Economic Development in Denmark Before and During the World War/Invalid Insurance
Invalid Insurance
Several attempts have been made to amend the act. The fixed rates of the Berg-Hörup bill have had many friends, and strong declarations have been made in favour of extending the act to include invalids under sixty years of age. It must be acknowledged that in this respect the German system has a great advantage over the Danish system. In 1903 a new committee was appointed, which, after several years, handed in a report. In this report two principles stand over against each other. On the one hand it was proposed to let the existing arrangement for sixty-year-old persons apply to younger invalids as well. This was a very simple solution, but it aroused some apprehensions on account of its expense. Now that the state and the municipality had bound themselves to spend so much upon the old, it was thought right and proper that a tax should be imposed as a sort of premium for a certain number of years on those who would benefit by the pension, in order to lighten the burden resting upon the general public. The chief proposal was to the effect that every person in the country should pay from his eighteenth year, for fifteen successive years, an annual contribution of 24 kroner as a premium, for which he would receive an annuity in case of invalidism, or at the age of sixty-five; and this annuity would be supplemented, if necessary, by a government grant. This arrangement was not adopted, however, and it was therefore to be inferred that public opinion favoured more and more the simple solution of allowing people to receive invalid pensions on the principle of the old-age pensions, i.e. without having to make payments towards them. During the World War money became easier, and expense is consequently not so carefully considered now as it was formerly, even though it may weigh heavily enough on an already strained budget. At the same time the trend of opinion is more and more towards socialism, even among people who continue to cling to individualism. It might be expected, therefore, that development in this direction would soon appear in the Danish old-age pensions act.
Such an amendment would place Denmark on a level with Australia. It is interesting to note that a system of old-age pensions similar to the Danish was adopted in New Zealand in 1898; but the rates there were fixed, as the intention was to grant an annual income of a specified amount. The age limit for males is sixty-five instead of sixty. This example was followed later in Australia, where an act was passed entitling any person in the whole commonwealth, upon certain conditions, to an old-age pension from the age of sixty-five and to an invalid annuity from the age of sixteen. From Australia the principle spread to England, where, in 1908, old-age pensions were introduced for all persons over seventy whose incomes did not exceed a certain sum per annum and who complied with certain rules. In England the great National Insurance Act of 1911, which was a radical departure from all inherited ideas of social policy, supplemented the pension act of 1908 by introducing a compulsory insurance, with contributions to the premiums by the state and the employer, designed to give aid in cases of sickness, permanent invalidism and unemployment. To this extent the social policy of England has diverged from that of Denmark; but Denmark may certainly pride herself on having been the model for England, though in a roundabout way with Australia as an intermediary.