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The amount of the pension, whether on account of old age or invalidity, is computed as follows: a sum described as the "basis" of the pension is first determined by multiplying the aggregate amount of the contributions paid by 325; the product is then divided by the number of weeks during which the insurance has continued. The number of weeks during which invalid pension has been paid, and the premiums paid in respect of such weeks, are not taken into account in making such computation. The "basis" of the pension is then increased by a sum equal to 14 per cent of the total amount of premiums paid, but this sum must in no case be less than a fifth of the "basis." In accordance with this formula an insured person who has paid 48 weekly contributions each year from the age of 20 to the age of 70, and whose wages were $5 a week up to the age of 25, $6 a week up to the age of 30, and $7 a week thereafter would be entitled to a pension of about $2.30 a week at the age of 70. In the event of his becoming incapacitated at the age of 30, he would from that time onward receive about $1.25 a week. Should such incapacity not occur until his 40th year, he would receive about $1.50 a week, and if it did not occur until his 50th year, he would receive about $1.80 a week.

Medical or surgical treatment at home or in a hospital may be provided when it is believed that an insured person might, without such treatment, become permanently incapacitated. If such person has 150 weekly contributions to his credit, provision may be made for the payment on behalf of his children under 13 of two-thirds of the estimated amount of the invalidity pension to which he may be entitled.

Provision is also made for the granting of invalidity and old-age pensions. To persons who voluntarily insure, contributions of two florins ($0.80) may be paid whenever the insured desires, but no more than 80 contributions are to be taken into account for any year. The amount of the pension is to be 1.5 per cent of each contribution for each half-year which shall have elapsed between the dates of the payment of the contribution, and the receipt of the pension, excluding, however, years during the major portion of which invalidity pension was received.

An annual State subsidy of 10,000,000 florins ($4,020,000) is to be paid for a period of 75 years. Before 1914 the government paid the districts a subsidy of 50 florins ($20.10) per pension. The estimated cost for 1914 for invalidity pensions was 9,500,000 florins ($3,819,000), and for old-age pensions 4,750,000 florins ($1,909,500), a total of 14,250,000 florins ($5,728,500) for all pensions paid in 1914. Pensions are paid through the State Insurance Bank and Local Labor Councils.

Sources. Maandschrift van het Centraal Bureau voor de Statistiek, 1914; British Board of Trade Labour Gazette, July, 1914; Staatsblad, van het Koninkrijk der Nederlanden, 1913, Nos. 205, 272, 281.

Greece. A compulsory invalidity and old-age insurance act was passed in 1907. It is restricted to Greek sailors and the cost is borne in equal shares by the insured, the employer, and the government. No statistics as to the operation of this act are available.

Source.- Statistisches Jahrbuch für das deutsche Reich, 1914.

Luxemburg. Compulsory invalidity and old-age insurance laws were passed in 1911 and 1912. All persons having an annual income of not less than 3,000 marks ($715) must insure. The pensionable age is 68 years. Invalidity is defined as inability to earn two-thirds of normal wage. Institutional care to prevent permanent invalidity and support of dependents may be granted. In the event of death before a pension becomes due, death benefits may be paid to the widow or the children of a pensioner. The contributions are at the rate of 2.1 per cent of the wage earned, and are paid in equal shares by the insured and the employer. The State pays a subsidy of 48 marks ($11.43) for every insured man and 38.40 marks ($9.15) for every insured woman. Compulsory insurance may be augmented by voluntary insurance for persons receiving an annual income not exceeding 3,600 marks ($858).

Iceland. Under a law dated July 11, 1890, a compulsory system of old-age and invalidity insurance was established. All servants between the ages of 20 and 60, all day laborers, and persons working with their parents must annually contribute to this fund 1 krone ($0.27) for men, and 30 ore ($0.08) for women. The male head of each household must pay this contribution for every person who resided with him during the year, but he may deduct it from the wages of his employees. For non-payment of these contributions, property may be attached. The only persons exempt from paying contributions are those without means who are responsible for maintaining one or more dependents who are unable to provide for themselves; those unable to earn wages on account of sickness or other causes; and those who have provided for their old age by purchase of an annuity of at least 150 kroner ($40.20).

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Pensions are granted to persons over 60 years of age who have received no poor relief during a prior period of ten years. The minimum pension is 20 kroner ($5.36) and the maximum pension granted may not exceed 200 kroner ($53.60).

For the first 10 years after the establishment of these relief funds all contributions plus accrued interest must be added to the funds. In later years one-half of such contributions plus interest is added to the funds, while the remainder is distributed in pensions.

Funds are administered in cities by the magistrates, in rural communities by the parish council, and these officials may set aside, as their salaries, 4 per cent of all contributions levied. They must also elect two persons who audit the annual balance sheet of the respective funds. Source. Lov om Understottelseskasser for Almuesfolk, cited in Zacher, Die Arbeiterversicherung im Auslande, 1898.

NON-CONTRIBUTORY OLD-AGE PENSIONS.

Although non-contributory old-age pension systems have been adopted in only a very few countries, the operation of these systems is being considered with a great deal of interest, particularly since the passage, in 1908, of the act which provided for the payment in the United Kingdom of old-age pensions on the non-contributory plan. This pension scheme, while not yet fully perfected, appears to have worked surprisingly well, and it has, therefore, been discussed at some length. Similar systems, previously adopted in Denmark, New Zealand, Australia, and New South Wales, have also been considered.

This form of old-age relief is justified by its advocates on the ground that all persons who have, for a considerable portion of their adult lives, engaged in honorable labor are entitled to freedom from anxiety on account of their physical needs during their declining years. Accordingly, in all such systems deserving persons only, who are without property or sufficient income to provide for immediate necessities, are eligible to receive pensions.

United Kingdom. The British old-age pension act was passed in 1908 and revised in 1911, and was the result of earnest consideration for at least twenty-five years during which five parliamentary commissions had investigated the subject and many different plans had been proposed. The non-contributory plan was adopted because that was the plan favored by the labor party and because there was urgent need of immediate relief. About one-fifth of the whole population of the United Kingdom above the seventieth year were actually paupers when the act was passed, and it was recognized that no plan of contributory insurance could be of any avail to those who were already aged. Both men and women, married or single, over seventy years of age, of British nationality, who for 12 years out of the last 20 years before consideration of their claims have been resident in the United Kingdom, and whose annual income does not exceed £31 10s. ($153) are eligible for pensions. The "character" disqualifications are:

(1) Habitual refusal to work according to ability, opportunity and need.

(2) Imprisonment for crime during the preceding ten years, without the option of a fine. Such imprison. ment for six weeks disqualifies for two years after release, imprisonment for a longer period disqualifies for ten years.

(3) Conviction under the inebriates act, which disqualifies for six months unless otherwise directed by the judge. Habitual inebriety may disqualify for ten years.

(4) Persons under detention as lunatics, and inmates of institutions where board and lodging amounts to an income above the pensionable limit are disqualified.

More important in actual effect than any of the foregoing is the disqualification of those in receipt of poor relief, except medical aid, after the granting of a pension. This may be termed a "thrift" test since it assumes that a pensioner should have some means of his own to supplement his pension. Under the original act the receipt of poor relief by any dependent of a pensioner was a disqualification, but the amendment of 1911 restricts the disqualification to the pensioner himself. A pension may be revoked for any cause which would disqualify a new applicant.

The amount of the pension varies with the pensioner's income, being 5s. ($1.22) per week for incomes of not more than £21 ($102) and graded in such a way that the total income (including the pension) shall not exceed £34 ($165). The income from any property is reckoned at 5 per cent per annum of its net capital value, irrespective of the actual income therefrom.

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In the case of a married couple, the income of each is taken to be one-half of the total income of both. Nearly all pensions (about 94 per cent in 1912) are for the full amount of 5s. ($1.22) per week.

The normal pension of £13 (about $63 a year) is low when judged by an American standard. Still it is notably higher than the average German old-age or invalidity pension ($40 and $48 respectively). Moreover an aged couple in Great Britain receives two pensions, whereas in Germany such couple receives but a single pension. Thus the total annuity of a married couple is nearly three times as large in the United Kingdom as in Germany.

At the close of the fiscal year, 1914-1915, the number of pensioners was 987,238, having increased from 647,494 in 1909, and from the outset the number was much greater than had been anticipated. The actual enrollment in the first three months exceeded the estimates for the second year by 250,000. This great discrepancy between the estimated number and the actual number shows that the pension system uncovered much unsuspected poverty among the aged. It was supposed that only one-third of the population 70 years of age and over could qualify for a pension, but as a matter of fact 624 out of each 1,000 persons of pensionable age in England and Wales were on the pension rolls, according to the Census of 1911. This means that only two out of every five aged persons were in receipt of an annual income of at least $153, from earnings or savings. For the United Kingdom as a whole, the proportion was 637 per 1,000.

The great increase (over 200,000) in the pension roll between 1910 and 1911 was due to the removal of an important disqualification. As the act first stood, the receipt of poor relief at any time after January 1, 1908, was a bar to the granting of a pension. The removal of this disqualification at the close of 1910 added 160,000 names to the pension roll. In other words, 160,000 persons who were 68 years of age or over in 1908, received poor relief before attaining the age of 70 years. This is rather conclusive evidence that the pensionable age is altogether too high.

The cost of pensions has increased correspondingly. Thus during the fiscal year 19081909, the expenditure was £8,077,110, 12s. ($39,307,259), having increased to £12,315,061, 4s. ($59,931,245) for the fiscal year, 1912-1913.

The present "character" and "thrift" tests are less severe than under the original act; nevertheless, 12,941 persons were disqualified under these tests during 1913. Of this number, 10,092 were disqualified because of receipt of poor relief after the granting of a pension. In some cases pensioners preferred to be maintained in the workhouse to subsisting upon such a small pension as $1.22 per week. In other cases, there was a deliberate attempt to secure both forms of relief. By means of "character" and "thrift" tests about one person in every thirty applicants is disqualified. One of the arguments advanced by advocates of an old-age pension was that the cost would, to a large extent, be offset by the reduction in poor relief, and this, in a measure, has been found to result. The number of workhouse (almshouse) inmates 70 years of age and over in England and Wales has, it is true, greatly decreased, but, as such persons are, for the most part, physically or mentally unfit to maintain an independent life, even with the aid of a pension, a better test is afforded by the number of persons seventy years and over who received "out-relief." The decrease in the number of actual paupers in England and Wales since 1910 has been 70.9 per cent. However, the old-age pension system, while resulting in a decreased expenditure on account of almshouse and out-relief, as such, has on the other hand added greatly to the budget of England and Wales, and it has been estimated that old-age pensions have cost at least four times as much as would have been expended under the former systems of poor relief.

The maximum pension of £13 ($63 per annum) is less than one-half the cost of maintaining a workhouse inmate and less than twice the cost of giving "out-relief" to the same individual. The great increase in the cost of old-age pensions, over poor relief, is, accordingly, due to increase in the number of persons relieved. The pension roll of England and Wales on March 31, 1915, comprised 691,405 names, of whom 3,413 received institutional care, and 5,897 received outdoor relief, both of non-disqualifying character. The old-age pension system, therefore, in part replaces poor relief, in part supplants private charity, and in part supplements incomes too small for proper maintenance.

The principal defects of the old-age pension system are as follows: (1) The maximum pension of £13 ($63.26) a year is too small and the income limit for eligibility of £31 10s. ($153) a year is too low, in view of the fact that the cost of living has risen considerably since 1906; (2) the pensionable age of 70 is too high, for the reason that a large proportion of those in need of a pension become incapable of earning a living long before reaching 70 years of age; consequently an old-age pension ought to be granted as soon as one becomes unable to earn a living, at whatever age, such cases being but partially provided for by disablement benefits under the Insurance Act. Furthermore, disablement benefits are received only by insured persons, who constitute less than 50 per cent of the population over 16 years of age and who receive an income of less than £160 ($779).

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The old-age pension act is administered by the Local Government Board under which are local pension committees for boroughs and urban districts and paid district pension officers. These authorities have worked together very conscientiously, and have displayed tact and sympathy. The cost of administration for 1913 was about 9s. 8d. ($2.35) for every £100 ($487) of pensions granted, or less than 5 cents for every dollar distributed.

Although it has been found necessary to amend the old-age pension act from time to time, and although the system has yet to be perfected in certain details, it has operated quite satisfactorily even during the short experimental period of less than eight years. The system has proved to be a source of real blessing to the aged and deserving poor, not only because of its provision for material needs late in life, but because it removes the cause of great anxiety with respect to their physical needs during advancing years.

Sources. 7 Edward VII, c. 40; 1 & 2 George V, c. 16; Annual Reports of Local Government Boards, 191315; Report on Old Age Pensioners and Aged Paupers (England and Wales) (Cd.7015); Fourth Report of Commissioner of Customs and Excise 1913 (Cd. 6993); British Statistical Abstracts; British Board of Trade Labour Gazette, 1913; The Labour Yearbook, 1916; H. J. Hoare, Old Age Pensions, 1915.

Denmark. The oldest of the non-contributory pension systems is that of Denmark, which dates from 1891. The pension age (60 years) is the lowest fixed by any country. The income and property qualification is rather vague, namely: Inability to provide one's self and dependents with necessary subsistence. The required residence is only 10 years. The character" and "thrift" tests, on the other hand, are unusually rigorous. No one shall receive a pension who has ever been convicted of crime, unless subsequently restored to civil rights, or who has received any poor relief, except medical aid, for one's self or dependents, during the five years next preceding the application for a pension, or whose own poverty has been due to extravagance or disorderly habits.

The amount of the pension is not determined by fixed rules but varies with individual circumstances, and must be sufficient for support, when supplemented by the pensioner's other income. In computing the pensioner's means no account is taken of any income, ownership of dwelling, etc., amounting to an annual income of less than 100 kroner ($26.80). In contrast with Great Britain, New Zealand, New South Wales and Australia, where man and wife receive separate pensions, the family in Denmark is treated as a unit, and the pension granted to the head of a family is for the support of himself and his dependents. The average pension increased from $27.23 in 1895 to $42.89 in 1907, this increase having no doubt been made in consideration of the increasing cost of the necessities of life.

There is much variation in the amounts of pensions granted to individuals, being larger for heads of families than for individuals, and higher in Copenhagen than elsewhere. Of single men only 37.5 per cent, and of single women only 33.4 per cent in the country as a whole, received more than 200 kroner ($54) during the fiscal year 1911-12. The total number of beneficiaries during that period was 79,340. Of this number 16,710, or 21 per cent, were heads of families; 20,085, or 25 per cent, were dependents (mostly wives); 9,356, or 12 per cent, were single men; and 33,034, or 42 per cent, were single women. As in other countries the number of pensioners has increased faster than the population, having been 60,066 in 1902 and 79,340 in 1911.

This increase is partly due to the removal of disqualifications by successive amendments to the original act and partly to a greater familiarity with the provisions of the act, but more particularly to the great desire on the part of the aged to avoid applying for poor relief between the fifty-fifth and the sixtieth year, so that they may be eligible to receive a pension.

Since the inauguration of the system the aggregate cost has increased enormously. In 1912-13 the country spent 13,100,000 kroner ($3,510,800) as compared with 2,600,000 kroner ($696,800) in 1892. In 1913-14 the total net disbursement was 14,013,954 kroner ($3,755,740), of which the State paid 7,054,354 kroner ($1,890,567), the cost being about equally divided between the national government and the communes.

As in New Zealand, pensioners who are unable to care for themselves are cared for in special homes, some of which are in groups of detached cottages, others are single large buildings. The inmates are under no special restraint and much concern for their comfort is shown. In 1911-12, three per cent of the total number of pensioners were cared for in these homes at a cost of 1,059,834 kroner ($284,036).

Old-age pensions are administered primarily by the municipal and communal authorities, under whom serve paid and well-trained inspectors. The Minister of the Interior has general supervision and to him are referred appeals from decisions of the local authorities. As the authority to fix the amount of pensions rests with the local officials the amount of pensions granted, particularly in the rural communes, is kept rather low from motives of economy, resulting in some dissatisfaction and provision for appealing from such decisions is therefore made.

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Sources. Annual Report of the U.S. Commissioner of Labor, 1909, Vol. I, pp. 623-649; Statistisk Aarbog, (Statistical Yearbook) 1912 and 1915; Statistiske Meddelelser, København 1914, Alderdomsunderstøttelsen, 1902-12, ch. V.

New Zealand. The New Zealand old-age pension system was established in 1898. The Act was amended in 1905 so as to provide that investigations of claims might be heard in private. By amendments in 1912 and 1913 the acts relative to widows' and military pensions were merged with the old-age pension act.

All persons, 65 years of age and over, except aliens and Maoris, who have been citizens for at least three years, and who have resided in New Zealand for at least 25 years (four years absence being allowed), whose property does not exceed £260 ($1,265), and whose income does not exceed £60 ($292) per year, or whose joint income in the case of a married couple does not exceed £90 ($438), are eligible to receive a pension, provided that the applicant has led a sober and reputable life for at least one year next preceding application, has not been imprisoned for as much as four months within five years, or for as much as five years within 25 years, and has not deserted his (or her) family within 12 years.

The amount of the pension is £26 ($127) per annum, less £1 ($4.87) for every £1 of income over £34 ($165) and for every £10 ($48.67) of net property above £50 ($243). In the case of a married couple it is estimated jointly and equally divided. Life insurance is not counted as property and income from property is disregarded (being offset by the property limit). A pensioner may retain a homestead to the value of £650 ($3,163), which shall revert to the colony at the death of the pensioner. Parents having two or more children may, in case of need, receive a pension, in the case of the father at the age of 60 years, and in the case of the mother at the age of 55 years. Such pension to parents is the same in amount as an old-age pension, but may be increased by not more than £13 ($63) per year if required by circumstances. Pensioners who require institutional care, or who are unable to maintain homes for themselves, may be maintained in suitable homes or hospitals. The cost of maintenance in such cases is deducted from the pension.

The number of old-age pensioners at the close of the fiscal year ending in 1913 was 16,509, constituting 36 per cent of the entire population qualified by age and residence for receipt of a pension. The great majority (14,017) were receiving the "normal" pension of $127. Only 32 were receiving parents' pensions above the normal amount. The total amount of pensions paid during the fiscal year was £415,761 ($2,023,301) or 7s. 10d. ($1.91) per capita. On March 31, 1915, there were in force 19,352 pensions which represented an amount of £475,970 ($2,316,308), while the estimated population, exclusive of Maoris, was 1,095,994 on December 31, 1914. The per capita cost was therefore 8s. 8d. ($2.11) in 1914.

The New Zealand old-age pension law is administered by a Commissioner of Pensions and by district Registrars, most of whom are court clerks. Pensions are paid monthly, in advance, through the post office.

It must be said that the pension system has not resulted in materially reducing expenditures in the form of public charitable aid, but it has tended to decrease voluntary charitable contributions, for the reason that tax payers who have contributed toward the pension funds through taxation appear to be disposed to reduce their voluntary contributions to public charities.

Sources. 62 Victoria, No. 14; 64 Victoria, No. 28; 8 Edward VII, No. 245; 1 George V, No. 45; Annual Report of the Pensions Department, 1913; New Zealand Official Year Book, 1913-1914; Le Rossignol and Stewart, State Socialism in New Zealand, 1910; Statistics of New Zealand, Pt. 1, 1914.

Australia. The Australian invalid and old-age pension law became operative July 1, 1909. Prior thereto the separate States of New South Wales, Victoria and Queensland had established pension systems of their own, so that the Commonwealth Fund took over some 60,000 pensioners in December, 1909, when the separate systems were combined in a single system.

The Australian law is very similar to that of New Zealand. The pension age is fixed at 65 years for men and at 60 years for women. The residence, race, citizenship and character qualifications are similar to those of New Zealand. The property limit is £310 ($1,509).

An invalidity pension is payable to any person above the age of 16 who is permanently incapacitated for work provided that he (or she) shall have resided in Australia for at least five years, is not receiving an old-age pension, has no claim upon an employer for accident compensation, has become permanently incapacitated while in Australia, did not purposely produce the incapacity, and does not have property or income in excess of the old-age pension limits.

The annual pension is such as the Commissioner (or Deputy Commissioner) of Pensions in each case "deems reasonable and sufficient", but must not exceed £26 ($127) per annum nor be such as to bring the pensioner's total income above £52 ($253). The "normal" pension