Recommendation concerning Income Security Adoption: Philadelphia, 26th ILC session (12 May 1944) - Status: Up-to-date instrument.
Preamble
The General Conference of the International Labour Organisation,
Having been convened at Philadelphia by the Governing Body of the International Labour Office, and having met in its Twenty-sixth Session on 20 April 1944, and
Having decided upon the adoption of certain proposals with regard to income security, which is included in the fourth item on the agenda of the Session, and
Having determined that these proposals shall take the form of a Recommendation,
adoptsthis twelfth day of May of the year one thousand nine hundred and forty-four, the following Recommendation, which may be cited as the Income Security Recommendation, 1944:
Whereas the Atlantic Charter contemplates the fullest collaboration between all nations in the economic field with the object of securing for all improved labour standards, economic advancement and social security; and
Whereas the Conference of the International Labour Organisation by a resolution adopted on 5 November 1941, endorsed this principle of the Atlantic Charter and pledged the full co-operation of the International Labour Organisation in its implementation; and
Whereas income security is an essential element in social security; and
Whereas the International Labour Organisation has promoted the development of income security--
by the adoption by the International Labour Conference of Conventions and Recommendations relating to workmen's compensation for accidents and occupational diseases, sickness insurance, provision for maternity, old-age, invalidity, andwidows'andorphans' pensions, and provision for unemployment,
by the adoption by the First and Second Labour Conferences of American States of the resolutions constituting the Inter-American Social Insurance Code, by the participation of a delegation of the Governing Body in the First Inter-American Conference on Social Security which adopted the declaration of Santiago de Chile, and by the approval by the Governing Body of the Statute of the Inter-American Conference on Social Security established as a permanent agency of co-operation between social security administrations and institutions acting in concert with the International Labour Office, and
by the participation of the International Labour Office in an advisory capacity in the framing of social insurance schemes in a number of countries and by other measures; and
Whereas some Members have not taken such steps as are within their competence to promote the well-being and development of their people although their need for improved labour standards, economic advancement and social security is greatest; and
Whereas it is now highly desirable that such Members take all necessary steps as soon as possible to reach the accepted international minimum standards and develop those standards; and
Whereas it is now desirable to take further steps towards the attainment of income security by the unification or co-ordination of social insurance schemes, the extension of such schemes to all workers and their families, including rural populations and the self-employed, and the elimination of inequitable anomalies; and
Whereas the formulation of certain general principles which should be followed by Members of the Organisation in developing their income security schemes along these lines on the foundation of the existing Conventions and Recommendations, pending the unification and amplification of the provisions of the said Conventions and Recommendations, will contribute to this end;
The Conference--
(a) recommends the Members of the Organisation to apply progressively the following general guiding principles, as rapidly as national conditions allow, in developing their income security schemes with a view to the implementation of the fifth principle of the Atlantic Charter, and to report to the International Labour Office from time to time as requested by the Governing Body, concerning the measures taken to give effect to the said general guiding principles;
(b)callsthe attention of the Members of the Organisation to the suggestions for the application of these general guiding principles submitted to the Conference and contained in the Annex to this Recommendation.
GUIDING PRINCIPLES
GENERAL
1. Income security schemes should relieve want and prevent destitution by restoring, up to a reasonable level, income which is lost by reason of inability to work (including old age) or to obtain remunerative work or by reason of the death of a breadwinner.
2. Income security should beorganisedas far as possible on the basis of compulsory social insurance, whereby insured persons fulfilling prescribed qualifying conditions are entitled, in consideration of the contributions they have paid to an insurance institution, to benefits payable at rates, and in contingencies, defined by law.
3. Provision for needs not covered by compulsory social insurance should be made by social assistance; certain categories of persons, particularly dependent children and needy invalids, aged persons andwidows,should be entitled to allowances at reasonable rates according to a prescribed scale.
4. Social assistance appropriate to the needs of the case should be provided for other persons in want.
SOCIAL INSURANCE
5. The range of contingencies to be covered by compulsory social insurance should embrace all contingencies in which an insured person is prevented from earning his living, whether by inability to work or inability to obtain remunerative work, or in which he dies leaving a dependent family, and should include certain associated emergencies, generally experienced, which involved extraordinary strain on limited incomes, in so far as they are not otherwise covered.
6. Compensation should be provided in cases of incapacity for work and of death resulting from employment.
7. In order that the benefits provided by social insurance may be closely adapted to the variety of needs, the contingencies covered should be classified as follows:
Provided that benefits should not be payable at the same time for more than one of the following contingencies: invalidity, old age and unemployment.
8. Supplements for each of the first two children should be added to all benefits payable for loss of earnings, provision for further children being left to be made by means of children's allowances payable out of public funds or under contributory schemes.
9. The contingency for which sickness benefit should be paid is loss of earnings due to abstention from work necessitated on medical grounds by an acute condition, due to disease or injury, requiring medical treatment or supervision.
10. The contingency for which maternity benefit should be paid is loss of earnings due to abstention from work during prescribed periods before and after childbirth.
11. The contingency for which invalidity benefit should be paid is inability to engage in any substantially gainful work by reason of a chronic condition, due to disease or injury, or by reason of the loss of a member or function.
12. The contingency for which old-age benefit should be paid is the attainment of a prescribed age, which should be that at which persons commonly become incapable of efficient work, the incidence of sickness and invalidity becomes heavy, and unemployment, if present, is likely to be permanent.
13. The contingency for which survivors' benefits should be paid is the loss of support presumably suffered by the dependants as the result of the death of the head of the family.
14. The contingency for which unemployment benefit should be paid is loss of earnings due to the unemployment of an insured person who is ordinarily employed, capable of regular employment in some occupation, and seeking suitable employment, or due to part-time unemployment.
15. Benefits should be provided in respect of extraordinary expenses, not otherwise covered,incurredin cases of sickness, maternity, invalidity and death.
16. The contingency for which compensation for an employment injury should be paid is traumatic injury or disease resulting from employment and not brought about deliberately or by the serious andwilfulmisconduct of the victim, which results in temporary or permanent incapacity or death.
17. Social insurance should afford protection, in the contingencies to which they are exposed, to all employed and self-employed persons, together with their dependants, in respect of whom it is practicable--
(a) to collect contributions without incurring disproportionate administrative expenditure; and
(b)topay benefits with the necessary co-operation of medical and employment services and with due precautions against abuse.
18. The employer should be made responsible for collecting contributions in respect of all persons employed by him, and should be entitled to deduct the sums due by them from their remuneration at the time when it is paid.
19. In order to facilitate the efficient administration of benefits, arrangements should be made for the keeping of records of contributions, for ready means of verifying the presence of the contingencies which give rise to benefits, and for a parallelorganisationof medical and employment services with preventive and remedial functions.
20. Persons employed for remuneration should be insured against the whole range of contingencies covered by social insurance as soon as the collection of contributions in respect of them can beorganisedand the necessary arrangements can be made for the administration of benefit.
21. Self-employed persons should be insured against the contingencies of invalidity, old age and death, under the same conditions as employed persons, as soon as the collection of their contributions can beorganised. Consideration should be given to the possibility of insuring them also against sickness and maternity necessitatinghospitalisation, sickness which has lasted for several months, and extraordinary expenses incurred in cases of sickness, maternity, invalidity and death.
22. Benefits should replace lost earnings, with due regard to family responsibilities, up to as high a level as is practicable without impairing the will to resume work where resumption is a possibility, and without levying charges on the productive groups so heavy that output and employment are checked.
23. Benefits should be related to the previous earnings of the insured person on the basis of which he has contributed: Provided that any excess of earnings over those prevalent among skilled workers may be ignored for the purpose of determining the rate of benefits, or portions thereof, financed from sources other than the contributions of the insured person.
24. Benefits at flat rates may be appropriate for countries where adequate and economical facilities exist for the population to procure additional protection by voluntary insurance. Such benefits should be commensurate with the earnings of unskilled workers.
25. The right to benefits other than compensation for employment injuries should be subject to contribution conditions designed to prove that the normal status of the claimant is that of an employed or self-employed person and to maintain reasonable regularity in the payment of contributions: Provided that a person should not be disqualified for benefits by reason of the failure of his employer duly to collect the contributions payable in respect of him.
26. The cost of benefits, including the cost of administration, should be distributed among insured persons, employers and taxpayers in such a way as to be equitable to insured persons and to avoid hardship to insured persons of small means or any disturbance to production.
27. The administration of social insurance should be unified or co-ordinatedwithin a general system of social security services, and contributors should, through theirorganisations, be represented on the bodies which determine or advise upon administrative policy and propose legislation or frame regulations.
SOCIAL ASSISTANCE
28. Society should normally co-operate with parents through general measures of assistance designed to secure the well-being of dependent children.
29. Invalids, aged persons and widows who are not receiving social insurance benefits because they or their husbands, as the case may be, were not compulsorily insured, and whose incomes do not exceed a prescribed level, should be entitled to special maintenance allowances at prescribed rates.
30. Appropriate allowances in cash or partly in cash and partly in kind should be provided for all persons who are in want and do not require internment for corrective care.
Annex
Guiding principles accompanied by suggestions for application
(The paragraphs in bold type are the general guiding principles and the subparagraphs are the suggestions for application.)
GENERAL
1. Income security schemes should relieve want and prevent destitution by restoring, up to a reasonable level, income which is lost by reason of inability to work (including old age) or to obtain remunerative work or by reason of the death of a breadwinner.
2. Income security should beorganisedas far as possible on the basis of compulsory social insurance, whereby insured persons fulfilling prescribed qualifying conditions are entitled, in consideration of the contributions they have paid to an insurance institution, to benefits payable at rates, and in contingencies, defined by law.
3. Provision for needs not covered by compulsory social insurance should be made by social assistance; certain categories of persons, particularly dependent children and needy invalids, aged persons and widows, should be entitled to allowances at reasonable rates according to a prescribed scale.
I. SOCIAL INSURANCE
A. Contingencies covered
Range of contingencies to be covered
5. The range of contingencies to be covered by compulsory social insurance should embrace all contingencies in which an insured person is prevented from earning his living, whether by inability to work or inability to obtain remunerative work, or in which he dies leaving a dependent family, and should include certain associated emergencies, generally experienced, which involve extraordinary strain on limited incomes, in so far as they are not otherwise covered.
Sickness
9.Thecontingency for which sickness benefit should be paid is loss of earnings due to abstention from work necessitated on medical grounds by an acute condition, due to disease or injury, requiring medical treatment or supervision.
(1) The necessity for abstention from work should be judged, as a rule, with reference to the previous occupation of the insured person, which he may be expected to resume.
(2) Benefit need not be paid for the first few days of a period of sickness, but if sickness recurs within a few months, a fresh waiting period should not be imposed.
(3) Benefit should preferably be continued until the beneficiary is fit to return to work, dies or becomes an invalid. If, however, it is considered necessary to limit the duration of benefit, the maximum period should not be less than 26 weeks for a single case, and provision should be made for extending the duration of benefit in the case of specified diseases, such as tuberculosis, which often involve lengthy, though curable, sickness: Provided that at the outset of the operation of an insurance scheme it may be necessary to provide for a shorter period than 26 weeks.
Maternity
Invalidity
11. The contingency for which invalidity benefit should be paid is inability to engage in any substantially gainful work by reason of a chronic condition, due to disease or injury, or by reason of the loss of a member or function.
(1) A handicapped person should be expected to engage in any occupation which may reasonably be indicated for him, having regard to his remaining strength and ability, his previous experience, and any facilities for training available to him.
(2) A person for whom such an occupation can be indicated but is not yet available, and a person following a training course, should receive provisional invalidity benefit, training benefit or unemployment benefit, if he is otherwise qualified for it.
(3) A person for whom no such occupation can be indicated should receive invalidity benefit.
(4) Beneficiaries whose permanent inability to engage regularly in any gainful occupation has been confirmed should be allowed to supplement their invalidity benefit by casual earnings of small amount.
(5) Where the rate of invalidity benefit is related to the rate of the previous earnings of the insured person, the right to benefit should be admitted if the handicapped person is not able to earn by ordinary effort as much as one-third of the normal earnings in his previous occupation of able-bodied persons having the same training.
(6) Invalidity benefit should be paid, from the date when sickness benefit ceases, for the whole duration of invalidity, provided that when the beneficiary reaches the age at which old-age benefit may be claimed the latter may be substituted for invalidity benefit.
Old Age
12. The contingency for which old-age benefit should be paid is the attainment of a prescribed age, which should be that at which persons commonly become incapable of efficient work, the incidence of sickness and invalidity becomes heavy, and unemployment, if present, is likely to be permanent.
(1) The minimum age at which old-age benefit may be claimed should be fixed at not more than sixty-five in the case of men and sixty in the case of women: Provided that a lower age may be fixed for persons who have worked for many years in arduous or unhealthy occupations.
(2) Payment of old-age benefit may, if the basic benefit can be considered sufficient for subsistence, be made conditional on retirement from regular work in any gainful occupation; where such retirement is required, the receipt of casual earnings of relatively small amount should not disqualify for old-age benefit.
Death of Breadwinner
Unemployment
14. The contingency for which unemployment benefit should be paid is loss of earnings due to the unemployment of an insured person who is ordinarily employed, capable of regular employment in some occupation, and seeking suitable employment, or due to part-time unemployment.
(1) Benefit need not be paid for the first few days of a period of unemployment reckoned from the date on which the claim is registered, but if unemployment recurs within a few months, a fresh waiting period should not be imposed.
(2) Benefit should continue to be paid until suitable employment is offered to the insured person.
(3) During an initial period reasonable in the circumstances of the case, only the following should be deemed to be suitable employment:
(a) employment in the usual occupation of the insured person in a place not involving a change of residence and at the current rate of wages, as fixed by collective agreements where applicable; or
(b)anotheremployment acceptable to the insured person.
(4) After the expiration of the initial period --
(a) employment involving a change of occupation may be deemed to be suitable if the employment offered is one which may reasonably be offered to the insured person, having regard to his strength, ability, previous experience and any facilities for training available to him;
(b) employment involving a change of residence may be deemed to be suitable if suitable accommodation is available in the new place of residence;
(c)employmentunder conditions lessfavourablethan the insured person habitually obtained in his usual occupation and district may be deemed to be suitable if the conditions offered conform to the standard generally observed in the occupation and district in which the employment is offered.
Emergency Expenses
15. Benefits should be provided in respect of extraordinary expenses, not otherwise covered, incurred in cases of sickness, maternity, invalidity and death.
(1) Necessary domestic help should be provided, or benefit paid for hiring it, during thehospitalisationof the mother of dependent children, if she is an insured woman or the wife of an insured man and is not receiving any benefit in lieu of earnings.
(2) A lump sum should be paid at childbirth to insured women and the wives of insured men towards the cost of a layette and similar expenses.
(3) A special supplement should be paid to recipients of invalidity or old-age benefit who need constant attendance.
(4) A lump sum should be paid on the death of an insured person, or of the wife, husband or dependent child of an insured person, towards the cost of burial.
Employment Injuries
B. Persons covered
Range of Persons to Be Covered
17. Social insurance should afford protection, in the contingencies to which they are exposed, to all employed and self-employed persons, together with their dependants, in respect of whom it is practicable--
(a) to collect contributions without incurring disproportionate administrative expenditure; and
(b)topay benefits with the necessary co-operation of medical and employment services and with due precautions against abuse.
(1) Dependent wives (that is to say, wives who are not employed or self-employed) and dependent children (that is to say, persons who are under the school-leaving age, or who are under the age of eighteen and are continuing their general or vocational education) should be protected in virtue of the insurance of their breadwinners.
Collection of Contributions
Administration of Benefits
19. In order to facilitate the efficient administration of benefits, arrangements should be made for the keeping of records of contributions, for ready means of verifying the presence of the contingencies which give rise to benefits, and for a parallelorganisationof medical and employment services with preventive and remedial functions.
Employed Persons
Self-Employed Persons
21. Self-employed persons should be insured against the contingencies of invalidity, old age and death under the same conditions as employed persons as soon as the collection of their contributions can beorganised. Consideration should be given to the possibility of insuring them also against sickness and maternity necessitatinghospitalisation, sickness which has lasted for several months, and extraordinary expenses incurred in cases of sickness, maternity, invalidity and death.
(1) Members of the employer's family living in his house, other than his dependent wife or dependent children, should be insured against the said contingencies on the basis of either their actual wages or, if these cannot be ascertained, the market value of their services; the employer should be responsible for the payment of contributions in respect of such persons.
(2) Self-employed persons whose earnings are ordinarily so low that they can be presumed to be a merely subsidiary or casual source of income, or that payment of the minimum contribution would be a hardship for them, should be excluded provisionally from insurance and referred for counsel to the employment service or to any special service that may exist for promoting the welfare of the occupational group to which they may belong.
(3) Persons who, after completing the contribution period prescribed as a qualification for invalidity and survivors'benefits,cease to be compulsorily insured, either as employed or as self-employed persons, should be given the option, to be exercised within a limited period, of continuing their insurance under the same conditions as self-employed persons, subject to such modifications as may be prescribed.
C. Benefit Rates and Contribution Conditions
Benefit Rates
22. Benefits should replace lost earnings, with due regard to family responsibilities, up to as high a level as is practicable without impairing the will to resume work where resumption is a possibility, and without levying charges on the productive groups so heavy that output and employment are checked.
23. Benefits should be related to the previous earnings of the insured person on the basis of which he has contributed: Provided that any excess of earnings over those prevalent among skilled workers may be ignored for the purpose of determining the rate of benefits, or portions thereof, financed from sources other than the contributions of the insured person.
24. Benefits at flat rates may be appropriate for countries where adequate and economical facilities exist for the population to procure additional protection by voluntary insurance. Such benefits should be commensurate with the earnings of unskilled workers.
(1) Sickness and unemployment benefits should, in the case of unskilled workers, be not less than 40 per cent.ofthe previous net earnings of the insured person if he has no dependants, or 60 per cent.thereofif he has a dependent wife or housekeeper for his children; for each of not more than two dependent children, an additional 10 per cent.ofsuch earnings, less the amount of any children's allowances for these children, should be payable.
(2) In the case of workers with high earnings, the foregoing proportions of benefit to previous earnings may be somewhat reduced.
(3) Maternity benefit should in all cases be sufficient for the full and healthy maintenance of the mother and her child; it should be not less than 100 per cent.ofthe current net wage for female unskilled workers or 75 per cent.ofthe previous net earnings of the beneficiary, whichever is the greater, but may be reduced by the amount of any child's allowance payable in respect of the child.
(4) Basic invalidity and old-age benefits should be not less than 30 per cent.ofthe current wage commonlyrecognisedfor male unskilled workers in the district in which the beneficiary resides, if the beneficiary has no dependants, or 45 per cent.thereofif he has a dependent wife who would be qualified for widow's benefit or a housekeeper for his children; for each of not more than two dependent children, an additional 10 per cent.ofsuch wage, less the amount of any children's allowances for these children, should be payable.
(5) Basic widow's benefit should be not less than 30 per cent. of the current minimum wage commonlyrecognisedfor male unskilled workers in the district in which the beneficiary resides; for each of not more than three dependent children, child's benefit at the rate of 10 per cent.ofsuch wage, less the amount of any children's allowances for these children, should be payable.
(6) In the case of an orphan, basic child's benefit should be not less than 20 per cent.ofthe current minimum wage commonlyrecognisedfor male unskilled workers, less the amount of any child's allowance payable in respect of the orphan.
(7) A portion of every contribution additional to those paid as a qualification for basic invalidity, old-age and survivors' benefits may be credited to the insured person for the purpose of increasing the benefits provided for in sub-paragraphs (4), (5) and (6).
(8) In every case in which retirement is deferred beyond the minimum age at which old-age benefit could have been claimed, basic old-age benefit should be equitably increased.
(9) Compensation for employment injuries should not be less than two-thirds of the wages lost, or estimated to have been lost, as the result of the injury.
(10) Such compensation should take the form of periodical payments, except in cases in which the competent authority is satisfied that the payment of a lump sum will be more advantageous to the beneficiary.
(11) Periodical payments in respect of permanent incapacity and death should be adjusted currently to significant changes in the wage level in the insured person's previous occupation.
Contribution Conditions
D. Distribution of Cost
26.Thecost of benefits, including the cost of administration, should be distributed among insured persons, employers and taxpayers, in such a way as to be equitable to insured persons and to avoid hardship to insured persons of small means or any disturbance to production.
(1) The contribution of an insured person should not exceed such proportion of his earnings taken into account for reckoning benefits as, applied to the estimated average earnings of all persons insured against the same contingencies, would yield a contribution income the probable present value of which would equal the probable present value of the benefits to which they may become entitled (excluding compensation for employment injuries).
(2) In accordance with this principle the contributions of employed persons and self-employed persons for the same benefits may, as a rule, represent the same proportion of their respective earnings.
(3) A minimum absolute rate, based on the minimum rate of earnings which may be deemed to be indicative of substantial gainful work, may be prescribed for the insured person's contribution with respect to benefits the whole or part of which does not vary with the rate of previous earnings.
(4) Employers should be required to contribute, particularly bysubsidisingthe insurance of low-wage earners, not less than half the total cost of benefits confined to employed persons, excluding compensation for employment injuries.
(5) The entire cost of compensation for employment injuries should be contributed by employers.
(6) Consideration should be given to the possibility of applying some method of merit rating in the calculation of contributions in respect of compensation for employment injuries.
(7) The rates of contribution of insured persons and employers should be kept as stable as possible, and for this purpose astabilisationfund should be constituted.
(8) The cost of benefits which cannot properly be met by contributions should be covered by the community.
(9) Among the elements of cost which may be charged to the community may be mentioned --
(a) the contribution deficit resulting from bringing persons into insurance when already elderly;
(b) the contingent liability involved in guaranteeing the payment of basic invalidity, old-age and survivors' benefits and the payment of adequate maternity benefit;
(c) the liability resulting from the continued payment of unemployment benefit when unemployment persists at an excessive level; and
(d)subsidiesto the insurance of self-employed persons of small means.
E. Administration
27. The administration of social insurance should be unified or co-ordinatedwithin a general system of social security services, and contributors should, through theirorganisations, be represented on the bodies which determine or advise upon administrative policy and propose legislation or frame regulations.
(1) Social insurance should be administered under the direction of a single authority, subject, in federal countries, to the distribution of legislative competence; this authority should be associated with the authorities administering social assistance, medical care services and employment services in a co-ordinatingbody for matters of common interest, such as the certification of inability to work or to obtain work.
(2) The unified administration of social insurance should be compatible with the operation of separate insurance schemes, compulsory or voluntary in character, providing supplementary, but not alternative, benefits for certain occupational groups, such as miners and seamen, public officials, the staffs of individual undertakings and members of mutual benefit societies.
(3) The law and regulations relating to social insurance should be drafted in such a way that beneficiaries and contributors can easily understand their rights and duties.
(4) In devising procedures to be followed by beneficiaries and contributors, simplicity should be a primary consideration.
(5) Central and regional advisory councils, representing such bodies as trade unions, employers' associations, chambers of commerce, farmers' associations, women's associations and child protection societies, should be established for the purpose of making recommendations for the amendment of the law and administrative methods, and generally of maintaining contact between the administration of social insurance and groups of contributors and beneficiaries.
(6) Employers and workers should be closely associated with the administration of compensation for employment injuries, particularly in connection with the prevention of accidents and occupational diseases and with merit rating.
(7) Claimants should have a right of appeal in case of dispute with the administrative authority concerning such questions as the right to benefit and the rate thereof.
(8) Appeals should preferably be referred to special tribunals, which should include referees who are experts in social insurance law, assisted by assessors, representative of the group to which the claimant belongs, and, where employed persons are concerned, by representatives of employers also.
(9) In any dispute concerning liability to insurance or the rate of contribution, anemployedor self-employed person, and, where an employer's contribution is in question, an employer should have a right of appeal.
(10) Provision for uniformity of interpretation should be assured by a superior appeal tribunal.
II. SOCIAL ASSISTANCE
A. Maintenance of Children
B. Maintenance of Needy Invalids, Aged Persons and Widows
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