MAJORITY REPORT. 
Jor 
Section A of Appendix I, to our Minutes of Evidence and it is 
not, therefore, necessary to enter into any detail here on the 
subject. The absence of a contribution in respect of any par- 
ticular week in the case of an employed contributor may be due 
to any of the following causes :— 
(1) absence from work owing to sickness; 
(2) absence from work owing to genuine inability to. 
obtain employment ; 
(3) voluntary abstention from work ; 
© the taking up of some non-insurable occupation. 
Arrears due to the first of these causes do not involve any penalty 
but in each of the other three cases, unless the arrears are 
redeemed by payment of the appropriate sum within the time 
allowed for the purpose, an insured person with arrears 
exceeding four during the year 1s subject to a penalty 
in the form of a reduction or suspension of the cash benefits. 
The title to medical benefit is not now affected by arrears so long 
as the insured person remains in insurance. Special temporary 
arrangements have been made under the Prolongation of Insur- 
ance Act and by related provision in the Arrears Regulations to 
mitigate the consequences of arrears in the case of insured persons 
who have had prolonged periods of unemployment during the 
present trade depression. 
654. It has been represented to us in evidence that it is illogical 
that penalties in the form of a reduction or suspension of health 
insurance benefits should be imposed on insured persons who have 
been so unfortunate as to suffer from genuine unemployment, 
particularly having regard to the fact that under the Unemploy- 
ment Insurance Scheme contributions are compulsorily payable 
against the contingency of unemployment and benefit is paid 
when that contingency arises. These schemes are alike 
authorised and enforced by the State; yet the circumstance which 
establishes the insured person’s title to benefit under one scheme 
involves a penalty under the other. We are impressed by the 
force of these arguments, and we think that a fundamental dis- 
tinction should be recognised between arrears arising from genuine 
inability to obtain work and those arising from voluntary absten- 
tion from work, or from employment in some non-insurable 
occupation. ~~ While arrears due to the last two causes must 
necessarily and properly involve the imposition of penalties, we 
do not consider that any penalty should be imposed in respect of 
the non-payment of a Health Insurance contribution for a week 
during which an insured person was genuinely seeking for work 
but unable to obtain it. We have received evidence from the 
Ministry of Labour on the subject (App. CII; Q. 25 290- 
23,395), and we anderstand that the Ministry are pre- 
pared to accept the general principle which we have set out 
above, but at the same time think it necessary to point out 
the difficulties of devising any satisfactory machinery for proving