The object of this Bill is to provide that certain sections of the Widows' and Orphans' Pensions Act, 1935, which are due to lapse on 6th January, 1941, shall continue in force. It is concerned only with the contributory provisions of the Act of 1935, in so far as they apply to workers in agriculture. It does not in any way affect the non-contributory scheme of pensions.
Under the contributory scheme of pensions established by the Act of 1935, which is the Principal Act, contributory pensions are granted, without any means test, to the widows and orphans of persons who, when they died, were insured persons under the Act and had paid a certain minimum number of contributions. The normal rate of contribution is 8d. per week for a man and 4d. a week for a woman, the employer paying half the contribution in respect of men and the whole contribution in respect of women. In return for these contributions, contributory pensions are payable at the rate of 10/- a week for a widow, 5/- a week for the eldest dependent child of a widow, 3/- a week for each other dependent child of a widow and 7/6 a week in respect of each orphan child.
It was recognised, however, that it would be proper to have regard to the lower level of wages paid to agricultural labourers as compared with other insured persons. Accordingly, the Principal Act provided that during the five years beginning on the second appointed day, which was the 6th January, 1936, these rates of contribution and benefit should be modified in their application to persons and the widows and orphans of persons engaged in agricultural employment. Instead of the full contribution of 8d. for a man and 4d. for a woman the contributions for agricultural workers were fixed at 4d. per week for a man, of which half is payable by the employer and 2d. a week for a woman, paid in full by the employer. This provision is contained in Section 38 (1) (b) and Part II of the Second Schedule of the 1935 Act. The effect of this provision is to require from persons employed in agriculture only half the rate of contributions applicable to persons engaged in non-agricultural employments. The contributory pensions payable in return for these contributions are 8/- a week for a widow, 4/- a week for the eldest dependent child of a widow, 2/6 a week for each other dependent child of a widow and 6/- a week for an orphan child. These provisions are contained in Sections 10 (2) and 12 (2) of the 1935 Act. It will be seen that whereas the agricultural rate of contribution is only half that of the non-agricultural rate, the contributory pensions payable to the widows and orphans of insured persons engaged in agriculture are approximately 80 per cent. of those payable to the widows and orphans of other insured workers.
These reduced rates of contribution and benefit were to remain in force only for a period of five years from 6th January, 1936, and under the law, as it stands at present, the position is that on 6th January next, the full contributions of 8d. and 4d. will be payable in respect of all insured workers, including insured workers in agriculture. On the other hand, the rates of contributory pension now applicable to the widows and orphans of insured persons employed in agriculture will become the rates at present applicable to the widows and orphans of insured persons who were not engaged in agricultural employment. In other words, if those sections of the 1935 Act, which provide for reduced rates of contribution and contributory pension in respect of agricultural employment, are allowed to lapse, the contributions of insured persons employed in agriculture will be doubled while the corresponding rates of contributory pension will be increased only by one quarter approximately. The Government is of the opinion that this is not desirable, as experience has shown that the lower rates of contribution and benefit applying in the case of agricultural labourers are justified, and when compared with the normal rates, are favourable to both employers and employees in agriculture. The Bill now before the House is, therefore, designed to provide that these provisions will not lapse on the 6th January next. In effect the Bill will merely preserve in the future the present position.