Ombudsman censures Social Insurance Agency for delay in payments

The Parliamentary Ombudsman has criticised the Swedish Social Insurance Agency for not paying out insurances to people on time, in line with the administration act. The agency cites its recent major reorganisation for the delays in processing payments. The media and the social partners have strongly criticised the agency’s services. Thus, the government has proposed to set up a new supervisory authority for social insurance to ensure that timely payments are made by the agency.

Reorganisation heightens insurance agency’s problems

In 2007, the then Director General of the Swedish Social Insurance Agency (Föräkringskassan), Curt Malmborg, apologised to the public for the problems associated with insurance payments and presented parts of a promising plan of action to rectify these problems. This plan was drafted on the basis of results from an evaluation of the agency, which showed that the public’s trust and faith in the agency was very low. Mr Malmborg asked the public and the government for patience during the planned reorganisation.

During the autumn of 2008, many people reported the operations of the Social Insurance Agency to the Parliamentary Ombudsman of Justice (Riksdagens ombudsman, JO) and complained about long processing times and serious shortfalls in the availability of services. In fact, the proportion of complaints increased by 65% between August and December 2008, forcing the Ombudsman to take action in the matter.

Interestingly, this is not the first time that the Social Insurance Agency has had difficulties living up to its duties. In 2007, a reorganisation was initiated in order to improve the agency’s processing efficiency. However, the reorganisation has made the situation worse and the agency has publicly acknowledged that the services offered are way below the standard expected. Furthermore, the agency has apologised to those who did not receive insurance payments on time.

Deterioration in agency’s services

The Social Insurance Agency’s current insurance processing time of more than six months has caused difficulties for people who are dependent on insurances in order to make a living. This problem has been exacerbated by the recent major reorganisation of the agency. In 2004, the turnaround time was on average 110 days. In 2005, the average time for payments amounted to 136 days according to the agency’s own statistics. At the time, the agency itself considered 136 days as an unacceptable turnaround time. However, the situation has become even worse. The recent changes in sick leave regulations, which the government introduced in 2008, have also aggravated the situation. Thus, the deterioration in the agency’s service has caused financial problems for people entitled to receive insurance payments (SE0901019I, SE0805049I).

Government proposes new supervisory authority

Politicians have reacted strongly to the situation: Carina Adolfsson Elgestam of the Social Democrats (Socialdemokraterna) and also a member of the Swedish parliament (Sveriges riksdag) proposed a new supervising body. The parliament agreed with the MEP’s proposal, as they are in favour of the new supervisory authority for social insurances proposed by the government. Patience from the public, as requested by Director General Malmborg of the Social Insurance Agency, is no longer present. This new supervisory authority will aim to ensure that insurance payments are paid on time by the agency and that the administration act is followed.

Agency requests extension of annual grant from government

Because of its declining economic situation, the Social Insurance Agency has recently asked the government for an extended annual grant of SEK 600 million (€53.5 million as at 23 February 2009) and an extra one-off grant of SEK 350 million (€31.2 million) to help the agency deal with the current deficits, as well as make the delayed payments to citizens. Negotiations with the government have taken place but no decisions have yet been announced.

Social partners demand action

In a press release (in Swedish) in January 2009, the Swedish Confederation of Professional Employees (Tjänstemännens Centralorganisation, TCO) stated that the situation in the agency is chaotic and unacceptable. TCO had warned the government that such a situation might occur when the new sick leave regulations were implemented. TCO suggested to the government to carry out an inquiry, in order to gauge whether the social insurance regulation needs to be reformed. However, TCO has initiated such an inquiry on its own as the government did not follow its suggestion to do so. One of Sweden’s most acknowledged experts on work environment issues, Töres Theorell, has been appointed to lead the inquiry. The inquiry will investigate the national health insurance regulation system and the Social Insurance Agency’s role in the Swedish welfare system.

In a press statement (in Swedish) in January 2009, the Swedish Trade Union Confederation (Landsorganisationen, LO) criticised the Social Insurance Agency for not taking responsibility in retaining the welfare insurance system in the appropriate way. LO blames the agency for creating a situation where people, who are already in a severe economic situation, are forced to take out expensive bank loans or apply for social services. This creates a threat to the welfare system’s legitimacy among citizens. LO is also worried that the agency does not have the competence and capacity to act according to the new regulation for sick leave.

Commentary

The Social Insurance Agency is now taking action in the matter and has improved the information on their website about the expected delay for insurance payments. The agency has also taken measures aiming to shorten these delays. Moreover, discussion has taken place about giving priority to those who have been waiting for a long time to receive insurance payments.

Karolin Lovén, Oxford Research