‘…the aim of the Plan for Social Security is to make want under any circumstances unnecessary’. William Beveridge, Beveridge Report, 1942
Beveridge recognised that one of the principal reasons for poverty was loss of earnings. This could be due to unemployment, sickness, accident or retirement.
Beveridge also thought that provision should be made for ‘exceptional expenditures’ associated with birth, marriage or death.
He believed that everyone should be guaranteed a minimum level of income that was sufficient to live on. Beveridge called this minimum the ‘subsistence level’.
He thought the best way to achieve this was with a universal system of social insurance, financed by contributions. This was a method people were already used to.
The contributions would go into a single Social Insurance Fund, administered by the Government. Benefits would be paid from this fund and not out of general taxation.
‘…benefit in return for contributions, rather than free allowances from the State, is what the people of Britain desire. This desire is shown both by the established popularity of compulsory insurance, and by the phenomenal growth of voluntary insurance … It is shown in another way by the strength of popular objection to any kind of means test’.
Each insured person would have access to all benefits based on a single weekly insurance contribution. The contribution would be compulsory and paid at a flat rate. There was to be no means test and the benefits would be paid ‘so long as the need continues’.
‘All insured persons, rich or poor, will pay the same contributions for the same security’.
Beveridge wanted the scheme to be comprehensive and cover most of the population. Employees and their employers, the self-employed and the State would all contribute to the Social Insurance Fund. Working married women could choose whether to pay contributions.
A Ministry of Social Security would be set up to administer the scheme.
Beveridge thought his Plan should be implemented as soon as possible. ‘If a plan for freedom from want, so far as social security can give it, is to be ready when the war ends, it must be prepared during the war’.