Some Norwegian reforms and challenges Thorgeir Hernes, Directorate of Labour and Welfare

Some Norwegian reforms and challenges

Thorgeir Hernes, Directorate of Labour and Welfare

Reykjavik 10 November 2009

NAV, 19.04.23 Side 2

Challenges in Norwegian welfare – Norway may 2009

In the work force: At the outskirts of the work force, receiving benefits:

2 400 000 295 043 disability pension/ 45 685 temporary disability pension

(11,0 % av working age population)

126 362 sickness benefit 55 945 occupational rehabilitation 48 079 rehabilitation benefit ---------- 571 114

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People on sickness leave – nordic countries

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The number of disability beneficiaries – the double of OECD-average

Source: National insurance authorities: NIA (Norway), IV (Switzerland) and ZUS (Poland).

0

2

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1990 1992 1994 1996 1998 2000 2002 2004

Norway Netherlands Sweden United Kingdom OECD

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

% of work-age population

NAV, 19.04.23 Side 5

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=) New Labor and Welfare system is an important answer…

NAV, 19.04.23 Side 6

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

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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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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, 19.04.23 Side 9

The New Labour and Welfare Administration - main purpose

The best welfare policy is work. Focus on people’s The best welfare policy is work. Focus on people’s potential and not their the limitations potential and not their the limitations

Objectives: Objectives: – More people at work and in activity, fewer on More people at work and in activity, fewer on

benefitsbenefits– A more user friendly, user oriented system tailored A more user friendly, user oriented system tailored

to individual needsto individual needs– A coordinated, well organized, efficient employment A coordinated, well organized, efficient employment

and welfare administration with a continuous focus and welfare administration with a continuous focus on how to improve the service delivery on how to improve the service delivery

NAV, 19.04.23 Side 10

The NAV reform/merger of several user oriented services

• 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

National Insurance Organization(530 offices)

National Employment Service(210 state offices)

Social Welfare/Social Assistance (433 local units)

Sickness benefits

Rehabilitation benefits

Disability benefits

Occupational injury benefits

Family and lone parents benefits

Old age pensions

Health service benefits

Labour Market

Employment services Unemployment benefits

Vocational rehabilitation

Rehabilitation benefits

NAV offices in every municipalityNAV offices in every municipality– – to provide services in accordance with the user needs to provide services in accordance with the user needs

NAV, 19.04.23 Side 11

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, 19.04.23 Side 12

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, 19.04.23 Side 13

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, 19.04.23 Side 14

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, 19.04.23 Side 15

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, 19.04.23 Side 16

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, 19.04.23 Side 17

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, 19.04.23 Side 18

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Inclusive working lifeA new way of dealing with sickness absence

NAV, 19.04.23 Side 19

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 age of retirement

NAV, 19.04.23 Side 20

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, 19.04.23 Side 21

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, 19.04.23 Side 22

”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, 19.04.23 Side 23

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, 19.04.23 Side 24

The bottom line

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9,711,1

13,7 14,2

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8,68,26,4

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11,2

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Sykepengedager per lønnstaker, kvinnerSykepengedager per lønnstaker, menn

NAV, 19.04.23 Side 25

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

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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

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The Qualification Programme

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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, 19.04.23 Side 29

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, 19.04.23 Side 30

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– Administered by the local NAV offices – Nationwide by the end of 2009

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The quantities

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2008 Mars Mai Juli Sept. Nov. 2009Januar

Mars Mai August

An

tall

Totalt antallsøknader hittil i2008 og 2009

Antalldeltakere iprogram vedmånedensutløp

Totalt antalldeltakere hittil i2008 og 2009(i program vedmånedensutløp + sumgjennomførteprogram)

NAV, 19.04.23 Side 32

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 = 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

All

wearing the same

uniform shoot towards

the same goal! Get it!

NAV, 19.04.23 Side 33

Vision

We give people opportunities

- for work for as many as possible- for meaningful activity - for a secure income