In 1893 Mr Gladstone referred the whole question to a
royal commission (Lord Aberdare, chairman). A majority
report, adverse to the principle of state pensions, was issued
in 1895. A minority report, signed by Mr Chamberlain and
others, dissented, mainly on the ground that public expectation
would be disappointed if nothing was done. In 1896 Lord
Salisbury appointed a committee “of experts” (Lord Rothschild,
chairman) to report on schemes submitted, and, if necessary,
to devise a scheme. The committee were unable to recommend
any of the schemes submitted, and added that, “we ourselves
are unable, after repeated attempts, to devise any proposal free
from grave inherent disadvantages.” This second condemnation
was not considered conclusive, and a select committee of the
House of Commons (Mr Chaplin, chairman) was appointed to
consider the condition of “the aged deserving poor.” After
an ineffectual attempt by Mr Chaplin to induce the committee
to drop the pension idea, and to consider the provision made
for the aged by the poor law, the committee somewhat hastily
promulgated a scheme of gratuitous pensions for persons possessing
certain qualifications. Of these the following were the most
important: age of sixty-five; no conviction for crime; no
poor-law relief, “unless under exceptional circumstances,”
within twenty years; non-possession of income of 10s. a week;
proved industry, or proved exercise of reasonable providence
by some definite mode of thrift. The committee refrained
from explaining the machinery and from estimating the cost,
and suggested that this last problem should be submitted to
yet another committee.
Accordingly a departmental committee (chairman. Sir E. Hamilton) was appointed, which reported in January 1900. The estimated cost of the above plan was, by this committee, calculated at £10,300,000 in 1901, rising to £15,650.000 in 1921. Mr Chaplin had publicly suggested that £2,000,000, the proceeds of a 1s. duty on corn, would go a long way to meet the needs of the case—a conjecture which was obviously far too sanguine. These unfavourable reports discouraged the more responsible advocates of state pensions. Mr Chamberlain appealed to the friendly societies to formulate a plan, an invitation which they showed no disposition to accept. Efforts continued to be made to press forward Mr Booth’s universal endowment scheme or some modification of it. To this Mr Chamberlain declared his hostility. And here the matter rested, till in his Budget speech in 1907 Mr Asquith pledged the Liberal government to start a scheme in 1908.
In 1908 accordingly there was passed the Old-Age Pensions Act, which carried into effect a scheme for state pensions, payable as from the 1st of January 1909 to persons of the age of 70 years and over. The act grants a pension according to a graduated scale of not exceeding 5s. a week to every person, male and female, who fulfils certain statutory conditions, and at the same time is not subject to certain disqualifications. The statutory conditions, as set out in § 2 of the act, are: (1) The person must have attained the age of seventy; (2) must satisfy the pension authorities that for at least twenty years up to the date of receipt of pension he has been a British subject and has had his residence in the United Kingdom; and (3) the person must satisfy the pension authorities that his yearly means do not exceed £31, 10s. In § 4 of the act there are elaborate provisions for the calculation of yearly means, but the following may be particularly noticed: (1) in calculating the means of a person being one of a married couple living together in the same house, the means shall not in any case be taken to be a less amount than half the total means of the couple, and (2) if any person directly or indirectly deprives himself of any income or property in order to qualify for an old-age pension, it shall nevertheless be taken to be part of his means. The disqualifications are (1) receipt of poor-law relief (this qualification was specially removed as from the 1st of January 1911); (2) habitual failure to work (except in the case of those who have continuously for ten years up to the age of sixty made provision for their future by payments to friendly, provident or other societies or trade unions; (3) detention in a pauper or criminal lunatic asylum; (4) imprisonment without the option of a fine, which disqualifies for ten years; and (5) liability to disqualification for a period not exceeding ten years in the case of an habitual drunkard. The graduated scale of pensions is given in a schedule to the act, and provide that when the yearly means of a pensioner do not exceed £21 he shall have the full pension of 5s. a week, which diminishes by is. a week for every addition of £2, 12s. 6d. to his income, until the latter reaches £31, 10s., when no pension is payable. The pension is paid weekly, on Fridays (§ 5), and is inalienable (§ 6).
All claims for, and questions relating to, pensions are determined by the pension authorities. They are (1) pension officers appointed by the Treasury from among inland revenue officers; (2) a central pension authority, which is the Local Government Board or a committee appointed by it, and (3) local pension committees appointed for every borough and urban district with a population of over 20,000, and for every county.
During the first three months of the year 1909, in which the act came into operation, there were 837,831 claims made for pensions: 490,755 in England and Wales, 85,408 in Scotland, and 261,668 in Ireland. Of these claims a total of 647,494 were granted: 393,700 in England and Wales, 70,294 in Scotland, and 183,500 in Ireland. The pensions in force on the 31st of March 1909 were as follows: 582,565 of 5s., 23,616 of 4s., 23,275 of 3s., 11,429 of 2S., and 6609 of is. By the 30th of September the total amount of money paid to 682,768 pensioners was £6,063,658, and in the estimates of 1909–1910 a sum of £8,750,000 was provided for the payment of pensions.
Germany.—The movement in favour of state aid to provision for old age has been largely due to the example of Germany. The German system (which for old age dates from 1891) is a form of compulsory and contributory insurance. One half of the premium payable is paid by the labourer, the other half by the employer. The state adds a subvention to the allowances paid to the annuitant. (See Germany.)
France.—By a law of April 1910 a system of old-age pensions, designed to come into operation in 1911, was adopted. It is a contributory system, embracing all wage-earners, with the exception of railway servants, miners and sailors on the special reserve list of the navy. It applies also to small landowners, tenant farmers and farm labourers. All are eligible for a pension at the age of 65, if in receipt of less than £120 a year. The actual rente or pension is calculated on the basis of the total obligatory contribution, together with a fixed viagère or state annuity. Male wage-earners are required to contribute 9 francs a year, and females 6 francs, the employers contributing a like amount. The largest pension obtainable is for life contributions and amounts to 414 francs. A clause in the act permits wage-earners to claim the rente at the age of 55 on a proportionately reduced scale without the viagere. The total cost of providing pensions in 1911 is estimated at over £5,500,000.
Denmark.—The Danish system of old-age pensions was instituted by a law of 1891, and has been extended by further acts of 1902 and 1908. By the law of 1891 the burden of maintaining the aged was in part transferred from the local to the national taxes, and relief from this latter source was called a pension. Recipients of public assistance must be over 60 years of age, they must be of good character and for 5 years previous to receipt must have had their domicile in Denmark without receiving public charity. Such public assistance may be granted either in money, or kind, or by residence in an institution, such as an hospital. The assistance given, whatever it may be, must be sufficient for maintenance, and for attendance in case of illness. The actual amount is determined by the poor-law authorities, but all private assistance amounting to more than 100 kroner (£5, 13s.) a year is taken into account in measuring the poverty of the applicant. The cost of assistance is met in the first case by the commune in which the recipient is domiciled, but half the amount is afterwards refunded by the state. In 1907–1908, 71,185 persons were assisted—53,008 by money and 18,177 otherwise. The total expenditure was £489,200, £242,660 being refunded by the state.
