It was financed by regular deductions from seamen's pay, which were deposited in a chest held at Chatham Dockyard and disbursed upon proof of a sailor's disability.

Originally conceived as a charity, the Chatham Chest was established after seamen who had been disabled in the war against Spain petitioned Queen Elizabeth for relief and maintenance.

Credit for its founding may belong to Charles Howard, the Lord High Admiral of England, who promoted the concept at court.

Until the late 18th century, and particularly before 1660, seamen's wages were often significantly less than the official rates while payments to the chest remained fixed.

From about 1673 onwards it was tacitly accepted that the government would meet the excess of expenditure over income each year on a "pay as you go" basis.

It was subsequently displayed at London's National Maritime Museum, and at The Mast House in Chatham Historic Dockyard.