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National Insurance (Exchequer Contributions)

Volume 415: debated on Monday 12 November 1945

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asked the Minister of National Insurance how the contribution to National Insurance is made up as between the employer, employee and the State; and what relation the direct contribution has to the total cost to the taxpayer.

I assume the hon. Member is referring to the present schemes. Contributions to the Unemployment Fund are divided equally between the employer and the employee, and the Exchequer pays an amount equal to one-half of the combined contribution. In the case of the National Health Insurance Fund and Pensions Account, the contributions of employers and employees are approximately in equal proportions, but the Exchequer payments are not directly related to contributions. In the case of the Health Insurance Fund, the payment by the Exchequer is calculated by reference to the expenditure on benefits and administration, the proportion being one-seventh of the benefits paid to men and one-fifth to women. In the case of the Pensions Account, the Exchequer provides an annual lump sum contribution based on the actuarial estimate of the deficiency over a period of years between contribution receipts and expenditure on pensions and administration. The amount of the Exchequer contributions to these funds is approximately two-fifths of the total of the contributions of employers and employees.