In the highly developed and advanced countries of United States of America, United Kingdom and Australia the law pertaining to Social Security is very well defined and established. It encompasses almost every risk to which the citizens might be exposed to under any eventuality.
The United States of America
Social Security was used first in America in 1935 by passing the Social Security Act and later it was used in different countries. In America the Social Security is well provided and covers every aspect of danger or threat in any sectors of the society whether the risk is major or minor that Americans are likely to be faced with due to any incident.
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Critics claim that social security treats women and minorities unfairly. True, the same rules apply to everybody, but not all mining eligibility have evolved in ways that militate against the interests of those whose employment and earnings histories differ from those of ‘average’ white males. Moreover, differences in marital status and life expectancy exacerbate the situation; some benefit unduly, whereas others are penalized by formulas that apply a single admittedly complex –set of criteria to all.
Public officials have been more responsive to women’s demands than to those of minorities. Both the Court and succession of high-level panels have sought to eliminate gender discrimination. The NCSSR paid scant attention to the pressing needs of aged minorities, but devoted entire meeting to women’s issues. Members of both parties agreed that inequities had to be corrected, but in light of the over-riding need to shore up Social Security’s financing, the commission did not recommend any measures that might greatly increase OASDHI costs. Instead, it fine-tuned eligibility criteria in order to serve the needs of select groups of women. Congress accepted the NCSSR’s recommendations and promised to further consider Social Security’s impact on women by the end of the decade.
Both the basic labor law, the federal National Labor Relations (Wagner) Act of 1935 (NLRA) and the Federal Social Security Act of 1935 (SSA) were enacted in the same year; each had its 50th anniversary in 1985. Both were adopted in the midst of the Great Depression- the most serious domestic social crisis to confront the Republic since the Civil War of 1861-65. Prior to 1935, the great bulk of labor law in the United States consisted of common-law state court decisions and a small body of state statutes the only federal statutory labor laws were the antitrust acts of 1890 and 191453, the Railway Labor Act 1926 (RLA), and the Norris LaGuardia Anti-Injunction Act of 1932.
In America there is a two-tier structure: the first tier is compulsory and it features a flat benefit financed by earnings-related contributions, and the second tier is optional, being fully earnings related on both sides. Thus, it is unfortunately necessary to look at both tiers together before considering the option to ‘contract out’ part of the benefits and contributions.
In America the main feature of the contribution system is that it is earnings related. No contributions are required from those earning lesser than the prescribed limit that is altered by regulations during the month of April every year. Contributions in respect of those earning more than the prescribed limit are periodically altered. The contributors are shared between the employee and employer in the case of industries. In America the main benefit from any retirement pension scheme would be in two components – the first component being a flat pension which is roughly equal to the lower and upper limits earned in the best 20 years prior to retirement and the second component would be the second pension which will be about one quarter of this average pay between the two limits during his best 20 years. On the death of a married male pensioner, the first component of his state pension (without the increase for a married couple-referred to above) is payable to this widow for life, along with an amount equal to his second component pension. In the case of dependent’s pension in the event of death while in service, the pension being the basic component plus any accrued second component, it is scaled down if the widow is less than the age of 50 years, and disappears if she is less than 40 years. A widower’s pension is payable only in the case of invalidity.
There are no lump sum death benefits under state scheme. There are no orphan’s benefits as such under the state scheme except that the age requirements regarding a widow’s pensions are released if the widow has dependent children. A new statutory sick pay scheme, which covers employees, commenced on April 6, 1983. Briefly, statutory sick pay is now paid by an employer if an employee is absent through sickness for four or more consecutive days, and continues for the first eight weeks of illness, not necessarily consecutive, in any one tax year, it is only after eight weeks’ absence due to an illness that an employee begins receiving state benefits. Employers are able to recover the gross amount of any statutory sick pay by offsetting it against the payment of National Insurance contributions. Thus, in essence, the Government has put upon the employer, the responsibility of administering short term sickness provisions.
The United Kingdom
The Social Security in United Kingdom appeared in July 1984. It has such potentially fundamental importance that explained in United Kingdom the personal pension is effectively provided for the employees as follows:
- Personal Pension (PPs) should be available as of right to all employees.
- PPs should qualify for contracting-out of the state earning-related pension scheme.
- Special arrangements should operate for employees whose employers run a contracted-out occupational pension scheme where the membership is compulsory, so as to avoid any threat to the scheme’s finances.
- The test for contracting-out should be based on a level of contributions calculated to bring an adequate pension on retirement.
- No employer’s contribution to a PP should be required, apart from an amount related to the National Insurance contribution rebate for employees who are contracted out.
- PPs would be based on contributions-that is they would be ‘money purchase’ schemes-not based on earnings as are ‘final salary’ schemes.
- Employers would be permitted to contribute to PPs beyond the minimum level required but this would be a subject for negotiation between employer and employee.
- PPs would be required to include an adequate level of widow’s pension on the death of the employee before or after retirement.
- The employees will bear the risk of his PP failing to provide the same level of benefits as would have been available from his employer’s scheme or from the earnings–related state scheme. Neither his employer nor the government will be obliged to top up benefits which have fallen short of the expected levels.
- Comments are invited as to the bodies or institutions that should be allowed to offer PP arrangements and the type of investments which should be permitted.
- Comments are invited as to how the PP system should be administered.
Two suggestions are made in the Consultative Documents. The first involves the setting up of a ‘clearing house’ for contributors and it anticipates that the costs of the clearing house will be borne by the institutions offering PPs-a reflection of the inevitably higher costs of an individual system as compared with a group system. The second suggestion involves the payment of contracted- in rates of National Insurance contributions to the DHSS who would in turn pass on the ‘rebates’ to the institutions providing PPs. Any additional contributions under this alternative would be paid directly to the institution by the employee or employer.
The Consultative Document also invites views on how best to encourage supplementary voluntary provision within existing occupational pension schemes and mentions ways of relaxing the present rules in this direction.
The amount of benefit upon death in service having accepted the need for death benefits, it is necessary to consider how much should be provided. Is the employer going to attempt complete provisions, in conjunction with the social security benefits, or is he merely going to provide a sum to tide the dependents over a period of adjustment to their new circumstances? If a young employee earning about 100 pounds a week dies and leaves a young widow with a family, it is much easier to say what is inadequate than what is adequate.
The actual form of benefits upon death, apart from its equivalent value, depends materially upon the type of scheme to be adopted and must have regard for the fact that, by Inland Revenue requirements, a benefit on death in service may not take a lump sum form beyond a limit of four times salary at death.
Death benefits after retirement the scale of the benefit payable on death in service, it is desirable to provide some benefit if death occurs immediately after retirement, partly on general grounds as set out above for death in service benefits, and partly because otherwise the dependents of a man who dies one day before retirement are better off than those of a man who dies one day after retirement. The benefits are as follows: scale of benefit; final salary pensions; salary disregard; integration; pensionable remuneration; scales of pension benefit; lump sum retirement benefit; effect of contraction out; retirement at other than normal pension age; post-retirement increases; health pensions and permanent health insurance; the level of ill health pension; inter-relation with state pension; the need for control; actual implications; continuing trustee scrutiny; permanent health insurance.
Australia
Social Security in Australia, began with the Social Security Act coming into existence in the year 1991. Social Security in Australia, refers to a system of social welfare payments provided by Commonwealth Government of Australia. These payments are administered by a government body named Centrelink. In Australia most benefits are subject to a means test. Income support payments are payable fortnightly, usually by direct deposit into the recipient's bank account. They are also subject to a means test which calculates the recipient (and their partner's) fortnightly income and assets and affects the rate of their payment accordingly. As such, people on lower incomes may be entitled to part-payment of their allowance (subject to other qualification requirements).
The assessment of income and assets is very similar between different Social Security payments but the effect that income and assets have on each payment differs in that they have different income thresholds (i.e. how much income one can earn before it affects their payment) and different taper rates (the amount the payment drops by per dollar above these thresholds).
The Age Pension was the first payment issued from the Commonwealth Government and dates back to 1909. It is available to men aged 65 years and over. The age for women to become eligible is being progressively phased upward from 60 to 65 years, in line with males. Women currently become eligible for the Age Pension at 63 years and 6 months. Unlike pension payments of many other countries, workers do not contribute to a pension or insurance within Australia and the payment is available subject to means testing. This ensures that only those that require assistance receive it.
Newstart Allowance is an unemployment benefit, colloquially known as ‘The Dole’, which is paid in the form of a payment for people between the age group of 21 and 64 and is given to those who apply for the benefit and are unemployed and are seeking work.
Ordinarily, during the first three months of unemployment, a job seeker has no other obligations but to submit a fortnightly application for payment form at the local office. The form asks the applicant a number of questions about his circumstances and for the basic details of four positions for which the job seeker applied in the last fortnight. Customers may also be required to make up to 10 ‘Job Search Contacts’ per fortnight (dependent on the local labor market and their personal circumstances) and record the details of these jobs within a specifically issued Job Seeker Diary for a given period of time. The job seeker then takes the Application for Payment form personally to the local Centrelink Office. He will then attend a short one-on-one interview with a Centrelink officer. The interview is usually for the purposes of checking that the application form is in order and that the applicant is aware of any appointments that may need to be attended, and obligations that may need to be met. The client at this stage also has the opportunity to talk to a Centrelink officer about any problems the client may be encountering without having to make a prior appointment first.
If after an initial three months of unemployment, during which the job seeker has only to hand in the fortnightly application form and record the Job Seeker Diary, the client remains unemployed; the client will be required to attend appointments with a Job Network agent whose responsibility it is to assist the client to re-enter the work force. The job seeker also has to attend a two-week training course which focuses on job searching skills such as writing resumes and attending interviews.
Youth Allowance is an income support payment to young Australians in full-time study, an Australian Apprenticeship, actively looking for employment or undertaking a combination of activities leading to employment. 'Youth' is defined as 15–24 for full-time students or 15–20 for job seekers. The payment is only available to dependent children of low-income earners or young people who have met specified independence criteria. Some of the criteria to be considered independent for Youth Allowance purposes include young people who have self-supported themselves through paid work, or have been in a marriage-like relationship, or have or had a dependent child, or are an orphan or refugee without parents in Australia, or unable to live with parents due to relationship breakdown or because the parent is incarcerated or missing.
Disability Support Pension provides income support for people who suffer a long-term disability, which in the opinion of an assessor they will not recover from in the next two years, and which will render them unable to work or participate in a training activity enabling them to work. It is more than you get on Newstart, and is income and assets-tested. However, if you are permanently blind, you can receive DSP without income and assets tests, and without needing to prove any inability to work, etc. DSP can take a while to process, so as a temporary-measure claimants are placed on another payment (e.g. Newstart with a medical certificate to cover the activity tests) while the payment is being assessed; once granted it is backdated to the claim date at the higher DSP rate.
Sickness Allowance payments for those who are currently suffering an illness/injury/ disability (i.e. less than 2 years) are employed, and have no access to leave or have used all their leave.
Additional and Supplementary payments income support recipients who are classed as non-homeowners and pay more than a required amount of board or rent for accommodation are eligible for Rent Assistance payments. This payment is paid as part of the income support payment. Verification of the rent details are required either a lease or by completing a rent certificate every six months.
The Pharmaceutical Allowance is very small payment for those receiving Centre link payments to help cover the cost of medicines. This payment forms part of the Pharmaceutical Benefits Scheme (PBS) and effectively gives Health Care Card holders free access to medicines on the PBS. The Telephone Allowances issued quarterly to eligible customers receiving pension payments, to help cover the cost of telephone bills. Eligible customers must have a telephone service subscribed in their name to be eligible for Telephone Allowance.
Conclusion
In conclusion, this essay has examined the features of the Social Security in the United States of America, the United Kingdom and Australia, defined and established over the years.
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