In page navigation
Social security contributions
Charges levied on individuals or their employers to pay for the costs of social security benefits. The argument for having specific charges for this purpose rather than simply paying for social security through the tax system is possibly the hope that such charges will be less resented than taxes and that calling the benefits system an insurance scheme will remove stigma from accepting benefits, and end the politicel freedom it confers to raise additional revenue without ‘raising taxes’. Social security systems are generally not true insurance schemes: in the UK, for example, National Insurance contributions are not sufficient to make the National Insurance system actuarially solvent.
Reference: Oxford Press Dictonary of Economics, 5th edt.
Invezz is a place where people can find reliable, unbiased information about finance, trading, and investing – but we do not offer financial advice and users should always carry out their own research. The assets covered on this website, including stocks, cryptocurrencies, and commodities can be highly volatile and new investors often lose money. Success in the financial markets is not guaranteed, and users should never invest more than they can afford to lose. You should consider your own personal circumstances and take the time to explore all your options before making any investment. Read our risk disclaimer >