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The Liberal Reforms

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National Insurance Act of 1911 - sickness benefit

  • One of the main reasons for poverty was sickness. Lloyd George wanted to help those who became poor through ill health.
  • Bad health cost many workers their jobs and often their lives.
  • The insurance scheme planned, allowed employer, employee and state to contribute to a fund of money when the worker was employed.
  • When the worker was ill, money was paid out for a limited period of time.
  • Insurance meant the cost of reform was not too expensive for the government.
  • Workers contributed to their own care, making the scheme 'respectable'.
  • Workers would hopefully vote for the Liberal Party.

The Act

  • Employers contributed 4 old pence a week if they earned under £160 a year, employers contributed 3 old pence a week and the state contributed 2 old pence a week.
  • It gave workers '9 old pence for 3 old pence'.
  • Insured workers were entitled to 10 shillings a week for 13 weeks and 5 shillings for another 13 weeks if ill.
  • Workers were entitled to free medical treatment and 30 shillings maternity benefit for the birth of each child.

Positive Impact

  • The State extended its role to help the poor. This was a compulsory Act.
  • The worker while in good health would pay money into a fund so that when they became ill and unable to work for more than 3 days, they could claim money out of the fund.
  • It also gave the worker free access to medicine and doctors so they could get back to work quickly.

Limits of the Act

  • Many workers were angry that they were forced to contribute as it reduced their pay packet and gave them less money from week to week, which may have made poorer families even worse off.
  • Payments were low.
  • Families did not receive benefits if they fell ill, only workers.
  • After using the 26 week entitlement, ill workers had to rely on poor law medical facilities.
  • The self employed and unemployed were not covered.

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