Reykjavik 10 November 2009 Some Norwegian reforms and challenges Thorgeir Hernes, Directorate of Labour and Welfare
Challenges in Norwegian welfare – Norway may 2009 In the work force: At the outskirts of the work force, receiving benefits: 2 400 000 age NAV, 3/17/2018 295 043 disability pension/ 45 685 temporary disability pension (11, 0 % av working population) 126 362 sickness benefit 55 945 occupational rehabilitation 48 079 rehabilitation benefit ----- 571 114 Side 2
People on sickness leave – nordic countries NAV, 3/17/2018 Side 3
The number of disability beneficiaries – the double of OECD-average % of work-age population …and we spend the double of OECD-average Source: National insurance authorities: NIA (Norway), IV (Switzerland) and ZUS (Poland). on sickness benefit and disability NAV, 3/17/2018 Side 4
The societal challenge § Approximately 1/5 of the working age population temporary ot permanently out of work because of disablities/health reasons § Disability and sickness benefits on the increase, and among the highest in OECD-countries § Many stay on for too long on temporary rehabilitation, occupational rehabilitation, and disability benefits, too few join the work force after rehabilitation period is over § Some immigrant groups have far lower participation in the work force, and higher unemployment, than the average population § 2% in long term poverty (NAV=) New Labor and Welfare system is an important answer… NAV, 3/17/2018 Side 5
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, 3/17/2018 Side 6
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 NAV, 3/17/2018 Side 7
Problems with old Norwegian system § Fragmented and uncoordinated for those in need of combined services § Not properly designed to reach important policy objectives – espescially getting more people into paid work § Low cost effectiveness, double work etc. § Locked people up on passive benefits NAV, 3/17/2018 Side 8
The New Labour and Welfare Administration - main purpose § The best welfare policy is work. Focus on people’s potential and not their the limitations § Objectives: – More people at work and in activity, fewer on benefits – A more user friendly, user oriented system tailored to individual needs – A coordinated, well organized, efficient employment and welfare administration with a continuous focus on how to improve the service delivery NAV, 3/17/2018 Side 9
The NAV reform/merger of several user oriented services National Insurance Organization (530 offices) National Employment Service (210 state offices) Sickness benefits Labour Market Rehabilitation benefits Employment services Unemployment benefits Social Welfare/Social Assistance (433 local units) Disability benefits Occupational injury benefits Family and lone parents benefits Old age pensions Health service benefits Vocational rehabilitation Rehabilitation benefits • Local Social Welfare • Local Social Assistance • A number of other services: - Health related, - educational related, - Child welfare - Housing needs - and more • “The last safety net” for the citizen NAV offices in every municipality – to provide services in accordance with the user needs NAV, 3/17/2018 Side 10
New interaction between state and local authority – “a forced partnership” § New offices based on an equal partnership between state and local authorities (legal agreements) - offer one door for all of NAV’s services. § Employees receive same training 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. NAV, 3/17/2018 Side 11
New Labor and Welfare Administration – Numbers and facts § At central level Labour and National Social Insurance/Welfare) merged July 2006 § At local level three bodies merges over a three year time period (2007, 2008 & 2009) § 14000 state employees and 4000 -6000 municipal employees § Nearly the whole Norwegian population are users § Administers a third of the national budget: unemployment benefits, occupational rehabilitation, pensions, childcare, etc The largest reform in the Norwegian public sector NAV, 3/17/2018 Side 12
What do we want to achieve? § One door in for all § A more authoritative and work-oriented frontline § More time for individual follow-up services § Clear division between case ”production”/paperwork and user/work-oriented processes NAV, 3/17/2018 Side 13
2010 § 470 new NAV offices established - approximately 12. 000 employees in front offices reorganized § 37 new “production sites” and 5 new pension units operational § Health area transfer from Labour and Welfare Service to Health Services § Nearly finished introducing modernized national pension scheme NAV, 3/17/2018 Side 14
Organizational reform Not only 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 target group, type of income support etc. NAV, 3/17/2018 Side 15
We are working towards…. § Strengthening of work orientation of the benefit system: – New short term benefit and qualification benefit with explicit work focus – Assessment of work ability and new work-focused follow-up procedures mandatory for the whole NAV system – New inclusion strategy (unlimited wage subsidies) § Simplification facilitates allocation of resources: – Merging of temporary benefits – Further simplification of benefits and of active measures § Higher flexibility gives NAV and users room to move: – Allowing measures to be used more freely, irrelevant of benefits and “target groups” – Work processes tailored to the users individual needs NAV, 3/17/2018 Side 16
Problems and challenges § Too much reform (organizational and content) and energy- consuming change at once? – Fatigue and rising sick leave in NAV § Problems implementing new content – Not more focus on work and follow-up services in new offices – Problems merging different cultures and competences – quality in the delivery of services § Problems with – old IT systems – logistics (telephone, post, archives) – availability – and productivity - even payments to citizens! § Building of new competence/keeping up productivity § Financial resources to implement the reform § On top of everything: financial crisis NAV, 3/17/2018 Side 17
. Inclusive working life A new way of dealing with sickness absence NAV, 3/17/2018 Side 18
The tripartite agreement on a More Inclusive Workplace (IW) § Point of departure: 19 -20 % of the Norway’s working age population is either – on sick leave – collecting rehabilitation benefits – collecting disability benefits § Signed by the government and the major labour market partners October 2001 – then a new agreement from December 2005 up to now § Three main objectives – Reducing sick leave by 20% for the entire agreement period – Secure employment for those with reduced working capacity – Increasing the average of retirement NAV, 3/17/2018 Side 19
General principles § Action should be carried out at the workplace § Active dialog between employer and employee – Clearly emphasizes the responsibility of the employer – Encourages an open dialogue between employers and employees § Early intervention and high quality follow-up § More focus on functional capacity – less on diagnosis NAV, 3/17/2018 Side 20
IW-enterprises: incentives § A regular contact person at the Centre for inclusive workplace help the enterprises to better follow up – Placed under NAV – One in each county (19 centres) – Serve only enterprises that signs the agreement (IW enterprises) § Occupational health service delivering services to IW enterprises are given a special refund rate § The employees’ right to take sick leave without a doctor’s certificate is extended NAV, 3/17/2018 Side 21
”Soft” IW results from some studies § Management and workers experience fewer conflicts, better communication and more co-operations § The workers experience more appreciation § More appropriate to have a dialogue with employees on sick leave § Leader’s are given more responsibility for following up employees that become sick. § IW-Enterprises do a better job including senior employees than other enterprises § The enterprises gives positive feedback on the work of the IW-centres and are very satisfied with their contact person NAV, 3/17/2018 Side 22
Other results so far § Nearly 9 000 enterprises have signed on - representing more than half of the active labour force (1, 1 million workers) § Enterprises with long IW-experience have (somewhat) reduced their sick leave more than in general. § The sick leave figures increased, then dropped in 2004, – and then a slight increase up to now NAV, 3/17/2018 Side 23
The bottom line NAV, 3/17/2018 Side 24
OECD 2005 § The agreement should not become a hindrance to change – the government should not accept a veto against government interventions/new incentive systems § The tripartite agreement have probably facilitated enforcement of stricter follow-up procedures NAV, 3/17/2018 Side 25
New model for intensified follow-up of employees on sick leave (2007) § Employer and employee are required to – agree upon a mutually binding follow-up plan before 6 weeks – arrange a dialogue meeting within 12 weeks § The doctor is required by law to – Make an “activity evaluation” concerning persons possibilities for work after 8 weeks – participate in dialogue meetings if desired by the employee § NAV’s role is to – check the possibilities and attempts of 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, eventually with participation of the doctor – effectuate economic reimbursements and benefits – coordinate access to relevant public services § Studies: – Employers: A majority positive to new requirements/new regime – NAV employees: Dialogue meetings are positive and makes a difference NAV, 3/17/2018 Side 26
. The Qualification Programme NAV, 3/17/2018 Side 27
What is the Qualification Programme? § Governments most important tool to eradicate poverty § Political expectations § A speedy implementation § Expected of 8850 participants by end of 2009 One of the main priorities of NAV in 2009 NAV, 3/17/2018 Side 28
What do we mean by Qualification Programme? § Guarantees an income (most often) above social assistance for 1 -2 years § Activities: a spectre/variety - based on an individuals unique and special needs: – – – - Work related activities and job seeking methods Training in professional skills. Coaching in social skills and building up of motivation. Physical activity and nutrition. Treatment and health issues. § The client/user has a right to have an Individual plan (IP). NAV, 3/17/2018 Side 29
Qualification programme § For whom? Significantly impaired working capacity and earning ability. Limited rights benefits from the National Insurance scheme. In particular those who have been dependent on social assistance for long periods – Those who fulfill criterias of the law have a right to the Programme – – – § Implies more work-oriented expectations and measures to these groups § ”Welfare contracts” to specify mutual expectations and obligations § Administration and implementation – – NAV, 3/17/2018 Administered by the local NAV offices Nationwide by the end of 2009 Side 30
The quantities NAV, 3/17/2018 Side 31
What if we succeed? All same aring the we ards hoot tow uniform s oal! Get it! g the same § 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 = approximately 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 = 20 billion NOK = 3 % of total state budget NAV, 3/17/2018 Side 32
Vision We give people opportunities - for work for as many as possible - for meaningful activity - for a secure income NAV, 3/17/2018 Side 33
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