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| THE NEW DEAL-- THE SOCIAL SECURITY ACT OF 1935 gggff |
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| THE NEW DEAL-- THE SOCIAL SECURITY ACT OF 1935 gggff |
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APPENDIXES
APPENDIX IX
SURVIVORS' INSURANCE IN FOREIGN COUNTRIES {1} Insurance for the survivors of wage earners is a form of protection against old-age dependency, together with provision for younger widows with dependent children. This protection is afforded by death benefits in the form of lump-sum payments or joint-survivor annuities, as well as by straight pensions to dependent survivors. A provision for death benefits linked to a contributory old-age insurance system has the advantage of assuring a wage earner that he is not purchasing his old-age protection at the expense of his family in the event of his death. In all the foreign countries which have survivors' insurance there is provision made for the children of the insured until they reach an employable age. Whether or not the widows or widowers of the insured persons receive benefits depends in most foreign laws on whether they are free and able to earn their living. Thus, in the following countries a pension is paid to the widow if she has dependent children: Austria, Czechoslovakia, Luxemburg, and Russia. Some countries pay pensions to widows who have reached an age where they can no longer find employment. They are: Austria, Belgium, Czechoslovakia, Germany, Hungary, Luxemburg, Netherlands, Poland, and Russia. The following countries make provision for all widows regardless of age: Bulgaria, France, Great Britain, Greece, and Yugoslavia. Provision for survivors made by foreign governments takes two forms, pensions and insurance. Pensions to widows and orphans are found in the British Dominions,, i. e., New Zealand, New South Wales, and seven Canadian Provinces; and in Denmark.{2} Insurance benefits to widows (as distinguished from other classes of needy mothers) and to orphans for large groups of the population are found in 13 European countries (including Great Britain), while a few South American countries require this type of insurance for special groups of employees--those in public utilities, in banks, on railroads, etc.{3} The oldest legislation of thin type made provision for workers with special risks-seamen and miners; the first general provision for insurance benefits to widows and orphans is found in the German act of 1911, which was an extension of the invalidity and old-age insurance for persons employed in industry, commerce, and agriculture.{4} The majority of insurance and pension legislation has been passed in the post-war period. The first general compulsory insurance legislation for widows and orphans (i. e., for other than special industrial groups, such as miners and seamen) was adopted in 1911 by Germany and was followed in 1913 by
{2}Armstrong, Barbara Nachtrieb, Insuring the Essentials (Macmillan Co., New York, 1932), pp. 446-461 ; International Labour Office, Studies and Reports, series M, no. 9, Non-contributory Pensions (Geneva, 1933), p. 135. {3} International Labour Office, Studies and Reports, series M, no. 10, Compulsory Pension Insurance (Geneva, 1933), pp. 6-10. {4} International Labour Office, International Survey of Social Services (Geneva, 1933), p. 279.
460 legislation in the Netherlands. The first pension legislation was adopted in 1911 by New Zealand and by the State of Illinois, followed in 1913 by Denmark and 16 American States.{5} The European post-war insurance movement dates from 1922, when Russia, Yugoslavia, and Greece enacted insurance legislation providing widows' and orphans' pensions for employed persons, although the Greek legislation was enforced to a very limited extent, and that in Yugoslavia has not yet been placed in operation; in 1924 Czechoslovakia and Belgium followed; in 1925, Great Britain; in 1927, Austria (although the provision in this law for widows' and orphans' pensions has never been enforced) ; and in 1928, France and Hungary concluded the list of nations providing widows' and orphans' pensions through insurance for other than small, special industrial groups. Before summarizing the insurance provisions, certain broad distinctions between benefits under insurance and pensions systems should be pointed out. Pensions systems commonly grant a pension subject to a means test or other proof of need and subject to conditions of residence, moral character, etc., to widows with children and often to other categories of mothers with dependent children, such as mothers divorced or separated from, or deserted by their husbands, or to mothers with husbands permanently invalided or in prison. European widows' and orphans' insurance systems commonly grant a pension to children and to widows, as distinguished from other classes of dependent mothers, provided, however, that the insurance record of the deceased meets certain specified standards as to length of insurance, number of weekly contributions, etc. The pension granted to widows of wage earners is further limited in most European systems: These usually provide a pension to her only when she is an invalid, when she is over a specified age, or when she has a specified number of children. Great Britain, France, and Belgium are among the few nations which do not impose these restrictions upon pensions of widows of wage earners. Notwithstanding these limitations, the widows in receipt of pensions outnumber the children receiving pensions in most of the European systems of widows' and orphans' insurance. This is a distinctly different emphasis from that of the American laws for aid to dependent children in which the children are the chief concern. In the United States a mother is granted a pension for the purpose of enabling her to care for her own children. European provision for survivors' insurance is commonly combined with insurance against invalidity and old age, and thus forms one of several benefits in a single compulsory system. The scope of the legislation necessarily varies from one country to another. In general, insurance is compulsory for persons employed under a contract of hire or for wages, in industry, commerce, and agriculture, with specified exceptions. Frequently, however, different classes of workers are insured in different and independent insurance systems within the same country. Thus, under one law, Germany provides pensions to widows and children of miners; under another, pensions to workers engaged in industry, commerce, and agriculture; and under a third, to salaried employees.{6} This separate provision for special classes of workers, notably miners and seamen, is frequent on the continent,{7} with separate legislation for
{6} International Labour Office, International Survey of Social Services, op. cit., pp. 279-288. {7} Ibid., and International Labour Office, Compulsory Pension Insurance, op. cit., pp. 80-118.
461 the two major groups: Persons employed under a contract of hire in industry, in commerce, and in agriculture; and persons employed on a salary. In general, agricultural workers are included in the same legislation as that for industrial and commercial workers. Austria, however, provides a special law for agricultural workers, passed in 1928, but not in operation as regards provision for widows and orphans. Hungary, however, specifically exempts agricultural workers{8} Great Britain, France, and Russia are exceptions to the continental practice and provide for all types of workers in a single act. In Great Britain The Widows', Orphans', and Old-Age Contributory Pensions Act of 1925 insures all persons working under a contract of hire, including seamen, miners, agricultural workers, and non-manual workers earning less than an annual specified rate, with specified exceptions{9} The various foreign countries which have provided insurance for widows and orphans, the classes of workers insured, the numbers insured, and the number of beneficiaries are given in table IX-1. The first obvious fact disclosed by this table is that, except in Germany and Great Britain, where totals of 22,197,000 and 17,000,000 workers, respectively, are insured, and in Russia and France, for which the figures are not available, the absolute numbers insured under any one scheme are relatively small. Of the smaller nations for which figures are available, Czechoslovakia and the Netherlands alone insure more than 2,000,000 workers. In those nations which make separate provision for wage earners, for salaried employees, and for miners, the wage earners are the largest group of insured workers. Comparison of the percentage of the total population insured (in those countries for which data are easily available) reveals some interesting differences: Great Britain insures 38.4 percent of her total population; Germany, 34.5 percent; the Netherlands, 34.3 percent; and Czechoslovakia, 14.9 percent. Although figures for other small nations are lacking, available data suggest the probability that the industrialized nations are those which insure the largest portion of their total populations. The ratios which the numbers of widows and of orphans receiving pensions in each country form of the total population of the country concerned are also of interest. In countries for which complete data are available, the numbers of widows receiving pensions per 10,000 of total population vary from 21.62 in the Netherlands, through 30.7 in Czechoslovakia, 118.82 in Great Britain, up to a maximum of 126.3 in Germany. The ratios of children receiving pensions per 10,000 of total population run distinctly lower; beginning with a minimum of 14.2 in Czechoslovakia, the ratios run through 16.6 in the Netherlands to 68.5 in Great Britain, up to a maximum of 116.2 in Germany, or a little more than eight times the minimum rate in Czechoslovakia. Under the insurance systems, as under pensions, the ratios of those assisted vary widely, depending, of course, upon such prerequisites as the proportion of the population insured, the length of the required period of insurance, the required number of previous contributions, and the limitations imposed upon beneficiaries. Comparison of the ratios of children pensioned under the insurance legislation with those assisted under legislation for aid to dependent children in those areas of the United States administering the law is suggestive. For the United
{9} Great Britain, Widows', Orphans', and Old-Age Contributory Pensions Act, 1925 (5 and 16 Geo. 5, c. 70), as reprinted by: International Labour Office, Legislative Series, 1925, G. B. 7, pp. 723-758; and Great Britain, National Insurance Act, 1911, sees. 1, 2, First schedule; as reprinted by: U. S. Bureau of Labor, Bulletin No. 102, "British National Insurance Act, 1911" (U. S. Government Printing Office, Washington, D. C., 1912) ; and International Labour Office, Compulsory Pension Insurance, op. cit., p. 93.
462
464 States as a whole, in those areas providing aid to dependent children in 1931, the number of children aided per 10,000 of total population was 28--a higher ratio than that under the insurance laws of Czechoslovakia and the Netherlands, but much lower than the ratios prevailing in Great Britain and Germany. On the other hand, if all the areas in the United States administering aid to dependent children should come up to the standard attained in Wisconsin of assisting 24 families or 76.2 children per 10,000 of total population, the ratio in the United States would be exceeded only by the much higher ratio of 116.2 in Germany. In other words, comparison of these ratios reveals that insurance per se is not necessarily the means of assisting a larger proportion of orphaned children than the United States is already aiding or could aid under laws for aid to dependent children, if the legislation and administration were brought up to the best existing American practice. Foreign countries as well as the United States, however, fell short of an ideal which would be that of providing generous survivors' pensions for all persons included in a contributory old-age insurance system. Comparison of the number of widows and children pensioned under the various systems per 10,000 insured in each system also reveals significant variations. Germany and Great Britain again show the highest ratios. Within each country the ratios vary for each individual group of workers covered: The miners, where insured in special funds, show higher rates than other workers insured in other funds, as in Germany, Czechoslovakia, and the Netherlands. In Germany widows and orphans of wage earners have higher ratios than those for survivors of salaried employees; in Czechoslovakia the positions are reversed. A comparison of the ratios of widows pensioned with those of children in each of the various insurance systems reveals that in general the number of widows pensioned per 10,000 insured is higher than that for the children in all but four instances--among workers in Czechoslovakia, Germany, and Luxemburg and among miners in the Netherlands. In these countries, however, the widow is eligible for a pension only if she is an invalid; otherwise she must be 65 years of age or over, as in Czechoslovakia and Germany; or have two or more dependent children, as in Czechoslovakia; or in Luxemburg, be 55 or over or have three or more dependent children.{10} In other instances the children constitute from 17.65 percent up to 72.9 percent of the widows aided. In Great Britain, where a pension is granted widows, regardless of incapacity or age, the children are but 57.7 percent of the widows pensioned. This preponderance of widows over orphans might be explained if pensions to children terminated at a very young age; but, as it has been pointed out, children are eligible for pensions in the different countries at ages ranging from 13 to 18 years. The benefits provided under survivors' insurance consist of pensions to widows and to children, and in some countries an additional temporary pension, or, as in Russia, a funeral benefit is provided. Such benefits are granted only to survivors of insured persons whose insurance records meet certain standard specifications, such as length of insurance, number of insurance contributions, age at entry into insurance, length of period married. In addition, pensions usually are provided only to those widows who meet certain specifications. {11}Under insurance plans for wage earners, as distinguished from those for salaried employees, a pension is often payable only if the widow is incapaci- {10}Armstrong, op. cit., ch. X, pp. 629-632. {11} Ibid.; International Labour Office, Compulsory Pension Insurance, op. cit., pp. 227-362.
465 tated; or, if she is not incapacitated, only if she has reached a specified age; or, as in Austria, Czechoslovakia, and Luxemburg, if she has a specified number of dependent children (two or more in Austria and Czechoslovakia and three in Luxemburg). In only a few countries are widows of wage earners granted a pension regardless of incapacity or age-for example, as in Belgium, Great Britain, and France. In the Netherlands a widow may draw a pension only if the husband was not in receipt of an invalidity pension at the time of his death. In some countries conditions under which widows of salaried employees may draw pensions are more liberal than those for widows of wage earners. For example, the German insurance for wage earners grants a pension to their widows only if they are more than 65 years old or are incapacitated to the extent that they are unable to earn one-third of the amount usually earned by able-bodied women; widows of salaried workers are entitled to a pension regardless of physical incapacity or age.{12} Pensions are payable to children only while they are under a specified age, varying from a minimum of 13 years in France to a maximum of 18 in Luxemburg and Austria, although the last law is not enforced.{13} The pension granted is usually a proportion of the invalid pension to which the deceased would have been entitled. In the case of half orphans, the pension ranges from 15 to 25 percent of the pension of the insured; whole orphans receive higher per-capita amounts, from 30 to 40 percent. In France a pension is payable to half orphans only when there are three or more children, and to whole orphans regardless of the number. Other countries make no distinction between children with one or both parents dead. Thus, in Yugoslavia, where the law is not yet enforced, children are entitled to one-fourth of the pension of the deceased parent; and in Germany to two-fifths. The total pension to all survivors is usually limited to the amount of the invalidity pension to which the deceased would have been entitled; in Germany it is further limited by the provision that it may not exceed 80 percent of the earnings of an able-bodied worker in the occupation of the deceased.{14} Great Britain, on the other hand, provides a fixed pension of 5s. a week for the first half orphan; 3s. weekly for each additional half orphan, and 7s. 6d. weekly for each whole orphan. For widows the pension also is usually a portion of the pension to which the deceased would have been entitled. In a few countries it is a fixed amount,{15} as the ls. weekly pension to widows in Great Britain. It is impossible to give any definite sums as the pensions payable to widows and orphans because these usually are but fractions of the invalid pension to which the deceased would have been entitled on the basis of his insurance record, which necessarily varies from individual to individual. However, an effort has been made in table IX-1 to give an approximate idea of the size of the pensions by calculating the average pensions received. These figures have the usual weakness of averages and have the additional shortcoming that they do not include certain lump-sum payments applicable to invalidity and old-age pensions as well as to survivors' pensions, other lump-sum payments at death, and returns of contributions.
{13} Armstrong, op. cit., chart X, pp. 629-632; International Labour Office, International Survey of Social Services, op. cit., p. 498. {14} Armstrong, op. cit., chart X, pp. 629-632 ; International Labour Office, Compulsory Pension Insurance, op. cit., p. 293. {15} International Labour Office, Compulsory Pension Insurance, op. cit., p. 306.
466 The expenditure for widows' pensions in foreign systems is in excess of that for children. The total amounts expended for children's pensions are smaller percentages of the sums granted widows than the percentages which the numbers of children pensioned are of the widows. This difference is reflected in the average size of the pension granted; the pension for children is uniformly less than that for widows. To some extent, of course, there may be overlapping--a widow and her children may both be in receipt of pensions. But in the majority of systems this overlapping is probably small, except in those few instances in which pensions are granted widows with two or more, or three or more dependent children, regardless of the age or physical condition of the widow. On the whole, it may be said that the European systems of widows' and orphans' insurance emphasize protection for the widows. In most instances the widows pensioned outnumber the children, while the expenditure for widows is disproportionately greater--a disproportion which is reduced to some extent by
the possibility of overlapping and the payment of both widows' and children's pensions in the same household. In analyzing the operation of European pension systems, one other question remains--that of the adequacy of the pension grants. Notwithstanding the inadequacy of the average to measure the size of pension grants, the average pension as given in table IX-1 indicates that the pensions are pitifully small. How small they may be in terms of purchasing power in the various countries, it is impossible to gauge in the absence of an international index of the cost of living for the various countries. In table IX-2 the average widows' and orphans' pensions in countries for which data are available are compared with the average weekly wage of unskilled labor in engineering. The widows' pensions range from nearly 6 to 58 percent of the weekly wage for unskilled labor, with the highest
467 ratio in the system for salaried workers in Austria and the lowest for industrial workers in Czechoslovakia. The figures do not suggest that widows and children in foreign countries are more generously provided for than mothers in the United States, where in 1931 a State average of $21.78 a month was the median grant to mothers among the States providing aid to dependent children." {16} U. S. Children's Bureau, op. cit., p. 17. |
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