tuberculosis
demands special knowledge and skill and implies the use of special
laboratory resources or radiology, the general practitioner must
give way to the expert in the tuberculosis dispensary.
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399
Medical Diagnosis
The chief difficulty is found in the early diagnosis of pulmonary
tuberculosis. It is generally admitted to-day that percussion and
auscultation are of less importance for the diagnosis of pulmonary
tuberculosis than X-ray examinations. Radioscopy enables a
large number of persons to be examined in a short space of
time, but it does not give the same security as radiography, which
can bring out the slightest changes which take place in the condition of the lungs. A photograph, however, has this disadvantage
as compared with radioscopy, that it gives only a static picture
and does not show the depth at which the foci are situated.
A bacteriological examination is not of any great value for the
early diagnosis of tuberculosis. The absence of bacilli by no
means proves that no active process is going on. Among
other specific methods of diagnosis, mention may be made
of the Pirquet reaction already mentioned and the intradermal
reaction, obtained respectively by the application or injection
of liquids containing tubercular bacilli which have been rendered
harmless.
An examination along medical lines leads to a diagnosis of the
disease. This diagnosis, which may be described as objective,
must in every case be interpreted according to the aetiology of the
disease and the anatomical and physiological peculiarities of the
individual, according to his type and more especially his personality. The diagnosis should show the position of the bacilli and of
the defensive forces of his organism, for it is these positions which
determine the measures to be taken to increase the patient's
resistance.
Social Diagnosis
The medical diagnosis must be supplemented by a social
diagnosis, so that appropriate therapeutic measures, both medical
and social, may be adopted. The social diagnosis takes account
of the factors affecting the conditions of life and standard of
living of the individual : his family circumstances, including the
number of persons for whose maintenance he is responsible
and the strength of the family bond; the wages he earns and
their purchasing power; his housing conditions; his situation
in his occupation and the hygienic conditions in which he
exercises it.
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Participation of Insurance Schemes in the Organisation
of Diagnosis
Invalidity, old-age and widows' and orphans' insurance institutions have a great interest in the general adoption of a system
of early diagnosis. Notwithstanding the decrease in the mortality
due to tuberculosis, and partly as a result of that decrease,
pulmonary tuberculosis implies heavy expenditure for the insurance institutions. Every case of tuberculosis which is discovered
too late, when the patient is already spreading bacilli, involves
expenditure on treatment and maintenance and increases the risk
of contagion. If tubercular cases are to be treated before it is
too late the insurance scheme requires a rapid and completely
reliable diagnosis.
The insurance institutions therefore have recourse to the general
organisation for combating tuberculosis. In the British system,
for example, the tuberculosis officer, who must have special
experience in the diagnosis and treatment of this disease, is
responsible for the working of the tuberculosis dispensary in his
area. The dispensary is the centre for diagnosis and for special
examinations. The tuberculosis officer is required to make his
diagnosis as early as possible in every case notified to him by
medical practitioners or discovered in any other way. He then
advises the doctor in attendance as to the diagnosis and treatment
of the case. He informs the medical attendant of any insured
person who is found to be infected by tuberculosis if the case has
not been notified by that medical attendant.
In the Italian tuberculosis insurance scheme the diagnosis is
made by the hospital establishments attached to the National
Social Insurance Institution, by the establishments with which
the Institution has an agreement, by the dispensaries attached to
the provincial tuberculosis associations, and sometimes by other
bodies appointed by the Special Committee on Tuberculosis
Insurance. When the diagnosis is made by the tuberculosis
dispensary, a medical adviser to the Institution is consulted.
In certain cases express provision is made for the use of itinerant
dispensaries for the purpose of diagnosis.
When there is no general specialised organisation, the insurance scheme must set up its own technical equipment enabling
an early and reliable diagnosis to be made in every case,
or else it must enter into agreements with public health
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401
offices or dispensaries which have specialised in the diagnosis
of tuberculosis.
In order to obtain as definite information as possible concerning
the treatment to be applied, the insurance institutions arrange
for special examinations in any case in which doubts may arise.
In Germany the invalidity, old-age and widows' and orphans'
insurance scheme generally uses its own observation stations or
the municipal tuberculosis dispensaries, but examinations may
also be carried out in the consulting rooms of doctors who have
specialised in the subject, or in clinics and hospitals. In Czechoslovakia the workers' invalidity, old-age and widows' and orphans'
scheme has set up its own centres for the examination of patients,
each of which acts as an observation and selection station in its
own area.
It will thus be seen that the insurance institutions, far from
interfering with the general organisation of detection and diagnosis
for the whole population, help, on the contrary, to make the
diagnosis of tuberculosis more rapid and more reliable. When
early diagnosis becomes general as an essential principle and as
a basis for systematic prophylactic measures, the expenditure of
the invalidity, old-age and widows' and orphans' insurance
schemes is so greatly reduced and the risks which the insurance
institutions have to meet are so greatly improved that these
institutions are eager to extend and improve, while adapting
them to their own needs, all the facilities for diagnosis available
to insured persons.
THERAPEUTIC MEASURES
Therapeutic measures include treatment and care at the hands
of specialists and general medical practitioners, which may be
given in the doctor's consulting room, the patient's own home, a
special or general public health dispensary or a residential curative
institution. These measures are supplemented by economic and
social assistance and the supervision of the patient after the
treatment is over.
Methods of Treatment
The discovery of the bacillus of tuberculosis gave rise to the
hope that the disease might shortly be exterminated, but this hope
was doomed to disappointment. The use of tuberculin, which
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BENEFITS IN KIND
consists of the broken-down protoplasm of cultivated tubercle
bacilli, did not at first pioduce the desired results, and the
failure of the first series of tuberculin experiments led to the
abandonment of all attempts at an active cure of pulmonary
tuberculosis. At the present time, apart from general hygienic
and dietetic treatment and special and chemical methods, surgical
treatment is that which is being more and more commonly
applied.
The object of general treatment is to fortify the powers of
resistance of the organism by means of sound hygienic principles
and a nourishing diet. A fresh air and rest cure under favourable
climatic conditions, in the mountains or at the seaside, is the
classical, and has for many years been the dominant, formula for
general treatment. In order to relieve the patient, recourse is
had to a form of treatment known as symptomatic because it
attacks the symptoms and not the root of the disease; that is,
steps are taken to reduce fever, which is harmful to the patient's
general condition, to provoke coughing in order to give air to the
lungs and relieve the bronchial tubes, or again to check a cough
which distresses the patient without clearing his bronchial tubes.
The special treatment by means of tuberculin has been resumed
after the preliminary failures, and perfected by careful dosage
applied to judiciously chosen cases. This treatment is intended
to fortify the natural but incomplete immunity conferred by
infection, and is applied in. particular where the disease tends to
take on a general form. In advanced cases of pulmonary tuberculosis the dosage is prescribed by a specialist. Chemical treatment consists in the injection of various substances, in particular
of gold salts, with the object of causing the tuberculosis foci to
subside more rapidly.
The surgical treatment introduced by Forlanini is being more
and more widely applied. The lung is made to collapse by
pumping oxygen into the pleura (pneumothorax), and this
collapse arrests the spread of the infection. According to observations based on a fairly extensive mass of material this treatment, known as collapsotherapy, enables the patient's earning
capacity to be restored in the majority of cases. It also has a
prophylactic value in that it puts a stop to spitting, and the
patient, no longer producing bacilli, ceases to be infectious. The
operation has been so highly perfected that pneumothorax is
now even applied bilaterally. In some cases the collapse of the
ROLE OF INSURANCE SCHEMES IN COMBATING SOCIAL DISEASES
403
lung has to be effected by means of oil (oleothorax), which is
capable of compressing even a lung that has lost its elasticity
and is only very slowly absorbed. The operation of oleothorax
need not be frequently repeated, but pneumothorax must be
maintained by repeated refills. When all other methods are
unable to arrest the progress of the disease, recourse is had to
surgical collapse of the lung by resection of the ribs (thoracoplasty). This very serious operation is sometimes the only
means of saving the patient's life.
Out-Patient Treatment
Until a few decades ago the medical campaign against open
tuberculosis was fought out exclusively in sanatoria, mainly in
the form of fresh air and rest cures. To-day, under the influence
of various factors, a certain reaction has taken place, and pulmonary tuberculosis is largely treated outside residential institutions, i.e. in the doctor's consulting room or the patient's own
home. The number of tuberculosis specialists has increased, and
centres for specialised treatment are available for patients who
are unable to obtain the necessary care elsewhere and whose
condition requires treatment demanding special knowledge and
skill. With the exception of serious surgical operations, most
forms of treatment may now be applied without necessarily
admitting the patient to hospital. Out-patient treatment is,
however, to be recommended only if the sick person may be left
in his own home without danger to himself or his surroundings.
In other words, it is essential that the patient shall be suitably
housed, adequately fed, in a position to carry out a fresh air and
rest cure, and provided with constant medical attention and the
means of preventing reinfection. The patient must also be
periodically subjected to an X-ray examination, so that he may
immediately be admitted to hospital if his condition becomes
worse.
In-Patient Treatment
There are several kinds of special institutions for the treatment
of tuberculosis.
Sanatorium treatment is essential wherever the disease appears
in an acute or progressive form which nevertheless allows of a
favourable prognosis, and also where it is of a chronic nature,
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but not endangering the patient's life. This form of treatment
is also indicated whenever a case of closed tuberculosis threatens
to become open, or inversely if it appears possible for open
tuberculosis to be reduced to a closed state by a course of sanatorium treatment. The formulation of medical and social indications for sanatorium treatment constitutes one of the most
difficult tasks with which social medicine is faced. As regards
the results of sanatorium treatment in the proper sense of the
term, in the majority of cases these appear to be confined within
specific limits. As a rule a sanatorium cure combined with an
individually prescribed course of treatment results in an increase
in weight and a decrease in serious symptoms, but not in a real
recovery. Sanatorium treatment prolongs the life of the patients
and decreases the death rate among them, but not their actual
numbers.
The development of specialised treatment; and in particular of
coUapsotherapeutic methods, has given rise to a new type of
residential institution, the sanatorium-hospital. In these institutions cases can be kept under observation, treatment applied
and operations performed, and research work and experiments
conducted. As all methods of treatment are applied in them,
they contain patients at every stage of the disease.
In all such establishments the alternation of exercise and rest
and the periods spent in the open air must be regulated under
medical supervision, and a nourishing diet suited to the requirements of the individual cases provided. The role of work in
treatment (occupational therapy) presents a difficult and manysided problem including medical, occupational, social and financial factors. The object is at once to occupy the patient, keep him
from idleness, maintain his inclination for work and, if necessary,
allow him to acquire the skill necessary to enable him to take up
a new occupation.
Apart from curative institutions, there are also others provided
for the isolation of incurable cases in the interests of those who
would otherwise be in contact with them.
The duration of treatment in residential institutions has
increased progressively in all countries. A fresh-air and rest
cure requires a prolonged stay, and surgical methods of treatment
spread over at least one or two years. This brings out the most
serious aspect of the social problem to which tuberculosis gives
rise. Unless the maintenance of the sick person and his family
BOLE OF INSURANCE SCHEMES IN COMBATING SOCIAL DISEASES
405
throughout the period of treatment were guaranteed beforehand,
it would be impossible to undertake active treatment spreading
over a long period. Social insurance provides the key to this
difficult problem by granting to the family of an insured person
undergoing treatment in a hospital or sanatorium daily allowances
or temporary pensions to ensure their maintenance while the
family breadwinner is incapacitated.
Economic and Social Assistance
As stated above, the cash benefits provided by social insurance
are an important factor in the campaign against social diseases,
particularly in that they make possible the maintenance or
improvement of conditions of food and housing for the sick
person and his family.
Other benefits also may be essential to the success of the treatment. In some cases the help of a visiting nurse is necessary.
It is also frequently necessary to teach the sick person and his
family the principles of hygiene in order to ensure compliance
with the orders of the doctor in charge of the case.
Tuberculosis is a chronic disease, which weakens the patient
and reduces his powers. In many cases some form of vocational
assistance is necessary to enable him to return to active life.
Benefits of this kind include in particular facilities for a change of
occupation and for readjustment to social life and work.
After-Care
Once obtained, the results of curative treatment must be
consolidated. The treatment must be continued and the patient
restored to a fit state to meet the demands of life and work and
bear the strain of his occupation. As already stated, there is a
tendency to introduce work into sanatorium treatment, not only
as a factor in that treatment but as a means of maintaining or
restoring the patient's working capacity in view of his return
to active life and the necessity for him again to earn his own
living. As the sanatorium aims both at providing treatment and
beginning the process of readjustment to social life, special steps
must be taken to confirm the habits contracted by the patient
in the institution. He must be admitted to training centres and
convalescent homes, and the curative treatment must be combined
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BENEFITS IN KIND
with vocational retraining and re-apprenticeship. Even outside
convalescent institutions periodical supervision of a medical a n d
social nature is necessary. This is effected b y means of visits of
inspection. The effects of t h e t r e a t m e n t m a y also be safeguarded
b y giving special instruction t o convalescents a n d their family
concerning the precautions necessary t o prevent a relapse or t h e
revival of an extinct focus.
Participation
of Insurance Schemes in Therapeutic
Measures
The effective treatment of tuberculous cases is in the interests
of all invalidity, old-age and widows' a n d orphans' insurance
institutions, even of those which do not grant benefits in kind.
I n most countries tuberculosis heads t h e list of t h e causes of
invalidity and death for which invalidity and widows' and orphans
pensions have t o be granted. Every case of tuberculosis partly
or perhaps even wholly cured represents a reduction of physical
and moral suffering, an increase in powers of resistance, t h e
possibility of a return to active life and a reduction of t h e
charges on insurance. Nor is this all. The treatment is prophylactic in intention, and aims a t preventing cases of closed tuberculosis from becoming open and reducing open cases t o a closed
state, t h a t is, rendering t h e m non-infectious. Every source of
infection so stopped relieves t h e burden on the general body of
t h e insured.
I n most invalidity, old-age, and widows' and orphans' insurance
schemes tuberculosis claims a dominant p a r t of t h e curative work
of the institutions as regards both t h e number and duration of t h e
courses of treatment granted, and this in spite of t h e fact t h a t
as a rule t h e insurance institutions are free to decide in each
particular case whether or not they will grant t h e prolonged
course of treatment demanded b y t h e nature of the disease.
The granting of special treatment is strictly compulsory only
under t h e Italian tuberculosis insurance scheme, which covers t h e
risk of tuberculosis alone and gives t h e insured person and his
family a specific right to treatment in special curative institutions
(sanatorium-hospital, sanatorium, convalescent home) or in
general hospitals containing special separate accommodation,
or, if there is no room, available in such establishments, t o
home treatment or admission t o institutions which, although not
specialised, offer facilities for t h e treatment of tuberculosis.
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407
The granting of treatment is discretionary, b u t very frequent,
under a number of schemes which have provided their invalidity,
old-age and widows' and orphans' insurance institutions with
medical services specially equipped for t h e campaign against
tuberculosis. Among these are : Austria (salaried employees),
Czechoslovakia (workers and salaried employees), Denmark
(persons of small means who are regular members of sickness
funds), Germany (workers and salaried employees), Luxemburg
(workers), the Netherlands (employed persons), Rumania (employed persons and handicraftsmen) and Yugoslavia (salaried
employees in Slovenia and Dalmatia).
The share of the British health insurance scheme in curative
work is limited to home treatment, the sanatorium treatment of
all tuberculosis cases, whether insured or not, falling within the
sphere of the public medical service and being assigned to t h e
local authorities. Rules are laid down for collaboration between
t h e insurance doctor and t h e tuberculosis officer. Patients not
admitted to a sanatorium are attended by their usual doctor
unless the case calls for treatment which the general practitioner
is not competent to apply. The tuberculosis officer may, however,
decide whether cases not admitted to hospital shall be subjected
t o methodical treatment by, or merely placed under the supervision of, t h e tuberculosis dispensary. I n either case the insurance doctor is relieved of all responsibility for the treatment,
unless the insured person refuses to submit to the treatment or
supervision provided b y t h e public medical service and demands
t o be attended by his usual doctor, who then resumes his full
rights and responsibilities.
This division of functions based on the method of treatment is
also found in a number of other arrangements between t h e
sickness funds, which intervene during the first twenty-six to
fifty-two weeks of sickness, according to t h e scheme concerned,
a n d the invalidity funds, which normally intervene only on behalf
of sick persons whose right to sickness benefit has expired. The
system may be worked satisfactorily as regards patients in receipt of home treatment, provided t h a t the invalidity insurance
institution assumes responsibility for the case as soon as t h e
patient has exhausted his sickness insurance rights, an event which
is shown b y experience to occur very frequently in tuberculous
cases owing t o the long duration of the treatment. As a rule
t h e invalidity insurance institution is solely responsible for all
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in-patient treatment. The selection of cases justifying treatment;
in a sanatorium or hospital-sanatorium is one of t h e most difficult
functions of the invalidity institutions. The institutions m u s t
sift carefully the applicants for admission, setting aside nontuberculous cases, cases still in t h e preliminary stages of t h e
disease and those which are already hopeless, t h e last, if infectious, being isolated in special establishments.
The German and Czechoslovak invalidity, old-age and widows'
and orphans' insurance schemes may be cited as examples of t h e
means b y which the difficulties which arise when sickness insurance and invalidity, old-age and widows' and orphans' insurance
are administered by separate funds m a y be overcome and admission t o sanatorium treatment regulated.
When t h e general rules for guidance in granting curative and
preventive assistance to insured persons were laid down on
27 February 1929 t h e German insurance scheme already h a d
behind it the experience of a forty years' campaign against
tuberculosis. These rules apply t o all insured persons a n d pensioners and t o t h e members of their family. The invalidity,
old-age and widows' and orphans' insurance institutions are
responsible for t h e execution of t h e curative measures considered
necessary by the sickness funds. The latter are notified of a n y
tuberculous cases b y the practitioners and tuberculosis dispensaries and thereupon inform, t h e competent invalidity, old-age
a n d widows' and orphans' insurance institution, which grants
treatment with the principal object of removing or preventing
invalidity. The rules provide t h a t all cases of active tuberculosis,
at whatever stage of t h e disease, which offer a chance of recovery
or at least of appreciable improvement and all tuberculous patients
threatened with rapid aggravation of the disease shall be admitted
t o a sanatorium or hospital-sanatorium. Incurable cases whom
it is necessary to place in an institution in the interests of those
around t h e m are admitted to special tuberculosis hospitals or
t o the tuberculosis wards of general hospitals. Patients who
have completed a course of treatment in a residential institution
are kept under constant supervision and are subjected t o supplementary curative measures, in particular, to renewed insufflation
of oil or oxygen.
Under t h e workers' invalidity, old-age and widows' and
orphans' insurance scheme in Czechoslovakia, applications for
admission t o sanatorium treatment are decided b y t h e Central
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409
Social Insurance Institution at Prague. Such applications are
submitted through the sickness insurance institutions wherever
sanatorium treatment may be expected to result in recovery, an
improvement sufficient to restore the patient's earning capacity
or the prevention or postponement of invalidity. The Central
Institution considers each application in the light of a report
submitted by the centre for examination and observation in
the district of the sickness institution. These centres select the
cases on the basis of instructions laid down by the Central Institution, containing detailed medical indications the use of which
is facilitated by graphic signs and standardised terms. The
cost of sanatorium treatment is borne by the Central Institution
except for the first six weeks (three weeks for young people under
eighteen) for which the sickness insurance institution is responsible. After the expiry of this period the sickness institution
is bound to pay sickness benefit for the duration of the treatment
subject to a maximum of one year, half the sum due being payable
to the Central Institution and the other half to the insured person
or his family.
Similar regulations have been laid down under most of the
other schemes which make the invalidity, old-age, and widows'
and orphans' insurance institutions responsible for any course
of protracted treatment and in particular for sanatorium treatment. The object in view is everywhere the same, namely, to
pick out rapidly and judiciously the cases which may be treated
with reasonable chance of success, to guarantee the continuation
of such treatment until a lasting result is obtained, to provide
for supervision after the treatment in order to consolidate its
effects by means of supplementary measures. These regulations
also often specify the benefits of an economic nature by which
curative treatment may usefully be followed up : measures to
improve food and clothing conditions, to improve, find and
maintain suitable housing accommodation and equipment, to
disinfect living quarters, and various other measures designed to
improve living conditions which might aggravate the state of tuberculous cases or compromise the results of the treatment granted.
PROPHYLACTIC MEASURES
While the mortality from tuberculosis is decreasing, the rate
of morbidity appears to be stationary. The effects of the depression and of unemployment on the movement of tuberculosis
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BENEFITS IN KIND
cannot yet be estimated with any certainty. Tuberculosis still
remains one of the most serious of medical and social problems.
The prophylactic campaign against tuberculosis aims a t bridging the gap between the epidemiological and social points of view
and bringing about t h a t collaboration between medical and social
action which is indispensable to t h e success of the struggle against
tuberculosis. Preventive: measures anticipate t h e disease by
preserving a n d improving t h e health. Systematic detection a n d
early diagnosis, making it possible t o pick out dangerous cases
and organise t h e protection of those exposed t o risk, are powerful
preventive factors. On these two great principles of prevention,
namely, the removal of dangerous cases and t h e protection of
those who are exposed, all prophylactic work is founded.
Preventive Work outside Residential
Institutions
Preventive work carried on outside resident institutions consists in t h e first place of measures designed t o prevent t h e spread
of t h e disease. Tuberculous and pre-tuberculous cases must be
trained t o observe rules t h a t will remove t h e risk of infection.
Housing conditions must also be improved so as to allow of t h e
isolation of the sick person in the interests of those who share
his home, e.g. by the provision of more ample or better arranged
living quarters.
This preventive work also includes measures for the protection
of persons in sound health, especially children, against infection.
Children must be removed from dangerous surroundings and
placed in healthy families living under satisfactory hygienic
conditions (supervised boarding out). Their physical powers of
resistance must also be fortified b y better food, exercises, etc.
Preventive Work within Residential
Institutions
Preventive work in residential institutions is based on t h e same
principles, i.e. the removal of dangerous cases b y placing t h e m in
institutions for isolation or t r e a t m e n t and t h e protection of those
exposed to risk, in particular of children, b y placing t h e m in
preventive institutions, mountain resorts, holiday camps, or
sending t h e m t o stay in the country. The removal of children
from contaminated surroundings is one of the main branches
of tuberculosis preventive work.
ROLE OF INSURANCE SCHEMES IN COMBATING SOCIAL DISEASES
Participation
411
of Insurance Schemes in the Work of Prevention
The whole contribution of social insurance t o t h e campaign
against tuberculosis, even t h e medical treatment which occupies
so large a place in the curative work of many invalidity, old-age
and widows' and orphans' insurance institutions, is definitely
directed along preventive lines. Insurance also plays a considerable part in the general preventive work outlined above.
A complete list of the activities undertaken and results obtained
by social insurance in various countries in t h e sphere of tuberculosis prevention would cover several pages. Although they
vary extensively in their scope and duration, these activities may
nevertheless be grouped under a few principal heads : relief
committees, intended t o supplement the action of tuberculosis
dispensaries; centres of visiting nurses for the promotion of
preventive work in the home; holiday camps and preventive
institutions for removing children from contaminated home
surroundings; the securing of dwellings for tuberculous families,
providing facilities for isolation and for fresh air and rest cures.
These activities may be set on foot either b y t h e insurance
scheme itself or by t h e anti-tuberculosis organisations with the
financial assistance of t h e insurance institution. I n either case
they complete t h e system of anti-tuberculosis organisation.
In t h e wide sphere of general preventive work collaboration
between social insurance institutions and all t h e other bodies
pursuing the same aims is even more necessary t h a n in the other
branches of anti-tuberculosis work. This collaboration is usually
based on a plan for joint action worked out in common. In the
interests of the social group whose health it is its mission t o
guard, t h e insurance institution must take an active p a r t in the
execution of the joint plan drawn up with a view to co-ordinating
t h e activities of different bodies and preventing overlapping.
There are so many different methods of collaboration in the
sphere of prevention t h a t it is impossible t o describe t h e m all.
They may however be reduced to two main types, the one based
on a division of labour between the insurance institutions and the
other bodies concerned and the other on the principle of common
action, t h e joint execution of a plan by all the bodies associated
with t h e work.
The existence of a public tuberculosis service for both curative
and preventive work appears t o facilitate t h e separate execution
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BENEFITS IN KIND
of preventive measures. In this case t h e task of t h e insurance
institution is t h a t of filling in a n y gaps in t h e general anti-tuberculosis organisation by undertaking to carry out all or p a r t of
its programme in so far as it affects the insured persons. This
subsidiary work, supplementing t h a t of t h e tuberculosis officer,
is assigned t o t h e medical service of the British health insurance
scheme, while the additional benefits which approved societies
m a y grant t o their members over and above t h e minimum statutory benefits fulfil the same function in relation t o t h e benefits
granted by t h e public tuberculosis service. The anti-tuberculosis
organisation in Italy is also based on t h e principle of a division
of functions, t h e general anti-tuberculosis organisation being
responsible for the development and supervision of preventive
services, while t h e tuberculosis insurance scheme is required t o
give financial support to the organisation and provide care and
treatment for insured persons a n d their families.
Invalidity insurance institutions are assigned a larger share in
preventive work in other countries, particularly in Austria,
Czechoslovakia, Denmark, Germany, Hungary, t h e Netherlands,
Poland and Yugoslavia, either because t h e insurance scheme
itself was set up prior t o the development of t h e general antituberculosis organisation or because t h e network of public health
dispensaries is still incomplete. The programme of preventive
work drawn up jointly by all the organisations concerned is also
jointly carried out, its execution being entrusted either to a body
already in existence specially suited t o carry out a specific p a r t of
t h e programme or t o a new body set up ad hoc. The general rules
issued in Germany in 1929 concerning curative and preventive
assistance t o insured persons already mentioned, not only regulate
t h e co-operation between sickness insurance institutions and those
of invalidity, old-age and widows' and orphans' insurance, b u t also
lay down definite principles for t h e collaboration which has long
existed in practice in t h e sphere of social hygiene and protection
against tuberculosis among insurance institutions, public and
voluntary bodies for social relief, t h e public health service and t h e
medical profession. The general instructions of t h e Central Insurance Institution of Czechoslovakia concerning collaboration
between social insurance institutions and public health institutions in anti-tuberculosis work date from t h e same year. As in
Germany, t h e insurance scheme takes an active p a r t in t h e
medical, financial and administrative branches of t h e work, t h e
ROLE OF INSURANCE SCHEMES I N COMBATING SOCIAL DISEASES
413
share of the insurance institution and of the public health organisations in each sphere being strictly specified with due regard
to local conditions and the needs of the insured persons.
Social insurance schemes are paying more and more attention
to methodical and practical preventive work performed in collaboration with all the other bodies engaged in the campaign
against tuberculosis, thus faithfully fulfilling their mission as
guardians of the workers' health.
§ 2.—The Campaign against Rheumatic Diseases
Rheumatic diseases, acute and chronic, are a source of heavy
expenditure to the social insurance institutions of all countries
in the form of sickness benefit or temporary or permanent invalidity pensions.
The astiological origin of rheumatic diseases is far from being
clearly established. The diagnosis of "rheumatism" is in itself
too vague and covers too large a variety of diseases, and is so
lacking in precision that it gives no appreciable help either in prevention or treatment. Failing a bacteriological explanation,
the various forms of rheumatism have to be classified according
to anatomical criteria and clinical experience. In this respect
notable progress has been made since the war, and the various
forms of rheumatism—acute arthritis, chronic arthritis, muscular
rheumatism and neuralgia—can now be distinguished from each
other both from the anatomical and the clinical standpoint.
With a view to facilitating and making more effective the
campaign against rheumatic diseases, attempts have been in
progress for many years, both on an international plane and
among the societies set up to fight rheumatism in various
countries, to introduce a uniform and carefully established
terminology for the description of rheumatic diseases. Until
medical practioners have acquired the habit of couching their
diagnosis in terms sufficiently precise, the campaign against
rheumatic diseases, which is already hampered by the elementary
state of serological knowledge in this sphere, will continue to be
beset with difficulties.
Constitutional pre-disposition is held to be a capital factor in
the origin of rheumatic diseases. Whole families sometimes
show a predisposition to chronic arthritis throughout several
generations, and it needs only the spur of some injurious outside
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BENEFITS IN KIND
influence, such as a chill, traumatism or infection, for a latent
susceptibility to degenerate rapidly into a definite disease.
External factors are largely conditioned by occupation. Chill
resulting from a sudden change in temperature appears to be
partly responsible for the frequency of arthritis among miners,
motor-car drivers, bakers, masons, carpenters, drivers, washerwomen and market women. As regards traumatism, this may
favour the development of rheumatic complaints, especially when
it is due to overstrain of specific joints, as in the case of girls
working stitching machines. There is unquestionably a close
connection between the temperature and humidity of the air and
rheumatic diseases. Rheumatic morbidity is highest in January
and February and lowest in July, the curve thus reaching its
peak when the temperature is at its lowest.
Besides occupational and climatic factors, unsatisfactory social
conditions may also help to aggravate a predisposition into a
definite disease. Arthritis is extremely common in overcrowded
and uncomfortable dwellings which expose their occupants to
damp and draughts.
The source of rheumatic ailments being as yet unknown,
methodical preventive work is still in its infancy. As rheumatic
diseases frequently set in as a result of abscesses on the tonsils
and the decay of the roots of the teeth, the removal of tonsils
and treatment of the roots of the teeth are frequently resorted
to as preventive measures. Little if anything can apparently
be done to remove hereditary predisposition. Vigorous movements and exercises are recommended as a means of increasing
resistance to chill.
The therapeutic methods applied aim at removing the symptoms
of the disease rather than eradicating its cause.
There are various forms of treatment by means of drugs.
Hydrochloric acid is the specific remedy for acute arthritis,
alleviating pain and low ering fever. To prevent digestive troubles
recourse is frequently had to frictions with lotions containing
hydrochloric acid.
Physico-therapeutic methods play a considerable part in the
treatment of chronic forms of rheumatism, e.g. warm and hot
compresses and baths, light baths, steam baths, hot-air baths,
warm showers, diathermy, massage, gymnastics and, during
recent years, radium and X-ray treatment.
Thermal resorts are visited chiefly by rheumatic cases. Mineral
ROLE OF INSURANCE SCHEMES IN COMBATING SOCIAL DISEASES
415
mud baths produce beneficial effects because of t h e heat which
penetrates deeply into the tissues. Sulphur baths are also a
frequently used remedy. N a t u r a l hot springs with no specific
chemical content yield clinical results of unquestionable value.
During recent years it has been recognised t h a t their therapeutic
properties reside in their radio-activity, and springs containing
a certain amount of radio-activity are now looked upon as
specific remedies for rheumatism.
The bodies engaged in the campaign against rheumatism in
various countries have created two kinds of special institution,
namely anti-rheumatism dispensaries which give consultations
b u t no treatment, help t o secure an early diagnosis, provide
instruction in hygiene and carry on anti-rheumatism propaganda,
and special hospitals which act a t once as centres for treatment
and research and which admit patients a t every stage of the
disease.
After these general a n d necessarily brief remarks, attention
may be turned t o social insurance with a view t o showing in t h e
light of a few examples, on the one hand the effect of rheumatic
morbidity on the expenditure of insurance institutions, ^and,
on t h e other, t h e measures adopted b y the latter to reduce
this morbidity and restore the earning capacity of their sick
members.
The British health insurance scheme provides statistics of t h e
experience gained between 1921 and 1925 by a group of funds
comprising a number of large approved societies with a membership of over three million, showing t h a t t h e rheumatic morbidity
for both sexes represented 14 per cent, of the general morbidity
for which sickness and disablement benefit was paid. This
figure confirms those established by t h e Rheumatism Committee
set up in 1924 b y t h e British Ministry of Health, namely 16 per
cent, for insured men and 14 per cent, for insured women; the
majority of the insured women were in t h e lower age groups.
I n German social insurance t h e percentage of morbidity due
t o rheumatism appears to be very similar t o t h a t for Great
Britain. As regards t h e Leipzig sickness fund, in 1928 cases of
incapacity due to some form of rheumatism represented 14.8
and 12.2 per cent, of all cases of incapacity for work for men
and women respectively. A representative group consisting of
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BENEFITS IN KIND
24 sickness funds shows a slightly lower aggregate figure of
10.69 per cent, for rheumatic morbidity. Rheumatic diseases are
a frequent reason for the granting of invalidity pensions : according
to Zimmer, one-ninth of all invalidity pensions are granted oh
account of rheumatic diseases. The ratio between rheumatic
diseases and tuberculosis as causes of invalidity is 73 to 100.
Rheumatism is a more frequent cause of invalidity among women
than among men, the ratio being 136.9 to 100. These general
figures, which apply to a great number of workers' invalidity,
old-age and widows' and orphans' insurance institutions, do not
include heart diseases resulting from rheumatism. The experience
of institutions situated near the sea confirms the part played
by damp in the causation of rheumatic diseases.
As a third example, the figures for 1930 for the Oslo sickness
fund may be cited, covering 115,000 members, exclusive of women
and children. During the year in question 12.4 per cent, of all
the sickness benefit paid was granted on account of rheumatic
diseases.
The high rate of rheumatic morbidity and the long duration
of chronic arthritis, averaging ten years' invalidity per case, are
sufficient explanation of the importance attached by invalidity
insurance institutions to the timely treatment of rheumatic
diseases. Of the insured persons and pensioners placed in hospital or sent to thermal resorts, the largest proportion are
rheumatic cases.
Below are given a few particulars of the extent and cost of antirheumatic treatment under the German workers' insurance
scheme, taken from the report of the Federal Social Insurance
Office for 1931 (1930) : patients granted continuous treatment
14,554 (21,958); comprising 10,152 (15,726) men and 4,402
(6,232) women; total expenditure 5.3 (8.2) million RM., or
364.45 (374.55) RM. per case. Of the 14,554 rheumatic patients
to whom continuous treatment was granted during 1931, 6,610
were treated in establishments belonging to the insurance institutions themselves., and 7,944 in establishments with which they
had contracted. A consideration of the nature of the establishments and of the treatment provided gives the following proportions per hundred cases treated : mineral mud baths 27.9,
thermal resorts 20.9, other watering places 18, sanatoria and
climatic resorts 14.8, sulphur springs 7.4, hospitals and clinics,
medico-mechanical and orthopaedic establishments and hydro-
BOLE OF INSURANCE SCHEMES IN COMBATING SOCIAL DISEASES
417
pathic establishments 6.6, convalescent and rest homes 4.2, nonspecialised establishments 0.2.
Under the British as under the German insurance scheme
special treatment for rheumatic cases is an additional benefit.
The work accomplished by the approved societies in collaboration
with the Red Cross Society's Clinic for Rheumatism was approved
by the Minister under the National Health Insurance Regulations
concerning additional benefits. During 1931, 3,046 new patients,
of whom 1,214 were sent by seventy-nine approved societies,
attended the clinic for preliminary consultation. Consultations
are given in the evenings as well as during the day, so that persons
employed during the daytime may have an opportunity of
treatment after working hours and without giving up their
work. Of the insured patients treated, 47 per cent, 'were able
to remain at work during the period when undergoing treatment
and 20 per cent, who were unable to work at first were reported
fit for work after treatment. These particulars, which are
extracted from the report of the Chief Medical Officer of the
Ministry of Health for 1931, show that the approved societies
make a point of sending their members for treatment in the
early stages of the disease so that the greatest amount of benefit
can be derived from the collaboration between the clinic and the
approved societies.
Thermal treatment makes it possible in a great many forms
of rheumatism to shorten a treatment, which would drag on
indefinitely or even be impossible if undertaken at home. Hence
the invalidity, old-age and widows' and orphans' insurance institutions of most countries have taken steps to organise thermal
cures for rheumatic cases. These being somewhat expensive
benefits, the insurance institutions are bound to exercise care in
choosing the cases to which it is granted. The medico-social
rules laid down in this respect by insurance institutions differ
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