Norwegian Labour and Welfare Policy. Enhancing the Labour Market Prospects for the Occupationally Disabled and for Employees With Health Problems

Erik Oftedal Director Directorate of Labour and Welfare Norway

Agenda



Challenges in Norwegian Labour and Welfare policy



The Norwegian way of enhancing labour market prospects for vulnarable groups



What if we succeed

NAV, 24.04.2020

Side 2

Brief information about Norway

NAV, 24.04.2020

•Population 4 640 200 •79 % active in work Women: 76% Men: 83 % The majority is employed in: • Public sector • Private service sector • Unemployment rate: 2.8 %.

Side 3

Fewer to share the costs

1967:

3,9

2003:

2,6

2050:

1,6

A steady decrease in the number of people in the work force per pensioner NAV, 24.04.2020

Side 4

Macroeconomic and labour market situation is very good 

High material income and wealth



Steady growth (3 3 ½ %)



High and stable labour force participation (80%)



Low unemployment (2-3 %)



Low inflation (1-2 %)



Low real interest rates (2-3 %)



Very strong public finances

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Side 5

The other sides of the medal



”It affords a strong back to bear good days”

–

How to keep up with intergenerationally well balanced economy and welfare?



An ageing population

–

Expected increase of expenditure towards health and care services as well as pensions.



Very high and increasing absence due to sickess and incidence and prevalence of disability:

–

700.000 persons – ¼ of the grown-up population below pension age receive an income support on the grounds of sickness, health problems or disability

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Side 6

Challenges in Norwegian welfare – Norway today

In the work force: 2 400 000 At the outskirts of the work force, receiving benefits: 298 000 disability pension 28 000 temporary disability pension 60 000 social welfare 120 000 sickness benefit 66 000 occupational rehabilitation 58 000 unemployment benefit 44 000 rehabilitation benefit 12 000 transitional benefit 7 400 individual benefit 2 800 severance benefit 2 400 severance pay NAV, 24.04.2020

Side 7

Net transfers according to age in 2004

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Side 8

Increasing number of income security beneficiaries

800 000 700 000 600 000 500 000 400 000 300 000 200 000 100 000 0 1997 1998 1999 2000 2001 2002 2003 2004 2005 NAV, 24.04.2020

Social welfare Daily cash benefit Sickness benefit Rehabilitation allowance Vocational rehabilitation allowance Disability benefits Side 9

In an OECD context Norway differs too

6% 5% 4% 3% 2% 1% % of employees absent on account of sickness Sw n e d e 0%

Source:

EULFS.

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Age 25-49 Sw n e d e Age 50-64 Side 10

Few disability beneficiaries return to the labour market

% of the disability beneficiaries that return to the labour market 6 5 4 3 2 1 0 UK N et he rla nd s P ol

Source:

National Labour Force Surveys.

an d NAV, 24.04.2020

S w itz er la nd S w ed en N or w ay Side 11

The number of disability beneficiaries

–

the double of OECD-average

Norway Netherlands % of work-age population Sweden United Kingdom OECD 12 10 8 6 4 2 0 1990 1992 1994 1996 1998 2000 2002 2004

Source:

…and we spend the double of OECD-average on sickness benefit and disability

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Side 12

The Norwegian path to increased welfare and a more inclusive labour market



The trend has to be changed



The strategy

–

Inclusive Workplaces – a tripartite agreement

–

The NAV reform – a new state agency for Work and Welfare

–

The White Paper on Work, Welfare and Inclusion

–

A reform of the pension system – presented by Mr. Christensen yesterday

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Side 13

Inclusive Workplaces – a tripartite agreement



Agreement 2001-2005 between the Government and the Social partners prolonged 2006-2009.

The goals

–

Reduce sickness abscence by 20 % compared to 2001

–

Increase the employment rate of disabled persons

–

Increase the average, real retirement age

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Side 14

Inclusive Workplaces cont.



A lot of good initiatives and work locally



Local work is based on cooperation agreements signed directly between the enterprises and NAV



New proposals 2007 …..

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Side 15

A new model for intensified follow-up on sick leave



Employer and employee are required to

(according to the Working Environment Act)

–

agree upon a mutually binding follow-up plan at the latest 6 weeks after the onset of sick-leave

–

arrange a dialogue-meeting within 12 weeks of the onset of sick-leave

 

The doctor is required by law to participate in the meeting

–

if desired by the employee NAV’s role is to

(according to the National Insurance Act)

–

check the possibilities of and attempts at work related activity, by controlling the sickness certificate and the follow-up plan

–

arrange a new dialogue meeting with the employer and employee within 6 months, possibly with the doctor participating too

– –

effectuate economic reimbursements and benefits coordinate access to relevant public services



Company health service, union representatives, safety deputies should participate too

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Side 16

A wave of reorganising the Work and Welfare administrations



A dominating trend in many European countries



Most outspoken in Northern Europe

–

Great Britain, The Netherlands, Germany, Denmark, Finland



The Norwegian reform – more far reaching

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Side 17

A New Employment and Welfare Administration



Merger

– –

The Public Employment Service The National Insurance Service and

–

The Municipal Social Welfare Administration



The aims

–

Better coordination of benefits

–

More effective and work-oriented casework

–

More user-oriented services and participation



Gradual implementation

–

Central agencies in 2006

–

Regional and local offices 2006-2009

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Side 18

NAV unifies the services

National Insurance Service (state)

• National Insurance Administration • County office • National insurance office • Special units • Around 9 000 employees

Aetat Employment Service (state)

• Aetat Directorate of Labour • Aetat county • Aetat local • Special units • Around 3 500 employees

Social welfare (municipality)

• Social welfare office in almost every municipality • Around 4 000 employees NAV, 24.04.2020

Side 19

The goals of the NAV-reform

 More people employed and active  One door for all the users of NAV – common access to combined and parallel services  Distinct work focus for frontline services  Steady course from passivity to activity  Time for more and better follow up and a higher degree of individual adjustments  Distinct division between ”production” and work related processes  Increased use of self service  Simple requests handled in a simple manner  Active user participation NAV, 24.04.2020

Side 20

New interaction between state and local authority

 The NAV office is based on an equal partnership between state and local authorities. The office will offer one door to all of NAV’s services.

 A general agreement between The Ministry of Labour and Social Inclusion and The Norwegian Association of Local and Regional Authorities constitutes the framework for local cooperation for all local authorities.

 Employees within both central and local authorities will receive training and education, and will work with the same tasks.

 The local NAV office will offer services on behalf of both central and local authorities, but in a way that makes them seem like one and the same.

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Side 21

Organizational reform Not only a new wrapping

Motto:

Everyone is unique and has unique service and support needs

•

Focus on functioning, abilities and possibilities – not diagnosis

• •

Symmetry between support/services and individual obligations Services tailored to INDIVIDUAL needs – not the target group, type of income support etc.

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Side 22

Decision making close to the public

 All follow up should take place in the local NAV office – main focus on close collaboration with the individual as far as work and activity are concerned  The NAV office decides which tools and measures to apply   The NAV office uses their own judgement as far as possible within the framework of rules and regulations. The office’s opinion should be a leading factor when deciding upon the case by special units – activity-requirement, conditions that have to be met, etc .

The NAV offices use individual plans as a tool – – based on a.o. the ability to work and the agreement on activity The plan plays a guiding role when assessed by a special unit  The NAV office coordinates services to the public  The NAV offices must be credible and reliable as far as follow up and guidance are concerned NAV, 24.04.2020

Side 23

White Paper on Work, Welfare and Inclusion



Preventive and facilitative measures at the workplace



New and better coordinated work-oriented measures



Reformed temporary income security within the NIS



A new qualification programme outside the NIS



Supplementary measures

–

for disabled persons

– –

for immigrants to combat poverty

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Side 24

Tools – today’s practice

Sickness benefit Rehabilitation allowance Vocational rehabilitation allowance Temporary disability benefit Unemployment benefit Social welfare

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Medical measures Primarily medical measures All labour market measures No demand for active measures Status depending on labour market measures Random offers of measures

Side 25

Tools – future practice

Follow up according to needs

Assessment Follow up Non-temporary wage subsidies Long term adapted working environment Assisted work Labour market training Ordinary education Motivation measures Wage subsidies Medical rehabilitation Low threshold alternative Economic counselling Close individual follow up Qualification programme

Tools should be applied freely, without regard to type of benefit/focus groups

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Side 26

Work ability assessment



A new, integrated system for work ability assessment is under way



Today: A number of concepts, methods and tools are in use within NAV



It will be the point of departure for formulating individual action plans



A move from the focus on diagnosis/disability to a focus on work-related abilities and possibilities

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Side 27

Assesment of work ability-

Job Qualifications Client

Benefits

Social qualifications Job-seeking qulifications Capacity Work NAV, 24.04.2020

Claims of job qualifications Claims of personal qualifications Recruitment strategy Claims of capacity Employee Side 28

Developing and renewing work-related measures and services



More flexible and individually-adapted use of all types of measures and services provided by the new employment and welfare administration



Extended use of wage subsidies through implementing trial projects involving wage subsidies that are not of a limited duration



Strengthening measures to improve fundamental knowledge and skills on the part of job-seekers who need this

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Side 29

Developing and renewing work-related measures and services cont.



Establishing and wider access to new and better clarification measures for users who do not currently have access to thi s

– Based upon the situation and needs of the individual – Will benefit – –

the long-term unemployed young people and

–

groups of immigrants



Establishing and wider access to new and better follow-up measures for users who do not currently have access to this

– Based upon the situation and needs of the individual – Will benefit –

the long-term unemployed

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– –

young people and groups of immigrants

Side 30

Qualification programme



A new qualification programme proposed established within NAV Local Services at the end of 2007



Target group

– persons with no or very limited benefits from the National Insurance Scheme – mainly persons living off municipal social welfare 

Participation in the qualification programme will entitle to qualification benefits granted as standard amounts

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Side 31

Qualification programme cont



The objective of the programme is to help participants to get work – by making the effort more general, systematic and binding in regard to both the participants and the public services



The programme can consist of several kinds of measures based on individual needs, e.g:

– Labour market measures – Different kinds of training – Motivation 

The municipial part of the local office will be responsible for implementing these programmes – but the programme can consist of all measures and services in accordance with individual needs

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Side 32

Temporary Income Security Benefits – at present and in the future

Today Future Sickness benefit Sickness benefit Medical rehabilitation benefit Vocational rehabilitation benefit Work A new temporary income security benefit Time- limited disability benefit Disability benefit Disability benefit

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Work

Side 33

Why a Reformed Temporary Income Security Benefit?



A single benefit to support through the whole period, enabling the recipient to focus on job-related activities



Merging/replacing the 3 existing medical and vocational rehabilitation and invalidity benefits (of limited duration) will permit a more flexible use of means/measures across “groups” of recipients



Harmonizing and simplifying the present rules, facilitates a more effective welfare system



Introducing the possibility to allocate resources from the administration of benefit payments towards follow-up activities and active measures

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Side 34

2010



470 NAV offices established in all municipalities, several in larger cities



12 administration units enhanced



20 new administration units established



5 new pension units established

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Side 35

2010



Specialisation and automation within the fields of information, administrative support and payment



Transfer of 1550 employees from local offices to special units



Health services transferred from The Labour and Welfare Service to The Health and Social Service



New tools and a new policy on labour, welfare and inclusion



Modernised national insurance scheme



Applied measures towards improving the competence of the employees

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Side 36

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What if we succeed?

 Possible positive results for individuals, society, public economy and finances and for the public service and administration Some examples:  1 person for 5 years longer in paid employment = approx 500.000 NOK higher life income  3.000 persons for 5 years longer in paid employment = 3 billion NOK ”society output”  30.000 fewer disability pensioners (10 %) = 20 billion NOK reduction of the budget costs = 3 % of total state budget Side 37