HISTORICAL DEVELOPMENT  : This article is based on NATIONAL INSURANCE which is really outside the scope of activities of those engaged in commercial insurance but a knowledge of what is involved in the national scheme is important, not only for the purposes of:, examination, but also for the sake of completing and rounding off our, Knowledge of insurance protection.

Background
Almost all who will read this book will have spent their entire lives under the protection of some form of "welfare state". In these circumstances it is extremely difficult for us to cast our minds back to pre-welfare state days but such days did exist and they were very harsh. Many plays, books and films portray the lot of the unfortunates who found themselves unable to earn a living through ill health or just through lack of work. The Elizabethan Poor Law Act (160 I) really marked the start of the state assuming some responsibility for social security and the responsibility for the relief of poverty was placed on the parish within which a person lived.

Although the eighteenth and nineteenth centuries saw the progression of the Poor Laws and the existence of workhouses, the coming of the industrial revolution and the consequent move towards towns made the position acute. Some employers did a little to help employees but the position was bleak, well described in many Dickens novels, especially for the underprivileged such as orphans, widows and
the elderly.

State intervention
A Royal Commission on poor law and relief was established in 1905 and it recommended the separate treatment of sickness, unemployment and old age. A National Insurance Act was passed in 1911 introducing the three-fold method of payment involving employers, employees and the state. The Act provided for sickness and maternity benefits for manual and certain non-manual workers. The Act also introduced unemployment insurance. A number of amending statutes were passed in following years but the landmark came in 1942 with the publication of the Beveridge Report on Social Insurance and Allied Services. The government accepted the report in principle and an extended scheme of National Insurance began in August 1948.

NATIONAL INSURANCE TODAY
Britain's current system dates back to 1948 and the Beveridge Report and is operated by a number of local offices spread throughout the country.

Operation of the scheme
In general everyone in Britain pays National Insurance contributions if they are sixteen or over and employed with earnings above a minimum level or alternatively are self-employed. It is these contributions together with employers' payments and state contributions that pay for benefits. Rates of contributions do change and schedules are available from the Department of Health and Social Security but a rough guide as to the proportions each pay would be that employers pay, on average, twice what the employee pays.

Classes of contribution
Class 1 contribution. These are paid by employees and their employers. The contributions are calculated on gross pay and are collected through P A YE income tax arrangements. The contributions are earnings-related.
Class 2 contributions. Paid by self-employed people, normally by direct debit to a bank or by stamping a contribution card.
Class 3 contributions. These are voluntary and can be paid to enable a person to qualify for extra benefits, as shown on the schedule of benefits below.
Class 4 contributions. Paid by self-employed people when profits are over a specific level in any tax year.
 
The benefits available
The benefits shown below are paid out of the National Insurance Fund but entitlement depends, among other things, on the amount and class of contributions paid.

Unemployment benefit. Only class 1 (employees) contributions count towards this benefit and it is available to people who are out of work but fit and available for work should it be available. A basic rate is paid plus an amount for wife or adult dependent, an amount for each child and in certain cases an "earnings-related supplement".

Sickness and invalidity benefits. Sickness benefit is payable to people who can provide medical evidence of their inability to work. Benefits are paid in the same way as for unemployment benefit. Where someone has been in receipt of sickness benefit for more than twentyeight weeks they go on to invalidity benefit.
 
Maternity allowance. Where a woman has paid, herself, full-rate contributions on earnings in the tax year related to her claim she is entitled to an allowance of a fixed amount for up to eighteen weeks.And we can see more articles directory related to NATIONAL INSURANCE.

Maternity grant. Every woman who has a baby is entitled to the oneoff maternity grant, presently £25, where either she or her husband have been making contributions.

Widows' benefits. Widows' benefits are based on the late husband's contributions and take the form of a widow's allowance payable for the first six months of widowhood, a widowed mother's allowance t