The Present Scheme of 1920
It was plainly necessary to make further provision, so a Bill for the extension of unemployment insurance was introduced in the House of Commons, first in December 1919, and again in February 1920, and passing into law in August as the Unemployment Insurance Act, 1920, came into operation on November 8, 1920. It is the statute under which the permanent National Unemployment Insurance Scheme is regulated—by it all previous enactments relating to unemployment insurance are repealed. This Act brings into insurance practically the whole industrial population, and also non-manual workers whose remuneration does not exceed £250 per annum. It excludes, however, agriculture and private domestic service, and empowers the Minister of Labour to grant certificates exempting the permanent employees of certain public undertakings, but, save in the case of railway servants, the numbers engaged in such specially excepted employments are not large. The total number of workpeople insured as the result of this Act is about twelve millions. The contributions prescribed by the Act of 1920 (since temporarily increased) are as follows:
| Employer’s Share. | Employee’s Share. | State Contribution. | |
|---|---|---|---|
| Men | 4d. | 4d. | 2d. |
| Women | 3½d. | 3d. | 1⅔d. |
| Boys (over 16 and under 18) | 2d. | 2d. | 1⅓d. |
| Girls (over 16 and under 18) | 2d. | 1½d. | 1d. |
The scheme is mainly worked through the Employment Exchanges. An unemployment book is issued to every insured worker, and, on obtaining employment, he is required to lodge it with his employer, who keeps it while the employment lasts, and when paying wages must affix to it a stamp of the value of the combined contributions of himself and the worker.
The books are valid for twelve months, from the beginning of July in one year to the beginning of July in the following year—a period known as the “Insurance Year.” Every July the books are exchanged. Employers usually lodge the books of their workers in bulk at the Employment Exchanges, where fresh books are written up for the ensuing year, but a workman has the right to take his old book himself to the Exchange and obtain his new book for the ensuing year.
Workmen are also entitled to receive from the Department, on application, a statement showing the condition of their accounts.
The stamps representing contributions are sold at Post Offices, and the proceeds of sales are paid over weekly by the General Post Office to the Ministry of Labour. The remittances are placed to the credit of the Unemployment Fund established under the Act, and the State contribution is added to the amounts so received, and similarly credited to the Fund. When the Fund is in credit, i.e. when the revenue is more than sufficient to pay the benefits accruing due, any surplus moneys are handed over to the National Debt Commissioners for investment on behalf of the Fund. Owing to employment being exceptionally good immediately before and during the war, the Fund accumulated a considerable surplus, which amounted, in November 1920, when the Act of that year was passed, to about £20,000,000.
The benefits prescribed in the Act of 1920, which were afterwards temporarily varied, are 15s. a week for men and 12s. a week for women, with half-rate for boys and girls. Benefit was provided to be payable after the first three days of unemployment, afterwards permanently increased to six by the Unemployment Insurance (No. 2) Act, 1921, which constitute a “waiting period,” and for a maximum of twenty-six weeks in any “insurance year.” It was fifteen weeks in the Act of 1920, but this was increased to twenty-six by the Unemployment Insurance Act, 1921. The amount of benefit must not in any event exceed the proportion of one week’s benefit for every six contributions paid, i.e. one day of benefit for each contribution. This limit is in certain cases temporarily suspended by the Unemployment Insurance Act, 1921.
The conditions for the receipt of benefit are that a prescribed number of contributions have been paid, viz. a minimum of twelve under the Act of 1920—in certain cases temporarily relaxed by the Unemployment Insurance Act, 1921; that applications for benefit have been made in the prescribed manner; that the contributor proves that since his application he has been continuously unemployed, capable of, and available for, work, but unable to obtain suitable employment, and that he has not exhausted his right to benefit. The workman is disqualified[17] from benefit if his unemployment is caused by a stoppage of work due to a trade dispute at his place of employment, or if he has lost his employment through misconduct or by voluntary resignation without just cause. Nor is benefit payable while the workman is an inmate of a prison or a workhouse or any other institution supported out of public funds, nor whilst he is resident outside the United Kingdom. Should he be in receipt of sickness or disablement benefit under the Health Insurance Acts or of an old age pension, he can claim no benefit.
Once an insured worker becomes unemployed, the employer must return to him his unemployment book, which he must lodge at the Employment Exchange, where he may claim benefit. When a claim is made, an inquiry is addressed by the Exchange to the last employer of the workman as stated by him on the claim form, in order to ascertain whether the conditions for the receipt of benefit are satisfied, and whether any of the disqualifications apply. During the currency of his claim, an unemployed insured worker must attend at the Exchange as evidence that he is unemployed. There he signs a declaration during the normal working hours of his trade that he is unemployed and unable to obtain suitable employment. In normal times, the frequency with which unemployed insured workers have to attend for this purpose is as follows: If the worker lives within two miles of the nearest Exchange, he is required to attend daily; if he lives between two and four miles from the Exchange, he attends every other day; between four and six miles, he attends once a week, and furnishes a declaration signed by two persons that he is unemployed; if he lives more than six miles from the nearest Exchange, he is not required to attend there personally for the purpose of giving evidence of unemployment, but may forward a certificate signed by two persons as to the continuance of his unemployment. Claims for benefit are adjudicated upon, in the first instance, by officers appointed under the Act known as insurance officers. The manager of the Exchange acts as an “insurance officer” and authorizes payment of obviously valid claims. Those as to which doubt arises are sent to the Chief Insurance Officer in London for adjudication. If the insurance officer’s decision is unfavourable to the claimant, the latter has a right of appeal to a Court of Referees, consisting of an independent chairman, a representative of employers and a representative of the contributors. The chairman and the panels are appointed by the Minister of Labour. Either the insurance officer, or the Trade Union to which the claimant belongs, or the claimant himself, if leave is given to him by the Court, has a further right of appeal from the recommendation of the Court of Referees to an umpire appointed by the Crown, whose decision is final and conclusive.