Catalogue description Ministry of Labour and Ministry of National Insurance: National Insurance Stamps, correspondence

Funds for providing the benefits conferred by the National Insurance Act 1911 were to be derived from contributions made by the insured person, their employer, and grants made from moneys voted by Parliament. That element of the contribution which comprised the amounts paid by the employee and employer was payable weekly and collection was normally arranged by the novel expediency of selling "insurance stamps", through the agency of the Post Office, to the employer, who deducted the employee's contribution from his wages. The stamps were then affixed to contribution cards which became records of continuing participation and entitlement in the schemes.

The two schemes of insurance were kept separate and each had its own series of stamps and contribution cards. Health and pensions insurance benefits were administered by "approved societies" such as Friendly Societies and trade unions, operating under the supervision of four regional Commissions which were established under the Act; unemployment insurance was directly controlled by the Government, first through the Board of Trade and then in 1916, when the Ministry of Labour was formed, by that ministry.

This responsibility was transferred in 1944 to the newly constituted Ministry of National Insurance, but the health and pensions insurance scheme continued to be operated by the "approved societies" until 1947; another year elapsed before the main National Insurance Acts of 1944 and 1946 came into effect and the two schemes were united to form the major part of a comprehensive system of social security, with a single contribution required for the purchase of one stamp which embraced all the contributions necessary to establish rights of participation in the various benefits.

Increases in the rates of contributions have been reflected in the reissue of stamps of higher denomination at the beginning of certain tax years.

In 1966 the Class 1 contributions were increased substantially because of inclusion within them of the new Selective Employment Tax, introduced by the Finance Act 1966. This continued until 1973, when the tax was abolished.

In 1975, under the Social Security Act 1973, flat rate Class 1 contributions ceased to be payable for employees and were replaced by contributions wholly related to earnings collected with income tax under the PAYE procedure. Stamp cards for employees were then abolished.

Stamps continue to be issued for collection of Class 2 and 3 contributions. There are two principal categories within Class 2: ordinary contributions, at a lower rate, for most self-employed occupations; and a special category for share fishermen, at a higher rate, entitling them to unemployment benefit. Class 3, for unemployed persons, is a single category.

Until 1975 there were different rates for men and women. This continued for Class 2 ordinary contributions until 1978, when the same rate for both sexes was introduced. For Class 3 there has been the same rate since 1975.

Stamps issued in Northern Ireland and the Isle of Man are in each case overprinted with the name of the territory.