The Unemployment Act 1934 was an Act of Parliament in the

United Kingdom The United Kingdom of Great Britain and Northern Ireland, commonly known as the United Kingdom (UK) or Britain, is a country in Europe, off the north-western coast of the continental mainland. It comprises England, Scotland, Wales and North ...

, reaching statute on 28 June 1934. It reduced the age at which a person entered the

National Insurance National Insurance (NI) is a fundamental component of the welfare state in the United Kingdom. It acts as a form of social security, since payment of NI contributions establishes entitlement to certain state benefits for workers and their famil ...

scheme to 14 and made the claiming age 16 years. It also separated benefits earned by paying National Insurance and those purely based on need. To do this, it established two bodies: the Unemployment Insurance Statutory Committee to deal with

unemployment benefit Unemployment benefits, also called unemployment insurance, unemployment payment, unemployment compensation, or simply unemployment, are payments made by authorized bodies to unemployed people. In the United States, benefits are funded by a compu ...

s earned by payment of National Insurance when in work; and the

Unemployment Assistance Board The Unemployment Assistance Board was a body created in Britain by the Unemployment Act 1934 due to the high levels of inter-war poverty in Britain. The Board kept a system of means-tested benefit A means test is a determination of whether an in ...

to provide

means-tested A means test is a determination of whether an individual or family is eligible for government assistance or welfare, based upon whether the individual or family possesses the means to do without that help. Canada In Canada, means tests are use ...

payments for those not entitled to such benefits. The 1934 Unemployment Act also restored the previous 10% cut in unemployment benefits, brought in after the 1931 May Committee. This was due to a reduction in the number of those unemployed in the UK, which was reduced partially due to the creation of the Iron and Steel Federation in 1934 and the introduction of the National Grid in 1933.

Basis for the Act

In order to pass the Unemployment Act, Sir Henry Betterton (Minister of Labour at the time), based his bill on a set of principles. Betterton divided the bill into three separate parts, each of which had a distinct set of principles.

Part 1: Insurance

# That the scheme should be financed by contributions from the workers, employers and the State. # That benefit should be dependent upon contributions # That the scheme should be maintained on a solvent and self-supporting basis.

Part 2: Eligibility

# That assistance should be proportionate to need. # That a worker who has been long unemployed may require assistance other than, and in addition to, cash payments. # That the State should accept general responsibility for all the industrial able-bodied unemployed outside insurance, within, of course, the limits of a practical definition.

Part 3: Transition

Part III of the Bill dealt with the transitory provisions—for the transition from the existing arrangements to the amended insurance scheme and the new assistance scheme.

References

{{Reflist Insurance legislation United Kingdom Acts of Parliament 1934 1934 in economics Unemployment in the United Kingdom Welfare state in the United Kingdom