In November 2006, the labour-led coalition government presented a white paper on work, welfare and inclusion. The main objective is to reduce poverty by enticing more people off welfare benefits and into employment.
On 3 November 2006, the labour-led coalition government presented a white paper on work, welfare and inclusion. The paper outlines the government’s strategies and measures to strengthen the inclusion of people who, for various reasons, have difficulties in gaining proper access to the labour market and working life. In short, the main objective of the government white paper is to reduce poverty by encouraging more people off welfare benefits and into employment.
In Norway, around 700,000 people are, at any given time, welfare benefit recipients who are positioned outside of the formal labour market; moreover, this figure appears to be increasing. The largest group are people on disability pension, representing 319,000 persons or 12% of the 18–67 year age group. Another large group comprises employees in receipt of sick pay benefits. The latest figures show that 6.8% of employees are absent from work due to sickness. According to the government white paper, a total of 500,000 person years are lost each year due to disability and sickness. This can be compared with the total of 1,962,000 person years in the Norwegian labour market in 2004, according to the National Accounts for that year. Both the number of people on sick leave and with impaired functionality are comparatively high in Norway (NO0611029I).
The most recent white paper is one of several government initiatives aimed at achieving its objective of enticing more people off welfare benefits and into employment. In addition to the white paper, the government also initiated one of the largest reforms ever seen in Norway, by merging three public sector services in November 2006 (NO0610069I). That so-called NAV reform is seen as a vital component of succeeding with the efforts outlined in the white paper.
From welfare to work
In the white paper, the government proposes to strengthen employment and inclusion of people who are outside – or losing touch with – the labour market. The underlying principle of the new welfare-to-work regime is the notion of a ‘welfare contract’. This implies vesting both rights and duties on the individual – and also on the state with regard to its provision of welfare services. It means that individuals have a duty to actively strive to attain employment or otherwise may lose their rights. In this context, several aims or measures have been put forward, the most important of which are outlined under the following headings.
Increased flexibility and improved coordination of existing welfare-to-work measures
The objective in this case is to allow more welfare recipients access to different types of labour market oriented measures. At present, access to different types of services and schemes is generally governed by whether the user is defined as a person with impaired employability or a job seeker, as well as by the type of benefit received. Being on one type of scheme and receiving one type of benefit will no longer exclude the recipient from other types of schemes and benefits, which is largely the case today.
More employment oriented measures and schemes
People with chronic illnesses currently have no alternative to the disability pension. To encourage such people back to work, the government proposes to widen the existing scheme providing wage subsidies (lønnstilskudd) for companies employing people with reduced employability. This change will be implemented in 2007.
Introduction of new temporary assured income
The wide range of benefit schemes that exist today serves to some extent to slow down the process towards employment. In recognition of this, the government aims to introduce a more transparent and uniform system by merging three important schemes: the rehabilitation scheme, the temporary disability scheme and the disability pension benefit scheme. In its new guise, the scheme will take the form of a ‘temporary assured income’.
Following a more comprehensive employability evaluation of each individual recipient, a clearer line will be drawn between those who are and those who are not employable. People who are deemed unfit to pursue any sort of work, even on an adjusted basis, will then be entitled to receive ordinary disability pension. The new income assurance scheme will be implemented from 1 January 2009.
New programme on qualifying for work
This programme is directed at those on social security benefits who, due to lack of employment, have not accumulated rights through the national insurance scheme. Such people often have a low level of education and a high degree of social insecurity. The programme aims to give social security recipients a more predictable income, while at the same time providing them with the opportunity to increase their formal and informal qualifications. The government concedes the need for further work in this area to confirm the exact details of the programme, but plans to implement it during the course of 2007.
Views of social partners
The government white paper has been broadly welcomed by the social partner organisations in Norway. Overall, the employer side seems to be satisfied with its focus on improving the employability of welfare recipients, and also with the commitment to introduce state subsidies to this end. At the same time, the employee side welcomes the proposed alterations to the present welfare regime as envisaged in the white paper.
Further information
In December 2005, the social partner organisations and national authorities in Norway signed a new agreement for an inclusive working life (NO0601101N). However, a research report published in September 2006 shows that restructuring in the Norwegian public sector may, in some cases, increase the probability of being excluded from working life through unemployment, sickness or disability (NO0610079I).
In a separate initiative pertaining to social benefits, in October 2006, the Norwegian government presented a white paper on a new pension system aimed at encouraging people to remain in employment for longer (NO0611019I).
Håvard Lismoen, Fafo Institute for Labour and Social Research