World Trends in Social Security Benefits, 1955 to 1957 by CARL H
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World Trends in Social Security Benefits, 1955 to 1957 by CARL H. FARMAN* Most yearsfrom the 1880’s to thepresent have seen the enact- 1956 enacted a new Social Security ment of laws establishing new social security programs or Code that introduced old-age insur- expanding existing ones. Programs established before 19.55 ance for the flrst time and consoli- have been reported in earlier issues of the Bulletin and in special dated it with health and maternity reports by the Social Security Administration. New legislation insurance and workmen’s compensa- affecting the various programs is summarized in the first part tion, as well as with other related of the article; some of the details of the most important changes programs. Iraq in 1956 adopted and are given, country by country, in the supplement. put into effective operation a new program providing both long- and short-term benefits, which may not, however, exceed the balance in the MONG the more notable changes United States, all of which added new individual’s own social security ac- A in social security programs dur- groups of self-employed persons to count at the time he claims benefits. ing 1955, 1956, and early 1957 those covered by one or more pro- In effect, therefore, the program sets were the widespread increases in grams. Argentina extended the pro- up what is essentially a compulsory cash benefits, the enactment in three tection of old-age, survivors and dis- savings or provident fund. countries of laws establishing entire- ability insurance to domestic serv- The following tabulation shows the ly new programs, and the adoption ants, and Austria covered female number of countries with various of new techniques developed in the domestic servants under unemploy- types of programs as of January 1955 search for ways of providing adequate ment insurance. Cuban retirement and, according to the latest available benefits.1 The benefit increases were programs began to operate in several information, as of March 1957.2 pronounced in industrialized coun- new occupational fields. In Uruguay, tries with long-established social se- agricultural employers came under curity programs. The new legislation the family allowances program. has naturally appeared in less in- Another type of coverage expan- I Countries with pro- i gl%IllSin opers- dustrialized nations-specifically Boli- sion-to additional areas in countries tion via, Iraq, and Nicaragua. The new where the social security system did Type of progrsm !-------- developments in theory and methods not originally operate throughout a ! January March have arisen in Western Europe, most nation’s territory-occurred in Colom- i 1955 1957 notably in Denmark, France, and bia, India, Mexico, Panama, and Ven- Old-age, invalidity, and Germany. ezuela. .SUWiVOrS hlsurancc i (or p+miOns).~~.. ___._-/ Major Program Developments In Finland, Germany, Mexico, the Health and maternity in- 1 Netherlands, and Spain, protection surance+ _______________I 45 I 47 Workmen’s compensation. ! 72 74 Expansion of coverage continued, of more persons has resulted from Unemployment insurance. _ 20 as in former years, with various the adoption of higher income limits Family allowances _________., F4 34 methods being used. Countries where for coverage. the program was expanded to cover Legislative activity was most pro- lIncludes Iraq (omitted from the count in the 1956 Rzcllelin article) Iwhose Labor Code of 1936 new occupational groups include Bel- nounced in old-age, invalidity, and provided for workmen’s compensation. gium, Germany, Norway, and the survivors insurance programs; it Under legislation adopted in 1956* f Division of Program Research, OfiCe was least apparent in unemployment of the Commissioner. insurance and family allowances. new programs of old-age, invalidity, 1 For reports on legislation enacted be- There were few marked changes dur- and survivors insurance became op- fore 1955, see (1) Old-Age, Survivors, and ing the period 1955-57 in health and erative in January 1957 in Bolivia Invalidity Programs Throughout the World, and Nicaragua. New health and ma- 1954 (Report No. 19, Division of Research maternity protection and workmen’s and Statistics), June 1954; (2) Health and compensation proDrams.D ternity insurance programs are now Maternity Insurance ThToughoutthe World, Three new laws of a general char- operating in Burma (act of 1955, 1954-Principal Legislative Provisions in 48 acter are noteworthy. Nicaragua effective 1956) and Nicaragua. Ghana Countries (extracted from part 8 of the and Tunisia are listed for the first Hearings before the House Committee on adopted in 1955 a unified system Interstate and Foreign Commerce. 1954), under which insurance against sick- time among the independent nations 1954; and (3) Social Security Legislation ness, old-age, permanent disability, with workmen’s compensation pro- Throughout the World-Five Charts SUm- death, and work injuries became op- marlzing the Principal Legislative Pro- s See Carl H. Farman, “World Trends in visions (Report No. 16, Division of Re- erative in the national capital in Social Security Benefits, 1936-55,” Social search and Statistics), 1949. January 1957. Bolivia in December Security Bulletin, May 1956. Bulletin, August 1957 3 grams, but the legislation dates from ting beneflts was discarded for a Denmark now offers a more favor. 1941 for Ghana and from 1921 for formula using a percentage of aver- able provision than before for persons Tunisia. age wages, plus increments. The av- who defer receipt of their pension erage pension determined under the beyond the age when they might Old-Age, Invalidity, and new formula is estimated at 790 receive it. The “waiting allowance” Survivors Insurance crowns a month: the average wage is 10 percent of the basic pension for Pension reform, fundamental in in industry is 1,300 crowns. Existing men who delay their claim until they nature and widespread in effect, has pensions were increased an average are aged 70 and for women who wait been the leading social security de- of 10 percent, but the rise did not until they attain age 65. It is 15 velopment in the period 1955-57. bring them to the level of those percent if the man waits until age Amending laws made extensive computed under the new formula. 72, and the woman until age 67. changes in the benefit structure of In adjusting the beneflt formula Funds to finance the old-age pen- most European programs and of sev- to favor workers in certain occupa- sions, which for more than 65 years eral systems elsewhere. The higher tions, Czechoslovakia followed the had been paid in full by the Govern- benefits thus provided reflect, at typical Eastern European approach ment, are now met in part by an ear- least in part, increases in living costs under which retirement age, qualify- marked income tax of 1 percent. and in national output and produc- ing period, method of computing Persons with low incomes are ex- tivity. benefits, and other elements affecting empted: the tax is not collected if Several countries passed legislation the status of the claim are related the contributions by a person with making other types of change. to the kind of employment. Under- dependents would amount to less Amendments adopted in the United ground miners and aviation (flight) than 40 crowns a year or by a single States in 1956 3 introduced perman- personnel, for example, make up the person to less than 25 crowns. In ent disability insurance for persons first of three groups or categories; disability insurance, which has al- aged 50-64 and thus expanded sig- they may receive an old-age benefit ways had separate financing, the nificantly its old-age and survivors 5 years earlier than the other groups; amount of the flat-rate contributions insurance program. Coverage was their basic benefit is higher than that is increased. extended on a contributory basis to received by other workers; and the In Finland an act of June 8, 1956- the Armed Forces and to practically annual increments are also greater. effective January 1957-provided for every occupation except self-employed Europe’s oldest noncontributory increased benefits and for abandon- physicians, and the minimum retire- pension program is that of Denmark, ing the principle of a large old-age ment age for women was lowered which had built up an elaborate sys- reserve fund. The dual nature of the from 65 to 62. tem of special allowances; fuel and pension-part being paid subject to In Belgium, which has a large clothing allowances and additional an income test and part as a right- number of aged persons in relation payments for very advanced age and is continued. The basic pension paid to the total population, the emphasis other special causes supplemented the to all covered workers was raised has been on long-range pension plan- basic pension. By the act of Oc- from about 4,000 marks a year to ning. The present system for wage tober 2, 1956, most of these supple- 24,000 marks. The supplements for workers, established by a 1955 law, ments were merged with the “basic persons without other income vary- is an insurance program with a pension,” which was raised to a level according to cost-of-living area--from rather high minimum for all bene- some 13 percent higher than the 54,000 marks to 72,000 marks (pre- ficiaries. The “normal” benefit is amount of the former basic pension viously they varied from 28,000 to based on the assumption of 45 years’ and supplements combined. The full 42,000). No part of the pension is re- coverage. payments are subject to an income lated to previous contributions, be- Provision is made for automatic test, which is, however, more liberal cause the basic pension has now changes in the benefit level if speci- than the previous requirements.