National Insurance Act (Sickness)

Max Thompson

What did it consist of?

• A state organised scheme where both workers and their employers contributed into a national fund

• The Treasury would also make additional payments

• These benefits could then be issued in a number of cases– Sickness resulting in unemployment for the individual– Free medical treatment with a state approved doctor– Disability benefit– Maternity grant if the insured female worker became pregnant (ie not

for a male worker’s wife)

Extent of the reform

• Overall it covered 13 million workers• It worked such that 10 shillings would be paid out weekly for

13 weeks• From then on, 5 shillings were paid for a further 13 weeks• That meant workers were covered for a total of half a year in

extreme circumstances although further provision could be made after this

Limitations of the reform

• Benefits only granted to those earning less than £160, which was placed on a sliding scale, and even then in some cases there were reduced rates of benefit

• Workers had to pay for system out of own wages • Workers were only covered from ages 16-60. As a pension

was provided at 70, this left a 10 year gap in provision• Only the worker, and not his or her family, was covered by

the scheme• Overall, only 13 million out of 45 million people were included

in the scheme

How much was achieved by 1914?

• For many of those in worst poverty, they would struggle even with extra assistance

• 10s would in reality make little difference; £1.05 needed just to keep a family of 5 above the poverty line

• However, it was a start, in giving 13 million working people some protection against having to take their families into the workhouse.