Source document: https://docs-lawep.s3.us-east-2.amazonaws.com/1694261566355.pdf (Liberia)
Social Protection in the Nordic Countries 1998 [Denne sider er blank] Social Protection in the Nordic Countries 1998 Scope, expenditure and financing Social Protection in the Nordic Countries 1998 Scope, expenditure and financing © Nordic Social-Statistical Committee 2000 Issued by the Nordic Social-Statistical Committee (NOSOSCO) Sejrøgade 11, DK-2100 Copenhagen Ø Tel.
+45 39 17 39 91 Fax +45 39 18 51 22 E-mail: nom-nos@inet.uni2.dk Website: www.nom-nos.dk Editor: Johannes Nielsen Translated by: Lone Dalgaard from: Social tryghed i de nordiske lande 1998, København: NOSOSKO, 13:2000 Cover by: Kjeld Brandt Grafisk Tegnestue ž Copenhagen Printed by: NOTEX – Tryk & Design a-s, Copenhagen 2000 ISBN 87-90248-15-5 ISSN 1397-6893 The basic data for this publication’s ta- bles on income distribution, typical cases, social expenditure, and the specifications hereof, may be downloaded from the NOSOSCO home page: http://www.nom-nos.dk/nososco.htm You can navigate through the statistics by clicking on the ‘Statistics’ menu.
Data may also be obtained from NOSOSCO’s Secretariat (please refer to the address at the top on this page).

PREFACE Preface The Nordic Social-Statistical Committee (NOSOSCO) is a permanent Committee under the Nordic Council of Ministers and the Nordic Com- mittee on Social Policy.

Set up to co-ordinate the Nordic countries’ social statistics, it analyzes and comparatively describes the scope and contents of social welfare measures.
The Committee is composed of three representatives from each country as well as a number of substitutes.

It is chaired for a three-year period by the countries in turn, with Denmark having the chairmanship for the period 1999-2001.

In its report Social Protection in the Nordic Countries, NOSOSCO pub- lishes its findings regarding current social developments.
As all Nordic countries are obliged, as a result of their EU membership or as participants in the EEA co-operation, to report data on social security to EUROSTAT, the EU’s statistical office, NOSOSCO has decided to fol- low the specifications and definitions in ESSPROS, EUROSTAT’s nomen- clature.

In the present report, a theme section concerning differences and simi- larities between the social expenditure on the elderly and the disabled.
In connection with the preparation of the present report, NOSOSCO set up an editorial group to assist the Committee Secretariat in its work.
5 PREFACE The Nordic Social-Statistical Committee is currently composed of the fol- lowing: DENMARK: Per Kampmann Rikke Thoning Torben Fridberg Carsten Torpe Steffen Hougaard FINLAND: Rolf Myhrman Anu Muuri Tuula Hausmann Mikko Pellinen Helka Hytti Tiina Heino ICELAND: Ingimar Einarsson Hrönn Ottosdóttir Kristinn Karlsson NORWAY: Odd Helge Askevold Berit Otnes Liv Torgersen SWEDEN: Mårten Lagergren Cathrina Ferrmark Hanno Barbro Loogna Lena Strömqvist Christina Liwendahl Ministry of Social Affairs Ministry of Social Affairs The National Institute of Social Research Statistics Denmark Statistics Denmark Ministry of Social Affairs and Health STAKES Statistics Finland Central Pension Security Institute Social Insurance Institution Ministry of Social Affairs and Health Ministry of Health and Social Security Social Security Directorate Statistics Iceland Ministry of Health and Social Affairs Statistics Norway National Insurance Administration Ministry of Health and Social Affairs National Social Security Office National Board of Health and Welfare Swedish Council for Social Research Statistics Sweden The Editorial Group consisted of the following members: Per Kampmann, Ministry of Social Affairs, Denmark Tiina Heino, Ministry of Social Affairs and Health, Finland Hrönn Ottosdóttir, Social Security Directorate, Iceland Anita M. Sivertsen, Ministry of Health and Social Affairs, Norway Lena Strömqvist, Swedish Council for Social Research, Sweden Johannes Nielsen, Head of NOSOSCO’s Secretariat, is the editor of the present report and acted as secretary to the editorial group.
Nordic Social-Statistical Committee, 2000.

6 CONTENTS Contents Chapter 1.

Changes in Nordic Social Policies since 1997 .......................... 8 Chapter 2.

Method.................................................................................... 21 Chapter 3.

Population and Income Distribution ........................................27 Chapter 4.

Families and Children .............................................................34 Chapter 5.
Unemployment ........................................................................65 Chapter 6.

Illness .......................................................................................84 Chapter 7.

Old Age, Disability and Survivors ...........................................99 Chapter 8.

Housing Benefits ...................................................................146 Chapter 9.

Other Social Benefits .............................................................153 Chapter 10.
Social Expenditure ...............................................................163 Chapter 11.

Theme: Differences and similarities in the social expenditure on the elderly and the disabled.. ...............................................................177 Appendix 1.

Description of the Tables Concerning Income Distribution .197 Appendix 2.

Description of Typical Cases ..............................................200 Appendix 3.
Further Information ............................................................206 NOSOSCO’s Publications ......................................................................211 Symbols Used in the Tables: Data not available........................................................................................ .. Data non-existent ......................................................................................... .
Less than half of the unit used ......................................................... 0 or 0,0 Nil (nothing to report) ............................................................................... – 7 CHANGES IN NORDIC SOCIAL POLICIES SINCE 1997 Chapter 1 Changes in Nordic Social Policies since 1997 DENMARK: Following a period with relatively high growth, the economic development has been rather slow in recent years.
While the annual average increase of the GDP was 3.3 per cent from 1994 to 1998, the growth de- creased to 1.6 per cent in 1999 and is expected to be approximately 2 per cent in 2000 and 2001.

The low economic growth is due to the tighter fiscal policy that has been implemented in order to curb growth in both the public and private demand with a view to encounter the trend towards problems in the economy balance.
The growth in production and employment resulted in a marked de- crease in the unemployment rate from 10.1 per cent in 1993 to 4.5 per cent in 1999.

As a result of the implemented structural reforms in the labour market, the decrease in the unemployment rate has not resulted in any con- siderable price and wage development.

The wage and inflation pressure has, however, been increasing during recent years.

Since 1997, there has also been an increasing surplus in the total public funds.
The deficit in the bal- ance of payments in 1998 has been turned to a surplus in 1999.

The latest labour market reform results in the unemployment benefit re- cipients’ right to be offered and obligation to accept activation as from 1999 gradually being brought forward to activation after one year of unemploy- ment.
The total unemployment benefit period will also be further reduced, from five to four years, and all young recipients of unemployment benefit under the age of 25 years have become entitled and obliged to accept acti- vation after an unemployment period of six months.

In 1999, a reform of the withdrawal system was implemented with a view to increasing job availability by way of a slower and more gradual with- drawal from the labour market.
A number of changes were implemented in the voluntary early retirement benefit scheme which, on one hand, maintain the possibility of retiring early, i.e.

from the age of 60 years, but, on the 8 CHANGES IN NORDIC SOCIAL POLICIES SINCE 1997 other hand, make it more financially favourable to continue working and postpone the transfer to voluntary early retirement benefit.
At the same time, it has become more advantageous to combine work and voluntary early retirement benefit and old age pension, respectively.

Furthermore, the pensionable age will be lowered from 67 years to 65 years with effect from 2004.

The number of new awards of anticipatory pension decreased by about one third from 1998 to 1999.

The marked drop should be seen in connec- tion with the new legislation which entered into force on 1 July 1998.
The new rules lay down that all possibilities as to rehabilitation, activation, treatment, etc., must be exhausted before an application for anticipatory pension can be made.
The preventive effort has been enhanced by an intro- duction of wage-subsidized flexi jobs for people with a reduced ability to work and an improved follow-up of incidents of long payment periods of sickness benefit with a view to uphold a person’s connection with his work place, as well as an earlier initiation of retraining and rehabilitation, etc.
Fur- thermore, the state reimbursement of the municipalities’ expenditure on new anticipatory pensioners has been reduced from 50 to 35 per cent from 1999, just as the state co-financing of the expenditure on the sickness bene- fit payable after 52 weeks was discontinued as from the middle of 1999.

In connection with the Budget for 2000, the Government entered into an agreement about the “spacious labour market” as well as about a reform of the anticipatory pension scheme.
A new anticipatory pension scheme will be added to an activation and rehabilitation system, where the ability to work will actually be tested.

A prerequisite for a reform of the anticipatory pen- sion scheme is a spacious labour market with increased possibilities of em- ployment for people with reduced working abilities.
The basic principles agreed upon for a reform of the anticipatory pen- sion scheme include a reduction of the number of benefit levels from the existing four to one or two, a simplification of the benefit structure through taxation of pensions and discontinuation of certain special benefits, includ- ing benefits in the housing benefit system, introduction of the work ability criteria, as well as a transfer of the disability compensating benefits from the Pension Act to the Social Service Act.
According to the agreement, the re- form will cover new anticipatory pensioners and is expected to enter into force in 2003.

In spite of the increasing employment rate and the marked decrease in the unemployment rate, the number of long-term recipients of cash benefit has by and large remained the same during recent years.

Immigrants and 9 CHANGES IN NORDIC SOCIAL POLICIES SINCE 1997 refugees form an increasing part of the long-term recipients of cash benefit.
The current low unemployment rate and high employment rate increase the possibilities of keeping and integrating more people in the labour market.

The demographic development, where large numbers of elderly leave the labour market concurrently with small numbers of youth entering it, more- over increases the need and the possibilities of making the labour market more spacious.
In co-operation with local authorities the Government has launched a number of initiatives with a view to maintaining and integrating weaker groups in the labour market, including people with reduced working abili- ties.

The effort must be directed more towards the labour market and be more business oriented, for example through enhancement of the business rehabilitation and increased municipal services to and cooperation with pri- vate enterprises.
Besides, the effort should be more differentiated and adapted to people’s skills and resources.

As the majority of the long-term recipients of cash benefit has completed only basic schooling, training ac- tivities must be enhanced by means of improved Danish courses for refu- gees and immigrants as well as of a reform of the education systems for adults and further education, putting priority to people with few years of schooling and training.
The enhancements of the day-care offers of recent years have resulted in a reduction in the number of children on waiting lists to a little less than 9,000 at the beginning of 1999.

Part of the efforts to abolish the waiting lists to day-care facilities has been for municipalities, who offer a day-care guar- antee for children of pre-school age, to increase parents’ payments by up to one percentage point a year for the period 2000-2002, however not exceed- ing 33 per cent.
Parents holding a free place are exempt from the increased payment.

With a view to creating a balance between public and private mainte- nance in connection with divorce or dissolution of cohabitation, there has been an increase as from 2000 of the child maintenance allowance by DKK 1,224 a year and a corresponding reduction of the ordinary child allowance to for instance single providers.
In March 2000, a new medicine subsidy system based on need was in- troduced, where the subsidy amount depends on a patient’s consumption of reimbursable medicine.

The many consumers who have a relatively moder- ate consumption of medicine will experience an increase in user payments, whereas the few people who have a relatively large consumption of medi- cine as a rule will face a reduction in their medicine costs.
10 CHANGES IN NORDIC SOCIAL POLICIES SINCE 1997 Activities in the hospital sector have increased considerably during recent years with a view to bringing down waiting periods for examinations and treatment.

As from 2000, more funds have been allocated to an increased effort within the cancer area in order to reduce waiting periods and improve the treatment quality.

The Government has, in co-operation with local and county authorities, continued its efforts to improve conditions for psychiatric patients.
The en- hancement of the district psychiatry scheme and the social housing offers has not proved sufficient to closing down psychiatric wards.

In the period 1996-1999, the district psychiatry scheme has been improved, new collec- tive housing units and residential care institutions for psychiatric patients have been established, including more single rooms in psychiatric wards.

Funds have been allocated to a continued improvement of those areas dur- ing the period 2000-2002.
FINLAND: The economic outlook for Finland is favourable.

The gross na- tional product has continued to increase for six years, and the forecast for 2000 is a growth of almost 5 per cent.

In 1999, the public sector showed a surplus for the third year in succession, whereas the state and municipal economies continued to show a slight deficit.

Following the years of reces- sion the state is encumbered by huge debts and interests payable on them.
The state economy is forecast to start showing a surplus in 2000.

The strong economic growth has a favourable impact on the employ- ment situation, and the unemployment rate is estimated to drop to about 9 per cent in 2000.

In consequence of this favourable development the un- employment expenditure is further decreasing.

The expenditure on pen- sions is increasing with the ageing of the population, and so does health spending.
The total growth of social spending is, however, still slower than that of the national economy.

The ratio of Finland’s social spending to GDP will decline to about 26 per cent in 2000, compared with almost 35 per cent in 1993.

The demand for labour has increased, which has improved in particular the employment situation of young and ageing people.

Job opportunities for ageing workers have been improved above all by the reduced number of dis- missals and the use of partial pensions.
Employment has also been boosted by so-called combined support and other active and more obliging employment policy.

Also young people with disabilities have been employed to a larger ex- tent than in the past.

Unemployment is increasingly of a structural character.

Simultaneously, there is already a lack of labour force in some areas.
11 CHANGES IN NORDIC SOCIAL POLICIES SINCE 1997 A National Programme for Ageing Workers (1998 - 2002) has been ini- tiated to promote the continued employment of ageing employees.

The chief goals of the programme are to maintain working capacity, to have an impact on attitudes and atmosphere in workplaces and to revise legislation so as to be more favourable for the participation in work of ageing employ- ees.
Some changes have been made in pensions in order to promote coping with work and postpone retirement with effect from the outset of 2000.

Among others, the age limit for entitlement to partial pension remains at 56 years to the end of 2002 and that for anticipatory pension is raised from 58 to 60 years.

Furthermore, unemployed persons aged over 55 years are now better able to accept short-time jobs without risking a weaker future pension cover.
The financing of unemployment and disability pensions has been changed so as to make it more lucrative for employers to employ older workers.

Fixed-term and shorter and shorter jobs have become increasingly gen- eral in recent years.

Consequently, from the beginning of 1998 all employ- ment periods under one month and those not exceeding the earlier mini- mum earnings limits have been covered by employment pension legislation.

Thus the pension accrues at present on the basis of almost all paid work.
The Social Assistance Act, that has been in force since 1 March 1998, incorporates the grounds for granting social assistance, which were before included in several laws and regulations.

At the same time, its basic part for children was reduced, part of housing costs was included in the costs cov- ered by the basic part, and it was made possible to reduce the basic part by 40 per cent if the person concerned refuses an offered job.
A system for evening out the substantial child welfare expenses was in- troduced in March 1999.

It is designed to level out the problems caused by high child welfare costs in particular for small municipalities.

The munici- palities invest in the system a payment determined on the basis of the num- ber of inhabitants and, in addition, part of the Government grant to mu- nicipalities is directed to it.
A municipality can receive compensation from the system if its expenditure on child welfare measures aimed at a family exceeds FIM 150,000 a year.

Client charges for health care services have been changed.

In November 1998 a specific charge for day surgery was introduced.

Compared with the earlier charge for a visit to the out-patient department of a hospital this charge was almost doubled, up to FIM 250.

At the beginning of 2000 the fee further rose to FIM 400.
At the same time, almost all charges for public health care were raised.

Furthermore, an annual ceiling was agreed on client 12 CHANGES IN NORDIC SOCIAL POLICIES SINCE 1997 charges in health care, which is FIM 3,500 during 12 months.

The charges included in the annual ceiling comprise medical services within out-patient care, visits to a hospital out-patient department, day surgery, and short-time institutional care both in health care and social welfare institutions.
After exceeding the annual ceiling, a client receives out-patient services free of charge.

It is however possible to levy FIM 70 per day for short-term care in an in-patient department.

It is estimated that the persons exceeding the an- nual ceiling number 90,000 – 100,000 a year.

As regards medicines, the pa- tient’s own deductible on prescription drugs (FIM 3,283 in 1999) has been applied since 1986.
As from August 2001, local authorities will be obliged to provide all 6 year-olds with pre-school teaching free of charge, or to offer teaching the year before the actual schooling begins.

Pre-school teaching may take place both within the school sector and the social sector.

Local authorities are en- titled on a voluntary basis to commence the new pre-school teaching along the lines of the new rules as early as from August 2000.
ICELAND: The economic development in Iceland has been very favour- able during recent years, with a growth in the GDP of 5 per cent per year for the period 1996-1999, or a little above the average calculated for the OECD countries.

Since 1997, the Government has seen a surplus on its budget each year.

This growth is expected to decrease slightly in the years to come, and the forecast for 2000 indicates that the GDP will increase by about 4 per cent.
According to the Economic Institute, inflation was between 1.7 per cent and 1.3 per cent in 1997 and 1998, but 3.9 per cent in 1999, whereas an in- flation of 5-6 per cent is anticipated in 2000.

The purchasing power has been increasing for several years, and in 1999 this increase was 5 per cent.

Estimates for 2000 indicate a decrease, so that an increase of only 1.5 per cent is expected.

Investments are increasing steadily and this trend seems to continue.
There are indications of a positive development in government finances.

Financial problems may arise, how- ever, due to a deficit in the balance of payments with other countries and to the increasing inflation.

The unemployment rate is still going down and in 1999 it was 1.9 per cent of the labour force, which corresponds to a decrease from 3,600 people in 1998 to 3,100 people in 1998.

This decrease is expected to continue.


There is, however, still differences in the unemployment rates concerning men and women, respectively, and it is increasing from year to year.

Un- 13 CHANGES IN NORDIC SOCIAL POLICIES SINCE 1997 employment among young people is also considerably higher than the aver- age unemployment rate.

In return, the unemployment situation in the Reyk- javik area is the same as that in the rest of the country, while it was consid- erably higher during the 1990s.
In the social insurance field, the development concerning the elderly and the disabled has been relatively favourable for the past 2-3 years.

Pensions and other supplements thus increased slightly more than the wage average in the general labour market.

This is confirmed by the Government alloca- tions to pensions and other services and benefits increasing by 8.8 per cent from 1998 to 1999.
During that period, the number of pensioners increased by 1.8 per cent, which was a considerable deviation from recent years where the increase was 3 per cent per year.

On the other hand, the number of dis- abled people receiving financial support increased from 2.9 per cent to 4.3 per cent.

This must be seen in relation to the measures initiated to reduce taxation of pensions as well as more in-depth methods to evaluating the dis- ability degree of an applicant.
Welfare and the future of the welfare state have been a recurring topic of the social debate of late.

In 1999, the Social Security Directorate published a report on the state of affairs in Iceland in which a comparison was made between Iceland and the other Nordic countries.

One of the main conclu- sions was that the expenditure on welfare is considerably lower in Iceland than in the other Nordic countries.
This is partly explained by a different age structure in that country, the labour market situation as well as other factors.

The most interesting aspect of the report is the description of how financially strong pension funds emerge to assume a large part of the pen- sion expenditure in years to come.

This makes it possible for the state to concentrate its efforts on those groups of elderly and disabled people who are worst off.
As from spring 1999, patients pay a maximum of ISK 5,000 for visits to specialists, the amount being independent of the nature of the consultation.

Expenditure on children is only one third of the amount pay- able before the reform.

Besides the social insurance supplements towards dental care for children, dental care for disabled people and pensioners have increased by 13 per cent.
In connection with the year of the elderly in 1999, focus was to an in- creasing degree on the elderly and their social situation.

Based on a survey on the circumstances of the elderly, as well as on social trends, the authori- ties are working to identify sectors concerning the elderly where enhanced efforts are needed.
The Minister for Health has for example set up a com- mittee that is to draw up a plan for the realization of specific measures 14 CHANGES IN NORDIC SOCIAL POLICIES SINCE 1997 within the health and social insurance areas in order to improve the situa- tion for the elderly during years to come.

Measures to improve the situation for children suffering from long-term illnesses have long had high priority.
A committee with representatives from four ministries have worked out a plan to ensure public support to those children and their parents.

Among those measures are improved training of specialist staff, enhancement of the psychiatric treatment of children and youth, as well as development of parameters for the service provided to children suffering from long-term illnesses.
For several years, mothers and fathers have to some extent been offered to share the leave period of six months granted in connection with preg- nancy and childbirth.

In 1998, a new law entered into force entitling new fa- thers to take leave from work with some compensation for an extra two weeks within the first eighteen weeks of their children’s birth.
Parental leave will be extended to nine months over a period of three years: to seven months on 1 January 2001, to eight months on 1 January 2002 and to nine months on 1 January 2003; this prolongation will be to the benefit of fa- thers.

One of the arguments for this is that a child is entitled to its father, like its mother, taking responsibility and participating in its upbringing right from the start.

For many years, the prices of pharmaceuticals and charges payable by patients have increased.
Recently, patients' situation has been somewhat improved by means of the introduction of possibilities of increasing compe- tition in the market for medicine.

Patients' payment for pharmaceutical products amounted thus in 1999 to an average of only 82 per cent of the expenditure for 1997.

NORWAY: 1999 was a year of stagnation for the Norwegian economy.

Af- ter six consecutive years of recovery, the economy grew by only 0.8 per cent from 1998 to 1999.
The development during 1999 underlines the previous impression of the Norwegian financial recovery ending in 1998, although growth has been higher in the second half year of 1999 than in the first.

The employment increase in the labour market has stopped almost com- pletely after the employment rate increased by about 50,000 people per year since 1993.

The substantial mobilization of the work force was a precondi- tion for the long-term growth up to 1999.
By the beginning of 2000, 71 per cent of the population aged 16-74 years were gainfully employed.

That is the highest employment rate registered in Norway for the past 50 years, and the unemployment rate is still low.

15 CHANGES IN NORDIC SOCIAL POLICIES SINCE 1997 Household consumption rendered a substantially lower growth impulse to the total demand in 1999 as compared with previous years.
The dispos- able real income of households increased by 2.9 per cent while consumption only increased by 2.1 per cent.

Thus personal saving increased for the third year running.

For the past 10 years, consumption prices increased on average by 2.4 per cent per year.

In 1999, the consumer price index increased by 2.3 per cent which was the same as the previous year.

An increase of 2.4 per cent is estimated for 2000.


Help to self-help is an important aim of the Norwegian welfare system, based on a wish for the individual to be able to provide for himself for as long as possible.

The best way to do so is by being gainfully employed.

By means of employment-related activities, endeavours are made to get more people into the labour market and to keep more people in general employ- ment rather than for them to become permanent benefit recipients.
The employment-related activities are still a central factor in the Norwe- gian welfare policy and it is one of the five main strategies emphasized by the government in its Stortingsmeldingen om forfordeling av inntekter og levekår i Norge (St. meld.

nr.

50 (1998-99) (Report on the Unfair Distribution of Income and Living Conditions in Norway) in order to reduce differences in income and living conditions.
In the report several special initiatives were suggested with the aim of preventing poverty and marginalization of espe- cially vulnerable groups.

As part of the effort of getting groups of disabled people and people with learning disabilities into the labour market, suggestions have been made to introduce more permanent wage supplements on a trial basis to people with variable abilities to work.

Besides, it will now be possible for single providers to receive vocational training.
Efforts are also made to improve housing policies and housing benefits to families with children in adverse circum- stances, single recipients of social benefits and young disabled people in lar- ger towns.

Furthermore, it has been suggested to increase the supplements to local authorities for them to construct houses for people living under ad- verse circumstances.
A better social security system is planned with im- proved benefits to families with children who receive social security benefits as income substitution as well as a support scheme for pensioners who have only lived in Norway for a short while.

Finally, the Government wishes to develop more goal-oriented and better coordinated health and social ser- vices in order to reach those with the largest needs.

A fairer taxation is an- other goal.


Some of the measures to obtain a better distribution of income 16 CHANGES IN NORDIC SOCIAL POLICIES SINCE 1997 and to improve living conditions are expected to be launched in connection with the Budget for 2001.

In March 2000, Norway got a new Government, and it is expected that the Government will follow up on several of the sug- gestions presented in the report from the Parliament.

On 1 August 1998, cash benefits for one-year-olds became payable.
The scheme was extended to comprise two-year-olds as from 1 January 1999.

The benefit is a cash benefit payable to parents with children between one and three years, who do not or only partly make use of a place in a state- subsidized kindergarten.

The full amount is NOK 3,000 per month, and this amount will be reduced subject to the time spent by a child in a kinder- garten.
The benefit scheme for single providers has been restructured as from 1 January 1998 to improve the financial situation of single providers with small children and to encourage them to provide for themselves after a tran- sition period.

The restructure results in higher benefits for a shorter period of time.

Absence due to illness has increased every year since 1994.
In 1998 and 1999, absence due to illness was more extensive than it was in 1988 which so far is the year showing the highest absence due to illness.

On 1 April 1998, the employer period was extended from 14 to 16 calendar days and from 1 January 1999, the minimum income basis for entitlement to sickness benefit increased from half of the basic amount of the Social Security Scheme to one and a quarter of its basic amount.
This implies that a person must have an annual income from work of at least NOK 58,689 in order to be entitled to sickness benefit from the Social Security Scheme.

Employees who have a lower income are still entitled to sickness benefit from their em- ployers for the first 16 calendar days.

As from 1 January 2000, the mini- mum income basis for entitlement to sickness benefit is once again half of the basic amount.
Since 1997, the social authorities have bought operations and examina- tions of people who are on sick leave in order for them to return to work faster.

In 1999, 4,500 people received treatment through this scheme, and on average people who had received treatment returned to work 51 days earlier than they would otherwise have done.
The number of invalidity pensioners continues to increase, and in 1999, invalidity pensioners made up 9.6 per cent of the population aged 16-66 years, as against 9.1 per cent the year before.

The Government has set up a public committee to identify the reason for this increase in the absence due to illness and the number of anticipatory 17 CHANGES IN NORDIC SOCIAL POLICIES SINCE 1997 pensioners, including the societal reasons for this as well as possible initia- tives to curb the increase.
The committee will submit its report in Septem- ber 2000.

On 1 May 1998, the minimum pension amount increased by NOK 1,000 per month.

The minimum pension now amounts to NOK 84,204 per year.

In the years to come, the number of people over 80 years will increase considerably.

Central Government contributes to the increase in the num- ber of places in care institutions and residential care as well as earmarked funds to the nursing and care sector.
These measures are aimed at enabling local authorities to extend offers to the elderly concurrently with the number of elderly increasing as well as at contributing to improving the quality of existing options.

The Norwegian Parliament has decided to extend and improve options for the period 1999-2006 for people with mental disorders.

This plan shall result in a considerable improvement of options for people with mental dis- orders as well as in user-oriented measures both in counties and local areas.
Prevention, early assistance and rehabilitation are in focus.

SWEDEN: The trend in the Swedish economy continues to be favourable.

The employment rate increases and the unemployment rate is estimated to fall to 5.4 per cent during 2000.

During 2000 and 2001 the economic growth is estimated to reach at least 3 per cent.

Prices continue to be stable, and Sweden currently has one of the lowest inflation rates in Europe.

The balance of payments also saw a positive development.
The export increase mainly takes place within the telecommunications and pharmaceutical products industries.

As a result of the positive balance of payments, the large Swedish foreign dept will be reduced, and interest rates have as a re- sult of the increased confidence in the financial market been kept at a his- torically very low level.

Also the value of the Krone has increased although Sweden does not participate in the European Monetary Union.
The aim of the employment policy is to establish full employment again.

Since autumn 1997, the unemployment rate has been reduced by 3 per- centage points.

The highest growth in the employment rate took place in the private service sector, but an increase was also seen in the municipal sector due to increased resources.

Altogether, the employment rate is ex- pected to increase by 4.3 per cent from 1998 to 2000, corresponding to 170,000 people.
The actual employment rate for the population aged 20-54 years is estimated to amount to approximately 77 per cent in 2000.

18 CHANGES IN NORDIC SOCIAL POLICIES SINCE 1997 Public finances have shown an increasing surplus since 1998 which has consolidated the public sector’s gross debt, the so-called Maastricht debt, which will be under 60 per cent of the GDP in 2000.

Adjustments will be made to the system by means of a cost ceiling aimed at controlling the de- velopment in public expenditure.
For 2000, a surplus of the public finances of 1.5 per cent of the GDP is anticipated.

It will increase to 2 per cent in 2001 and the following years.

Due to the improved financial situation, more resources could be allo- cated to the municipal sector, both as larger state subsidies and as higher tax revenues.

The nursing, school and care sectors have been given high prior- ity.

Those sectors will be granted an increase of SEK 27 billion in 2001 as compared with 1997.
In spite of the fact that the development in the mu- nicipal sector as a whole is good, there are still problems in some munici- palities and counties.

Many municipalities still have financial problems due to relocation, imbalance in the age structure and too little growth.

Compen- sation is made through the municipal compensation system for the struc- tural problems that cannot be influenced.
An analysis of the distribution effect of public consumption shows that it contributes highly to a more uniform consumption in the society.

More public resources are used for whose with a low financial standard than for the more well-to-do, and women receive more support than men.

The dif- ferences between the various groups in the use of child-care facilities have been reduced during the 1990s.

Child-care facilities are, however, still used to a higher extent by well- educated parents.
Payments for child care depending on income and time create problems by creating marginal effects for parents who pass from un- employment to work, or who increase there working hours.

For this reason, the introduction of a maximum ceiling for payment for child care has been planned.

Life expectancy continues to increase and several indicators show an im- provement in public health.
The social differences in poor health and mor- tality do not decrease, however, and there is a trend towards an increasing number of people suffering from mental disorders.

The income distribution has barely changed during the 1990s.

The gap between those having a low or a high level of education has been reduced markedly, and - like Finland and Denmark - Sweden has a more even distribution of income and level of education than almost all other countries.
Further steps have been taken to enhance patient influence and partici- pation in prevention and treatment of illness through legal changes.

By 19 CHANGES IN NORDIC SOCIAL POLICIES SINCE 1997 means of higher subsidies from the state, local and county authorities have become able to decrease waiting periods within the health sector, as well as to solve the current problems in the health sector for the elderly.
Initiatives have been made to improve the co-operation between the county health- care sector and the municipal schemes for care for the elderly when it comes to medical assistance.

By introducing a new model for county subsidies, the cost development control concerning pharmaceutical products is expected to improve.

As from 2001, the county authorities will resume responsibility for medical expenses.

Only few changes will take place within the social insurance sector in 2000.
The child allowance will be increased by SEK 100 to SEK 850 per month.

The price basic amount will be increased to SEK 36,000.

Pension payments, other benefits and the benefit ceiling will be adjusted accord- ingly.

The pension supplement payable to elderly, anticipatory pensioners and survivors was already increased in June 1999; the increase was granted as a compensation for the increase in the maximum user charge for phar- maceuticals.

In 1999, it was decided to introduce a new Social Security Act.
This implies that the social insurance scheme be divided into two parts: a housing-based insurance consisting of a guaranteed amount and a supple- ment, and a work-based insurance to cover loss of income.

The new rules will enter into force on 1 January 2001.

Within the anticipatory pension system it will as from 2000 be possible to become a dormant pensioner.
During a period of 12 calendar months, including the three months' trial period, an insured person may try to take on work without losing his pension rights.

The expenditure on sickness insurance has increased for the third con- secutive year.

Due to the steep expenditure increase, an examination has been initiated in order to find an explanation to the reason for this increase.

An examination must also provide proposals for measures to reduce the continued expenditure increase.
An examination concerning rehabilitation will be made during 2000.

Furthermore, an examination of a number of family allowances and marginal effects of the benefits has been initiated.

20 METHOD Chapter 2 Method The present report follows the structure and definitions of the ESSPROS1) nomenclature.

The overall definition in Social Protection in the Nordic Coun- tries was, however, previously almost identical to that used by EURO- STAT.
EUROSTAT uses the following order: Illness; Disabled People; Old Age; Survivors; Families and Children; Unemployment; Housing Benefits; and Other Social Benefits.

For the sake of continuity, NOSOSCO has decided to keep the original order in its description of the social protection systems, which is as follows: Families and Children; Unemployment; Illness; Old Age, Disability and Survivors; Housing Benefits; and Other Social Benefits.
Old Age, Disability and Survivors are described together in one chapter of three sections, as pensions and services provided to these groups are interrelated, both at the regulatory and at the organizational level.

Further on the ESSPROS Classification The main features of ESSPROS are the following: the overall classification is made according to schemes to illustrate whether these schemes cover all of a population or only part of it.
Furthermore, it must be evident who the de- cision makers are, whether or not the schemes are subject to payment of contributions, and whether the schemes are voluntary or statutory.

EURO- STAT has not previously published figures according to schemes, but merely lists of schemes for each country defined by the individual countries within the framework of ESSPROS.
ESSPROS classifies schemes that cover an entire population, irrespective of affiliation with the labour market (universal schemes), benefit schemes that cover only the labour force (general schemes), and special benefit schemes 1ESSPROS = European System of Integrated Social PROtection Statistics.

21 METHOD (special schemes) that cover part of a population.

The countries define which national schemes fall under the individual schemes within the framework of ESSPROS.
A distinction is made between basic schemes which cover the ma- jority of a population, and supplementary schemes which are benefits pro- vided in addition to the basic amounts, etc., or which extend the coverage of a basic scheme.

EUROSTAT gathers tables (data) for each function, including subclas- sifications, which depend on each item of expenditure being classified ac- cording to a scheme, in addition to two main tables covering revenue and expenditure in connection with social benefits and services.
Changes in Relation to the Previous Report Compared with the previous report, a number of corrections have been made in the social expenditure.

In the previous report, Denmark and to some extent Sweden shifted expenditure on home nursing from expenditure on the elderly and the disabled to illness.

Norway has done the same in the present report and has revised the 1997 expenditure accordingly.
Iceland has included the calculated expenditure on wages payable in relation to childbirth and adoption; that entry represents the highest increase in the so- cial expenditure on families and children.

As quite a few reforms have taken place in the pension systems in some of the Nordic countries, a revision has been made of the sections on pen- sions in Chapter 7.
Definitions Both in the previous versions of Social Protection in the Nordic Countries and in ESSPROS, statistics have been based on the notion that they should pri- marily include all public transfer incomes and service measures aimed at in- suring citizens in certain specific situations as well as against the conse- quences of certain types of social occurrences.

Also included are schemes that are compulsory for large groups of people as a result of collective or other kinds of agreements.
The statistics concern current running costs.

As a rule, investment spending and tax reductions are not taken into account.

22 METHOD Social Benefits The definition of a social benefit is a benefit that is of real advantage to the recipient.

This means that the recipient does not pay the market price or the full running costs for services.
That the recipient, by being affiliated with an insurance scheme, has paid contributions – and thereby in reality has fi- nanced, fully or partly, what he receives – is of no significance in this con- text.

The benefits must present a direct value to the citizens.

Consequently, subvention to trade and industry, e.g.

in the shape of subsidies to housing construction, is not regarded as social benefits.
Registration Accounts from public authorities and other social administrations are, wherever possible, used in the registration of expenditure and revenue.

In some cases, the expenditure and financing will, however, have to be given as calculated amounts.

In other cases, the required specification cannot be made on the basis of the national accountancy systems, and consequently the figures have to be broken down on the basis of estimates.
In cases where user charges are payable for social services, the expendi- ture is registered after deduction of such charges.

The expenditure on such social services is consequently not the total running costs, but the net amount for the body in charge of the service in question.

Financing Incoming funds or contributions to the financing of social expenditure are made up of means deriving from public authorities, employers and insured individuals or households.
The incoming funds are used for current pay- ments in the course of the year, and in some cases also for the establishment of funds to ensure future payments.

According to need and rules, these funds also cover current payments.

Yield on funds in the shape of income from interest and property can first and foremost be found in relation to pensions.
Where transfers are made to funds, and where means from funds have been used for the financ- ing of the current social expenditure, these are listed by net amounts in the expenditure statistics.

23 METHOD Benefits from public authorities payable only to their own employees are regarded as benefits payable by an employer.
Certain benefits payable by employers to their employees, such as sickness benefit for part of a period of illness, are regarded as being financed by an employer, even though such benefits in other connections are regarded as part of the employees’ salaries.

Charges payable by citizens (user charges) for social services have not been included in the social expenditure tables.

Yield on real property is in- cluded as part of the financing according to ESSPROS´s method of calcula- tion.
Specifications Specification of the individual expenditure entries can be downloaded from NOSOSCO’s homepage (cf.

the colophon).

Administration Costs In the present report, administrative costs are listed as one single entry.

In principle, only expenditure on direct administration of the social expendi- ture is listed.

It is, however, not always possible to separate administrative costs from other wage/salary or running costs.
Typical Cases To illustrate the compensation payable in connection with various social oc- currences, calculations have been made for different types of families and income levels as to the compensation level of a number of benefits.

The cal- culations are based on the earnings of an ‘Average Production Worker’ (APW), calculated by the OECD.

A detailed description of the typical cases can be found in Appendix 2 of the present report.
The calculations concerning the typical cases can be downloaded from NOSOSCO’s home page (cf.

the colophon).

24 METHOD Calculation of Distribution of Income In order to illustrate further the significance of social cash benefits to the distribution of income, information on the composition and distribution of disposable incomes for households in the five countries have been included in Chapters 3, 4 and 7, respectively.
A household consists of adults and any children living at one and the same address, irrespective of the children’s ages.

This does, however, not apply to Iceland where children over the age of 15 living at home are considered as independent households.

The data are (with the exception of Iceland) based on representative samples of the populations in each of the countries.

Based on these population segments, calculations have been made of the income distribution.
Data have been re- trieved in respect of each individual population segment from administra- tive records and special surveys on income, tax, social benefits and services, family types, etc.

The basis for the calculations for the tables and figures can be seen in Appendix 1.

The spreadsheets, on which the tables and figures in the present report are based, concerning distribution of income can be downloaded from NO- SOSCO’s home page (cf.

the colophon).
the colophon).

Purchasing Power Parities Purchasing power parities (PPP) are defined as the currency conversion factor corresponding to the purchasing power of the individual currencies.

This means that a certain amount, when converted from different curren- cies by means of PPP factors, will buy the same amount of goods and ser- vices in all the countries.
The PPP calculations have partly been used in the comparison of social expenditure, partly in the comparison of compensation levels in connection with various social occurrences.

The PPP calculations used in the present report are in PPP-Euro.

The following estimates have been used for the individual countries: Denmark 9.44; Finland 6.955; Iceland 94.24; Norway 12.36 and Sweden 10.85.
In the calculations in the tables of income distribution, which are based on 1997 data, estimates for 1997 have been used.

25 METHOD Ways of Comparing the Nordic Countries with Europe In the other Western European countries (the EU Member States), a sub- stantial expansion of the social protection systems has generally taken place during the past decades.
Comparing the Nordic countries with the EU Member States presents some difficulties, but can be done when it comes to the data on social expenditure gathered by EUROSTAT, the statistical of- fice of the EU.

The introductions to the various chapters contain tables of the social ex- penditure in the respective fields, seen in relation to the overall social ex- penditure.

Miscellaneous All the Nordic countries are now using the SNA-93/ESA-95 systems when calculating the gross domestic product (the GDP).
This shift has resulted in an increase in the GDP - highest in Norway by approximately 10 per cent and lowest in Finland by approximately 2 per cent.

In connection with this shift, the countries have adjusted their GDP for the previous years.
26 POPULATION AND INCOME DISTRIBUTION Chapter 3 Population and Income Distribution Population The demographic composition of the populations in the Nordic countries varies somewhat from one country to another, which is significant both in relation to the need for minding facilities for infants, activities for children and young people, number of unemployed people and their age groups, number of old-age pensioners, as well as the need for care and nursing of the oldest age groups.
After stagnating for several years, the birth rate has again increased dur- ing resent years, but in some of the countries, the birth rates have, however, again started to fall.

The increasing number of infants has, to varying de- grees, led to an increase in the need for minding facilities.

At the same time, the number of people in the oldest age groups has in- creased and consequently also the need for care and nursing.
There are, however, marked differences between the countries and between the two sexes.

In all the countries, there are more women than men in the oldest age groups, which naturally results in many women living alone during their last years.

Of the Nordic countries, Sweden has the oldest population and Iceland the youngest.
In relation to the rest of Europe, the average figures for the EU countries do not show the same increase in population in respect of the youngest age groups, whereas the trend towards there being more people in the oldest age groups, in particular as far as women are concerned, is also found within the EU countries.
27 POPULATION AND INCOME DISTRIBUTION Table 3.1 Mean population by sex and age, 1998 Denmark Finland Iceland Norway Sweden 1,000 Per cent 1,000 Per cent 1,000 Per cent 1,000 Per cent 1,000 Per cent Men 0-6 years 7-17 » 18-24 » 25-49 » 50-64 » 65-79 » 80- » Total Women 0-6 years 7-17 » 18-24 » 25-49 » 50-64 » 65-79 » 80- » Total Men and women 0-6 years 7-17 » 18-24 » 25-49 » 50-64 » 65-79 » 80- » Total POPULATION AND INCOME DISTRIBUTION Figure 3.1 Population by sex and age as percentage of the total popula- tion, 1998 Denmark Finland Males Females Males Females 80+ 75-79 70-74 65-69 60-64 55-59 50-54 45-49 40-44 35-39 30-34 25-29 20-24 15-19 10-14 5-9 0-4 80+ 75-79 70-74 65-69 60-64 55-59 50-54
 45-49 40-44 35-39 30-34 25-29 20-24 15-19 10-14 5-9 0-4 45 3 2 01 0 45 3 012 0 Iceland Norway Males Females Males Females 80+ 75-79 70-74 65-69 60-64 55-59 50-54 45-49 40-44 35-39 30-34 25-29 20-24 15-19 10-14 5-9 0-4 80+ 75-79 70-74 65-69 60-64 55-59 50-54 45-49 40-44 35-39 30-34 25-29 20-24 15-19 10-14 5-9 0-4 45 3 2 01 0 45 3 012 0 Sweden EU-countries Males Females Males Females 80+ 75-79 70-74 65-69 60-64 55-59 50-54 45-49 40-44 35-39 30-34 25-29 20-24 15-19
 10-14 5-9 0-4 80+ 75-79 70-74 65-69 60-64 55-59 50-54 45-49 40-44 35-39 30-34 25-29 20-24 15-19 10-14 5-9 0-4 45 3 2 01 0 45 3 012 0 % % % % % % 29 POPULATION AND INCOME DISTRIBUTION Income Distribution Several studies have shown that the differences in the income level are rela- tively small in the Nordic countries in comparison with those in most of the OECD countries.
Figure 3.2 shows the distribution of the disposable household income for each country in 1997, broken down by quartiles.

The quartiles have been calculated on the basis of the equivalent dispos- able income.

The first quartile is composed of the households with the low- est incomes, whereas the households with the highest incomes constitute the fourth quartile.

As can be seen from the figure, the distribution of income among the households is relatively homogenous in the Nordic countries.
In Finland and Sweden, the lowest quartile forms a slightly larger part of the total household incomes than is the case in the other Nordic countries.

It should be mentioned, however, that the Icelandic data are not completely comparable with the data from the other Nordic countries (cf.

Chapter 2).

This may explain the larger income dispersion in Iceland.
Figures 3.3 and 3.4 show the average disposable incomes for single peo- ple and couples, respectively, broken down by quartiles, converted into PPP-Euro.

They also show the distribution on factor income and social ser- vices and benefits in per cent of the gross income, as well as the tax in per cent of the gross income in 1997.

The quartiles have been fixed on the basis of the disposable incomes for the total number of households.

As was the case in Figure 3.2, equivalent incomes have been used.
The average disposable income for single people is highest in the first quartile in Norway and lowest in Iceland.

In the fourth quartile, it is highest in Norway and lowest in Sweden.

For couples, the disposable income in the first quartile is highest in Norway and lowest in Iceland.

In the fourth quar- tile, it is also highest in Norway and lowest in Finland.
The proportion of the social benefits of the gross income is for all coun- tries (with the exception of single people in Iceland) largest for the house- holds with the lowest disposable incomes, and smallest for the households with the highest disposable incomes.

The social benefits are in other words contributing to the elimination of differences in the incomes.
The very low cash benefits payable to single people in the lowest income bracket in Ice- land are due to the fact that this group comprises children over the age of 15 years living at home (cf.

Chapter 2).

In the other countries, social bene- fits constitute a relatively large part of the gross incomes in the lowest quar- tile for single people.
For couples with children, social benefits constitute a 30 POPULATION AND INCOME DISTRIBUTION relatively large part of the gross income in the lowest quartile in Denmark, and to some extent also in Finland, Norway and Sweden.

Social benefits also constitute a considerable part of the gross income in the higher quar- tiles for single people and couples with children in Finland and Sweden and for single people in Denmark.
In all the countries the social cash benefits constitute a larger part of the gross income for all single people than for all couples with children.

This is mainly due to the number of pensioners and other households who receive transfer in- comes being larger among single people than among couples with children.

The tax share of the gross income is in all the countries lowest for the households with the lowest disposable incomes and highest for the house- holds with the highest disposable incomes.
Consequently, the tax system is contributing to the elimination of the differences in the income levels.

The tax share of the gross income is clearly higher in Denmark than in the other countries.

This is due to the fact that employers’ social contribu- tions play a significantly larger role in the financing of public benefits in the other Nordic countries (cf.

Chapter 10).

Differences in the taxation of the social benefits from one country to another are also relevant.
A more detailed description of the calculation basis can be found in Ap- pendix 1.

Figure 3.2 Distribution of household incomes by quartiles, per cent, 1997 Per cent 50 45 40 35 30 25 20 15 10 5 0 Denmark Finland Iceland Norway Sweden 1 2 3 4 31 POPULATION AND INCOME DISTRIBUTION Figure 3.3 Average disposable income in PPP-Euro, distribution in per cent of the gross income on factor incomes, social cash benefits and taxes as percentage of the gross income, broken down by quartiles, 1997.
Single people with or without children Denmark Finland Pct.

100 80 60 40 20 0 -20 -40 Pct.

100 80 60 40 20 0 -20 -40 Pct.

100 80 60 40 20 0 -20 -40 1 2 3 4 Iceland PPP-Euro 30,000 25,000 20,000 15,000 10,000 5,000 0 -5,000 -10,000 PPP-Euro 30,000 25,000 20,000 15,000 10,000 5,000 0 -5,000 -10,000 Pct.

100 80 60 40 20 0 -20 -40 Pct.
100 80 60 40 20 0 -20 -40 1 2 3 4 Norway PPP-Euro 30,000 25,000 20,000 15,000 10,000 5,000 0 -5,000 -10,000 PPP-Euro 30,000 25,000 20,000 15,000 10,000 5,000 0 -5,000 -10,000 1 2 3 4 1 2 3 4 Sweden PPP-Euro 30,000 25,000 20,000 15,000 10,000 5,000 0 -5,000 -10,000 Social cash benefits Factor income Taxes Disposable income in PPP-euro 1 2 3 4 32 POPULATION AND INCOME DISTRIBUTION Figure 3.4 Average disposable income in PPP-Euro, distribution in per cent of the gross income on factor incomes, social cash benefits and taxes as percentage of the gross income, broken down by quartiles, 1997.
Married and cohabiting couples with or without children Denmark Finland Pct.

100 80 60 40 20 0 -20 -40 Pct.

100 80 60 40 20 0 -20 -40 Pct.

100 80 60 40 20 0 -20 -40 1 2 3 4 Iceland PPP-Euro 30,000 25,000 20,000 15,000 10,000 5,000 0 -5,000 -10,000 PPP-Euro 30,000 25,000 20,000 15,000 10,000 5,000 0 -5,000 -10,000 Pct.

100 80 60 40 20 0 -20 -40 Pct.
100 80 60 40 20 0 -20 -40 1 2 3 4 Norway PPP-Euro 30,000 25,000 20,000 15,000 10,000 5,000 0 -5,000 -10,000 PPP-Euro 30,000 25,000 20,000 15,000 10,000 5,000 0 -5,000 -10,000 1 2 3 4 1 2 3 4 Sweden PPP-Euro 30,000 25,000 20,000 15,000 10,000 5,000 0 -5,000 -10,000 Social cash benefits Factor income Taxes Disposable income in PPP-Euro 1 2 3 4 33 FAMILIES AND CHILDREN Chapter 4 Families and Children While the Nordic countries spend almost identical amounts of the total so- cial expenditure on families and children, somewhat larger differences can be seen in the expenditure patterns in the EU countries.
Table 4.1 Expenditure on families and children as percentage of the total social expenditure in the EU, Iceland and Norway, 1997 12.6 12.6 12.5 13.7 10.8 Denmark Finland Iceland Norway Sweden 13.2 Italy 5.3 Luxembourg 2.0 The Netherlands 9.1 Portugal Spain 10.1 United Kingdom 10.5 Note: The source is EUROSTAT: Social Protection Expenditure and Receipts.

European Un- Austria Belgium France Germany Greece Ireland 8.8 10.0 8.2 3.7 13.2 3.5 ion, Iceland and Norway Edition 2000.
A characteristic feature of Nordic families is that there are relatively many single parents.

In all the countries, there are considerably more single mothers than there are single fathers.

The large number of single parents reflects the frequent collapses of the family structure.

The Nordic countries also differ from the other European countries in that the participation rate among women is high (cf.

Chapter 5).

This in- creases the need for child-minding options during parents’ working hours.
34 FAMILIES AND CHILDREN Table 4.2 Families by family type, 1998 Number of families with children aged 0-17 years (1,000) Percentage of whom are: – Married couples – Cohabiting couples – Single people Total Number of families without children (1,000) Percentage of whom are: – Married couples – Cohabiting couples – Single people Total Number of single people with children (per cent): Men Women Total Number of single people without children (per cent): Men Women Total Average number of people per family Denmark Finland Iceland1) Norway2) Sweden3)4) 645 64 18 18 100 625 67 14 19 100 40 573 1,141 55 22 23 100 63 15 22 100 80 { .. 68 100 12 88 100 48 52 100 2.0 { 36 64 100 23 77 100 59 41 100 2.0 1 Children aged 0-15 years.
2 Cohabiting couples without joint children have been calculated under single people.

3 Figures from labour-force surveys performed by Statistics Sweden.

The data have been calculated on the basis of a selection of about 17,000 individuals per month.

The number of people per family has been calculated by dividing the number of households with per- sons between 18 and 64 years by the total population under 65 years.

4 Cohabiting couples included under married couples.
The significance of social cash benefits to the disposable incomes of families with and families without children appears from Figure 4.1.

The figure shows the distribution of gross income on factor income and social cash benefits for families and single people with or without children, respectively.
35 FAMILIES AND CHILDREN Figure 4.1 Income structure in 1997 for single people and for couples aged 20-44 years Denmark No children 1 child 2 children 3+ children No children 1 child 2 children 3+ children -40 -30 -20 -10 0 10 20 30 Pct.

40 50 60 70 80 90 100 Factor income Social cash benefits Taxes Finland No children 1 child 2 children 3+ children No children 1 child 2 children 3+ children -40 -30 -20 -10 0 10 20 30 Pct.
40 50 60 70 80 90 100 Factor income Social cash benefits Taxes Iceland No children 1 child 2 children 3+ children No children 1 child 2 children 3+ children Single people Couples Single people Couples Single people Couples -40 -30 -20 -10 0 10 20 30 Pct.
40 50 60 70 80 90 100 Factor income Social cash benefits Taxes 36 Figure 4.1 continued … Norway No children 1 child 2 children 3+ children No children 1 child 2 children 3+ children FAMILIES AND CHILDREN Single people Couples -40 -30 -20 -10 0 10 20 30 Pct.

40 50 60 70 80 90 100 Factor income Social cash benefits Taxes Sweden No children 1 child 2 children 3+ children No children 1 child 2 children 3+ children Single People Couples -40 -30 -20 -10 0 10 20 30 Pct.
40 50 60 70 80 90 100 Factor income Social cash benefits Taxes The relative income level for single people and couples with or without children, respectively, appears from Table 4.3, the average disposable in- come for all single people and all couples with children having been fixed at 100.

A family consists in this connection of adults and children living to- gether at one and the same address, irrespective of the children’s ages.
Families with children are defined as families with children of the age group 0-17 years living at home.

As to Iceland, children over 15 years are, how- ever, counted as independent households.

Equivalent incomes have been used in the comparison.
37 FAMILIES AND CHILDREN Table 4.3 Index for disposable incomes for single people and married or cohabiting couples with or without children, respectively, and total disposable incomes in PPP-Euro for all in the age group 20-44 years, 1997 (total disposable income = 100) 1) Denmark Finland Iceland Norway Sweden Single people Couples Single people Couples Single people Couples Single people Couples Single people Couples Index for disposable income No chil- dren 1 child 2 children Total dis- posable in- come in PPP-Euro Total The basis of the calculations is the equivalent disposable income.
As appears from Table 4.3, the equivalent disposable incomes for childless families are higher than are the disposable incomes for families with chil- dren.

In Finland, however, cohabiting or married couples with one child have a disposable income that almost corresponds to that of cohabiting or married couples without children.

It is furthermore characteristic of both single parents and couples with children that the disposable income is lower, the more children there are in a family.
In Iceland, where a different family definition is used, the relative income level for couples without children is clearly higher than it is for couples with children, but the income level for couples without children is also relatively high in Denmark, Norway and Sweden.

From Figure 4.1 it appears that in all the countries social cash benefits represent a considerably larger part of the gross income for single people than is the case for couples.
In particular for single people, social cash bene- fits represent a larger part of the gross income for families with children than is the case for families with no children.

It is also characteristic that the more children there are in a family, the larger the part of the gross income is represented by social benefits - and similarly, the more children there are in a family, the smaller is the part represented by tax of the gross income.
In all the countries, social benefits and taxes contribute to levelling off the differences in factor incomes between single people and couples, between families with children and families without children, and between families 38 FAMILIES AND CHILDREN with one child and families with two or more children.

For couples with chil- dren, social cash benefits play the most important part in Finland and Sweden and the least important part in Iceland.
In all the countries, the social cash benefits constitute a considerable part of the gross income for single providers.
The differences in the significance of social cash benefits to the individ- ual family types are a result of two different factors: firstly, the composition of the social benefits payable to families with children; it is essential that special benefits are granted to single parents in all the countries (with the exception of Sweden), and that the benefits per child in all the countries (with the exception of Denmark and Iceland) increase concurrently with the number of children in a family.
Secondly, the differences are consequences of differences in for example the extent of unemployment in the various families.

This is significant to the differences between single people and couples, as the unemployment rate is generally higher among single people than among couples.

Within the age group 20-44 years, single people are normally younger than are couples, and consequently there are more stu- dents receiving student grants among single people.
Cash Benefits to Families and Children2) Daily Cash Benefits in Connection with Childbirth or Adoption – Financial support to all in connection with childbirth and adoption In all Nordic countries, compensation is granted to cover loss of income in connection with childbirth during the weeks prior to and the months follow- ing childbirth.

In all the countries, a similar benefit is payable in connection with adoption.
In all the countries, with the exception of Iceland, the benefit payable in the 2 Pensions payable to children who have lost one or both parents are described in Chapter 7 together with the other pensions.

Special benefits which are granted as supplementary so- cial benefits to families and children are described in Chapter 9.
39 FAMILIES AND CHILDREN Table 4.4 Rules governing payment of income-substituting cash benefits in the event of childbirth as per December, 1998 Denmark Finland Iceland Norway Sweden Working (employees) Maximum number of weeks in which mater- nity benefits are payable Of which (weeks): – Only the mother - Father together with mother – Only the father – Either the mother or the father Of which: – Before birth Benefit taxable?
Not working Maximum number of weeks in which mater- nity benefits are payable Benefit taxable?

Leave period sharable with father?

30 18 2 2 10 41) Yes – .

44 262) 523) Approx.

645) 18 3 - 26 5-8 Yes 44 Yes 4 22) – 2 4 9 4 2 4 2 4 39 Approx.

60 Max.

12 Max.

approx.

9 Yes Yes Yes 282) Non-recurrent payment Approx.

64 Yes No No No4) Yes Yes .

Yes, but for a max.

of 26 weeks 1 The period may be prolonged in case of a difficult pregnancy, or if work is a risk to the foe- tus.
Public-sector employees and some private-sector employees are entitled to maternity leave with pay for eight weeks prior to birth according to collective agreements.

2 In Iceland, fathers are as of 1 January 1998 entitled to paternity leave for 2 weeks within the first 8 weeks following the confinement.

The period may be prolonged, if either the mother or the child is suffering illness.

3 42 weeks with 100 per cent compensation or 52 weeks with 80 per cent compensation.
4 May be shared if the mother dies, and/or the father is awarded custody.

5 Fathers are entitled to 10 days in connection with the confinement.

These days are not in- cluded in the 64 weeks.

event of loss of income is based on previous earnings.

In Denmark, Finland and Iceland, public-sector employees and some private-sector employees re- ceive full pay during the months following childbirth.
Non-public employees in Iceland receive a fixed amount irrespective of their income, but the amount depends on the rate of employment (full-time or part-time employment).
40 FAMILIES AND CHILDREN Table 4.5 Amount of income-substituting cash benefits in the event of childbirth as per December, 1998 Denmark Finland Iceland Norway Sweden Working (employees) Amount of maternity benefit (per week) in per cent of previous income Income ceiling per week for full compensation in national currency1) Income ceiling per week for full compen- sation in PPP-Euro1) Min.

amount per week in national currency Min.

amount per week in PPP-Euro Max.

amount per week in national currency Max.


amount per week in PPP-Euro Not working Amount of maternity benefit (per week) 2,971 315 – – 2,688 285 100 Normally 70 .

.

.

100/80 80 5,235 5,250 424 484 .

.

360 11,9572) 436/349 420 56 123 35/28 39 .

.

16,1122) 5,235/4,188 4,186 171 424/339 386 .

360 7,082 6183) 420 1 The income ceiling is the income limit (previous income) in relation to which the maternity benefit is calculated.
The calculation of the income ceiling is made in accordance with dif- fering principles in the various countries.

2 The amount of the maternity benefit depends on the amount of work carried out during the 12 months prior to giving birth.

The minimum amount will be payable after between 516 and 1,031 hours of work, and the maximum amount after 1,032 hours or more.

3 In Norway, a non-recurring amount of NOK 32,138 is payable for 52 weeks, correspond- ing to NOK 618 per week.
Only mothers qualify for the benefit payable prior to childbirth, whereas in all the countries, the benefit payable after childbirth may be granted to the fathers instead of to the mothers, but according to somewhat varying schemes.

In Denmark, one must be affiliated with the labour market in order to receive the benefit, either by being self-employed, a wage-earner or a recipi- ent of unemployment or sickness benefits according to specific rules.
In the other Nordic countries, people who are not affiliated with the la- bour market also qualify for a benefit.

In Finland, Iceland and Sweden, 41 FAMILIES AND CHILDREN however, only a small amount is awarded, and in Norway, the benefit is a non-recurrent payment.

In Denmark, Finland and Sweden, fathers are also entitled to daily cash benefits for a number of days immediately following childbirth at the same time as mothers receive maternity benefit.
In Norway, fathers are entitled to take leave together with the mothers immediately following the birth, but without pay.

Both in the public and in large parts of the private sector there are, however, collective agreements granting wage compensation to fathers for a certain amount of days (usually 14 days) immediately following childbirth.

The period in which daily cash benefit is payable in connection with birth and adoption is generally relatively long in the Nordic countries.
Maternity leave is, however, significantly longer in Sweden than in Iceland and Denmark.

The compensation level in connection with childbirth also varies consid- erably from one country to another.

Figure 4.2 shows the disposable income at five different income levels, i.e.

for a single childless employed person and for a single mother receiving maternity benefit.

Figure 4.3 shows the disposable income at four different income levels.
The calculation has been made for a couple with no other children than the new-born and for a couple who already has two children.

The compensa- tion level is the amount of the disposable income where the person earning the most receives maternity benefit, stated in per cent of the disposable in- come, where both are gainfully employed.
As can be seen from Figure 4.2, the compensation level is over 100 per cent for single parents in the lowest income brackets in all the Nordic coun- tries, with the exception of Iceland.

This is primarily due to the child allow- ances payable for new-born children, but also to the housing benefit being higher for families with children than it is for childless families.

Something similar applies to couples, cf.

Figure 4.3.
Figure 4.3.

In respect of couples with two children besides the new-born, the high compensation level in the lowest income groups (in particular in Sweden) can be attributed to the payment for places in day-care institutions for the other two children being lower when the parent earning the most receives maternity benefit.

This is also a contributing factor to the compensation level of the lowest income groups being higher for families with two chil- dren than it is for childless families.
42 FAMILIES AND CHILDREN Figure 4.2 Disposable income for a single person with a new-born child, 1998 Denmark PPP-Euro PPP-Euro Finland 2,000 1,750 1,500 1,250 1,000 750 500 250 0 I II III IV V 2,000 1,750 1,500 1,250 1,000 750 500 250 0 I II III IV V PPP-Euro PPP-Euro Iceland Norway 2,000 1,750 1,500 1,250 1,000 750 500 250 0 I II III IV V PPP-Euro Sweden 2,000 1,750 1,500 1,250 1,000 750 500 250 0 2,000 1,750 1,500 1,250 1,000 750 500 250 0 I II III IV V Disposable income per month (December) Disposable income per month (December), while the single person recieves maternity benefit I II III IV V Note: The income groups I-V have been calculated on the basis of the average wage of a produc- tion worker.
The calculation basis is described in Appendix 1.
43 FAMILIES AND CHILDREN Figure 4.3 Disposable income while receiving maternity benefit as per- centage of disposable income when working, 1998 Couple without children besides the newborn Couple with 2 children besides the newborn Per cent Per cent 110 100 90 80 70 60 50 110 100 90 80 70 60 50 I II III IV I II III IV Denmark Finland Iceland Norway Sweden Denmark Finland Iceland Norway Sweden The compensation levels also depend on the level of the daily cash benefits seen in relation to previous income.
As mentioned above, a fixed amount is payable in Iceland to both full-time and part-time employees, irrespective of income.

Besides, public employees and some private employees are paid in full for the first months following childbirth.

In the other countries, the daily cash benefits are lowest in Finland and highest in Denmark and Norway, measured in relation to previous income (cf.

Table 4.5).

In Finland, in re- turn, there is no upper limit to the level of daily cash benefits.
In the other countries, the maximum daily cash benefit is highest in Norway and Swe- den and lowest in Denmark.

These factors contribute to the compensation level generally being high- est in Norway, also in respect of the upper income brackets.

In Sweden and Finland, the compensation levels are also relatively high for the upper inco- me brackets, whereas the level in Denmark, and in particular in Iceland, is relatively low for those groups.
44 FAMILIES AND CHILDREN Table 4.6 Recipients of daily cash benefits in the event of pregnancy, childbirth or adoption during the year, 1990-1998 Denmark Finland Iceland1) Norway Sweden Number of beneficiaries Men 1990 1995 1997 1998 Women 1990 1995 1997 1998 Number of benefit days (1,000) Of which percentage of men 1990 1995 1997 1998 1 Entitlement to daily cash benefit during maternity leave shall lapse if a mother is entitled to 8.8 10.3 11.1 .. 5.8 6.7 .. 0.1 0.1 2.4 3.6 3.8 4.1 4.4 4.3 11.6 7.0 2.3 3.9 4.8 full pay from her employer.
Of the 5,004 mothers receiving daily cash benefit in 1998 3,374 received daily cash benefits due to giving birth in 1998; 704 other mothers who gave birth in 1998 were not entitled to daily cash benefits as they received full pay during the maternity period.

It is characteristic that more and more men make use of the leave schemes in connection with childbirth or adoption.
However, both the number of re- cipients and the number of days in which maternity benefit is received vary considerably from one country to another.

This partly reflects differences in the coverage of the schemes, partly in the duration of the period in which one is entitled to that benefit.

In Den- mark, fathers’ entitlement to paternity benefit has been extended by two weeks as from 1998.
As per 1 January 1998, Icelandic fathers obtained an independent entitlement to paternity leave for two weeks within the first eight weeks of childbirth.

Norway has seen a rise in the number of men re- ceiving daily cash benefits.

This is due to both a new scheme from 1993 45 FAMILIES AND CHILDREN giving men an exclusive right to four weeks of leave with daily cash benefits as well as a ‘time-account’ scheme that since 1994 has allowed for flexible use of leave of absence with daily cash benefits.
The Swedish figures are not comparable with those from the other countries, as the benefit is payable for more days per child than is the case in any of the other countries.

Besides, parents may be entitled to daily cash benefits until a child reaches the age of 8 years.

In 1998, about 89 per cent of the total amount of days for which parental daily cash benefit was paid was for children under the age of two years.
For women about 90 per cent of the days were for children under the age of two, and for men, it was about 73 per cent.

Cash Benefits to Parents Minding Children – Entitlement to leave of absence for child minding In Denmark, parents with children under the age of nine are entitled to child- minding leave.

In 1997, parents were entitled to 13 weeks’ leave, but 26 weeks if the child was under one year old.
In agreement with one’s employer or the public employment service, a leave period may be prolonged to a total of 52 weeks.

The leave scheme applies to both wage earners, self-employed and un- employed people.

During a parental leave period, a child must not make use of any public day-care facility if it is under the age of three years, and may only be in half-day care if it is between three and eight years old.
The benefit payable during leave was in 1995 reduced from 80 to 70 per cent of the maximum amount of daily cash benefits and was further reduced to 60 per cent in 1997.

Moreover, local authorities may grant a supplementary benefit of up to DKK 35,000 per year.

The average number of people on child-minding leave dropped from 22,000 in 1997 to 20,000 in 1998 and 1999.
In Finland, parents are, after having received parental daily cash benefit for a while, entitled to choose between a place in a municipal day care insti- tution or an allowance towards minding of small children.

The scheme was continued as per 1 August 1997.

The allowance may be granted either as a supplement towards child minding in the home or a supplement towards private child minding.

The allowance towards child minding in the home is payable if a family has a child under the age of three years.
The allowance may consist of a basic amount and a supplement.

The basic amount is FIM 1,500 per month for a child under three years and FIM 500 per month for each additional child under three years.

For other children of pre-school age, the allowance amounts to FIM 300 per month.

46 FAMILIES AND CHILDREN The supplement (FIM 1,000) will only be granted for one child and is subject to the family income.

At the end of 1998, child-minding allowances were being paid for 129,400 children.
Allowance towards private child minding is described in the section on day-care institutions and family day care.

Parents may also choose to work reduced hours if they have children un- der the age of three.

They will then be entitled to a partial minding allow- ance of FIM 375 per month.

In Iceland, there are no schemes for parental benefits in connection with child-minding.

In Norway, there is a so-called time-account scheme.
The scheme ap- plies in the event of childbirth or adoption and makes it possible for part of the maternity benefit to be paid in combination with income from work for a period exceeding the standard periods of 42 or 52 weeks.

Where 52 weeks of absence from work with 80 per cent of the pay have been chosen, a minimum of six and a maximum of 39 weeks must be used in combination with reduced working hours.

Where 42 weeks with full pay have been cho- sen, between six and 29 weeks must be used in this way.
The period of work may be fixed at 50, 60, 75, 80 or 90 per cent, and the rate of the ma- ternity benefit payable as a supplement to the income will consequently be 50, 40, 25, 20 and 10 per cent, respectively.

In 1998, 2.6 per cent of moth- ers and 0.8 per cent of fathers chose the time account.

Three fourth of the women chose leave with a compensation level of 80 per cent.

About 30,200 fathers received daily cash benefit.


Of these 4,260 fathers received paternity benefit for longer than the four weeks that are reserved for fathers.

In Norway, a cash benefit for one-year-olds was introduced on 1 August 1998 and for two-year olds on 1 January 1999.
The cash benefit amounts to NOK 3,000 per month and is granted per child without being subject to in- come or need; the benefit is exempt from tax and will not be reduced or shortened in the event that the beneficiary receive other public benefits at the same time.

The amount of the cash benefit is determined by the Nor- wegian Parliament.

The condition for receipt of the full amount is that no place is taken up in a state-subsidized kindergarten.
A graduated benefit is granted in connection with a part-time place in a kindergarten.

In Sweden, parents are entitled to a parental benefit for 64 weeks in con- nection with childbirth.

This period may de divided into several shorter pe- riods until a child turns eight or has completed its first year of schooling.

In most of the countries, there are also schemes entitling parents to stay at home without pay to take care of their children.
47 FAMILIES AND CHILDREN Minding of sick children In all Nordic countries, parents are entitled to some extent to stay at home to mind a sick child.

In Norway and Sweden, this right is governed by law and in the other countries by collective agreements.

In all the countries, parents themselves decide whether the mother or the father shall stay at home to take care of a child.
In Sweden, it is also possible for an insured person other than one of the parents to take time off to mind a sick child and to receive daily cash benefit.

In Norway, single providers are entitled to 20 days of absence and couples to 10 days of absence each to mind a sick child.

As to the length of the period in which one is entitled to stay at home to mind a sick child, the scheme is most generous in Sweden allowing 60 days per year per child, and least so in Denmark and Iceland.
In Denmark, Finland and Iceland, full wage compensation is given, how- ever, in connection with child minding during short-term illness.

In Nor- way, a benefit equivalent to the amount of sickness benefit is payable, while in Sweden, a compensation corresponding to 80 per cent of the income from work is payable.

In Denmark, Finland, Norway and Sweden, there are also special rules concerning minding of chronically or seriously ill children.

Those rules are described in Chapter 7.


Child Allowance – An allowance payable for all children In all five countries, an allowance is payable for children.

The allowance is tax free and independent of parents’ income, with the exception of Iceland where the child allowance is means-tested.
In Denmark, the allowance is payable until a child reaches the age of 18; in Finland, until a child reaches the age of 17; and in Iceland, Norway and Sweden, until a child reaches the age of 16 years - 20 years in Iceland and Sweden, however, if a child is re- ceiving education.

In all the countries, Central Government finances the child allowance.

48 FAMILIES AND CHILDREN Table 4.7 Rules governing child allowance 1998 Denmark Finland Iceland Norway Sweden Child allowance income- adjusted?
Child allowance exempt from tax?

Same allowance granted for children of all age groups?

Supplements for any addi- tional children?

Extra child allowance to single parents?

No Yes No No Yes No Yes Yes Yes Yes Yes Yes No Yes Yes No Yes No Yes Yes No Yes Yes Yes No In Denmark and Iceland, the family allowance is higher for children be- tween the ages of 0 and six years than it is for children over the age of six years.
In Denmark, the allowance is higher for the 0-2 year-olds than it is for the 3-6 year-olds.

In Norway, a supplement is payable for children aged 1-3 years, as well as supplements for children living in the Finnmark and in certain municipalities in Troms County.
As from 1998, an extra infant sup- plement was introduced to single providers who have children between 0 and 3 years and who meet the requirements for entitlement to the increased child allowance according to the Act on Child Welfare and for the full tran- sition allowance according to the Social Security Act.

The supplement is awarded per single provider.

The extra infant supplement amounts to NOK 7,884.- per year.
In all the countries, apart from Sweden, a special child allowance is pay- able to single providers, making the allowance per child higher for single parents than it is for two-parent families.

In Finland and Norway, the child allowance per child will be increased for each child in the family, in Norway up to and including the a fifth child.

In Denmark, Finland and Norway, an extra child allowance is payable to single providers.
In Sweden, no new multiple-birth supplements were granted in 1996 and 1997, but as from 1998, the multiple-birth supplement will be granted again to families with three or more children.
49 FAMILIES AND CHILDREN Table 4.8 Annual amount of child allowance as per December 1998 Couple with: 1 child 2 children 3 children Single parent with: 1 child 2 children 3 children Denmark Finland DKK1) FIM Iceland Norway Sweden ISK2) NOK3) SEK 10,000 20,000 30,000 6,420 14,304 23,652 - - 60,349 11,112 22,740 35,832 9,000 18,000 29,400 18,192 32,836 47,480 8,820 19,104 30,852 165,398 312,459 475,683 22,740 35,832 49,572 9,000 18,000 29,400 Average amount of child al- lowance per child in KR/FIM 10,418 7,682 60,590 14,035 9,531 Average amount of child allow- ance per child in PPP-Euro 1 Calculations have been made on the basis of a general family allowance for the 3-6 year- 1,136 1,104 1,105 643 878 olds of DKK 2,500 per quarter to both single parents and couples.
The allowance payable for the 0-2 year-olds amounted to DKK 2,750 per quarter and DKK 1,950 per quarter for the 7-17 year-olds.

2 In Iceland, the amount of the allowance is subject both to the number of children in a fam- ily and to the family income.

The maximum amount to a couple with one child 0-15 years is ISK 104,997 and ISK 174,879 to single parents.

For each child over one year, a maxi- mum of ISK 124,980 is payable to cohabiting couples and ISK 174,879 to single parents.
Besides, a supplement of ISK 30,930 is payable for children between 0 and 6 years.

Where a couple’s annual income exceeds ISK 1,169,568 and that of a single parent ISK 584,784, the allowance will be reduced by 5 per cent of the earnings exceeding the maximum amount for one child, 9 per cent for two children and 11 per cent for three or more chil- dren.

The calculations have been made for a child under 7 years.

The average amount ap- plies to all children between 0 and 15 years.
3 The calculation has been based on child allowances for children between 3 and 16 years plus the supplement for Northern Norway.

A supplement of NOK 657 per month is granted for children aged 1-3 years plus the supplement for Northern Norway of NOK 316 per month.

In Denmark, special child allowances may be granted where one of a child’s parents is a pensioner, or where one of the parents has died, or where paternity has not been established.
In Iceland, a non-income regu- lated supplement is granted in the shape of maternity or paternity wages to widows and widowers, unmarried or divorced women who provide for two or more children under the age of 18 years.

If the parents are old-age or an- ticipatory pensioners, the child allowance will be paid as a supplement to the pension.

The amount is tax free and not subject to any income.
50 FAMILIES AND CHILDREN Advance on Maintenance Allowance for Children – The allowance is payable in advance by the public authorities For children whose parents do not live together, a maintenance allowance will normally be payable by the parent not living with the child.

A mainte- nance allowance for children will be fixed in connection with a dissolution of marriage and as part of the legal proceedings in connection with birth of a child out of wedlock.
The allowance will be fixed either according to agreement between the parents by way of a court decision or a decision rendered by the local authorities.

Where the party liable to pay does not comply on time, the party entitled to the allowance may, in all the Nordic countries, be paid in advance by the public authorities.

The age limit for entitlement to advanced payment of the maintenance allowance is 18 years.
In Iceland, Finland and Sweden, the pe- riod may be extended to 20 years if a child is receiving education.

In all the countries, a minimum has been fixed for the amount of the maintenance-allowance advance.

In Finland, Norway and Sweden, the pub- lic authorities pay the difference up to the minimum amount if the party li- able to pay is unable to do so.

In Norway, the number of children receiving maintenance-allowance advances as percentage of the number of children entitled to allowances has decreased.
This is due to an amendment of the law to the effect that maintenance-allowance advances will now only be payable where the party liable to pay does not pay or does not pay on time.
Table 4.9 Amounts of maintenance-allowance advances in 1998 Denmark Finland Iceland Norway Sweden Maximum amount per child per year, KR/FIM Maximum amount per child per year, PPP-Euro 8,904 7,678 146,460 12,840 14,076 943 1,104 1,554 1,039 1,297 51 FAMILIES AND CHILDREN Table 4.10 Number of children receiving maintenance-allowance advances as percentages of the population under 18 years, 1990-1998 Denmark Finland Iceland Norway Sweden 1990 1995 1997 1998 14 15 15 15 7 10 11 11 16 17 19 19 12 15 12 12 15 16 16 16 Other Benefits In Norway, the general child allowance is supplemented with tax relief for children.
The expenditure on this relief is, however, not included in the so- cial expenditure statistics.

Single providers may also be granted a so-called transition allowance for maintenance by the Social Security Scheme.

In Finland, Iceland, Norway and Sweden, a child pension has been in- troduced in the shape of a basic pension and a supplementary pension.

In Denmark, a special child allowance is granted.

Child pension is payable to children in the event that one or both parents are deceased.
Child pensions are described in detail in Chapter 7.

Services to Families and Children In the Nordic countries, it has been decided to provide children and families with an extensive daily service.

The responsibility for the operation of such services rests primarily with the local authorities who provide day care insti- tutions for children and young people, pre-school classes, family day care, child-minding in the homes, as well as child and youth welfare schemes.
Children who are physically or mentally disabled will, as far as possible, be integrated in the general care schemes.

In all the countries, families with children may, in exceptional cases, be granted home help.

This applies for example in cases where the person tak- ing care of the home and the children is unable to do so due to illness, childbirth or the like.

Families may furthermore be granted assistance in order to avoid that children and young people be placed outside of their homes.
52 FAMILIES AND CHILDREN Day Care Institutions and Family Day Care – Children are looked after in both public and private institutions Day care institutions for pre-school children Children at pre-school age are received in day care institutions.

In all the countries, most institutions provide both full-time and part-time places, but full-time institutions and part-time institutions also exist separately.
Both in Denmark, Finland and Norway, parents may, according to slightly differing rules, be granted a cash amount for completely or partly taking care of their children in their own homes.

In all the countries, local authorities must ensure that there are a suffi- cient number of places available.

In Denmark, 71 per cent of the munici- palities provided a child-minding guarantee in 1998 for children aged 0-9 years, whereas another 7 per cent guaranteed child-minding for part of that age group.
Since 1998, local authorities have been able to grant financial support to parents who choose private child-minding over a public day- care-facility offer.

In Finland, all children under seven years have since 1996 been entitled to a place in a municipal day care institution or in family day care.

Since 1 August 1997, parents may also have their children looked after in a private home with municipal subsidies.
The local authorities pay the amount direct to the institution/private individual looking after the child/children.

The subsidy consists of a basic amount of FIM 700 and a supplement of FIM 800, where the supplement is subject to parents’ in- come.

By the end of 1998, subsidies were paid for to private minding of 12,755 children.
In Iceland, 88 per cent of all children aged 3-5 years and 64 per cent of all children aged 0-5 years had places in public day care institutions for children or in family day care.

In Norway, 51 per cent of all children aged 0-5 years had places in a kindergarten or in family day care.

In Sweden, children whose parents are actively employed or study are given priority to a child-minding facility.

Besides, there are minding schemes for children who need special support.
Family day care Municipal family day care exists in all Nordic countries.

These schemes mainly cover pre-school children.

Municipal child-minders are employed and paid by the local authorities and receive children in their own homes.

53 FAMILIES AND CHILDREN As is the case with places in day care institutions, parents pay for having their children minded in family day care.

In all the countries, there is also private family day care that is run without any subsidies from public authorities.
Such child-minding options are not included in the Nordic social statistics.

Pre-school classes In both Denmark, Finland and Norway, there are special classes preparing young children for school.

These classes have been established according to somewhat differing rules.

In Denmark, local authorities are obliged to offer children a place in a pre-school class for at least 20 hours per week – an offer that is accepted by 98 per cent of all children.
After school hours, children may spend time in either day care institutions or after-school club schemes.

In Finland, the scheme is not compulsory, but about 78 per cent of the children participate in measures preparing them for school.

In Iceland, all 6 year-olds must attend school and are consequently not included in these statistics.

In Norway, children start school at the age of six where they are receiv- ing education adapted to their age.
In Sweden, local authorities are as from 1998 obliged to offer all 6 year- olds a minimum of 525 hours in the new school structure - pre-school class.

In the autumn 1998, 92 per cent of all 6 year-olds attended pre-school class, whereas 6 per cent already had started school proper.

All 6 year-olds are en- titled to start school if their parents so wish.

Children of school age In all the countries, there are day care options for children of school age.
Minding may either take place in special youth centres for children of school age or may be integrated in the minding of pre-school children in the day care institutions.

In Norway, the responsibility for the development of after-school club schemes is placed with the school sector.

This also largely applies in Denmark, Iceland and Sweden.

The range of offers varies from one municipality to another.

There are different age limits for entitlement to places at youth cen- tres/after-school-club schemes.
In Denmark, the age limit is 10 years in some municipalities and 14 years in others.

In Finland, there is normally no age limit, but in special cases it may be 10 years.

In Iceland, it is 9 years, in Norway 10 years and in Sweden 12 years.
54 FAMILIES AND CHILDREN Table 4.11 Children enrolled in day care institutions and family day care (thousands) by age, 1990-1998 Denmark Finland1) Iceland2) Norway3) Sweden4) 3 10 13 1 13 34 145 179 11 190 55 141 196 17 213 19 120 139 .. .. 101 218 319 123 441 88 161 248 74 322 103 263 367 146 512 1990 0-2 years 3-6 years 0-6 years, total 7-10 years 0-10 year-olds, total 1995 0-2 years 3-6 years 0-6 years, total 7-10 years 0-10 year-olds, total 1997 0-2 years 3-6 years 0-6 years, total 7-10 years 0-10 year-olds, total 1998 0-2 years 3-6 years 0-6 years, total 7-10 years 0-10 year-olds, total 1 Figures from and including 1997 include children in publicly subsidised private day care 123 367 490 198 688 108 362 470 242 712 118 404 522 223 745 110 253 363 166 529 114 244 358 152 511 39 149 188 .. .. 50 134 184 .. .. 49 139 188 .
.

44 178 222 9 231 45 175 220 10 230 5 12 17 - 17 5 12 17 – 17 5 12 17 – 17 institutions.

2 As from 1995, only children between 0 and 5 years, as the after-school schemes were taken over completely by the school sector in 1995 (no statistics available).

3 As from 1997, only children between 0 and 5 years.

4 As from 1998, a special pre-school class has been introduced for 6 year-olds.

These children have not been included in the calculation, unless they also attend a day care institution.
The number of children who are covered by day care schemes in day care institutions and family day care varies significantly from one country to another.

Some of the reasons for this are the extent of the unemployment and the fact that children in pre-school classes in Denmark also spend time in day care institutions after having attended their pre-school classes.

The low figures for the 0-2 year-olds in Finland are due to the home-care allow- ance option.
In Sweden, the long maternity-leave period also plays a signifi- cant part.
55 FAMILIES AND CHILDREN Table 4.12 Children enrolled in day care institutions and family day care, by age as percentages of the respective age groups, 1990-1998 Denmark Finland1) Iceland2) Norway3) Sweden4) 1990 0-2 years 3-6 years 0-6 years, total 7-10 years 0-10 year-olds, total 1995 0-2 years 3-6 years 0-6 years, total 7-10 years 0-10 year-olds, total 1997 0-2 years 3-6 years 0-6 years, total 7-10 years 0-10 year-olds, total – 35 39 66 55 - 35 11 57 33 .. .. 22 61 44 .. .. 28 73 50 .. .. 29 64 48 38 44 37 74 59 45 54 41 84 68 68 60 1998 0-2 years 3-6 years 0-6 years, total 7-10 years 0-10 year-olds, total 1 Figures as from 1997 include children in publicly subsidised private day care institutions.
2 As from 1995, only children between 0 and 5 years.

The inscription percentage is 90,5 for 42 79 66 49 59 55 90 75 65 72 27 75 51 .

.

42 68 57 - 36 25 69 51 4 33 3-5 year-olds and 6.6 for 0-5 year-olds.

3 As from 1997, only children between 0 and 5 years.

4 Cf.

Table 4.11, note 4.


56 FAMILIES AND CHILDREN Child and Youth Welfare – Preventive measures are in focus In all the Nordic countries, various forms of preventive measures are taken to further the upbringing of children and youth in safe and comfortable envi- ronments.

These may comprise both general measures and measures specifi- cally aimed at individual children or youths.
Legislation in the various countries also allows for the public authorities to step in to lend support if the risk arises of children or young people grow- ing up in adverse circumstances.
In Denmark, 28,049 families made use of one or more preventive meas- ures during 1998 in the shape of advisory services, practical educational support in the homes, family treatment, stays in residential institutions for both parents and children, or financial support with a view to avoiding plac- ing children outside of their homes.
Furthermore, by the end of 1998, 6,226 children and youths had been placed in residential care, with foster families or in other relevant places, to relieve their parents from taking care of them for a while.

1,369 children and youths had had a personal advisor appointed to them, and 275 children a specific contact person.

1,923 children and youths received financial support towards staying at boarding or continua- tion schools without that being an actual placement outside of their own homes.
In Finland, the preventive child welfare service is responsible for influ- encing the development of children’s well-being as well as for preventing the risks to which a child may be exposed.

Such measures may be in the shape of support staff or support families, support to getting a job, a place to live, or support to hobby activities.

In 1998, 38,632 people received sup- port.

92 per cent of these were children under 18 years, whereas the remain- ing 8 per cent were between 18 and 20 years.
In 1998, there was an addition of 9,183 new clients, corresponding to 24 per cent of all those receiving as- sistance.

In Iceland, 1,080 children made use of one or more preventive measures during 1997.

Of these, 652 were placed outside of their homes for short or long periods.

In Norway, 24,300 children made use of one or more preventive meas- ures in 1998.

8,737 were placed in respite homes; 5,579 were allocated sup- port contacts.
Support and contact people are employed by the local au- thorities to follow up on the young people in order for them to function well in social terms.

8,778 people received financial or other support.

Some of 57 FAMILIES AND CHILDREN the children were also placed outside of their homes as part of the preven- tive scheme.

The Child Welfare Service cared for 5,800 children in 1998, all of whom were placed outside of their homes, either with families or in in- stitutions for children.
In Sweden, preventive measures consist of initiatives for families with in- fants with a view to improving the interaction between parents and children.

Measures may also take the shape of group activities for young people and/or single mothers as well as for children of alcoholics, or extended pre- school classes combining daily work with visits to the homes aimed at pro- viding families with practical and psycho-social support in the homes.
For criminal young people, abusers and young people with other psycho- social problems, measures have been developed to the effect that a youth in the course of a day participates in a number of structured activities, usually work/studies and organized leisure activities.

Another kind of activity is the so-called contact staff.

An adult contact person or family is assigned to a child or youth whom they see regularly.
A contact person or contact family is the part of the open efforts which most children and youths had contact with in 1998.

About 21,000 children and youths had such a contact during the year.

About 17,000 children and youths received personal support based on need, and about 3,500 partici- pated in a structured treatment programme (without placement) during 1998.

In all the countries, it may become necessary to place a child outside of its home.
The reasons may be that parents need help to bring up a child, or that a child’s health or development is threatened due to lack of proper care.

Measures may also be taken if young people themselves expose their health or development to grave danger, e.g.

through alcohol and/or drug abuse or crime.

In all the countries, children may be removed from their homes without the consent of their parents.

In Finland and Sweden, this is done following a court decision.
In Denmark and Iceland, special municipal child and youth committees decide whether or not a child is to be removed from its home.

In Norway, special committees under the county authorities decide whether the child welfare service must assume care of a child and place it outside of its own home, but the law also allows that a child be placed outside of its home without any decision being made by the welfare service about assuming care.
The number of children placed outside of their own homes varies from one country to another, but one trait common to all the countries is that more preventive measures are taken in the homes, in respect of children and families.
58 FAMILIES AND CHILDREN Table 4.13 Children and young people placed outside of their own homes during the year, by age and per 1,000 inhabitants in the respec- tive age groups, 1990- Denmark 0-6 years 7-14 years 15-17 years 18-20 years 0-20 years Finland 0-6 years 7-14 years 15-17 years 18-20 years 0-20 years Iceland1) 0-6 years 7-12 years 1 3-16 years 0-16 years Norway 0-6 years 7-14 years 15-17 years 18-19 years 0-19 years Sweden2) 0-6 years 7-14 years 15-17 years 18-20 years 0-20 years 1 Children and young people of the ages 7-12, 13-16 and 0-16 years.
2 As from 1998, figures include a group of 18-20 year-olds are who are receiving treatment according to the Social Service Act.

This group of mainly 19-20 year-olds was previously included in the statistics as adult abusers.

 .. .. .. ..
In Denmark, the decline in the number of placements is furthermore a re- sult of a number of young people who are at boarding or continuation schools – due to an amendment of the law in 1993 – no longer being con- sidered to be placed outside of their homes.

The number of placements is nevertheless still somewhat higher in Denmark than in the rest of the Nordic countries.

This mainly applies to the 15-20 year-olds.


Even after the 59 FAMILIES AND CHILDREN amendment of the law in 1993, a relatively large number of young people in Denmark are placed outside of their homes, e.g.

at boarding schools or con- tinuation schools, in lodgings or in socio-instructional communal housing.

This is only the case to a limited degree in the other Nordic countries.

The development in Norway is i.a.


due to an enhanced effort on the part of the local authorities which has lead to cases being dealt with faster, and that more children and youth have – for a period of time – been placed out- side of their own homes.
Expenditure on and Financing of Cash Benefits and Services for Families and Children Differences and similarities in the expenditure on families and children The amounts calculated in PPP per capita spent by the Nordic countries on families and children vary highly.

Denmark spends the most and Iceland the least.

It should be mentioned, however, that only Finland and Iceland have included salaries and wages in calculations concerning childbirth and adop- tion in the social expenditure.
A more detailed picture appears from the distribution on the individual benefit areas.

Sweden and Norway, who have the largest expenditure on daily cash benefits in connection with childbirth and adoption, also have the longest leave schemes.

In return, Iceland spend the largest amount on benefits pay- able on childbirth.

Such benefits are also granted in Norway, but are almost non-existent in the other countries.
Both Finland and Denmark spend relatively large amounts on parental benefits for child minding, but these benefits are granted to different schemes.

In Denmark, it is leave schemes for child-minding, in Finland, al- lowances for minding children in the home, and in Sweden, where a some- what lower amount is spent, it is temporary parental benefits.

In Norway, the amount covers expenditure on a child-supervision scheme.
This is a scheme aimed at single providers who are granted a financial subsidy for minding children; the subsidy shall enable the single provider to be profes- sionally active.

Similar allowances do not exist in the other countries.

60 FAMILIES AND CHILDREN The expenditure on child allowances is highest in Norway and lowest in Sweden.

This should be seen in relation to the allowance per child clearly being highest in Norway and lowest in Iceland and Sweden.
Expenditure on other cash benefits is mainly public authorities’ advance payment of main- tenance allowances for children where Sweden spend the highest amount.

Norway spends more on transition allowances and study grants to single, divorced and legally separated providers.

Such benefits are not payable in the other countries.

When it comes to services, Denmark spend the most and Iceland the least.
In Denmark, the expenditure on both day-care institutions and residen- tial institutions, preventive measures, etc., is considerably higher than in the other countries, followed by Sweden.

There are certain parallels in the ex- penditure on day-care institutions and the degree of coverage in the various countries.

As the expenditure on after-school-club schemes are not included in the social expenditure, there is no direct connection between expenditure and the degree of coverage.
The considerably higher expenditure on residential institutions, preven- tive measures, etc., in Denmark is due to the number of children and young people placed outside of their own homes being relatively high in Denmark.
Development in the social expenditure on families and children from 1997 to 1998 In Denmark, the expenditure on the child-minding leave scheme continued to decrease as a result of a decrease in the leave benefit from 70 to 60 per cent of the daily cash benefit maximum as per 1 April 1997 and partly as a result of a slight decrease in the number of parents on leave.
In return, the expenditure on day facilities increased as a result of an increase in the num- ber of enrolled children of about 23,000 from 1997 to 1998, including chil- dren in the after-school club schemes.

The expenditure on after-school schemes which is not included in the Nordic statistics on expenditure in- creased from about DKK 2.2 billion in 1997 to about DKK 2.3 billion in 1998.

In Finland, the expenditure on families and children has remained unal- tered.
However, the expenditure on day-care institutions and minding of children in the homes has increased.

In Iceland, the social expenditure on families and children has increased from 1997 to 1998.

Although the expenditure on cash benefits dropped on 61 FAMILIES AND CHILDREN Table 4.14 Expenditure on and financing of cash benefits and services for families and children, 1998 Denmark Finland Iceland Norway Sweden Cash benefits, million KR/FIM A.

Daily cash benefit in the event of childbirth and adoption B.
Birth grants C. Parental leave benefits D. Family or child allowances E. Supplements F. Other a.

Of which advance on maintenance allowance to children Cash benefits, total Services, million KR/FIM A.
Child day care B. Accommodation C. Home help D. Other Services, total Total expenditure, million KR/FIM Expenditure as percentage of GDP Financed by (per cent) – Public authorities – Employers – The insured (contributions and special taxes) Changes 1997-1998 in terms of 1998 prices – Million KR/FIM – Per cent 4,658 - 1,567 11,781 - 35 35 2,855 53 2,231 8,353 - 515 515 1,444 681 - 4,360 - 605 605 6,366 492 625 13,822 - 3,577 501 11,236 20 2,892 16,855 - 2,989 2,989 18,040 14,007 7,089 24,882 33,992 19,176 5,365 12 1,488 26,040 44,080 7,301 771 179 1,040 9,291 23,297 4,421 970 50 800 6,242 13,331 9,341 1,213 - 4,801 15,354 40,236 27,073 5,411 - 3,228 35,712 69,704 3.8 3.4 2.3 3.6 3.7 85.9 0.3 13.8 89.7 4.5 5.8 87.7 12.3 - 80.4 11.3 8.3 80.6 19.0 0.4 1,656 3.9 198 0.9 670 5.3 594 1.5 112 0.2 Table 4.15 Expenditure on cash benefits and services for families and chil- dren, PPP/capita 1998 Cash benefits, total Services, total Families and children, total 62 Denmark Finland 360 520 880 391 259 650 Iceland Norway Sweden 354 454 372 280 726 734 275 242 517 FAMILIES AND CHILDREN account of an enhanced means test of the child allowance, other expendi- ture continued to increase.
Also expenditure on social services increased steeply, where the expenditure on day-care institutions accounted for the largest amount.

In Norway, the expenditure increased by almost 8 per cent from 1997 to 1998.

As from 1 August 1998, a cash benefit to one-year-olds was intro- duced, which influenced the expenditure; this can be seen from the expen- diture on maintaining children increasing by 7.7 per cent.
The expenditure on cash benefits payable in connection with childbirth increased by 7.7 per cent although the number of births dropped by 1,500 from 1997 to 1998.

There are still more fathers receiving paternity cash benefits, and the basis for the calculation of cash benefit to fathers was in 1998 NOK 51,000 higher on average than it was for women.
In Sweden, the cash benefits increased by 10.5 per cent, which was due to the child allowance and the benefit level of parent insurances being in- creased on 1 January 1998.

The expenditure on day-care institutions has decreased somewhat due to the continued financial squeezes in the munici- palities as well as to a drop in the number of children.

User charges payable for child-minding In all five Nordic countries, parents pay part of the costs for having their children minded in day care institutions.
When charges are calculated, a family’s income is normally taken into account, just as discounts may be given for siblings.

In Iceland, only single providers and students pay a re- duced rate.

Children of parents who have a very low income may in all the countries (with the exception of Iceland) be granted a place free of charge.

In Denmark, rules governing the maximum amount of user charges, places free of charge and sibling discounts are laid down centrally.
In Fin- land, user charges are fixed centrally, whereas the local authorities decide whether or not they will grant places free of charge.

In Iceland, Norway and Sweden, user charges are fixed by the local authorities.

In Sweden, parents normally pay a rate based on both their incomes and the period of time which their child spends in the institution, but there is also a fixed charge independent of income and period of time.
The charge payable for child- minding in one of the private care schemes ought in principle to be the same as the charge payable in the municipal schemes.

In none of the coun- tries may the charges exceed the actual costs of a place in an institution.

In Denmark, the total amount of user charges amounted to approxi- mately 21 per cent of the running costs.

In Finland, user charges made up 63 FAMILIES AND CHILDREN about 15.4 per cent of the running costs for municipal day care.
In Iceland, user charges for places in municipal day care institutions amounted to about 35.6 per cent of the total running costs, and user charges for after-school club schemes amounted to 41.6 per cent of the total running costs.

In Nor- way, the user charge payable for private kindergartens amounted to 46 per cent and for the municipal kindergartens 29 per cent of the total running costs.

Also after-school club schemes are mostly based on user charges ad- justed by local authorities.
It is, however, not possible to calculate how large a share parents pay themselves.

In Sweden, user charges amounted on aver- age to about 17 per cent of the total running costs, 15 per cent in pre- schools and 23 per cent in after-school clubs.

64 UNEMPLOYMENT Chapter 5 Unemployment In the countries where the unemployment rate is high, the expenses for curbing unemployment make up a considerable part of the total social ex- penditure.
The rules governing both income-substituting benefits to the unem- ployed as well as the extent of activating measures for the unemployed vary considerably from one country to another.

Consequently, there is no strict correlation between the extent of unemployment and the expenditure on unemployment.

Table 5.1 Expenditure on unemployment as percentage of the total social expenditure in the EU, Iceland and Norway, 1997 Denmark Finland Iceland Norway Sweden 12.6 13.3 3.2 4.3 9.5 Note: Cf.

Table 4.1.
Table 4.1.

Austria Belgium France Germany Greece Ireland 5.5 12.7 7.8 9.1 4.6 15.7 1.8 Italy Luxembourg 3.7 The Netherlands 11.0 Portugal 5.0 14.1 Spain 4.0 United Kingdom Generally, the Nordic countries have a high participation rate, but there are significant differences between the countries.

The unemployment rate was very high in some of the Nordic countries during the 1990s, but has declined in recent years, cf.

Figure 5.1.
Figure 5.1.

65 UNEMPLOYMENT Figure 5.1 Development in the unemployment rate, 1990-1998 Per cent 20 15 10 5 0 Denmark Finland Iceland Norway Sweden 1990 1991 1992 1993 1994 1995 1996 1997 1998 Table 5.2 The population aged 16-64 years broken down by activity, 1998 Denmark Finland1) Iceland Norway Sweden The population aged 16-64 years (1,000) Of whom (per cent): Employed, total – Full-time employed – Part-time employed Unemployed Outside of the labour force Total 1 Population aged 15-64 years.
UNEMPLOYMENT Table 5.3 Development in the unemployment rate by sex, 1990-1998 Total number of unemployed people Denmark1) 1990 1995 1997 1998 Finland 2) 1990 1995 1997 1998 Iceland 1990 1995 1997 1998 Norway3) 1990 1995 1997 1998 258,000 197,000 174,000 155,000 82,000 382,000 314,000 285,000 2,255 7,200 5,700 4,200 112,000 107,000 93,000 74,000 Unemployed people as percentages of the labour force Total Men Women Total Men Women 16-24 year-olds .. 11.0 7.7 6.0 11.8 11.8 10.9 9.3 11.8 8.8 6.6 7.2 10.2 30.7 25.4 22.8 .. 13.1 8.3 6.4 12.7 12.2 10.4 9.1 12.4 10.6 9.2 7.3 8.2 28.6 25.1 24.3 .. 8.6 7.1 5.6 10.7 11.5 11.5 9.4 Sweden 1.7 1990 8.5 1995 8.5 1997 6.9 1998 1 The data are based on the labour-force surveys.
By ‘young men and women’ the 15-24 75,100 333,000 341,900 275,900 3.8 16.7 16.3 12.9 3.7 15.3 15.4 11.9 1.6 6.9 7.5 6.0 1.6 7.7 8.0 6.5 3.6 14.0 14.4 10.7 year-olds are meant.

The surveys in 1990 were conducted according to methods different from those used in other years, and the results are therefore not directly comparable.

2 15-24 year-olds; unemployment pensioners not included.

3 The statistics were restructured in 1996, for which reason the figures are not comparable with those from previous years.
Had the gathering method been the same, the unemploy- ment figures would have been lower for both men, women and young people of the ages 16-24 years.

67 UNEMPLOYMENT Cash Benefits in the Event of Unemployment – All unemployed people are entitled to income-substituting benefits The actual extent of the unemployment cannot be measured merely by fo- cusing on the number of unemployed people.
The ways in which the indi- vidual countries have designed their labour market measures vary consid- erably in relation to active help (employment measures, etc.)

and passive help (unemployment benefit and the like).

With the exception of Iceland, the activating measures amount to appro- ximately one third of the total expenditure on labour market measures in the Nordic countries.

In Iceland, the amount is about 10 per cent.


A special trait of the Nordic countries is that most unemployed people are entitled to cash benefits.

In Norway, unemployment insurance is com- pulsory for wage earners; in Iceland, all wage earners and self-employed people are automatically insured against unemployment, and in Denmark, Finland and Sweden, unemployment insurance is voluntary.
In those coun- tries, non-insured people are, however, entitled to a cash benefit, which is usually lower than the unemployment benefit.

In Denmark, they are entitled to cash assistance (social assistance) if they meet certain requirements, whereas they in Finland and Sweden are entitled to a special labour-market benefit - in Sweden called basic insurance.

Unemployed people, who are not members of an unemployment insu- rance fund, are in Finland entitled to the basic amount of the daily cash be- nefits.
People who have received income-related daily cash benefit or the basic amount for the maximum period of two years, and who are still un- employed, are paid a so-called labour-market assistance.

This also applies to people entering the labour market for the first time.

With the exception of Iceland, the unemployment insurance schemes are financed by employer and Government contributions.
In addition, mem- bership contributions are payable to the unemployment insurance funds in Denmark, Finland and Sweden.

In Denmark, the unemployment benefit scheme is mainly financed through the labour-market contribution payable by all employed people.

In Iceland, the laws were amended in 1996 to the effect that the unemploy- ment benefit is now financed completely by employer contributions.
68 UNEMPLOYMENT The requirements for being entitled to benefits from an unemployment insurance fund vary from one country to another: In Denmark, one must have been a member of an unemployment insu- rance fund for one year, and full-time insured members must have worked for a minimum of 52 weeks as employees or in self-employment within the past three years.
The maximum period during which one can receive un- employment benefit is five years, of which period one is entitled to and obliged to accept activation for the last three years.
Members of unemploy- ment benefit funds, who by the end of their active period have reached the age of 50 years and who, by continuing as members, would meet the requi- rements for entitlement to voluntary early retirement benefit at the age of 60, shall preserve their right to daily cash benefits until they reach the age of 60 years.

Members of unemployment benefit funds who have turned 60 years are entitled to daily cash benefits for a maximum of two and a half years.
En- titlement to unemployment benefit cannot be (re)gained through publicly subsidised employment but only through regular employment.

Regaining of entitlement to unemployment benefit is subject to at least 26 weeks of work as an employee or as a self-employed person within the past three years.

In Finland, one must have been a member of an unemployment insurance fund for at least 10 months prior to becoming unemployed in order to be en- titled to unemployment benefit.
It is furthermore required that one must have worked for at least 43 weeks during the two previous years.

The total benefit period is normally 500 days within four consecutive calendar years.

Indivi- duals who reach the age of 57 years before having been paid unemployment benefit for 500 days are entitled to unemployment benefit until they reach the age of 60.

After that, they are entitled to an unemployment pension.
In Iceland, one must have worked for at least 425 day-time hours during the past 12 months in order to be entitled to unemployment benefit.

Un- employment benefit is payable for 260 working days, after which period payment will be discontinued for 16 weeks.

After the 16 weeks, one will again become entitled to benefit for 12 months.
Recipients may avoid such discontinuation if they have accepted job training or special employment of- fers for a duration of at least eight weeks during the past unemployment be- nefit period.

Payment of unemployment benefit cannot exceed five years.
In Norway, a prerequisite for being entitled to unemployment benefit is that one has earned an income of NOK 56,713 during the last calendar year prior to becoming unemployed or has earned an average income from work during the past three years, amounting to NOK 45,370.

The maximum be- nefit period varies according to the amount of the previous income.
A pre- vious income of at least NOK 90,740 results in a benefit period of 156 69 UNEMPLOYMENT Table 5.4 Rules applying to payment of cash benefit in the event of unem- ployment as per December 1998 Denmark Finland Iceland Norway Sweden Insured individuals Age limit for entitlement to unemployment benefit 19-66 years1) 17-64 years 16-69 years 16-66 years 16-64 years5) Number of qualifying days – 7 Maximum num- ber of days of unemployment benefit 1,300 within 7 years (5 benefit days per week for 5 years)2) 500 within 4 years4) (5 benefit days per week) – 260 3 5 780 (156 weeks of 5 working days) 300/4506) Benefit reobtainable?
On which conditions?

Yes Yes Yes Yes Yes By complying with the re- quirement of 26 weeks’ work within the past 3 years By complying with the re- quirement of 43 weeks’ work within 2 years Payment of un- employment benefit discon- tinued for 16 weeks By complying with the re- quirement of minimum in- come By complying again with the requirement of 6 months’ work prior to unem- ployment Benefit taxable?

Yes Supplement for children?


No Yes Yes Yes Yes Yes Yes Yes No 17-64 years 18-66 years3) Non-insured individuals Age limit for entitlement to unemployment benefit Maximum benefit period 1 Individuals between the ages of 18 and 65 years are entitled to join an unemployment insurance fund, but entitlement to unemployment benefit applies to people between 19 and 66 years.
2 Members of an unemployment insurance fund, who have reached the age of 50 years at the end of the total unemployment benefit period, and who would be entitled to voluntary early retirement benefit from their 60th year, maintain their entitlement to unemployment benefit till they reach the age of 60 years.

Members who have turned 60 years are entitled to unem- ployment benefit for a maximum of 30 months.

16-66 years 20-64 years 300/4506) .

.

.

.

.


3 Children under 18 years and people of 67 years and above may in certain cases be entitled to cash assistance.

4 For 57 year-olds, however, up to the age of 60.

5 Individuals under the age of 16 years are also entitled to unemployment benefit if the work requirement is met.

6 450 days for recipients over 57 years.


70 UNEMPLOYMENT Table 5.5 Amount of cash benefit in the event of unemployment as per December 1998 Denmark Finland Iceland Norway Sweden Insured individuals Amount of unemployment benefit (per week) 90 per cent of the income from work for 5 days per week2) DKK 3,302 1) 1) 350 Maximum income per week for full compensation in na- tional currency Maximum income per week for full compensation in PPP-Euro Min.

amount per week in national currency Min.


amount per week in PPP-Euro Max.

amount per week in national currency Max.

amount per week in PPP-Euro Non-insured individuals Amount of benefit per week 285 234 DKK 2,205 DKK 2,690 Young people under 25 years: DKK 507/ 1,0363); others: DKK 1,615/ 2,150 + special assistance4) Income-related benefit: on aver- age 58 per cent of previous in- come from work.

Basic amount: FIM 590 + child supplement: FIM 120-225 per week .

.
.

Fixed amount + child supplement 5) 62.4 per cent of the calcula- tion basis 80 per cent of the previ- ous income from work 5 days per week .

.

NOK 5,235 SEK 3,675 424 339 FIM 590 ISK 3,440 NOK 684 SEK 1,200 91 .

.

37 55 111 ISK 13,7606) NOK 3,264 SEK 2,900 146 264 267 .

FIM 0-590 + child supple- ment: FIM 48-90 Means-tested social assist- ance SEK 1,200 1 The maximum income is the income ceiling (previous income) on the basis of which the unemployment benefit is calculated.
Calculation of the income ceiling is made according to differing principles in the various countries.

2 Employers pay daily cash benefit of DKK 480 per day for the first and second days of un- employment.

3 Special benefits for young people under the age of 25 with no children living at home and with no previous income from work exceeding 60 per cent of the unemployment benefit for 18 months.
4 The total assistance may not exceed 90 per cent of any previous income and may after 12 months of cash assistance not exceed 100 per cent of the maximum amount of daily cash benefit.

5 The cash assistance will be increased by 4 per cent for each child under 18 years.

6 One must have been gainfully employed for at least 1,700 day-time hours within the past 12 months to be entitled to the maximum amount.
71 UNEMPLOYMENT weeks, whereas an earned income of less than NOK 90,740 qualifying one to unemployment benefit, results in a benefit period of 78 weeks.

People over 64 years are ensured daily cash benefits until they reach the pensio- nable age of the national social security fund, which is 67 years.
In Sweden, one must have been gainfully employed for at least six months and been working for at least 70 hours per calendar month, or have been gainfully employed for at least 450 hours for a consecutive period of six calendar months and been working for at least 45 hours per month for all six months within a 12 months’ period in order to become entitled to un- employment benefit (the so-called employment requirement).
The first period in which unemployment benefit is payable is based on previous, regular work.

A re-qualification to a new unemployment benefit period may be obtained for activities comparable to work, as for example a labour-market education, a period of relief work, subsidized temporary em- ployment, or a period in which one has received assistance to set up one’s own business.

People under the age of 57 years are entitled to unemployment benefit for a maximum of 300 days.
If a beneficiary is over the age of 57 years, un- employment benefit may be payable for 450 days.

As from July 1997, the work requirement became more rigorous.

As per 29 December 1997, the compensation was increased to 80 per cent of previous income from work.

In 1998, a new, general and coherent unemployment insurance scheme was introduced.

The new insurance consists of a basic insurance replacing the cash labour-market assistance, and a voluntary lapse-of-income insurance.
In order to get daily cash benefits corresponding to 80 per cent of the pre- vious income, one must have been a member of an unemployment insu- rance fund for 12 months.

People who have not been members for 12 months will only be entitled to the basic insurance amount.

Apart from the rules mentioned above, entitlement to unemployment benefit is in all five countries subject to a person being registered with the employment service as seeking employment and being able to take on work.
In addition, some of the countries have a qualifying period during which unemployment benefit is not payable.

In Denmark and Iceland, there is no qualifying period; in Norway, there are three qualifying days, whereas Fin- land has seven and Sweden five qualifying days.

Figure 5.2 shows the disposable income at four different income levels for a childless couple, where both are employed, and where the one earning the most starts receiving unemployment benefit, respectively.
The Figures 5.3 and 5.4 show the disposable income in the event of unemployment in per cent of the income earned from work for single people with or without 72 UNEMPLOYMENT Figure 5.2 Disposable income for an insured childless couple, 1998 PPP-Euro PPP-Euro Denmark Finland 3,600 3,200 2,800 2,400 2,000 1,600 1,200 800 400 0 I II III IV 3,600 3,200 2,800 2,400 2,000 1,600 1,200 800 400 0 I II III IV PPP-Euro PPP-Euro Iceland Norway 3,600 3,200 2,800 2,400 2,000 1,600 1,200 800 400 0 I II III IV PPP-Euro Sweden 3,600 3,200 2,800 2,400 2,000 1,600 1,200 800 400 0 3,600 3,200 2,800 2,400 2,000 1,600 1,200 800 400 0 I II III IV I II III IV Disposable income per month (December) Disposable income per month (December), while the highest APW receives unemployment benefit Note: The income groups I-IV have been calculated on the basis of the average wage of a produc- tion worker.
The calculation basis is described in Appendix 2.
73 UNEMPLOYMENT Figure 5.3 Disposable income while receiving unemployment benefit as percentage of disposable income while being employed, 1998 Single person without children Single parent with one child Per cent 110 100 90 80 70 60 50 40 30 20 Per cent 110 100 90 80 70 60 50 40 30 20 I II III IV V I II III IV V Denmark Finland Iceland Norway Sweden Denmark Finland Iceland Norway Sweden Figure 5.4 Disposable income for non-insured individuals as percentage of disposable income while being employed, 1998 Single person without children Single parent with one child Per cent 110 100 90 80 70 60 50 40 30 20 Per cent 110 100 90 80 70 60 50 40 30 20 I II III IV V I II III IV V Denmark Finland Sweden Denmark Finland Sweden Note: The income groups I-V have been calculated on the basis of the average wage of a pro- duction worker.
The calculation basis is described in Appendix 2.

74 UNEMPLOYMENT children, calculated at five different income levels.

The calculation has been made for insured and non-insured people, respectively (the latter only in re- spect of Denmark, Finland and Sweden).

As it appears from the figures, there are marked differences in the com- pensation levels for insured and non-insured people, respectively.
This ap- plies in particular to single people who have previously earned a high inco- me and for single people without children.

The compensation level for insu- red people depends first and foremost on the amount of the daily cash be- nefit in relation to previous income.

This is highest in Denmark and lowest in Finland and Norway.

In Iceland, a fixed amount is payable, irrespective of previous income.

Secondly, the compensation level depends on the ma- ximum amounts.
This is highest in Denmark and lowest in Iceland.

In Finland, there is no upper limit to the amount of daily cash benefits.

In Sweden, the compensation-increase from level I to II is due to the way in which the basic allowance is calculated in the tax system.

To families with children, it makes a difference whether or not a sup- plement for children is payable, which is the case in Finland, Iceland and Norway.
In addition, the amount of both housing benefit and charges pay- able for day care institutions are adjusted in relation to the amount of the income.

This is important in relation to the compensation level for both in- sured and non-insured people and contributes in particular to giving single parents a high compensation level.

For the groups in the lowest income brackets, these factors result in the compensation level being lowest in Nor- way and highest in Denmark and Finland.
For couples, it is, however, highest in Sweden.

For the upper income brackets, the compensation level is lowest in Iceland and highest in Sweden and Finland.

In Denmark and Iceland, the compensation levels decrease steeply when going from the low income level to the higher levels.

In Table 5.3, the number of unemployed people is shown as an average at a number of given census times, while Table 5.6 shows the number of people af- fected by unemployment for at least one day during the respective years.
A comparison of the figures in the two tables thus indicates that relatively many unemployed people find employment again within less than a year, but the length of the unemployment periods also varies from one country to another.

In Finland, a pension is payable to people in their sixties who have been unemployed.

This benefit is calculated in the same way as is invalidity pen- sion.

In 1998, 49,389 people received unemployment pension of an average of FIM 5,486 per month.
In Denmark, it is also possible to retire early from the labour market, cf.

Chapter 7, but this is not depending on whether the person in question has been or is expected to become unemployed.
75 UNEMPLOYMENT Table 5.6 Number of people (1,000) who received cash benefits for at least one day in connection with unemployment, 1990-1998 Denmark Finland Iceland1) Norway1) Sweden 1990 Insured Non-insured Total Total in per cent of the labour force 1995 Insured Non-insured Total Total in per cent of the labour force 1997 Insured Non-insured Total Total in per cent of the labour force 621 116 737 26 672 111 783 28 607 90 697 25 171 126 289 11 683 270 827 33 477 309 753 30 11 .. 11 .. 19 .. 19 .. 16 .. 16 11 303 – 303 14 310 - 310 14 207 - 207 9 262 36 298 7 824 137 961 22 836 118 954 22 1998 Insured Non-insured Total Total in per cent of the labour force 1 Calculated on the basis of the number of approved applications for unemployment benefit.
742 91 833 163 .. 163 421 323 703 569 88 657 12 .. 12 20 28 24 8 7 Cash Benefits in Connection with Job Training and Activation – Activation is important In addition to unemployment benefit, all the Nordic countries offer other forms of cash benefits to unemployed people.

The lower age limit for the implementation of labour market measures is 18 years in Denmark and Finland and 16 years in Iceland and Sweden.

In Norway, the age limit de- pends on the measure in question.
76 UNEMPLOYMENT In Denmark, the activation options in the labour market and social poli- cies have played an increasingly important part since the labour market re- form in 1994.

Unemployed recipients of daily cash benefits under the age of 25 years who have had no vocational training qualifying them for the labour market are, after 6 months of unemployment entitled and obliged to receive an of- fer of education or training for a minimum of 18 months.
The benefit pay- able during education or training corresponds to half the amount of the daily cash benefit.

As regards unemployed recipients of daily cash benefits, the entitlement to and obligation to accept activation has moreover been advanced in connec- tion with a shortening of the total period of entitlement to daily cash benefit as from 1996.

In 1998, this five-year period has been divided into a two-year daily cash benefit period and a three-year activation period.
In the activation period, an unemployed person has the right and obligation to receive an acti- vation offer in the shape of education, job training, etc., for a maximum of three years.

During the daily cash benefit period, the activation is based on need and is flexible, partly aimed at groups at risk of becoming long-term un- employed, and partly as prevention of lack of qualified manpower (“bottle necks”).
The objective of the activation is primarily to improve the qualifica- tions of the unemployed, so that they can take on ordinary work but also to motivate them to look for employment or education/training themselves.
After a maximum of 13 weeks, unemployed recipients of cash assistance under the age of 30 years are entitled and obliged to accept an offer of em- ployment or training for at least 30 hours a week for 18 months; however for people with an education/training qualifying them to work only for six months.

Recipients of cash assistance of 30 years or more must be offered activation no later than 12 months after they have become unemployed.
Unemployed people are entitled to wages during job training, while the benefits payable in connection with other activation and training measures largely correspond to the amount of daily cash benefits or cash assistance.

In Finland, the active measures aimed at improving the employment situa- tion are an important part of the Finnish labour market policy.
By way of such measures jobs are created, options for the long-term unemployed are improved and the possibilities of the young to get into the labour market are improved.

Moreover, the measures are aimed at preventing long-term unemployment and to reduce the regional differences in the unemployment rates.

Unemployed people who want to start their own business are also entitled to assistance.

The most important part of the active labour market policy is the service aimed at those available for work.
The services provided by the agencies are 77 UNEMPLOYMENT job provision, information on training and occupation, vocational training for adults, information on education, training and various professions as well as occupational rehabilitation.

In Iceland, the Unemployment Insurance Fund has, apart from perform- ing its main task of paying out unemployment benefit, to an increasing de- gree undertaken to grant subsidies to various courses for unemployed peo- ple and special municipal employment measures.
In Norway, responsibility for occupational rehabilitation rests with the labour market authorities.

The aim is to ensure an overall follow-up on cash benefits and services to the unemployed.

In addition, the labour market au- thorities offer unemployed people a number of measures in order better to qualify them for the needs of the labour market.

The labour market meas- ures must, however, not compete with the general offers of education and training.
In Sweden, job and qualifying activities are the most important aspects of the active labour market policy.

This implies that an unemployed person who does not easily find work must be offered training or some other easy measure aimed at enabling that person to take on a proper job.

The guiding activities managed by the employment service include i.a.

information on vocational training and education as well as various activat- ing measures such as job application activities.
People in need of occupational rehabilitation or special guidance may get help from a labour market institute.

These institutes have special resources and qualifications within labour assessment, practical work orientation, ad- justment of work places, etc.

When the recession set in at the beginning of the 1990s, vocational train- ing was prevalent among labour market measures, but since 1992, focus has clearly shifted towards other cyclically dependant measures.

These schemes include i.a.


introduction to the work place which is to provide unemployed people looking for work via the employment service with vocational guid- ance, practice and vocational experience.

As a supplement to the general la- bour market measures, an IT/activity centre has been set up for unem- ployed people, with a view to teaching them to work with information tech- nology.

Young unemployed people under 20 years may receive in-service training in a municipal enterprise.
Young unemployed people between 20 and 24 years may be offered a full-time activation programme for a period of less than 12 months.

The activation programme must be individually adapted and include training or practice, or a combination of both.
Moreover, there are schemes concerning working life development, aimed at inducing unemployed people to return to the general labour market, as well 78 UNEMPLOYMENT Table 5.7 Number of activated people, 1998 Number of activated people during the year Number of activated people at the time of sur- vey/average number of activated people Activated people as percentage of the labour force at the time of survey Total 16-24 year-olds Total 16-24 year-olds Total 16-24 year-olds Denmark 1995, total 1997, total 1998, total Of whom: - Subsidized employment - Education and training - Other Finland 1995, total 1997, total 1998, total Of whom: - Subsidized employment - Labour market training - Labour market support Iceland 1995, total 1997, total 1998, total Of whom: - Subsidized employment - Labour market training - Wage subsidies to employers Norway 1995, total 1997, total 1998, total Of whom: - Public employment measures - Wage subsidies to employers - Education measures Sweden 1995, total 1997, total 1998, total Of whom: – Labour market measures – Subsidized employment – Sheltered employment with public employer 258,392 248,421 252,921 106,699 152,482 23,876 285,575 310,809 288,413 156,952 85,298 46,163 52,214 39,066 36,361 23,288 11,782 7,431 82,217 94,788 85,385 32,943 13,203 39,239 .. .. .. .. .. .. .. .. .. .. .. .. 781,000 873,873 715,247 645,823 61,135 8,289 .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. 110,935 100,387 100,344 46,052 49,164 5,128 103,667 120,127 109,308 57,018 41,444 10,846 .. 4,150 2,565
 .. .. 67 16,030 12,566 11,580 6,680 3,629 1,271 25,973 30,102 26,083 11,919 5,730 8,434 .. 989 568 .. .. 35 48,618 25,256 14,657 19,106 9,131 4,889 .. .. .. 275,100 246,681 226,885 171,911 49,031 5,943 .. .. .. .. .. .. .. .. .. 4.0 3.6 3.6 1.7 1.8 0.2 4.2 4.8 4.4 2.3 1.6 0.4 .. 2.8 1.7 .. .. - 2.2 1.1 0.6 .. .. .. 6.1 5.8 5.3 4.0 1.2 0.1 3.4 2.8 2.7 1.5 0.8 0.3 9.9 10.6 8.8 4.0 1.9 2.8 .. 4.1 2.1 .. .. 0.1 6.4 2.9 1.5 .. .. .. .. .. .. .. .. .. 79 UNEMPLOYMENT as recruitment support to employers aimed at stimulating them to hire an unemployed person by covering his expenses in connection with the em- ployment of a person who needs extended introduction or training.
In addi- tion, people who are unemployed or are at risk of becoming unemployed may in some cases be granted a subsidy to start their own business.

For people with reduced working capacity, there are measures enabling them to work in subsidized jobs either with a public or a private employer.
Services in Connection with Unemployment The services provided in connection with unemployment is first and fore- most job provision, but in all the countries, also mobility-promoting benefits are available in the shape of i.a.

removal assistance and assistance in connec- tion with double housekeeping.

Employment Service – Job provision is free of charge In all five Nordic countries, there are employment services.

They provide services to both job-seekers and employers.
The employment service is run by the State, with the exception of Iceland where it is run by the local au- thorities, but on 1 July 1997, the State took over the job service.

In all five countries, job provision is free of charge for users, and it is in principle up to a job-seeker whether or not he or she wishes to accept the job offered.

Unemployment benefit is, however, only payable if a job-seeker is willing to accept a suitable offer, when available.
There are considerable differences from one country to another as to how many vacant positions are registered with the employment service.

The differences in the figures reflect, however, differences in the way in which the employment service is used, rather than the actual number of vacant po- sitions in the various countries.

80 UNEMPLOYMENT Table 5.8 Number of vacancies registered with the employment offices.
In thousands and as percentage of the labour force, 1990-1998 Denmark Finland Norway1) Sweden2) Number of positions registered 1,000 112 117 95 97 As per- centage of the labour force 4 4 3 3 Number of positions registered 1,000 341 170 242 255 As per- centage of the labour force 13 7 10 10 Number of positions registered 1,000 237 276 391 472 As per- centage of the labour force 11 13 18 21 Number of positions registered 1,000 650 339 324 413 As per- centage of the labour force 14 8 8 10 1990 1995 1997 1998 1 Comprises both vacancies registered with the employment offices and vacancies registered elsewhere.
2 As percentage of the labour force aged 16-64 years (including the unemployed).

Expenditure on and Financing of Benefits in Connection with Unemployment Differences and similarities in the expenditure on unemployment The expenditure on unemployment reflects partly the extent of the unemploy- ment, partly the amount of the daily cash benefit, and partly the extent of the activating measures provided for the unemployed.
Finland, being the Nordic country with the highest unemployment rate, has the second highest expenditure on unemployment measured in PPP per capita.

It should be mentioned, however, that several subsidies are payable to the employers for activation.

These costs have not been included as social expenditure in this report.

Sweden, being the country with the second high- est unemployment rate, spends almost the same amount as Finland.
The high expenditure in Denmark is due partly to the amount of the daily cash benefit, partly the extent of the activation/job training.

Iceland has the lo- west unemployment rate, followed by Norway, which also reflects low costs.

81 UNEMPLOYMENT Table 5.9 Expenditure on and financing of cash benefits and services in connection with unemployment, 1998 Denmark Finland Iceland Norway Sweden Cash benefits, million KR/FIM A.

Unemployment benefit B.


Partial unemployment benefit C. Pension for labour market reasons D. Cash benefits payable dur- ing vocational training E. Compensating benefits F. Other Cash benefits, total Services, million KR/FIM A. Mobility and resettlement B.

Vocational training C. Other a.
Of which employment services Services, total Total expenditure, million KR/FIM Expenditure as percentage of GDP Financed by (per cent) – Public authorities – Employers – The insured (contributions and special taxes) Changes 1997-1998 in terms of 1998 prices – Million KR/FIM – Per cent 19,574 15,421 2,272 5,268 34,827 - - 17,428 - 36 37,038 - - 2,588 985 213 2,986 1,214 95 - 19,929 10 1,201 748 748 2,588 1,959 - - 164 - - 2,203 162 - - 2,434 - - - 5,432 12,733 614 - 50,417 - - - 57.4 24.5 18.1 27.7 68.1 4.2 -2,770 -6.5 -2,594 -10.6 -341 -11.0 -2,749 -30.3 -4,338 -7.0 Table 5.10 Expenditure on cash benefits and services in connection with unemployment in PPP/capita 1998 Cash benefits, total Services, total Unemployment, total 82 Denmark Finland Iceland Norway Sweden 740 52 792 556 55 611 94 13 107 99 64 525 77 163 602 UNEMPLOYMENT The development in the expenditure on unemployment from 1997 to 1998 In Denmark, the expenditure on unemployment benefits continued fal- ling from 1997 to 1998 as a result of the decline in the unemployment rate.
The average number of daily cash benefit recipients dropped from 183,000 in 1997 to 147,000 in 1998.

On the other hand, the expenditure on activa- tion increased from 1997 to 1998.

In Finland, the costs of combating the unemployment decreased by FIM 2.6 billion due to the drop in the unemployment rate.

The largest drop took place in the income-related daily cash benefits, whereas the expenditure on unemployment pension increased, just as the did the expenditure on labour- market support.
In Iceland, the expenditure on unemployment declined from 1997 to 1998.

This was mainly due to a decrease of 19.4 per cent in the payments of unemployment benefit.

The expenditure on the employment services, however, continues to increase as in previous years and is twice as high in 1998 as in 1997.

This is due to the State being in the process of taking over the employment service.

In Norway, the expenditure on unemployment continues to decrease, and from 1997 to 1998, the drop was almost 25 per cent.
The unemploy- ment rate decreased by 0.9 percentage points to 3.2 from 1997 to 1998.

In Sweden, the drop in the unemployment rate has reduced the expendi- ture on cash benefits to unemployed people.

83 ILLNESS Chapter 6 Illness The degree of the total social expenditure in relation to the expenditure on illness varies considerable.

The expenditure on illness is almost twice as high in Iceland and Ireland as in Denmark, which is the country spending the least.
Table 6.1 Expenditure in connection with illness as percentages of the total social expenditure in the EU, Iceland and Norway, 1997 Denmark Finland Iceland Norway Sweden 18.1 21.9 37.9 29.1 22.5 Note: See Table 4.1.
Austria Belgium France Germany Greece Ireland 25.8 24.0 28.8 28.1 25.2 35.8 23.2 Italy Luxembourg 24.9 The Netherlands 30.8 Portugal 33.3 28.8 Spain United Kingdom 26.1 Paid Absence in Connection with Illness – Everyone in gainful employment is in principle entitled to daily cash benefits in case of illness The structures of the wage and daily-cash benefit schemes vary considerably from one country to another.
In Denmark, public-sector employees and some private-sector employees will be paid in full during illness according to collective agreements.

In Iceland, wages payable during illness, as well as the supplemen- tary daily cash benefit schemes of the unions, form the all-important part of the general daily cash benefit scheme.

After one year of employment with one em- ployer, an employee is entitled to one month’s pay in the event of illness.
The 84 ILLNESS majority of employees have a statutory right, or a right deriving from collective agreements, to receive wages for a fairly long period of time.

When entitlement to pay during illness ceases, supplementary daily cash benefits may be payable in addition to the public sickness benefit scheme.

The public daily cash benefit consists of a fixed amount per day, irrespective of any previous income, and this amount is rather small.
In accordance with the Act on Employment Contracts, employers in Finland pay in full for the first day of illness and the subsequent seven working days.Usually, it has been agreed in the collective agreements for the individual business sectors that wages shall be paid in full for a fairly long period as for example one or two months.

An employer may also, after some time, pay part of the full pay.

In Norway, daily cash benefits are paid through the National Social Security Fund.
Absence due to illness entitles a person to sickness benefit if he has been employed for at least 14 days and has an income from work of at least half of the basic amount payable by the Na- tional Social Security Fund, corresponding to NOK 22,685 per year.

Entitlement to sickness benefit is in Denmark, Finland and Norway based on a so-called accumulation period which is three months.

A similar scheme does not exist in Iceland or Sweden.
In several of the countries, self-employed people can take out an insur- ance entitling them to sickness benefit in case of illness.

In all the countries, sickness benefits are regarded as taxable income.

Table 6.2 Rules governing payment of cash assistance to employees in connection with illness as per December 1998 Denmark Employer period?

Yes Finland No2) Norway Sweden Yes Yes Duration of employer period 2 weeks for pri- vate employers – 2 weeks 2 weeks3) Qualifying period?
– 9 days – 1 day Maximum period of sickness benefit /sick pay 52 weeks1) 52 weeks 52 weeks No time limit 1 Under special circumstances, the benefit period may be prolonged.

This applies, for in- stance, where it is deemed likely that rehabilitation may be implemented, or where an ap- plication for anticipatory pension has been submitted.

In addition, a benefit period may be prolonged by 2×26 weeks in case of serious illness or industrial injury.
2 According to collective agreements, employers pay full or partial wages for 1-3 months during illness.

During that period, the benefit will be paid to the employer.

3 During the employer period, there is a qualifying period of one day.

85 ILLNESS In Sweden, there is a qualifying period of one day prior to sickness bene- fit becoming payable.

In Finland, the qualifying period is nine working days, whereas the Icelandic public insurance scheme operates with a quali- fying period of 21 days.
If the sickness period lasts for 21 days or more, sickness benefit shall, however, be payable from the 15th day.

Most wage earners are, however, entitled to their usual pay during this period.

In Denmark and Norway, there is no qualifying period.

In several of the countries, a so-called employer period has been intro- duced, during which employers pay wages or sickness benefit during the first weeks of absence due to illness.
In Denmark and Sweden, employers pay sickness benefit for the first two weeks of a period of illness.

In Norway, this period was prolonged from 14 to 16 days as from 1 April 1998.

In Table 6.3 Amount of cash assistance payable to employees in connection with illness as per December 1998 Denmark Finland Norway Sweden 80 per cent SEK 5,250 .

315 100 per cent 100 per cent .


NOK 5,235 Normally 70 per cent Amount of sickness benefit as percentage of income from work Maximum income per week for full compensa- tion in national currency1) DKK 2,971 Maximum income per week for full compensa- tion in PPP-Euro1) Min.

amount per week in national currency Min.

amount per week in PPP-Euro Max.

amount per week in national currency Max.

amount per week in PPP-Euro Sickness benefit taxable?

Supplement for children?


1 The maximum income is the income ceiling (previous income) on which the calculation of sickness benefits is based.

The calculation of the maximum income is made according to varying principles in the various countries.

.

NOK 5,235 DKK 2,6882) NOK 436 285 424 424 Yes Yes Yes No No No 41 .

.

.

.

.
.

.

.

.

8 386 Yes No 484 SEK 133 SEK 4,186 2 Public-sector employees and some private-sector employees are, according to general agreement, entitled to full pay during illness, some private-sector employees, however, for the first couple of weeks only.

86 ILLNESS Sweden, the employer period was prolonged to four weeks for the period 1 January 1997 to 1 March 1998.

Public employers in Denmark and Norway pay wages for the entire period in which an employee is absent due to ill- ness.
In Denmark, employers are obliged to pay compensation during the employer period, either in the shape of daily cash benefits or wages.

In Norway, all employers pay full wage compensation for incomes of up to NOK 272,220 per year.

In Sweden, an amount (sick pay) corresponding to 80 per cent of the income from work is payable after a deduction of 20 per cent of the income from work.

In Finland, there is no official employer pe- riod, but most employers pay full wages in the event of short-term illness.
Figure 6.1 Disposable income for a childless couple, 1998 PPP-Euro PPP-Euro Denmark Finland 3,600 3,200 2,800 2,400 2,000 1,600 1,200 800 400 0 I II III IV 3,600 3,200 2,800 2,400 2,000 1,600 1,200 800 400 0 I II III IV PPP-Euro PPP-Euro Norway Sweden 3,600 3,200 2,800 2,400 2,000 1,600 1,200 800 400 0 I II III IV 3,600 3,200 2,800 2,400 2,000 1,600 1,200 800 400 0 Note: The income groups I-IV have been calculated on the basis of the average wage of a pro- duction worker.
The calculation basis is de- scribed in Appendix 2.

I II III IV Disposable income per month (December) Disposable income per month (December), while the highest APW receives sickness benefit 87 ILLNESS Figure 6.1 shows the disposable income at four different income levels for a childless couple, partly where both are employed, and partly where the per- son earning the most starts receiving sickness benefit.
Figure 6.2 shows the disposable income at five different income levels for a single childless per- son and for a single parent with one child receiving sickness benefit in per cent of the disposable income from work.

As can be seen from the figures, the compensation levels in connection with illness differ considerably.
For single people in the lowest income brack- ets, compensation is highest in Denmark and Norway and lowest in Sweden, whereas it for single people in the highest income brackets is lowest in Den- mark and highest in Norway and Sweden.

For childless couples, the compen- sation is generally highest in Norway and lowest in Sweden.
The differences depend partly on the amount of the daily cash benefit in relation to the in- come from work (they are highest in Denmark and Norway and lowest in Finland), partly on the maximum amount which is relatively low in Denmark in relation to Sweden and – in particular – Norway.

In addition, it is signifi- cant that Finland has no upper limit to the amount of the daily cash benefits.
Figure 6.2 Disposable income while receiving sickness benefit as percent- age of disposable income from work, 1998 Single person without children Single parent with one child Per cent 110 100 90 80 70 60 50 40 Per cent 110 100 90 80 70 60 50 40 I II III IV V I II III IV V Danmark Finland Norge Sverige Danmark Finland Norge Sverige Note: The income groups I-IV have been calculated on the basis of the average wage of a production worker.

The calculation basis is described in Appendix 2.
88 ILLNESS The higher compensation levels in Denmark and Finland for single parents with one child in relation to single people with no children are mainly due to the fact that payment for places in day care institutions decreases when a person starts receiving sickness benefit; apart from that, single parents with one child are also entitled to higher rent subsidies, as the rules governing this subsidy are generally more favourable for families with children than it is for childless families.
In Denmark, Finland and partly in Sweden, absence due to illness dropped slightly during the 1990s.

There are several reasons for this, among others the increasing rate of unemployment up through the 1990s.

In 1998, there was a slight increase in the absence due to illness in Sweden.

Norway has the most absence which was due to increased employment and a de- crease in the unemployment rate.
Table 6.4 Calculated absence due to illness for at least one week among employees as percentage of all employees, 1990-19981) Denmark Finland Iceland Norway Sweden 1990 Men Women Total 1995 Men Women Total 1997 Men Women Total 1.5 2.2 1.8 1.4 2.2 1.7 1.3 1.8 1.5 2.2 2.6 2.4 2.0 2.3 2.1 2.0 2.2 2.1 1.1 2) 1.9 2) 1.5 2) 1.3 2.1 1.7 1.3 2.0 1.7 2.7 3.5 3.1 2.2 3.1 2.6 2.6 3.9 3.2 3.7 5.4 4.5 2.2 3.4 2.7 1.8 3.1 2.4 1998 Men 1.9 Women 2.3 2.1 Total 1 The figures have been calculated on the basis of labour-force surveys as an average of the 1.4 1.6 1.5 0.9 1.6 1.2 2.1 3.6 2.8 2.7 3.9 3.2 censuses.
2 Refers to 1991.
89 ILLNESS Table 6.5 Number of sickness benefit periods of at least 15 days (per cent), 1998 Duration (days) 15-21 22-29 30-59 60-89 90-119 120-149 150-179 180-359 360+ Total Denmark Finland Norway Sweden There are certain differences between the countries as regards the pattern of long-term absence due to illness (for more than two weeks).
This reflects i.a.

different practices as to when long-term ill people start receiving benefits from other parts of the social system.

This applies for instance to the transi- tion to rehabilitation benefit or anticipatory pension.

In Sweden, there is no limit as to for how long sickness benefit is pay- able, and consequently the benefit may be payable for more than one year of illness.

In some cases, this may also occur in Denmark.


The 5 per cent in Norway of over 360 days also cover people who are ill for more than a year (365 days).

They are not entitled to sickness benefit for more than one year, but will be paid rehabilitation benefit.

Daily Cash Benefit in the Event of Industrial Injury or Work-Related Illness In all five countries, benefits are payable in the event of industrial injuries or occupational diseases.

The short-term benefits may be sickness or equiva- lent benefits.
In Finland, industrial injury benefits are payable, usually equivalent to normal wages.

90 ILLNESS Services It is a common trait of the Nordic countries that they have a well-estab- lished service network for both prevention and treatment of diseases.

It is, however, an area which varies somewhat from one country to another.

In Denmark, Finland, Norway and Sweden, the local and/or county au- thorities are responsible for the organization of the health sectors, while it in Iceland is Central Government.
Occupational health services have been established in Denmark, Nor- way, and Sweden.

The purpose of these services is to initiate preventive measures and exercise health control within the framework of the individual work places.

In Finland, there is also a statutory occupational health service which is responsible for preventive measures.

It can be supplemented by voluntary schemes which may be preventive measures or general treatment of illness, subsidized by the sickness insurance scheme.
Hospitals – The hospital service is mainly a public issue In all the Nordic countries, there are general hospitals with out-patient clin- ics/policlinics and emergency wards.

There are also highly specialized hos- pitals, psychiatric hospitals and, in some of the countries, hospitals for long- term care.

The hospitals are mainly run by Central Government, the coun- ties, or the municipalities, but there are also a few private hospitals.
It is very difficult to obtain comparable data in respect of the capacity of the health services in the Nordic countries, as the organization of this area varies considerably from one country to another.

It is, however, a general trend that the length of hospitalization becomes still shorter, and that more and more patients are treated at the out-patient clinics.
In all the countries, there has been a tendency towards shutting down the psychiatric hospitals and instead develop treatment of psychiatric patients in their own environments.
91 ILLNESS Table 6.6 Discharges and average length of hospitalization in somatic wards, 1990-1998 Denmark Finland Iceland1) Norway Sweden Number of discharges from somatic hospital wards per 1,000 inhabitants 1990 1995 1997 1998 193 190 190 191 180 193 208 206 166 178 .. .. 155 145 148 152 170 167 162 147 Average hospitalization (days) in somatic wards 7.5 1990 6.1 1995 5.6 1997 5.7 1998 Source: Health Statistics in the Nordic Countries concerning the years 1990, 1995, 1997 and 1998.
Finland: STAKES (1990, 1995, 1997 and 1998).

1 Figures for 1995 refer to 1994.

7.6 6.3 .. .. 7.1 6.7 6.1 6.2 7.2 5.6 5.0 4.6 6.7 6.1 5.9 5.8 Medical Treatment, Etc.

– Preventive measures and general medical treatment take place outside of hospitals In the Nordic countries, general (primary) medical treatment takes place outside of hospitals.

Various forms of preventive health care measures are furthermore linked to the primary health services.
In Denmark, general medical treatment is provided solely by self- employed general practitioners, fully financed and according to agreement with the public authorities.

In Norway, about 75 per cent of the general medical treatment is provided by self-employed general practitioners.

This only applies to a slight degree in the other Nordic countries.

It is thus esti- mated that about 20 per cent of the general medical treatment in Sweden are performed by self-employed general practitioners.
About 20 per cent of the general medical treatment as well as treatment by specialists are in Finland performed by self-employed doctors.

The remaining part is performed at public health centres by doctors employed by the public authorities.

In Finland and Iceland, health centres may be equipped with wards.

92 ILLNESS Specialist treatment is available in all the countries.

It is performed by specialists according to agreements with the public authorities.
These ser- vices are provided according to either general or specific rules.

Due to the large differences from one country to another in the organiza- tion of the primary health sector, it is very difficult to obtain comparable data concerning the number of medical visits per inhabitant.

Home nursing is available in all the countries, both to families and chil- dren and to the elderly and the disabled.

In all five countries, pregnant women and infants are offered public health care.
In addition, all the countries provide school health care schemes.

Most children are immunized according to the recommended immunization programme.

Screening programmes exist to a certain degree in all the countries, e.g.

to detect breast cancer, etc.

In Finland, these tasks are performed by the health centres.

In all five countries, subsidies are payable for transport expenses in con- nection with illness.
Dental Treatment – Dental treatment free of charge for children and youth Dental treatment is a well-developed service in all the Nordic countries.

With the exception of Iceland, treatment of children and youth is performed at public clinics.

In all the countries, treatment is completely or partly free of charge.

Dental treatment of adults is mainly performed by self-employed dentists.

In Sweden, the counties organise the public dental care scheme.
93 ILLNESS Expenditure on and Financing of Cash Benefits and Services in Connection with Illness Differences and similarities in the expenditure on illness There are certain differences in the expenditure on illness in the Nordic countries where Finland spends least and Norway most.

In respect of expenditure on paid absence due to illness, Norway spends approximately twice as much as the other Nordic countries measured in PPP per capita.

This is mainly due to the amount of the cash benefit (cf.
Table 6.3), but the low unemployment rate also has some influence on the absence due to illness.

As regards expenditure on services (medical treatment), they are lowest in Finland and highest in Norway.

What influences the expenditure on medical treatment is patients' pay- ment of user charges for medical treatment and medicine, which is highest in Finland.
Another influential factor is the grey zone between the health sector and treatment of the elderly and the disabled which is organized in somewhat different ways in the various countries.

Development in the social expenditure on illness from 1997 to 1998 In Denmark, there has been a decrease in the estimated expenditure on sickness benefit payable during the employer period.
The expenditure on services in the health sector has increased, including both the hospital sec- tor, medicine, home nursing and municipal health schemes for children and young people.

In Finland, the expenditure on illness increased by about FIM 1 billion which is mainly due to the fact that the need for care and treatment has in- creased at the same time as new cost-consuming forms of treatment have been introduced.
In spite of the increase in the health expenditure, this is now at the same level as before the recession in the Finnish economy.

In Iceland, the social expenditure on illness increased by about 11 per cent from 1997 to 1998.

The increase in cash benefits was 5.2 per cent, while it was 12.4 per cent in services.

This increase is first and foremost ex- 94 ILLNESS plained by a high pay increase, mainly within the public sector and in the specialized medical treatment in the hospitals.
In Norway, cash benefits in connection with illness increased by nearly 13 per cent from 1997 to 1998.

This increase must be seen in relation to the increased employment rate.

The number of days, in which sickness benefits were paid, increased from 10.5 days in 1997 to 11.1 days in 1998.

The ex- penditure on services also increased by about 13 per cent.

In Sweden, the expenditure on sickness insurance increased considerably due to more absence due to illness.
The expenditure on short-term illness, payable by the employers, also increased.

Table 6.7 Expenditure on and financing of cash benefits and services in connection with illness, 1998 Denmark Finland Iceland Norway Sweden Cash benefits, million KR/FIM A.

Paid sick leave Of which: a.

General sickness benefit b.

Daily cash benefits in employer period c. Special insurance in the event of industrial injury or occupational disease B.
Other Cash benefits, total Services, million KR/FIM Services, total Total expenditure, million KR/FIM Expenditure as percentage of GDP Financed by (per cent) – Public authorities – Employers – Insured (contributions and special taxes) Changes 1997-1998 in terms of 1998 prices – Million KR/FIM – Per cent 10,792 7,951 7,664 29,956 31,701 7,392 2,509 451 16,600 18,609 3,400 4,700 6,979 13,356 9,400 - 408 11,200 584 - 7,951 233 - 7,664 0,0 - ILLNESS Table 6.8 Expenditure on cash benefits and services in connection with ill- ness in PPP/capita 1998 Cash benefits, total Services, total Illness, total Denmark Finland 224 1,085 1,309 221 929 1,150 Iceland Norway Sweden 331 1,151 1,482 547 1,249 1,796 277 1,099 1,376 User charges payable for health services The rules governing user charges payable for health services differ some- what in the Nordic countries.
In Finland, Norway and Sweden, there are rules governing maximum payment of user charges for health services.

Such rules also exist in Iceland, but patients are only partly exempt from paying.

In Denmark, there are no such rules.

Maximum user charges In Finland, the sickness insurance fund covers the amount of the total amount of user charges payable for medicine exceeding FIM 3,240 per year and the costs for transport in connection with treatment exceeding FIM 900 per year.
In Iceland, the maximum user charge payable per year is ISK 12,000 for people in the age group 16-66 years, and for children under 16 years, the maximum user payment is ISK 6,000.

For pensioners between 67 and 69 years receiving full basic pension, as well as for pensioners who are 70 years old or more and recipients of anticipatory pension and people who have been unemployed for more than six months, the maximum user charge is ISK 3,000.
When a patient has reached the maximum amount, he only has to pay one third of the rates.

There are also special rules governing payment for physiotherapy, occupational therapy and other therapeutic treatment.

In Norway, the user charges payable by people in the age group 16-66 years for pharmaceutical products are 36 per cent, up to a ceiling of NOK 330 per prescription.

For other age groups and for anticipatory pensioners, user charges are 12 per cent per prescription up to a ceiling of NOK 110.
The National Insurance Administration reimburses the remaining amount.

In 1998, the social security scheme financed 54.3 per cent of all pharma- ceutical products, the hospitals 13.9 per cent and the patients 32.5 per cent.

In Sweden, there is a maximum user charge per year for general medical treatment of SEK 900 and another maximum user charge for medicine of SEK 1,300.
96 ILLNESS In case one or both parents jointly have several children under 18 years, these children are exempt from paying user charges if the purchase of pharmaceutical products for them in total exceeds the maximum amount fixed for user charges.

As to the municipal care schemes, there are no gov- ernment rules concerning maximum user charges.

Medical treatment, etc.

In Denmark, medical treatment and home nursing are free of charge.
A small group of people who is at liberty to choose doctors freely must pay a minor amount for medical treatment.

In the other Nordic countries, pa- tients pay an amount for treatment.

In Finland, the amount will amount to a maximum of FIM 100 per year or FIM 50 for the first three treatments in an out-patient clinic in the primary health sector.

For temporary home nursing, FIM 50 is payable per visit by a doctor and FIM 30 per visit by a nurse.
For continuous care in the home, an amount is payable which de- pends partly on the extent of the care and partly on a patient’s financial situation.

In Iceland, a maximum of ISK 12,000 is, as mentioned above, payable for medical treatment, but home nursing is free of charge.

In Nor- way user charges payable for medical visits vary.
In connection with visits to a general practitioner and for visits to an emergency medical service, user charges are NOK 102, whereas they are NOK 140 for treatment by a spe- cialist.

User charges for home nursing were abolished as from 1998.

In Sweden, user charges vary from one county to another from SEK 60 to SEK 260.

For medical treatment and for visits to a physiotherapist, psy- chologist, chiropractor, etc., user charges are between SEK 60 to SEK 100.
Usually, user charges are highest in connection with visits to a specialist (from SEK 120 to SEK 260), but visits to general practitioners cost be- tween SEK 60 and SEK 120.

Dental treatment In all the countries, dental treatment of children and young people is com- pletely or partly free of charge.

The rest of the population pay all costs for treatment themselves, or are reimbursed a small part of these costs.
In Den- mark, patients’ payments amounted in 1998 to about 61 per cent of the total costs, including expenses for the municipal dental care schemes for children and young people which are free of charge.

In Finland, people born in 1956 or later are entitled to a supplement of about 50 per cent for dental treatment and subsidies of 75 per cent for examinations and preventive treatment.
In Iceland, people over 67 years, as well as disabled people, are refunded be- tween 50 and 100 per cent of the expenses, depending on their incomes.

97 ILLNESS Medicine In Denmark, patients’ share of the costs for medicine, including over-the- counter products, amounted to about 41 per cent in 1998.

The National Health Insurance Service (the counties) financed about 53 per cent and the municipalities financed the remaining 6 per cent of the expenses.
In Fin- land, user charges amounted to about 60 per cent of medicine with basis re- imbursement.

For specially subsidized medicine, patients pay 30 per cent or 4 per cent.

In Iceland, user charges are calculated to be about 35 per cent, but pharmacies may grant a number of discounts, for which reason the ac- tual amount of user charges cannot be calculated.
In Norway, user charges for medication with reimbursement were in 1998 12 per cent of the amount remaining up to NOK 110 for old-age and anticipatory pensioners and young people under 16 years.

For the remaining part of the population, user charges were 36 per cent of the prescription amount up to NOK 330.

People who had incurred medicine costs of more than NOK 1,290 during a calendar year were reimbursed completely for the remaining amount.
The ceiling for user payment per prescription and for the total amount of user payment resulted in the patients' actual user payment for pharmaceuticals being 10 per cent.

In Sweden, user charges amounted to 21 per cent of the expenses.

Hospitalization In Denmark, Iceland and Norway, hospitalization is free of charge.

In Fin- land, a maximum of FIM 125 per day is payable for short-term hospitaliza- tion and FIM 70 per day for hospitalization in psychiatric wards.
A maxi- mum of SEK 80 per day is payable in Sweden, irrespective of the length of the hospitalization.

98 OLD AGE, DISABILITY AND SURVIVORS Chapter 7 Old Age, Disability and Survivors The Structure of this Chapter While the other chapters have followed the chapter structure of ESSPROS, the descriptions of elderly and disabled people and survivors have in this report been gathered in one chapter.
As the rules in the Nordic countries governing pensions are largely identical and more often than not based on the pension systems for the elderly, it was considered most expedient to describe the pension systems together.

As mentioned in Chapter 2, the expenditure on home nursing was, where possible, moved from this chapter to the chapter on illness in order to obtain a more homogenous statement.

As to Sweden, it has only been partly possible to separate home nursing from the rest.
The structure of this chapter is as follows: first, a description is given of the retirement from the labour market for people aged 50-65/67 years.

Then follows a general description of pensioners’ incomes followed by a general description of the pension system, as well as a description of cash benefits and services provided to the elderly and the disabled, respectively, and to survivors.
At the end of this chapter, there is an overall description of the social expenditure on the elderly, the disabled and survivors.

Early Retirement from the Labour Market Both in the Nordic and in other European countries, the expenditure on the elderly and the disabled forms a substantial part of the total social expendi- ture.
The relatively small proportion of these expenses spent in the Nordic countries is first and foremost a result of enhanced efforts being made in re- spect of families, children, and unemployed people.

99 OLD AGE, DISABILITY AND SURVIVORS Table 7.1 Expenditure on the elderly, the disabled and survivors as per- centage of the total social expenditure in the EU, Iceland and Norway, 1997 Denmark Finland Iceland Norway Sweden 50.2 48.6 41.2 49.6 41.3 Note: See Table 4.1.
Austria Belgium France Germany Greece Ireland 56.7 51.7 48.8 49.3 57.5 29.9 Italy 71.4 56.6 Luxembourg The Netherlands 42.8 55.5 Portugal Spain 53.9 United Kingdom 52.9 What is important in relation to the expenditure on the elderly and the dis- abled is mainly the question of for how long people in active employment remain in the labour market.
Figure 7.1 shows the employment rate for men and women between the ages of 50 and 66 years in 1998, and Figures 7.2 and 7.3 show the devel- opment in the employment for 60 and 64 year-old men and women, respec- tively, for the period 1990-1998.

As it appears from Figure 7.1, men have generally a higher employment rate than women.

In all the Nordic countries, the employment frequency declines markedly with age in respect of both men and women.
There are, however, also large differences between the countries.

Both in respect of men and women, the highest employment rate is found in Iceland, and the lowest in Finland, with Sweden in between.
The explanations of the differ- ences between the countries are mainly to be found in the various occupa- tional structures, with the resulting different patterns of wear in the labour force, differences in the unemployment situation in the 1990s, as well as dif- ferences in the possibilities of withdrawing early from working life with pub- lic income-substituting benefits.

Early retirement from the labour market is most common in Denmark and Finland.
Those two countries partly have the most comprehensive public retirement schemes, partly has the unemployment rate been relatively high for a long period of time.

Early retirement is least common in Norway and espe- cially Iceland, where there are no other public retirement schemes than health- related disability/anticipatory pension as well as a very limited unemployment problem.
Sweden holds a position in the middle, both in respect of public re- tirement schemes and the extent of the unemployment in the1990s.

There are distinct difference between the countries in the employment rate for the 60 and 64 year-old men and women.

While there in 1998 were less than 30 per cent men in employment in Finland, the employment rate 100 OLD AGE, DISABILITY AND SURVIVORS was over 80 per cent in Iceland, over 70 per cent in Norway and about 60 per cent in Denmark and Sweden.
The pattern is seen as regards 64 year- old men, but the employment rate is less than 20 in Finland and less than 30 in Denmark.

As regards 60 year-old women, the participation rate is very low both in Denmark (less than 40 per cent) and Finland (less than 30 per cent), whereas it is very high in Iceland (over 70 per cent) and partly also in Norway and Sweden (about 60 per cent).

The employment rates for the 64 year-old women show a similar pattern, only at a considerably lower level in all the countries.
The development during that same period also varies among the coun- tries.

While there was a decline in the employment rate for men in Denmark and Sweden up to the middle of the 1990s, resent years have seen an in- crease.

In Finland, the employment rate for men has, however, generally been declining.

In Norway and Iceland, the employment has by and large remained the same during the period in question.
As regards women, recent years have seen an increase in the employment rate for the 60 year-olds in Denmark and Norway, while the employment rate for the 64 year-olds has been decreasing in general in all the countries.
Figure 7.1 People in gainful employment as percentage of the population, broken down by age and sex, 1998 Men Women Per cent 100 80 60 40 20 0 Per cent 100 80 60 40 20 0 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 Age 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 Age Denmark Finland Iceland Norway Sweden Denmark Finland Iceland Norway Sweden Source: For Denmark LFR, all other countries LFS 101 OLD AGE, DISABILITY AND SURVIVORS Figure 7.2 Percentage of employed people among 60 and 64 year-old men.
Per cent 1990-1998 Denmark Finland 100 80 60 40 20 0 100 80 60 40 20 0 1990 91 92 93 94 95 96 97 98 Norway 1990 91 92 93 94 95 96 97 98 60 years 64 years 100 80 60 40 20 0 100 80 60 40 20 0 100 80 60 40 20 0 102 1990 91 92 93 94 95 96 97 98 Iceland 1990 91 92 93 94 95 96 97 98 Sweden 1990 91 92 93 94 95 96 97 98 OLD AGE, DISABILITY AND SURVIVORS Figure 7.3 Percentage of employed people among 60 and 64 year-old women.
Per cent 1990-1998 Denmark Finland Norway 1990 91 92 93 94 95 96 97 98 60 years 64 years 1990 91 92 93 94 95 96 97 98 Iceland 1990 91 92 93 94 95 96 97 98 Sweden 1990 91 92 93 94 95 96 97 98 103 OLD AGE, DISABILITY AND SURVIVORS Pensioners’ Income Figure 7.4 shows the disposable income for families, where the key person, i.e.
the person earning the most, is over 65/67 years, as a percentage of the disposable income for single people and couples less than 65/67 years.

As in the other chapters, equivalent incomes have been used.

The disposable in- come is the factor income plus social cash benefits less tax.

As mentioned earlier, a different family definition is used in Iceland, and the result in Fig- ure 7.1 is consequently different.
As can be seen from the figure, families over 65/67 years have a lower average disposable income in all the countries than have families less than 65/67 years.

This applies to both single people and couples.

Single people in Iceland do, however, have a slightly higher income than is the case in the other countries.

This should be seen in relation to the fact that a different family definition is used (cf.

Chapter 2).

Besides, the actual pensionable age is very high in Iceland.
With the exception of Sweden, single people over 65/67 years have a relatively higher disposable income than have couples.

This is a result of the pension systems in the Nordic countries paying a relatively high compensa- tion to single people in relation to previous income, cf.

Figure 7.4.

In addi- tion, there are more young single people with a relatively low income than there are couples.
As to single people over or under 65/67 years, the differences in the av- erage disposable incomes are least significant in Iceland and most significant in Norway.

For couples, the difference is most significant in Denmark and least so in Sweden.

This is due to the employment pension being relatively small in Denmark in particular in relation to the extended employment pen- sion schemes in Sweden.
Income from supplementary pension schemes, in- cluded in Figure 7.4 (but not in Figure 7.5), probably plays a more impor- tant part in Denmark and Norway than it does in Sweden and Finland.

Ap- parently, the schemes are not sufficiently developed to level off the great differences in the statutory employment pension schemes.
104 OLD AGE, DISABILITY AND SURVIVORS Figure 7.4 Disposable incomes for single people and couples over 65/67 years as percentage of disposable income for single people and couples under 65/67 years, 1997 Denmark Finland Iceland Norway Sweden 0 10 20 30 40 50 60 70 80 90 100 110 Single people Married/cohabiting couples Per cent Pensions The purpose of pensions is to guarantee all citizens a certain level of income in connection with old age, disability, early retirement from the labour mar- ket or loss of provider.
In all the countries, pension is payable to the elderly.

In addition, there are a number of schemes, which ease the transition to old- age pension: the so-called special old-age pensions.

The different pension types are in this publication divided as follows: Pensions where health criteria are predominant are described under disabil- ity/anticipatory pension.

The special old-age pensions cover many different kinds of pensions, which ease the transition from work to retirement.
In re- spect of the Danish anticipatory pension, it applies that the highest and in- termediate amounts of anticipatory pension are regarded as anticipatory pensions, whereas the general and the increased general anticipatory pen- 105 OLD AGE, DISABILITY AND SURVIVORS sion are regarded as special old-age pensions.

The Finnish unemployment pensions are included in Chapter 5, Unemployment.
As regards loss of provider, Finland, Iceland, Norway and Sweden have a special survivors' pension payable to surviving spouse and children.

In Denmark, a surviving spouse is in certain cases entitled to the basic ordinary anticipatory pension (special old-age pension).

In all the countries, a pen- sion is payable to children, in Denmark, however, in the shape of a special child allowance.
Pension Structures While there are differences in both the pension and financing forms, in many years it has been a common feature of all the Nordic countries that the pensions consist of three parts: a.

A statutory basic pension payable to everyone, irrespective of previous income.

b.
b.

A statutory employment-related pension (employment pension)- pre- viously called supplementary pension in this publication - in Denmark called Labour Market Supplementary pension and in Norway and Swe- den called supplementary pension, payable to gainfully employed people, where the pension amount is based on previous income from work and on premiums and payments of the insured and their employers.
c. Supplementary pensions - previously called additional pension in this pub- lication- established by law or by agreements between employers and em- ployees.

During recent years, the development has, however, resulted in this divi- sion no longer applying in all the Nordic countries.

Some reforms have been implemented, and others are about to be.
In Denmark and Iceland, the statutory basic pension may be discontin- ued, if the recipient in question has any other income above a certain level, in Denmark, however, only in the shape of income from work in respect of old-age pensioners.

In Finland, the basic pension is proportional to the statutory earnings- related pension (employment pension), and as the employment pension reaches a certain limit no basic pension is paid at all.
In the new Swedish 106 OLD AGE, DISABILITY AND SURVIVORS system the basic pension is called a guarantee pension and it is also propor- tional to the statutory earnings-related pension (employment pension).
Table 7.2 Pension recipients by type of pension, 19981) Denmark Finland Iceland2) Norway2) Sweden Recipients of: Basic pension/ guaranteed minimum pension Employment pension Supplementary pensions All people resi- dent in the country for at least 3 years All people resi- dent in the country for at least 3 years All people resi- dent in the country for at least 3 years All people resi- dent in the country for at least 3 years All people resi- dent in the country for at least 3 years Employees Employees and self-employed people Employees and self-employed people Employees and self-employed people Employees and self-employed people having worked for at least 3 years – Statutory for public-sector employees (civil servants) Public collective agreements – Private collec- tive agreements Private collec- tive agreements – – – – Statutory for public-sector employees (civil servants) Public collective agreements Public collective agreements – Private collec- tive agreements 1 As a result of the concluded EU/EEA Agreement, the rules governing entitlement to basic pension in the Nordic countries have become almost identical.
As a main rule, one must have been resident for at least three years in the country in question between the ages of 15 and 65/67 years in order to be entitled to a pension.

Periods of employment in an EU Member State, or in another country with which a social-insurance convention has been concluded, may be taken into consideration in the calculation of compliance with the resi- dence requirement.

The rules governing employment pension in Denmark apply only to old-age pensioners.
2 The limit of three years does not apply in case of industrial injuries.

Whereas this basis principle is the same in both the Finnish and the Swedish system, the pension systems are quite different in structure.

Be- sides, the rules governing payment of anticipatory pension have not yet been fixed in the new Swedish pension system.
The employment pension system still remains the same in Denmark, Iceland and Norway, whereas the supplementary pension schemes continue to apply in all the Nordic coun- tries.

The supplementary pension schemes play, however, a very small part in Finland, and it is not possible to define clearly the borders between the three pension systems, especially not between employment pensions and supple- mentary pensions.
107 OLD AGE, DISABILITY AND SURVIVORS Table 7.3 Supplements to the basic pension/guaranteed minimum pen- sion, 1998 Denmark Finland Child supplement – Income-adjusted?

– Taxable?

Supplements to people receiving only the basic pension/guaranteed minimum pension – Income-adjusted?

– Taxable?

Housing benefit – Income-adjusted?

– Taxable?

Spouse supplement where only one spouse receives pension – Income-adjusted?

– Taxable?
– Taxable?

Wife/spouse supplement Outside assistance or attendance allowance to disabled people – Income-adjusted?

– Taxable?
– Taxable?

Ordinary and special child al- lowance No No Yes Yes Yes Yes1) Yes No No – – No Yes No No No2) – – .3) .3) .3) Yes Yes No No – – No2) Yes No No Iceland Yes Norway Sweden Yes No 5) No No Yes Yes Yes No4) Yes Yes Yes Yes Yes No Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes No Yes Yes Yes No Yes No No – – Yes6) Yes7) Yes Yes Yes No No – – No5) Yes No No 1 Pensioners may qualify for a housing benefit depending on income and size of their ac- commodation.

The benefit is not part of the pension.


2 As from1996, neither child nor spouse supplement shall be awarded.

The child supplement will have totally disappeared by the year 2001 and the spouse supplement, by the year 2002.

3 The old-age pension is totally dependent on the employment pension.

People who have ei- ther a small or no employment pension are guaranteed a minimum amount.

The old-age pension is taxable.


4 There are special pension supplements that are not connected directly to the housing ex- penses, but they are primarily given to pensioners with high housing costs.

5 The child supplement will have totally disappeared by the year 2005.

The wife supplement has been phased out since 1990 and will only be granted in special cases according to transition rules.

6 Shall only be granted to people with a low employment pension 7 Only in respect of the employment pension.
In the statistics in the present report, basic pensions in Denmark, Iceland and Norway as well as the guaranteed minimum pension in Finland and Sweden are dealt with as one.

Also the new and old employment pensions are dealt with as one.
108 OLD AGE, DISABILITY AND SURVIVORS The Nordic statistics thus differ somewhat from the European statistics where basic and employment pensions are dealt with together as the first pillar in the pension systems, and the supplementary pensions are referred to as the second pillar, while private pensions, which have not been included in the present report, are referred to as the third pillar of the pension sys- tem.
In Denmark, the employment pension depends solely on the length of the contribution period and the extent of the employment, whereas it in the other countries depends on the pension accrual period, and the amount of income from work.

In Finland, the statutory retirement pension depends on the amount of the employment pension and the supplementary pensions.

The basic pension is not payable if the employment pension exceeds about FIM 5,000 per month (for married people FIM 4,500 per month).
Income-substituting benefits, other than pensions, are usually pension- able in all the countries in relation to the employment pension.

Taxation of Pensions In Denmark, pensioners are taxed according to the same rules as those ap- plying to other taxpayers.

In Iceland, pensions are normally also taxable.

In the other countries, tax rules are especially favourable for pensioners, which means that persons with only low pension incomes are not liable to pay tax.
Housing benefits to pensioners, as well as special supplements to dis- abled persons, are exempt from tax in all the countries with the exception of Iceland.

Child supplements payable to pensioners are exempt from tax in Denmark and Iceland, but subject to tax in Norway.
109 OLD AGE, DISABILITY AND SURVIVORS Number of Pension Recipients Table 7.4 Pension recipients by age, in thousands and as percentage of the age group as per December 1998 Denmark Finland Iceland Norway Sweden 1,000 As per- centage of each age group 1,000 As per- centage of each age group 1,000 As per- centage of each age group 1,000 As per- centage of each age group 1,000 As per- centage of each age group Age 16-39 40-49 50-54 55-59 60-64 65-66 67+ Total The figures in Table 7.4 do not include child pensioners, partial retirement pensioners or recipients of survivor’s pension.
In respect of Denmark, the total number of pensioners includes recipients of voluntary early retirement pay (143,835 persons) aged 60-64 years, as well as recipients of transition benefit (33,351 people) aged 50-59 years.

As the widow’s pension has been abolished in Denmark, and widows instead may apply for basic anticipatory pension, the number of pension recipients in Denmark is overestimated in relation to the other Nordic countries.
In Finland, one reason for the high rate of pension recipience among the 60-64 year-olds is that public-sector employees are usually pensioned off at the age of 63.

Besides, there are several early retirement pension schemes in Finland, such as unemployment pension and an early old-age pension for the 60-64-year-olds, as well as an individual early retirement pension for the 58-64 year-olds.

There were, moreover, 10,900 people in 1998 aged 58-64 years who received partial retirement pension.
Were they to be included in the calculations, 81 per cent of the 60-64 year-olds and 27.8 per cent of the 55-59 year-olds were pensioners.

In Sweden, there were in 1998 11,000 persons aged 61-64 years who re- ceived partial retirement pensions.

Were they to be included in the calcula- 110 OLD AGE, DISABILITY AND SURVIVORS tions, 43.9 per cent of the 60-64 year-olds in this group were pensioners, corresponding to a total of 184,000 persons.
As it applies to all the countries that one may be resident outside the country in question and still receive a pension, the number of recipients may exceed 100 per cent.

Old Age Pensions to the Elderly – Various forms of transition to retirement The qualifying age for basic pension and guaranteed minimum pensions is 65 years in Finland and Sweden and 67 years in Denmark, Norway and Ice- land.
In Denmark, Finland, Norway and in the old Swedish system, the qualify- ing age for employment pension is the same as for basic pension, but it is 65- 70 years in Iceland.

In Finland, the general pensionable age for public-sector employees is 63 years, but it is currently being increased successively to 65 years.

In the new Swedish pension system, the qualifying age for the employ- ment pension is flexible from the age of 61 years.
The qualifying age for the supplementary and individual pension schemes is 60 years in Denmark.

In all five countries, old-age pension is payable both in the form of a basic or guaranteed minimum pension and of an employment pension.

The pensions are usually adjusted in relation to the general wage and/or price development in the various countries.

In Norway, the Government adjusts the basic amount annually, following negotiations between the State, the unions and the associations of the insured.
In Finland and in the old Swedish system, one may be granted a basic pension and/or a employment pension before the general pensionable age, but in that case the pension amount will be reduced.

Similarly, the pension will be higher if retirement is postponed beyond the general pensionable age.

In Denmark, the employment pension will be increased if it has not been paid out before a pensioner reaches the age of 70 years.
111 OLD AGE, DISABILITY AND SURVIVORS Basic pension or guaranteed minimum pension to the elderly In Denmark, Iceland, Norway and in the old Swedish system, the basic pension consists of a basic amount and a supplement.

In Denmark, the ba- sic amount will be adjusted for all pension recipients in relation to any in- come from work they may have.

In Iceland, the basic amount is adjusted in relation to any other taxable income, including one's own and any spouse’s incomes, according to special rules.
In Finland, a reform was implemented in 1996 to the effect that entitle- ment to basic pension became proportional to other pension incomes.

At the beginning of 1997, the basic amount and the pension supplement were combined into one benefit (guaranteed minimum pension).

In Sweden, a completely new pension system is gradually being introduced as from 1999.
The basic pension which in the old system was independent of other income will be replaced by a guaranteed minimum pension payable to those who are either not entitled to or who receive a very low employment pen- sion.

The guaranteed minimum pension will be payable as from 2003.

In Denmark, the general pension supplement is adjusted in relation to a pensioner’s own and any spouse’s total income apart from the basic pen- sion.

The special supplement to single persons is not income-adjusted.
In Norway, a minimum pension consisting of the basic pension amount and/or special supplements as well as the employment pension is payable.

The special supplement is calculated in relation to the amount of the em- ployment pension.

In Denmark and Iceland, a supplement to the basic amount is payable.

The amount of this supplement depends on any other income a pensioner might have.
112 OLD AGE, DISABILITY AND SURVIVORS Table 7.5 Monthly minimum amount of pension, 1998 Denmark Finland1) Iceland2) Norway3) Sweden Single people Minimum amount of pension per month KR/FIM – Basic amount – Supplement Minimum amount of pension per month, total - Before tax KR/FIM - Before tax in PPP - After tax KR/FIM - After tax in PPP 3,901 3,867 7,768 812 5,682 602 .

.
15,123 43,396 3,781 2,999 2,854 1,650 2,591 373 2,591 373 58,519 621 58,519 621 6,780 549 6,780 549 4,504 422 4,504 422 7,802 3,428 Married couples Minimum amount of pension per month KR/FIM – Basic amount – Supplement Minimum amount of pension per month, total - Before tax KR/FIM 11,230 1,190 - Before tax in PPP 8,801 - After tax KR/FIM 932 - After tax in PPP 1 The basic pension and the pension supplement were combined into one amount on 1 11,670 944 11,510 931 85,188 904 85,188 904 4,544 653 4,544 653 27,222 57,966 5,672 5,998 .
.

7,968 734 7,968 734 4,668 3,300 January 1997.

Pensioners who at the end of 1995 only received the basic amount are enti- tled to a so-called reduced old-age pension until the end of the year 2000.

2 Only the basic amount and supplement of the basic pension.

3 Minimum pension for old-age pensioners.

As from 1998, old-age pensioners will be taxed according to more favourable rules than are disability pensioners.
113 OLD AGE, DISABILITY AND SURVIVORS Employment pension to the elderly The significance of the employment pension in respect of the total payment of pension varies considerably from one Nordic country to another: from being only a small amount in Denmark to being the most important contri- bution in Iceland, Finland and Sweden.

One condition for being awarded employment pension is in all the countries that the insured person has pre- viously been affiliated with the labour market.
In Norway, the employment pension is a part of the security provided by the Social Security Scheme and is calculated in relation to previous income.

Supplementary pension to the elderly The supplementary pension schemes are, as a rule, based on collective agreements and mainly apply to government and municipal employees.

Pri- vate-sector employees are covered by these schemes to varying degrees.
In Denmark, about 80 per cent and in Norway about 60 per cent of the wage earners are covered, while in Sweden, almost all wage earners are cov- ered by the supplementary pension schemes.

In Finland, these pension schemes are insignificant, as there is no upper limit to the amount of the employment pension.
Table 7.6 Average payment of statutory retirement pensions per month, 1998 Denmark1) Finland Iceland2) Norway3) Sweden KR/FIM PPP-Euro 6,508 4,921 74,500 7,958 7,813 689 708 791 644 720 1 Average payment of statutory retirement pension in January 1998 and payment of own pension in the shape of employment pension in 1998 pr.

recipient of statutory retirement pension.

2 Expenditure on both basic and employment pensions, divided by the number of recipients of basic pension have been included.
96 per cent of those receiving a basic pension also re- ceive a employment pension.

3 Average payment of pension in December, consisting of basic pension, special supplement, employment pension, compensatory supplement as well as the increase in the minimum pension in 1998.
114 OLD AGE, DISABILITY AND SURVIVORS Figure 7.5 first and foremost shows the disposable income at five differ- ent income levels (including the maximum amount of employment pen- sion) for a single old-age pensioner, in per cent of the disposable income from work.

It also shows the disposable income at four levels (including employment pension) for a married pensioner couple, in per cent of dispos- able income from work.
Figure 7.5 Disposable incomes when receiving old-age pension (including employment pension) as percentages of disposable income from work, 1998 Single person without children Couple without children Per cent Per cent 150 140 130 120 110 100 90 80 70 60 50 40 150 140 130 120 110 100 90 80 70 60 50 40 I II III IV V I II III IV Denmark Finland Iceland Norway Sweden Denmark Finland Iceland Norway Sweden Note: The income groups I-IV/V have been calculated on the basis of the average wage of a production worker.
The cash benefit is payable to the person earning the most.

The calculation basis is described in Appendix 2.

As can be seen from the figures, there are considerable differences in the compensation levels after retirement.

This applies both to countries and to differences between single people and couples.

One reason for this is the employment pension, which is very low in Denmark, but a full pension in Sweden.

This also applies to the Icelandic employment pension schemes.
The very high compensation levels in Denmark and Finland for single peo- 115 OLD AGE, DISABILITY AND SURVIVORS ple in the lowest income brackets - and for single people and couples in the equivalent income brackets in Sweden - is a result of the relatively high amount of housing benefits payable to pensioners in those countries.

In Finland, Norway and Sweden, an important factor is that especially favour- able tax rules apply to pensioners.
Besides, the minimum pension is rela- tively high in Denmark and the employment pension is generally high in Sweden.

The differences in the compensation levels in the various countries, in particular in relation to the high-income brackets, reflect to a certain degree the significance of the supplementary pension schemes based on labour market agreements (not included in the figures).

These schemes are most important in Denmark and Norway.
As can be seen from Table 7.7, there are considerable differences be- tween the countries and between the two sexes in respect of how many per- sons receive only a basic pension.

In Denmark it is 19 per cent of men and 52 per cent of women.

In Sweden the respective figures are 4 per cent of men and about 25 per cent of women.
116 OLD AGE, DISABILITY AND SURVIVORS Table 7.7 Pensioners receiving old-age pension in the shape of basic pen- sion/guaranteed minimum pension and employment pension at the end of the years 1990-1998 Old-age pensioners, total (1,000) Old-age pensioners who only receive basic/minimum pension, broken down by men and women Men who only receive basic/minimum pension, and men who receive both basic/minimum and employment pension, per cent Women who only receive basic/minimum pension, and women who receive both basic/minimum and employment pension, per cent Men Per cent Women Per cent Only basic/ minimum pension Both basic/ minimum and employment pension1) Only basic/ minimum pension Both basic/ minimum and employment pension1) Denmark 1990 1995 1997 1998 Finland2) 1990 1995 1997 1998 Iceland 1990 1995 1997 1998 Norway 1990 1995 1997 1998 706 709 708 709 737 804 837 847 24 26 27 .. 613 625 628 631 24.3 24.0 20.9 20.5 12.3 11.8 13.8 14.9 37.4 26.7 30.9 .. 18.5 15.4 14.1 14.9 75.7 76.0 79.1 79.5 87.7 88.2 86.2 85.1 62.6 73.3 69.1 .. 81.5 84.6 85.9 85.1 24.9 27.4 20.8 19.3 6.7 4.3 4.7 4.5 28.9 10.9 10.8 .. 6.6 3.9 3.5 3.5 75.1 72.6 79.2 80.7 93.3 95.7 95.3 95.5 71.2 89.1 89.2 .. 93.4 96.1 96.5 96.5 52.7 59.5 54.0 51.7 27.4 19.0 17.0 16.1 37.9 22.8 18.5 .. 38.5 26.5 22.6 22.2 47.3 40.5 46.0 48.3 72.6 81.0 83.0 83.9 62.1 77.2 81.5 .. 61.5 73.5 77.4 78.8 8.2 8.2 8.8 9.3 91.8 91.8 91.2 90.7 1,554 1,590 1,597 1,598 Sweden 59.4 1990 69.5 1995 73.1 1997 1998 74.7 1 In Denmark, the very small employment pensions are payable as
 non-recurrent amounts since 1993.
The calculation for Finland also includes pensioners who only receive em- ployment pension.

The figures for Norway only include pensioners who receive a employ- ment pension that makes the old-age pension exceed the minimum pension amount.

The figures for Sweden include all pensioners who receive employment pension even where the employment pension amounts to less than the pension supplement.
95.1 96.3 96.5 96.5 40.6 30.5 26.9 25.3 4.9 3.7 3.5 3.5 2 The figures comprise people who have been awarded old-age pension before time as well as old-age pensioners less than 65 years.

117 OLD AGE, DISABILITY AND SURVIVORS Special Old-Age and Partial Retirement Pensions – Schemes facilitating the transition from working life to life as a pensioner The special old-age pensions comprise several forms of pension granted to people of working age, which cannot be regarded as traditional old-age pen- sions.
Social or health-related criteria and/or circumstances in the labour market or agreements may enable people to retire partly or completely.
In Denmark, such pensions are the general anticipatory pension, which may be awarded to people aged 18-66 years whose working capacity has been reduced by at least 50 per cent for health and/or social reasons; and secondly the voluntary early retirement pay, which is a voluntary retirement scheme for members of an unemployment fund aged 60-66 years; thirdly a transition allowance, which was a voluntary retirement scheme for long- term unemployed recipients of daily cash benefits aged 50-59 years.
Acces- sion to this scheme stopped by the end of 1995; fourthly partial pension, which is awarded to employees and self-employed people aged 60-66 years, who wish to retire partly from the labour market.

In Finland, employees and self-employed people who have turned 60 years may be awarded early retirement pension.

In the public sector, the age limit is 58 years.

Early retirement reduces the pension, also after the recipi- ent has reached the age of 65 years.
All early retirement pensioners have been included as old-age pensioners.

Self-employed people and employees who have been working for a long time, may chose partial pension when they reach the age of 58 years.

In the period 1 July 1998 to 31 December 2002, the age limit will, however, be 56 years.

Farmers who stop operating their farms before reaching the pensionable age, may receive a special pen- sion.

The Finnish unemployment pensions are described in Chapter 5.
In Norway, it was decided in 1989 to introduce a scheme of pensions fixed by collective agreements (AFP).

The main idea of the scheme is that working people may on certain terms retire before the statutory retirement age of 67 years.

The pensionable age of the scheme has been lowered sev- eral times and recently to 62 years as from 1 March 1998.
About 60 per cent of working people may obtain a pension fixed by collective agreements; especially in certain highly physically demanding trades it is difficult to con- tinue working until the statutory retirement age.

There are three further pension schemes that are adapted to the social 118 OLD AGE, DISABILITY AND SURVIVORS insurance scheme, and they function as special early retirement schemes for people of less than 67 years.
In the pension scheme for sailors and fisher- men, old-age pension may be obtained from the age of 60 years, and in the pension scheme for woodsmen pension may be obtained from the age of 63 years.

In Sweden, a partial pension is payable to insured people aged 61 to 64 years, who have reduced their working hours by a maximum of 10 hours per week.

An insured person is, however, not allowed to work less than 17 and more than 35 hours per working week.
Table 7.8 Average monthly amounts of the special old-age/partial retire- ment pensions as per December 1998 KR/FIM PPP-Euro Denmark Basic general anticipatory pension1) Voluntary early retirement pay2) Partial retirement pension3) Transition allowance2) Finland 3) Partial retirement pension Special pensions to farmers Norway4) Pension fixed by collective agreement Special pension to sailors Special pension to fishermen Special pension to woodsmen 7,039 9,420 5,204 9,035 3,060 3,814 10,060 2,664 4,135 3,102 746 998 551 957 440 548 814 216 335 251 Sweden3) Partial retirement pension 1 Average pension paid out in January 1998.
2 Average benefit amount paid out in 1998.

3 Average pension amount paid out in December 1998.

4 Average monthly amount, December 1998 (average annual amount in 1998 divided by 12).
3,200 295 119 OLD AGE, DISABILITY AND SURVIVORS Table 7.9 Pensioners receiving special old-age and partial retirement pen- sions, by sex and age, 1998 Total -49 50-59 60-64 65- M W M W M W M W 106,258 11,841 15,134 11,963 24,619 6,596 21,498 2,977 11,630 Denmark Basic general anticipatory pension Voluntary early retirement pay1) Partial retirement pension Finland Partial retirement pension Special pension to farmers Norway Pension fixed by col- lective agreement Special pension to sailors2) Special pension to fishermen Special pension to woodsmen 177,186 4,201 10,924 42,696 21,573 19,329 1,693 98 .
.

.

.

.

.

22,730 10,621 47,928 52,471 23,038 20,398 .

.

.

2,072 565 1,239 325 .

2,328 2,980 2,617 2,999 .

.

.

2,126 4,134 5,469 7,309 11,236 12,422 .

.

.

6,457 4,579 6,010 4,527 } } } } 14,825 .. .. 123 .. 4,381 .. .

.. .. .

.

.

.. .. .. .. .. .. .. .

Sweden3) Partial retirement pension 1 Including 33,351 people in the age group 50-59 years receiving transition allowance.

The transition allowance was introduced in 1992 as a temporary measure.

It was discontinued at the end of 1995. .


7,000 4,000 11,000 .

.

.

.

2 It is not possible to break down recipients of special pension to sailors by sex.

3 Calculated.

120 OLD AGE, DISABILITY AND SURVIVORS Services to the Elderly Institutions, etc., for the elderly The majority of the older population lives in ordinary housing.

Only a mi- nority lives in housing specially adapted to older people.
Such housing ex- ists in all five countries, and the layout depends on the need of the elderly for care and may be divided into: 1.

Institutions (nursing homes/homes for the long-term ill/old people’s homes).

2.

Service housing (sheltered homes/service flats/collective housing/housing where special care is provided, etc.).

Elderly people may also, to varying degrees, be offered long-term medical treatment in hospital wards - often in the so-called geriatric wards.
In Nor- way, there are also special wards in some nursing homes where elderly peo- ple who live at home may be admitted on a short-term basis when needed.
Table 7.10 People aged 65 years and older living in institutions or service housing, total and as percentages of the total number of elderly, December 1998 Denmark1) Finland Iceland2) Norway1) Sweden3) People of the ages 65-74 years 75-79 years 80+ years Total, 65/67+ years 9,105 10,650 43,502 63,257 8,699 8,425 32,400 49,524 469 509 2,040 3,018 8,441 12,259 48,166 68,866 10,905 17,023 90,787 118,715 As percentages of the respective age groups 65-74 years 75-79 years 80+ years Total, 65/67+ years 1 Age groups 67-74, 75-79 and 80+ years.
2 Only residents in residential care homes, nursing homes and old people’s homes have been 1.4 4.9 21.0 7.7 3.1 7.8 25.6 11.1 2.6 8.2 28.0 9.6 2.0 5.6 18.8 6.5 2.8 6.4 20.8 9.0 included, which explains the large discrepancy in relation to previous figures.

3 Calculation as per 1 November 1998.

Only people staying permanently in institutions and not short-term stays, which were previously included.
121 OLD AGE, DISABILITY AND SURVIVORS Home help Table 7.11 Elderly people receiving home help, 1998 Recipients of home help 65-74 years 75-79 years 80+ years Total 65+ years Denmark1) Finland2) Iceland3) Norway4) Sweden5) {65,024 101,224 166,248 17,221 41,226 26,369 84,816 .. .. .. 6,101 18,478 15,159 23,318 22,421 84,253 60,702 98,282 126,049 {13.2 Recipients of home help as percentages of the age group 3.9 65-74 years 16.6 75-79 years 35.2 80+ years 11.2 Total 65+ years 1 People of the age groups 67-79 years and 80+ years.
2 Households in the age groups 65-74, 75-84 and 85+ years.

3 Age group 65-79 years.

4 Age group 67-74 years and 75+ years.

5 People who as at 1 November 1998 had been granted home help and who live in their own .. .. .. 19.3 5.5 14.2 32.2 15.9 2.4 6.7 19.5 8.2 48.5 23.7 house or flat.

In all five countries, home help is provided to the elderly.

The extent of as- sistance is determined on the basis of individual needs and may vary from a few hours per month to several hours per day.
The assistance is a municipal matter and is provided by municipal staff.

Statistics concerning home help in the Nordic countries are not easily compared.

While the figures for Denmark and Norway are situation- statements, the Icelandic and Finnish data contain information about how many people received help during a year.

The Swedish data cover people who per 31 December had been granted home help.
Besides, the Finnish statistics comprise households, whereas they for the other countries com- prise individuals.

Support services and leisure activities In the Nordic countries, pensioners are offered various kinds of support services and activating measures either on a municipal or on a private basis.

The range of services and activities offered varies from one country to an- other and from one municipality to another.

No comparable statistics are available to reflect the extent of such activities.
122 OLD AGE, DISABILITY AND SURVIVORS Support schemes mainly aim at enabling elderly people to remain in their own homes for as long as possible.

The service schemes include delivery of meals, telephone chains, home-visiting schemes, physiotherapy and occupa- tional therapy, hairdressing, pedicure, gardening and snow clearing.

There are also schemes for washing and mending clothes.
There are no centrally agreed policies regarding payment, but usually a fee is charged for the pro- vision of meals, pedicure and gardening.

Part of the activities may take place in the special centres for elderly people.

The transport service scheme is a service to elderly or disabled people who are unable to use public transport or to get about on their own.
Disabled People Health-Related Disability/Anticipatory Pension – Social grounds are evaluated in different ways in respect of award of disability/anticipatory pension In all the Nordic countries, persons whose working capacity is reduced by physical and/or mental disability may be entitled to a disability/anticipatory pension.

The disability/anticipatory pension is called disability pension in Finland and Iceland and anticipatory pension in Denmark, Norway and Sweden.
In addition to the ordinary disability pension, which covers the whole working-age population, Finland has a special disability pension scheme (individual early retirement pension) based on less strict health criteria for the age group 60-64 years.

In Denmark, the statutory retirement pension (old-age pension), disabil- ity pension, widow’s pension and anticipatory pension are integrated in a coherent set of rules.
Anticipatory pensioners are awarded basic pension ac- cording to the same rules as applies to old-age pensioners.

Besides, anticipa- tory pensioners who have been granted the intermediate amount of antici- patory pension also receive a disablement allowance, and anticipatory pen- sioners who have been granted the highest amount of anticipatory pension receive apart from the disablement allowance also an unemployability amount.
The disablement allowance and the unemployability amount are 123 OLD AGE, DISABILITY AND SURVIVORS not earnings-related, and besides, the disablement allowance is exempt from tax.

In Denmark, anticipatory pensioners do not receive employment pen- sion.

As mentioned earlier, the general minimum anticipatory pension has been included as a special old-age pension in the present report.
In Finland, Iceland, Norway and Sweden, disability/anticipatory pension is granted in the shape of a basic pension/guaranteed minimum pension and a employment pension according to the same rules as apply to old-age pen- sions, whereas the old rules apply in Sweden.

For the calculation of the employment pension, which is done on the ba- sis of previous income from work, the time up to the statutory pensionable age is usually included in Finland, Iceland, Norway and Sweden.
In the Nordic countries, there are a number of alternative benefits that affect both the award of disability/anticipatory pension and the number of disability/anticipatory pensioners.

In Sweden, for example, sickness benefit is payable without any time limit, whereas sickness benefit is payable for a maximum of one year in the other countries, with a possibility of prolonga- tion in Denmark, however.

In Norway, rehabilitation benefit is normally payable before anticipatory pension will be awarded.
Also the other disability/anticipatory pension schemes (which in this re- port are referred to as special old-age pensions) may affect the number of disability/anticipatory pensioners.

In Denmark and Finland, there is, for ex- ample, a large number of pensioners who mainly draw pension for other reasons.
The existence of schemes such as the voluntary early retirement scheme in Denmark and the unemployment pension scheme in Finland has contributed to there being fewer disability/anticipatory pensioners than would otherwise have been the case in these countries.

In Norway, 60 per cent of people working have since 1989 been part of the AFP-scheme (pen- sions fixed by collective agreements).
During the 1990s, this scheme was extended to include still younger age groups without that having any large effect on the number of anticipatory pensioners.

The amount of the anticipatory pension, including pension supplement, is either higher or equal to the pension awarded to retirement pensioners in all the countries.

In addition, a number of special supplements may be pay- able in Denmark, as well as a employment pension in the other countries, as mentioned above.
Figure 7.6 shows the compensation level for a single 50 year-old disabil- ity/anticipatory pensioner who has previously been working, and who has completely lost his working capacity.

The highest level is found in Denmark and Sweden and the lowest in Norway for people who previously had a low 124 OLD AGE, DISABILITY AND SURVIVORS income.

The very high compensation level in Denmark is due to the highest anticipatory pension being independent of any previous income.
Besides, people who have completely lost their working capacity are entitled to both a disablement amount and an unemployability amount.

Furthermore, the rules governing housing benefits for pensioners are relatively favourable.

This also applies to Sweden.

The anticipatory pension in the other coun- tries is calculated in relation to previous income from work.
Figure 7.6 Compensation level for a single 50 year-old disability/ anticipatory pensioner 1998 Single person without children Per cent Denmark Finland Norway Sweden 160 150 140 130 120 110 100 90 80 70 60 50 I II III IV V Note: The income groups I-IV/V have been calculated on the basis of the average wage of a production worker.

The cash benefit is payable to the person earning the most.

The calculation basis is described in Appendix 2.


125 OLD AGE, DISABILITY AND SURVIVORS Table 7.12 Average monthly amount of disability/anticipatory pension, 1998 KR/FIM PPP-Euro Denmark1) 9,171 5,164 Finland Iceland2) 70,800 8,305 Norway Sweden2) 7,645 1 Average amount of highest and intermediate anticipatory pensions paid out in January 1998.

2 Expenditure on both basic and employment pensions divided by the number of disability pensioners who receive basic pension have been included.
55-60 per cent of the anticipa- tory pensioners also receive employment pension.

972 742 751 672 705 3 Average pension amount as per December 1998 including pension supplement and other supplements.

There has been a limited decrease in the number of new anticipatory pen- sioners in Denmark in recent years.
The decrease must be seen in connec- tion with changes in the awarding powers, the financing and strengthening of the early, preventive effort to maintain people with reduced working ca- pacities in employment, e.g.

on special terms.

With effect from 1 July 1998, an application for anticipatory pension may only be submitted when all ac- tivation, rehabilitation, care and other measures to improve the working ca- pacity have been exhausted.
These conditions have, however, mainly re- sulted in a decline in the number of accessions of the general anticipatory pensions (special old-age pensions), where new awards of the highest and intermediate anticipatory pensions have only declined moderately.

Both in Norway and Sweden, the rules governing award of anticipatory pension have been tightened.

In Norway, this was already done in 1991 when the medical grounds for award were tightened.
After a decrease in the number of accessions at the beginning of the 1990s, the number has increased again.

This is mainly a result of demography and amendment of rules in other benefit areas.

In Finland, the number of disability pensioners has decreased.

This is due to the qualifying age for individual disability pension having been raised, and to older long-term unemployed people receiving unem- ployment pension and consequently not applying for disability pension.
126 OLD AGE, DISABILITY AND SURVIVORS Table 7.13 Recipients of disability/anticipatory pension and new accession of disability/anticipatory pensioners, by sex, 1990-1998 Denmark1) Finland Iceland2) Norway3) Sweden M K M K M K M K M K 1990 Recipients New accession New accession as percentage of population 1995 Recipients New accession New accession as percentage of population 1997 Recipients New accession New accession as percentage of population 1998 Recipients New accession New accession as percentage of population 76,113 78,481 159,509 141,423 3,097 4,350 104,704 129,657 166,716 188,600 .. 14,444 15,140 23,643 26,850 6,638 5,597 .. .. .. 0.4 0.3 .. .. .. .. 1.1 1.2 0.9 1.0 82,166 83,871 165,348 144,156 4,250 5,769 103,401 132,900 185,413 223,163 723 11,016 12,223 18,639 20,565 5,941 5,087 502 .. .. 0.3 0.3 .. .. 0.6 0.9 0.8 1.0 0.7 0.8 82,248 84,033 157,120 137,831 4,533 6,308 106,919 139,622 188,750 234,166 565 13,194 15,170 20,032 21,166 4,997 4,179 312 .. .. 0.3 0.2 .. .. 0.4 0.7 1.0 1.2 0.8 0.9 82,031 83,659 153,123 134,924 .. 4,896 4,209 .. 0.3 0.2 .. .. .. .. .. .. 111,164 146,939 186,672 234,952 .. 14,881 18,409 15,909 18,578 .. 1.1 1.4 0.6 0.7 1 The number of recipients has in this table been calculated as at the beginning of the year; in the other pension tables, the number has been calculated as at the end of the year.
2 Pensionable age 16-66 years.

3 Pensionable age 16-66 years (as from 1991, the age group 16-67 years).
127 OLD AGE, DISABILITY AND SURVIVORS Table 7.14 Pensioners receiving disability/anticipatory pension in the shape of basic pension/guaranteed minimum pension and/or employment pension, total 1990-1998 1990 1995 1997 1998 Denmark 18-19 years 20-29 » 30-39 » 40-49 » 50-59 » 60-64 » Total 18-64 » 65-66 » Finland 1) 16-19 years 20-29 » 30-39 » 40-49 » 50-59 » 60-64 » Total 16-64 » 65-66 » Iceland2) 16-19 years 20-29 » 30-39 » 40-49 » 50-59 » 60-64 » Total 16-64 » 65-66 » Norway 16-19 years 20-29 » 30-39 » 40-49 » 50-59 » 60-64 » Total 16-64 » 65-66 » Sweden 16-19 years 20-29 » 30-39 » 40-49 » 50-59 » 60-64 » Total 16-64 » 65-66 » 407 6,959 15,943 31,198 52,990 35,688 143,185 12,953 1,980 10,477 23,286 43,970 119,384 101,835 300,932 .
221 837 1,137 1,275 1,801 1,481 6,752 695 668 6,336 18,314 38,442 69,141 65,803 198,704 35,657 3,232 10,486 25,629 59,984 120,184 141,839 361,354 .

485 8,317 18,305 34,919 57,198 34,504 153,728 12,918 1,978 9,031 20,379 49,498 113,830 114,787 309,503 .

322 1,048 1,825 1,973 2,234 1,712 9,114 905 778 6,625 19,106 44,153 73,415 59,700 203,777 32,524 3,138 12,181 31,645 78,902 156,598 137,394 419,858 .

574 7,747 18,430 33,551 58,910 33,832 153,044 12,646 1,962 8,330 19,165 47,473 109,556 108,465 294,951 .
324 1,087 1,955 2,313 2,505 1,701 9,885 956 863 7,161 20,583 45,527 82,295 58,788 215,217 31,318 3,191 12,296 31,845 77,076 162,279 136,229 422,916 .

593 7,703 18,393 33,405 59,545 33,762 153,401 12,223 1,992 8,189 18,751 45,791 106,442 106,882 288,047 .

.. .. .. .. .. .. .. .. 755 7,508 21,944 47,644 88,361 61,464 227,676 30,427 3,411 12,597 32,063 75,791 164,218 133,544 421,624 .

1 Including individual disability pensions.


2 15-18 per cent of the included disability pensioners are not really general disability pensioners.
128 OLD AGE, DISABILITY AND SURVIVORS Table 7.15 Pensioners receiving disability/anticipatory pension in the shape of basic pension/guaranteed minimum pension and/or employment pension as percentages of the respective age groups, 1990-1998 1990 1995 1997 1998 Denmark 18-19 years 20-29 » 30-39 » 40-49 » 50-59 » 60-64 » Total 18-64 » 65-66 » Finland 1) 16-19 years 20-29 » 30-39 » 40-49 » 50-59 » 60-64 » Total 16-64 » 65-66 » Iceland2) 16-19 years 20-29 » 30-39 » 40-49 » 50-59 » 60-64 » Total 16-64 » 65-66 » Norway 16-19 years 20-29 » 30-39 » 40-49 » 50-59 » 60-64 » Total 16-64 » 65-66 » Sweden 16-19 years 20-29 » 30-39 » 40-49 » 50-59 » 60-64 » Total 16-64 » 65-66 » 0.1 0.9 2.1 4.0 9.7 14.6 4.1 13.3 0.8 1.5 3.0 5.7 22.6 39.4 9.1 .
1.3 2.0 2.8 4.3 8.7 14.4 4.2 13.0 0.3 1.0 2.9 6.7 18.0 33.6 7.4 43.8 0.7 0.9 2.2 4.8 13.7 33.5 6.7 .

0.2 1.1 2.3 4.5 8.8 14.4 4.3 14.3 0.8 1.4 2.7 5.9 19.4 47.6 9.2 .

1.9 2.6 4.3 5.6 9.7 17.0 5.4 21.8 0.4 1.0 2.9 7.1 16.3 33.9 7.4 42.8 0.8 1.0 2.6 6.4 14.7 34.2 7.6 .

0.2 1.0 2.3 4.5 8.4 13.6 4.3 14.1 0.8 1.3 2.5 5.8 16.8 43.9 8.8 .

1.9 2.7 4.6 6.2 10.0 17.4 5.7 23.8 0.4 1.0 3.0 7.2 16.1 33.7 7.5 42.2 0.8 1.1 2.6 6.4 14.2 33.5 7.7 .

0.2 1.0 2.2 4.5 8.3 13.2 4.3 13.7 0.8 1.3 2.5 5.7 15.6 41.8 8.5 .
.. .. .. .. .. .. .. .. 0.5 1.2 3.3 7.7 16.9 34.6 8.2 42.7 0.8 1.1 2.6 6.4 13.9 32.0 7.6 .

1 Including individual disability pensions.

2 15-18 per cent of the included disability pensioners are not really general disability pensioners.
129 OLD AGE, DISABILITY AND SURVIVORS Rehabilitation People whose working capacity has been reduced due to physical, mental or social factors may be granted support to education, retraining and re- schooling where it is deemed necessary for their future possibilities to man- age on their own and support their families.

Support may also be granted towards meeting special expenses incurred by the education or training.

Education may consist of training in the open labour market.
The support is provided in the shape of wages or wage sup- plements.

In addition, special support may be granted towards acquisition of tools, etc., and towards establishment of a business.

In Denmark, support is granted as a fixed rehabilitation allowance corre- sponding to the maximum amount of daily cash benefits.

Payment of the rehabilitation allowance is subject to rehabilitation being initiated according to a fixed occupational plan.
The allowance is payable until the occupa- tional plan has been implemented, but usually for a maximum of five years.

In respect of young people under the age of 25 years, the rehabilitation al- lowance is payable by half of the amount.

In Finland, about 80 per cent of the recipients receive rehabilitation benefit from the Social Insurance Institution.

In those cases, the daily cash benefit equals the amount of the sickness benefit.
The amount of the daily cash benefits from the accident and traffic insurance schemes as well as from the statutory employment-related pension scheme depends on the paying authorities.

In Iceland, a rehabilitation allowance is payable when an injured person is no longer entitled to sickness or accident benefits.

As a rule, the allowance is payable for a maximum of 12 months or until a decision has been made as to the future of the disabled person in question.
The allowance equals the basic amount of the disability pension and is awarded according to the same criteria; it is, however, never payable for more than 18 months.

Everyone receiving rehabilitation allowance must undergo examinations and treat- ment during the period in which the allowance is received.

In Norway, subsidies are payable towards maintenance according to the same rules as apply to disability pension, apart from the fact that there is no minimum amount.
The rehabilitation proper may be carried through in a co-operation between i.a.

the health, labour market, insurance and social sectors to the effect that these sectors must provide an overall offer to each person concerned.

In Sweden, a number of compensations and benefits are payable in con- nection with rehabilitation.
A training benefit in the form of daily cash 130 OLD AGE, DISABILITY AND SURVIVORS benefit is payable to participants who are or would have been entitled to benefits from the unemployment insurance scheme, provided the person in question participates in labour market activities.

This is subject to the per- son in question complying with the conditions for receipt of daily cash benefits in the event of unemployment or having received a benefit for the maximum period in which unemployment benefit is payable.
Daily cash benefit may also be payable to people who are not entitled to unemploy- ment benefit; however at a reduced rate.

Daily cash benefit is payable for a maximum of five working days per week and the benefit shall be reduced in case the recipient receives other benefits such as pension, parental benefit, rehabilitation benefit or pay from an employer.

In connection with rehabili- tation, a rehabilitation benefit as well as special benefits may be awarded in- stead of sickness benefit.
The rehabilitation benefit is in that case awarded to people who participate in occupational rehabilitation, and the special benefits shall cover the expenses incurred by the rehabilitation such as travel.

The occupational rehabilitation measures may for example be job training, analysis at a labour market institute and education.
Table 7.16 People receiving rehabilitation benefit during the year and as at December 1998 Denmark1) Finland2) Iceland Norway3) Sweden4) People receiving reha- bilitation benefit dur- ing the year People receiving reha- bilitation benefit as at December 1998 48,531 49,816 675 90,496 34,295 19,629 9,857 259 62,236 18,827 1 Excluding refugees, people receiving support towards meeting special costs, etc., undergo- ing rehabilitation and people undergoing retraining in the general labour market in a wage subsidized job.
2 Includes only rehabilitation benefit payable by the Social Insurance Institution (80 per cent of all payments).

3 People receiving rehabilitation benefit.

4 Includes only people receiving rehabilitation benefit.

The number of people receiving spe- cial benefits cannot be calculated.
131 OLD AGE, DISABILITY AND SURVIVORS Compensation for Industrial Injury In all Nordic countries, people who have suffered an industrial injury are entitled to either sickness benefit or an equivalent benefit in the event of temporary loss of their working capacity.

In case of long-term or permanent loss of working capacity, disability/anticipatory pension or a similar benefit is payable.
An industrial injury is defined as a work accident or work-related illness causing temporary or permanent loss of the ability to work.

In all the countries, compulsory industrial injury insurance funds have been established, but according to somewhat differing rules.

The industrial injury insurance fund pays out compensation for lost ability to work, either in the shape of a non-recurrent payment or monthly payments.
Normally, the industrial injury insurance fund also covers expenses for treatment that are not covered by the general sickness insurance scheme.

In Denmark, compensation is granted for loss of ability to work if an in- dustrial injury has reduced the working capacity by at least 15 per cent.

In addition, a non-recurrent payment is payable if the degree of the permanent injury is 5 per cent or more.

In Finland, one is entitled to pension if one's working capacity is reduced by at least 10 per cent.
The pension payable to a person who is completely incapable of working amounts to 85 per cent of the previous income from work.

An employee who is partially incapable of working is entitled to part of the full pension corresponding to the reduction of the working capacity.

The compensation level for pension on the grounds of accidents drops to 70 per cent of the income from work when the recipient turns 65 years.
Pension in the event of accident to a partially disabled employee shall also be reduced when he turns 65 years.

In Iceland, entitlement to wages during illness (absence due to an accident) plays the most important part for an injured person.

People who are not enti- tled to wages, or in the event that the period in which one is entitled to receive wages has expired, the people concerned receive daily cash benefits from the industrial injury insurance fund under the general insurance scheme.
This benefit is a fixed amount independent of the wages earned prior to the acci- dent.

The benefit is usually payable for a maximum of 52 weeks.

In Norway, one may be granted anticipatory pension in the event that an industrial injury or a work-related accident reduces one’s working capacity by 30 per cent, where a reduction of the working capacity of 50 per cent is normally required in order to be awarded anticipatory pension.
A loss of a minimum of 15 per cent of the ordinary working capacity is required in or- 132 OLD AGE, DISABILITY AND SURVIVORS der for a compensation to be awarded (compensation for loss of working capacity).

In Sweden, compensation is granted in the shape of annuities in the event that one's working capacity has been permanently reduced by at least one fifth (6.6 per cent).

The annuity shall normally be calculated on the ba- sis of the insured person’s sickness-benefit entitling income.
Care Allowance to Disabled People In all the Nordic countries, families may receive financial support from the public authorities to cover expenses for care of a physically or mentally ill child in the home.

The rules vary somewhat from one country to another, but the aims of the schemes are identical, i.e.

to make it financially possible for families to maintain a child in the home by having the extra expenses in- curred by the child’s disability covered.
Disabled adults who live in their own homes are also entitled to subsi- dies.

The various countries also have slightly differing rules in this respect.

Support may be granted for technical aids that the person concerned needs in order to carry out a trade or to remedy his or her disorder, or to ease the daily existence in the home.

In several of the countries, subsidies may be granted for purchase and/or maintenance of a car or other motor vehicle.
Services for Disabled People Institutions, etc., for disabled people In all the countries, there is special housing for disabled people, such as: 1.

Institutions (nursing homes/homes for the long-term ill).

2.

Service housing (sheltered housing/service flats/collective housing).
133 OLD AGE, DISABILITY AND SURVIVORS Table 7.17 People under 65 years living in institutions or in service hous- ing, December 1998 Denmark1) Finland Iceland Norway2) Sweden3) Under 65 years, total 16.130 15.103 823 13.092 23.252 Under 65 years as per- centage of the age group 1 Under 67 years; including special housing for the elderly.

2 The information applies to residents in special-care housing units as well as to people ad- 0,3 0,3 0,3 0,3 0,3 mitted to institutions (age group 0-66 years).
3 Calculation as at 1 November 1998, and only people who are staying on a permanent and not short-term basis, who were previously included.

In addition to these special types of accommodation, disabled people may also, to varying degrees, be offered long-term medical treatment in hospital wards in the so-called long-term-care wards.
In Norway, local authorities receive an ear-marked subsidy in order to ensure that disabled people under 67 years be moved from old people’s homes or nursing homes to housing facilities outside of the institutions.

Home help In all five countries, home help is provided to disabled people.

The extent of the assistance is determined on the basis of individual needs and may vary from a few hours a month to several hours per day.

The assistance is a municipal matter and is provided by municipal staff.
In all the Nordic countries, people with severe disabilities may be granted financial support towards payment of personal assistance and help to man- age the household.

In Norway, this is a municipal task, but the local au- thorities may receive subsidies to this end from the State on a trial basis.

In 1998, the scheme comprised 311 people.

In several of the countries, a per- son may employ one or more people to assist him.
134 OLD AGE, DISABILITY AND SURVIVORS Table 7.18 People under 65 years receiving home help, 1998 Denmark1) Finland2) Iceland Norway1) Sweden3) Recipients of home help under 65 years, total 28.272 41.606 3.631 25.010 14.697 Recipients of home help as percentages of the age groups under 65 years 1 Households under 67 years.

2 Households.

Out of the 41,606, the 6,292 were disabled.

3 Including people staying in their own homes, who as at 1 November 1998 had been 0,7 0,6 1,0 1,5 0,2 granted home help.
Rehabilitation In all five countries, there are specialized institutions for retraining, assess- ment of working capacity and re-schooling of disabled people and other oc- cupationally impaired groups.

Furthermore, sheltered workshops have been established for disabled people who are unable to maintain a job in the open labour market.
In Denmark, people with reduced working capacities are offered train- ing, assessment of working capacity, sheltered employment, etc., at rehabili- tation institutions and sheltered workshops.

At the end of 1998, these measures comprised 18,912 people.

People with permanent limited working capacities may furthermore find employment with private or public em- ployers in flex-jobs or wage-subsidized sheltered jobs.
Flex-jobs are given to persons who are not entitled to any social pension whereas sheltered jobs are given to anticipatory pensioners.

At the end of 1998, there were 5,042 peo- ple in flex-jobs and 5,328 in sheltered jobs.

In Finland, the Social Insurance Institution can offer rehabilitation in- cluding assessment of working capacity.

The health sector offers the largest part of the medical rehabilitation.

The accident and traffic insurances fur- thermore offer rehabilitation to their own clients.
Besides, the employment pension funds may initiate rehabilitation in order to prevent a person from becoming incapacitated for work or to improve the ability and capacity for work of the person in question and to ease his return to the labour market.

War veterans may also be offered rehabilitation, and war invalids are offered rehabilitation at least every second year.

In Iceland, disabled people are offered retraining and education, shel- tered employment in the open labour market.
In 1998, there were 10 shel- 135 OLD AGE, DISABILITY AND SURVIVORS tered workshops employing 257 people and 17 rehabilitation institutions re- habilitating 251 people.

107 people were able to participate in work in the open labour market with special support.

The health sector is responsible for the medical rehabilitation and technical aids.

In Norway, the labour and social sectors co-operate when it comes to meas- ures aimed at activating the disabled in the labour market.
People with reduced working capacities may have their work situation adapted according to special needs.

It is also possible to borrow various technical aids from the technical aids centres.

There are sheltered workshops for people with reduced working ca- pacities.

Besides, people with disabilities may receive treatment and guidance at a number of retraining institutions.

Disabled people, who have no connec- tion with the labour market, may also borrow technical aids for daily life use.
People undergoing rehabilitation are entitled to support according to the same rules as apply to anticipatory pension.

A comprehensive occupational rehabilitation is offered to the extent nec- essary and expedient for the person in question in order for him to return to working life or to keep a suitable job.

The aim of the occupational rehabili- tation is to enable job seekers and employees of ill health to get a job on or- dinary terms.
Occupational rehabilitation is based on training, job training and guidance.

Benefits in relation to the occupational rehabilitation are cal- culated in the same way as is anticipatory pension, with the exception that no special supplements are payable.

This means that there is no lower limit to the amount of the rehabilitation benefits.

In Sweden, people with reduced working capacities may participate in various labour market measures.
In 1998, an average of 26,100 people with reduced working capacities participated in cyclical measures.

The four measures that on average covered the majority of the total number of people with reduced working capacity during 1998, were working life development, work place introduction, occupational rehabilitation or extensive guidance at the labour market institutes, labour market training, working life devel- opment and introduction to the work place.
Besides, about 53,600 incapaci- tated people participated in special programmes for disabled people.

A per- son who, due to a disability, cannot get a job in the open labour market may find employment in a Samhällföretag through the employment service.

At the end of 1998, about 26,900 incapacitated people worked at Samhäll.

Samhäll took on about 2,300 people in 1998.


At least 40 per cent of the newly employed come from the so-called priority groups (people with learning difficulties, multiple disabilities and mental illnesses).

136 OLD AGE, DISABILITY AND SURVIVORS Support services and leisure activities In the Nordic countries, disabled people are offered various kinds of sup- port services and activating measures either on a municipal or on a private basis.
The range of services and activities offered varies from one country to another and from one municipality to another.

No comparable statistics are available to reflect the extent of such activities.

Support schemes are mainly aimed at enabling disabled people to remain in their own homes for as long as possible.

The service schemes include de- livery of meals, telephone chains, home-visiting schemes, physiotherapy and occupational therapy, hairdressing and pedicure, gardening and snow clear- ing.
There are also schemes for washing and mending clothes.

There are no centrally agreed policies regarding payment, but usually a fee is charged for the provision of meals, pedicure and gardening.

The transport service scheme is a service to disabled people who are un- able to use public transport or to get about on their own.
Survivors Pensions to Widows and Widowers – of still decreasing importance Changes during the past decades regarding family patterns, increasing par- ticipation by women in the labour market and the changes in the distribution of income between spouses have caused legislative changes within this field.

In Denmark, pension to widows and widowers has been abolished.

In Fin- land, the pension paid is influenced by a survivor’s own employment pension as well as by one’s own pension.
In Norway and Sweden, entitlement to survivor’s pension is subject to a survivor’s ability to provide for him/herself.

In Sweden, the current widow’s pension shall lapse on a long-term basis for most survivors.

Widows and widowers may in Denmark apply for general anticipatory pension, which in this report is termed special old-age pension.

In Finland, Norway and Sweden, widows and widowers are entitled to survivor’s pen- sion in the form of basic pension/guaranteed minimum pension.
137 OLD AGE, DISABILITY AND SURVIVORS Table 7.19 Pensioners aged 18-64/66 years receiving statutory survivors’ pen- sion, 1990-1998 Denmark1) Finland2) Iceland3) Norway4) Sweden5) 1990 1995 1997 1998 M W M W M W M W M W .

.

.

.

157 1,211 1,484 34,234 1,372 68,020 171 735 1,854 30,023 2,147 64,423 986 3,132 1,910 28,046 1,529 57,970 .. 2,236 27,052 1,529 56,772 1,633 60,527 5,814 52,767 6,795 49,892 7,256 48,798 .

.

.

.

.. 1 The widow’s pension scheme has been abolished.
Pension may be granted to widows by way of the anticipatory pension scheme.

2 Widows/widowers over 64 years may be granted survivor’s pension in the form of em- ployment pension.

In 1998, the number of pensioners over 64 years receiving survivors’ pension was 175,133 women and 15,818 men.

3 Pensioners aged 16-65 years.

4 Not including widows and widowers receiving disability/anticipatory pension.

Widows/ widowers under 67 years.


5 Includes widow’s pension from the retirement pension scheme as well as transition pension and special pension to survivors.

On 1 January 1997, the transition pension period was re- duced from 12 months to six months.

As at 1 April 1997, the widow’s pension from the statu- tory retirement pension scheme became income-related.
Prior to 1990, the data were exclud- ing persons who only received transition pension from the Employment pension Fund or only widow’s pension from the statutory retirement pension scheme.

The basic pension/guaranteed minimum pension will be revoked when a survivor becomes entitled to the basic pension/guaranteed minimum pen- sion from the retirement pension scheme.

The basic pension/guaranteed minimum pension will also be revoked in the event that a survivor is awarded anticipatory pension.
Pension is payable to a survivor in the shape of an em- ployment pension/employment pension or a supplementary pension.

In Norway, favourable rules governing the employment pension in the Social Security Scheme’s old-age and disability/anticipatory pension system exist for survivors.

They can choose from their own employment pension, the deceased’s accumulated employment pension or 55 per cent of the sum of their own and the deceased’s accumulated employment pension.
In some of the countries, funeral assistance is also granted.

Table 7.20 Average monthly amounts of survivor's pension, 1998 Denmark Finland Iceland Norway Sweden1) KR/FIM .

2,268 .. 5,265 3,590 PPP-Euro 1 Average amount per December 1998 for pension recipients under 65 years in the shape of widow’s pension, transition pension and special pension to survivors from both the basic pension and the labour market employment pension schemes.

331 326 426 .. .
331 326 426 .. .

138 OLD AGE, DISABILITY AND SURVIVORS Child Pension – Children are secured in case of parents’ deaths In all the Nordic countries, child pension has been introduced in the shape of a basic pension and a employment pension.

Child pension is granted to children under 18 years if one or both parents have died.

In Denmark, a special child allowance is granted to orphans and to children who have lost one of their parents.
In Finland, Norway and Sweden, child pension may be payable until the age of 20 years if a child/youth is receiving education.

In Norway, this ap- plies only if both parents are deceased.

The same limit applies in Iceland to orphans receiving education and to child pension in the shape of basic pen- sion.

Child pension which is granted due to education or vocational training to young people in the age group 18-20 years is payable according to the Social Assistance Act.
In Norway, the pension may in exceptional cases be granted to 21 year-olds.

In Denmark, Finland, Norway and Sweden, child pension may further- more be granted in the shape of employment pension if the deceased was a member of such a pension scheme.

Table 7.21 Children receiving child pension in the form of basic pension and/or employment pension.
Total and as percentages of chil- dren of the qualifying age groups, 1990-19981) Denmark Finland Iceland Norway Sweden Number of children receiving child pension 1990 1995 1997 1998 As percentages of children of the qualifying age groups 19,753 17,590 17,640 17,664 28,429 29,338 29,339 28,879 1,545 1,325 1,232 1,300 14,751 13,658 13,600 13,594 30,629 31,208 30,448 30,118 1998 1 Entitled were, in 1998, children of widows and widowers as well as orphans; in Finland, 2.3 2) 1.3 1.6 1.8 1.4 2) Iceland, Norway and Sweden, children under 18 years (in some cases up to 20 years).
As to Denmark, child pension has been listed with orphans and children of widows and widow- ers receiving the special child supplement.

2 In per cent of children 0-19 years.

139 OLD AGE, DISABILITY AND SURVIVORS Table 7.22 The average monthly amounts of child pension, 1998 Denmark 748 Finland 1,556 Iceland1) 12,205 Norway 1,441 Sweden 2,453 79 224 130 117 226 KR/FIM PPP-Euro 1 Basic pension only.
Expenditure on and Financing of Benefits and Services to the Elderly, the Disabled and Survivors The theme section in the present report is a detailed illustration of the dif- ferences and similarities in the expenditure on the elderly, the disabled and survivors, for which reason only a explanation of the reasons for the changes in the various countries is given here.
Development in the social expenditure on the elderly, the disabled and survivors from 1997 to 1998 In Denmark, the expenditure on the voluntary early retirement benefit has increased considerably as a result of an increase in the number of recipients from 129,000 in 1997 to 140,000 in 1998, whereas the expenditure on the transition allowance has declined as the closing of the access to the scheme resulted in a decline in the number of recipients of about 6,000 from 1997 to 1998.
There has also been an increase in the expenditure on the em- ployment pensions and supplementary pensions, while the expenditure on statutory retirement pension and anticipatory pension has remained practi- cally unchanged.

Furthermore, there has been an increase in the expendi- ture on care for the elderly and the disabled.

In Finland, the expenditure on old-age pension increased by about 10,000 people.

Especially the expenditure on early retirement pension and partial pension.
The expenditure on services to the elderly remained the same as in 1997, while the expenditure on home help increased.

The ex- penditure on the disabled decreased substantially, which was mainly a result of long-term unemployment.

As a result of a new index system, the disabil- ity pension and survivor's pensions increase less than the old-age pensions.

In 1998, improved services were provided to the disabled, especially in the shape of rehabilitation and out-patient treatment.
140 OLD AGE, DISABILITY AND SURVIVORS In Iceland, the expenditure on the elderly increased by 11.6 per cent, of which services increased by 14 per cent and the cash benefits by almost 11 per cent.

The increasing expenditure on services was mainly due to increas- ing payroll costs resulting in increasing running costs in relation to care for the elderly.
The wage development also has influenced the increasing ex- penditure on cash benefits, as the pensions are related to the wage develop- ment, but most important is the development in the employment pension scheme, as there has been an increase in expenditure of almost 17 per cent from 1997 to 1998.
This is due to a relatively large increase in the number of people receiving employment pension, as well as additional old-age pen- sioners on average being entitled to a higher employment pension than are older pensioners.

The expenditure on the disabled and survivors increased from 1997 to 1998 and may be explained by the same reasons as apply to the elderly, but it should be noted that the employment pension is less sig- nificant in relation to the disabled than to the elderly and survivors.
In Norway, the expenditure on old-age pension increased by 10 per cent from 1997 to 1998, where the number of old-age pensioners almost re- mained constant during 1998.

The increase in the expenditure is due to the Social Security Scheme still being in the process of establishment and the number of pensioners entitled to employment pension having increased.

The increase in the minimum pension by NOK 1,000 per month as from 1 May 1998 also contributed to the increased expenditure.
The accession of new anticipatory pensioners was historically high in 1998 and only in 1987 to 1989 was it higher.

The expenditure on anticipatory pension increased by about 11 per cent from 1997 to 1998.

In Sweden, the expenditure on old-age pensioners continued to increase due to a continued increase in the accumulation of the Employment pen- sion Scheme.

There was also some increase in the expenditure on the ser- vices to the elderly although the number of people receiving assistance de- clined.
The expenditure on assistance and services to the disabled also con- tinues to increase due to increasing expenditure on personal assistance.

The expenditure on survivors has by and large remained unaltered.

141 OLD AGE, DISABILITY AND SURVIVORS Table 7.23 Expenditure on and financing of pensions, other cash benefits and services to the elderly, 1998 Denmark Finland Iceland Norway Sweden Cash benefits, million KR/FIM A. Old-age pensions Of which: a.

Basic pension b.
Basic pension b.

Employment pension c. Supplementary pension B.

Special old-age pensions C. Partial retirement pension D. Other Cash benefits, total Services, million KR/FIM A.

Institutions, etc.

B.
Assistance to carry out daily tasks C. Other Services, total Total expenditure, million KR/FIM Expenditure as percentages of GDP Financed by (per cent) – Public authorities – Employers – The insured (contributions and special taxes) Changes 1997-1998 in terms of 1998 prices – Million KR/FIM – Per cent 79,100 45,766 21,936 66,192 178,067 54,008 2,953 22,138 29,226 248 14 108,588 11,279 32,806 1,686 3,107 321 832 50,034 12,672 9,264 - - - - 21,936 30,152 28,378 7,662 304 - - 52,645 88,900 36,522 - OLD AGE, DISABILITY AND SURVIVORS Table 7.24 Expenditure on and financing of pensions, other cash benefits and services to disabled people, 1998 Denmark Finland Iceland Norway Sweden Cash benefits, million KR/FIM A. Disability/Anticipatory pensions Of which: 19,212 15,259 8,468 27,995 43,076 a.
Basic pension b.

Employment pension c. Supplementary pension 19,212 - - 3,865 11,288 106 5,953 2,515 - 11,429 14,229 2,337 13,529 23,610 5,937 B.

Early retirement benefit due to reduced working capacity C. Care allowance D. Financial integration of the disabled E. Other Cash benefits, total Services, million.

KR/FIM A.

Institutions, etc.

B.
Assistance to carry out daily tasks C. Rehabilitation D. Other Services, total Total expenditure, million KR/FIM Expenditure as percentages of GDP Financed by (per cent) – Public authorities – Employers – The insured (contributions and special taxes) Changes 1997-1998 in terms of 1998 prices – Million KR/FIM – Per cent 1,742 - 3,293 1,880 26,128 3,120 424 257 1,812 20,872 - - - 2,371 - 2,652 - 157 8,625 6,335 1,103 37,804 951 - - 17.2 11.8 23.1 15.9 1,854 5.0 -770 -2.9 903 7.7 3,067 7.0 2,765 4.0 143 OLD AGE, DISABILITY AND SURVIVORS Table 7.25 Expenditure on and financing of cash benefits and services to survivors, 1998 Cash benefits, million KR/FIM A. Survivors’ pension Of which: a.
Basic pension b.

Employment pension c. Supplementary pension B.

Death grants C. Other Cash benefits, total Services, million KR/FIM A.

Funeral grants B.
Other Services, total Total expenditure, million KR/FIM Expenditure as percentages of GDP Financed by (per cent) – Public authorities – Employers – The insured (contributions and special taxes) Changes 1997-1998 in terms of 1998 prices – Million KR/FIM – Per cent User charges Denmark Finland Iceland Norway Sweden 1 - - 1 - - 1 181 - 181 182 0.0 100 - - -9 -4.7 7,014 3,095 3,895 14,073 246 6,442 326 206 - 7,221 33 - 33 251 2,844 - 57 - 3,152 - - - 1,187 949 1,759 - 14 3,909 218 - 218 762 12,352 959 - - 14,073 - - - 7,254 3,152 4,127 14,073 1.1 0.5 0.4 0.7 7.3 69.8 22.9 2.1 70.5 27.4 41.7 35.4 22.9 1.0 48.1 40.9 -28 -0.4 273 9.5 63 1.6 92 0.7 User charges payable for stays in nursing homes, institutions for elderly and disabled people as well as for home help are levied according to different sets of rules in the Nordic countries.
The conditions concerning user charges payable for stays in nursing homes/old people’s homes and institutions for disabled people are defined centrally (by Central Government) in Denmark, Finland, Iceland and Nor- way, but de-centrally (by the local authorities) in Sweden.

In Denmark, residents in nursing homes, etc.


receive their pension in full and must then pay for services provided as part of their stay in the nursing 144 OLD AGE, DISABILITY AND SURVIVORS home, such as rent, meals, hairdressing and laundry services.

In return, care and cleaning are free of charge.

User charges are estimated to amount to about 10 per cent of the total expenditure.

The permanent home help ser- vice is free of charge.
In return, temporary home help must be paid for, de- pending on income.

The proportion of user charges of the total expenditure cannot be calculated.

In Finland, user charges payable for long-term care of the elderly depend on a patient’s income.

In 1998, user charges made up 21 per cent of the to- tal expenditure.

In institutions for mentally impaired people, user charges made up 5 per cent of the total expenditure.

User charges for home help depend on the household income.
User charges amounted to about 15 per cent of the total expenditure on home help.

In Iceland, the proportion of user charges of the total expenditure cannot be calculated, but user charges for home help amounted to 7.8 per cent of the municipal expenditure.

In Norway, user charges payable for stays in institutions depend on a pa- tient’s income.
User charges for stays in institutions are fixed on the basis of centrally determined rules that are adjusted in respect of how large a part of a resident’s income, a municipality may demand in payment for a stay in an institution.

User charges amount to 75 per cent (less a basic allowance of NOK 6,000) of an income that is lower than NOK 45,370 and to 85 per cent of incomes higher than that.

Besides, there are special rules for people whose spouses still live in their homes.
The individual local authorities fix user charges payable for home help, but the amount must not exceed the actual costs.

User payment may not be charged for the part, which is per- sonal care and nursing.

If an income is lower than NOK 90,740 in 1998, user charges must not exceed NOK 50 per month.

In Sweden, local authorities are basically at liberty to fix the amount of user charges within the care schemes for the elderly and the disabled.
User charges must not exceed the local authorities own expenses, however.

Be- sides, the individual must be left with an adequate amount after payment of tax, rent and user charges to the local authorities for his own maintenance.

User charges amounted to approximately 9 per cent of the gross expendi- ture for the entire care schemes for the elderly and the disabled.
As from 1996, user charges payable for stays in institutions, individual housing and home help in traditional housing cannot be calculated separately.

User charges payable for home help and home nursing represented 6 per cent of the gross expenditure.

145 HOUSING BENEFITS Chapter 8 Housing Benefits Table 8.1 Expenditure on housing benefits as percentage of the total social expenditure in the EU, Iceland and Norway, 1997 Denmark Finland Iceland Norway Sweden 2.2 1.2 0.6 0.7 2.7 Note: See Table 4.1.
Austria Belgium France Germany Greece Ireland 0.3 .. 3.3 0.6 3.3 3.4 Italy Luxembourg The Netherlands Portugal Spain United Kingdom 0.0 0.2 1.3 0.0 0.3 7.0 Housing Benefits to Families – Housing benefits are income-adjusted and tax free In all the countries, housing benefit is granted to both families with and families without children.

In Norway, housing benefit is usually only granted to families without children in the event that at least one person re- ceives certain other cash benefits.
The rules governing housing benefit to families with children are more favourable than those applying to families without children; this is, however, not the case in Norway.

In Denmark and Iceland, the benefit is only payable to families living in rented accommodation.

In the other countries, housing benefit may also be granted to families who own their accommodation.
A family’s income and the amount of the rent, as well as the number of children, are taken into consideration when a benefit is being granted.

The scopes of these schemes vary greatly from one country to another.
146 HOUSING BENEFITS Table 8.2 Average housing benefit per month to families, 1998 Denmark Finland Norway Sweden Average housing benefit per month per family, KR/FIM Married and cohabiting couples – with children – without children Single people – with children – without children Average housing benefit per month per family, PPP-Euro Married and cohabiting couples – with children – without children Single people – with children – without children In all the countries, housing benefits are means-tested.
In addition to the housing benefit, a subsidy may be granted, which will partly or fully cover the deposit in order to enable people with a poor economy to get an appropriate and reasonable home.

In Finland and Norway, social assistance may also be granted in cases where housing costs are high in relation to income.

At the beginning of the 1990s, there was a marked increase in the num- ber of beneficiaries.
This mainly applied to single providers and was due to an increase in the unemployment rate in several of the countries.

From 1997, however, the number of recipients of housing benefit dropped again in some of the countries due to a decrease in the unemployment rate.

In Finland, the number of recipients increased, however, as the maximum in- come for receiving housing benefit was increased.
In Sweden, households without children lost their entitlement to housing benefits as from 1996 if an applicant was over 28 years of age and many other households without chil- dren, who had received housing benefit according to special rules, also lost this benefit.

As from 1997, a number of significant rules were introduced which has resulted in a decrease in the number of households receiving hous- ing benefits.
One of the most important changes is a new system for income- regulation, where temporary and permanent benefits are subject to taxable in- come.

Besides, the possibilities of receiving the benefit became limited, and individual income ceilings were fixed for cohabiting parents.
147 HOUSING BENEFITS Table 8.3 Families receiving housing benefit, 1990-1998 Denmark Finland Norway Sweden1) Number of recipients 1990 Married and cohabiting couples – with children – without children Single people – with children – without children 1995 Married and cohabiting couples – with children – without children Single people – with children – without children 1997 Married and cohabiting couples – with children – without children Single people – with children – without children 1998 Married and cohabiting couples – with children – without children Single people – with children – without children 1 Individuals - not families.
.. .. .. .. .. .. 5,016 5,016 .. 13,740 13,740 – 5,617 5,617 – 15,453 15,453 – 5,030 4,609 421 14,544 12,590 1,954 109,000 .. .. 135,000 .. .. 198,044 180,798 17,246 352,416 228,021 124,395 107,357 102,061 5,296 245,519 197,293 48,226 86,634 82,090 4,544 237,824 190,850 46,974 148 HOUSING BENEFITS Housing Benefit to Pensioners – Support to pensioners with low incomes In all the Nordic countries, housing benefit is payable to pensioners.
The amount of the housing benefit depends on a pensioner’s personal income, the amount of the rent, etc.
Table 8.4 Pensioners receiving housing benefit by the end of the years 1990-1998 1990 Married and cohabiting pensioners Single pensioners Total 1995 Married and cohabiting pensioners Single pensioners Total 1997 Married and cohabiting pensioners Single pensioners Total 1998 Married and cohabiting pensioners Single pensioners Total Denmark Finland Norway Sweden 54,617 223,239 277,856 12,036 116,288 130,150 .. .. .. In Denmark, the benefit may also be granted to pensioners who own the house or flat they live in, but only in the shape of a loan.
A heating supple- ment may also be granted to help cover heating costs.

In Finland, housing benefit may be granted on the grounds of age or pension.

In Iceland, a spe- cial housing benefit is payable to pensioners with low incomes who are un- able to pay their expenses without getting a supplement to their pensions.

In Norway, housing benefit is payable to pensioners having modest housing standards, but high housing costs and low personal incomes.
In Sweden, 149 HOUSING BENEFITS housing benefit is payable to old-age pensioners, recipients of anticipatory pension, and people receiving survivor’s pension who have low personal in- comes.

Housing benefit is granted according to rules that apply uniformly to the entire country.
Table 8.5 Average housing benefit per month to pensioners, 1998 Denmark Finland Norway Sweden Average housing benefit per month to married or cohabiting pensioners – KR/FIM – PPP-Euro Average housing benefit per month to single pensioners – KR/FIM – PPP-Euro 1,450 154 1,708 181 731 105 669 96 1,271 103 1,132 92 .. .. 150 HOUSING BENEFITS Expenditure on and Financing of Housing Benefits Table 8.6 Expenditure on and financing of housing benefits, 1998 Denmark Finland Iceland Norway Sweden Services, million KR/FIM A.
Housing benefit to people in rented housing a.

Of which pensioners B.

Housing benefit to owner- occupiers a.
Of which pensioners Services, total Total expenditure, million KR/FIM Total expenditure per capita, PPP-Euro Expenditure as percentage of GDP Financed by (per cent) – Public authorities – Employers – The insured (contributions and special taxes) Changes 1997-1998 in terms of 1998 prices – Million KR/FIM – Per cent 8,396 6,601 - - 8,396 8,396 168 0.7 100 - - 163 2.0 2,505 - 110 - 2,505 2,505 73 0.4 100 - - 683 - - - 683 683 26 0.1 100 - - 293 - 15,356 7,245 1,930 - 2,223 - - 15,356 2,223 15,356 41 0.2 100 - - 160 0.8 100 - - 420 20.1 140 25.8 356 19.1 -521 -3.3 Differences and similarities in the social expenditure on housing benefits There are distinct differences in the amounts spent by each country on housing benefits, measured in PPP per capita.
Although the number of re- cipients has dropped noticeably, Sweden spends almost as much as Den- mark, while Iceland spends least, followed by Norway.

Both in Denmark and in Sweden, housing benefits play an important part to pensioners with low pension incomes, but particularly in Sweden, many single providers with low incomes receive housing benefits.
151 HOUSING BENEFITS Development in the social expenditure on housing benefits from 1997 to 1998 In Denmark, the expenditure on housing benefits to pensioners increased from 1997 to 1998, which was primarily due to an increase in the number of pensioners living in special housing for the elderly receiving housing benefits.

The expenditure on housing benefits to families has, however, de- clined slightly as a result of a drop in the number of families with children receiving housing benefit.
In Finland, housing benefits to pensioners are part of the pension sys- tem, for which reason this expenditure (FIM 1.2 billion) has been included in Chapter 7.

The income limit for entitlement to housing benefit was raised in 1998.
On the other hand, the drop in the unemployment rate has not resulted in the need for housing benefit decreasing concurrently, as a large part of the unemployed receive either labour-market benefit or the ba- sic amount of the daily cash benefits, which is considerably lower than the income-linked daily cash benefits.

In Iceland, the expenditure on housing benefits increased distinctly from 1997 to 1998.
This can be explained partly by an increase in housing costs and consequently an increase in rent costs, and partly by the local authori- ties to a decreasing extent fixing the rent in municipally owned housing in accordance with the prices in the private housing market.

In Norway, the increase in the expenditure on housing benefits is mainly a result of an access of new recipients.

Besides, the average amount paid to recipients increased as a result of increased housing costs.
In Sweden, revised rules governing the reception of housing benefits are the main reason for a decline in the expenditure.

This is to some extent also caused by increasing incomes.

152 OTHER SOCIAL BENEFITS Chapter 9 Other Social Benefits In the previous chapters, a description was given of social benefits granted in connection with defined social incidents.

In a number of cases, however, social incidents that are not covered by any specific legislation may occur.
It is difficult to compare the extent of services provided in such cases, both in relation to the EU and between the Nordic countries.

Table 9.1 Expenditure on other social benefits as percentage of the total social expenditure in the EU, Iceland and Norway, 1997 Denmark Finland Iceland Norway Sweden 4.0 2.5 2.6 2.7 3.2 Note: See Table 4.1.
Austria Belgium France Germany Greece Ireland 1.1 2.7 1.3 2.3 1.2 2.1 Italy Luxembourg The Netherlands Portugal Spain United Kingdom 0.0 1.3 0.4 0.9 0.8 0.8 Special Circumstances in the Individual Countries A number of special circumstances in the Nordic countries makes it difficult to compare their data in this chapter.
In Denmark and Norway, non-insured unemployed people, who are not entitled to unemployment benefit, are entitled to social assistance in the event of unemployment, whereas non-insured unemployed people in Fin- land and Sweden are entitled to a special labour-market benefit according to the labour-market legislation - and often also supplementary social aid.

In Iceland, a number of benefits under the heading ‘social assistance’ are payable to families and children.
In the other countries, these benefits fall under special legislation.

153 OTHER SOCIAL BENEFITS Supplementary to the actual social assistance, a number of other benefits may be payable: In Denmark, these include support towards payment of non-recurrent expenses as well as removals, assistance to victims of the German occupa- tion, financial assistance to Danish nationals living abroad, compensation to victims of crime, as well as financial support to repatriation of sailors.
In Finland, relatives of servicemen may be granted a so-called military al- lowance to ensure them a decent income level.

In Iceland, temporary assistance may be granted to people in extraordi- narily difficult circumstances.

In Sweden, financial support may be given to Swedish nationals living abroad.

In all the Nordic countries, wage earners may receive their wages from special wage earners’ guarantee funds in case insolvency of their employer makes it impossible for him to pay their wages.
Cash Benefits Social Assistance – The last resort in the social safety net In all Nordic countries, social assistance will be granted when all other sup- port options in connection with loss of income or in other social situations have been exhausted.

The assistance, which is means-tested in all the coun- tries, is thus the last resort of assistance granted by the social security sys- tems.

It will be given either as a substitute for other income or as a supple- ment to a very low personal income.
The assistance is individual and is granted according to need in order to meet costs of living.

The social assistance does not influence the granting of any other social benefits or subsidies in any of the countries.

In Denmark, cash assistance is a taxable gross benefit.

For people obliged to provide for children, the assistance equals 80 per cent of the maximum rate of unemployment benefit.

For non-providers, the assistance equals 60 per cent of the unemployment benefit.
Young people under the age of 25 living, who do not have any children living at home, and who have 154 OTHER SOCIAL BENEFITS not had any income from work amounting to more than 60 per cent of the unemployment benefit received for 18 months, are entitled to special, lower youth benefits.

In Iceland, social assistance is taxable.

In the other countries, it is payable as a tax-free net benefit.

In Finland, cash assistance may be payable in case payment of other benefits is delayed.
Local authorities may also grant benefits in order in time to prevent people from getting into financial difficulties.

In Norway, there is no upper limit to the amount of the assistance, which may also be granted by way of a loan.

In Sweden, the purpose of the social assistance is twofold: it must serve to guarantee a family a reasonable financial standard of living, and it must serve as a preventive and rehabilitating measure.
Recommended norms concerning the amount of the social assistance have been prepared.

Some municipalities work with one norm for long-term and another for short- term social assistance.
Table 9.2 Individuals receiving social assistance during the year, in thou- sands and as percentage of the population 16/18 years or over, 1990-1998 Denmark Finland Iceland Norway Sweden Thousands 1990 1995 1997 1998 235.2 195.1 188.8 185.8 255.6 430.3 434.9 391.8 4.6 6.9 6.4 5.4 178.3 184.2 167.0 151.0 339.4 474.2 492.6 455.1 As percentage of the population 16/18 years or over 1990 1995 1997 1998 Note: Calculations based on all people of 18 years and above (in Iceland 16 years) - children 5.9 10.9 10.9 9.8 5.8 4.7 4.5 4.5 5.0 6.9 7.1 5.1 5.3 5.5 4.9 4.4 2.6 3.5 3.4 2.8 not included.
Married couples who receive social assistance, where this assistance is payable in the name of one of the spouses only, count as two individuals.

The figures for Denmark include recipients of cash assistance payable towards maintenance (incl.

refugees).

Activated cash assistance recipients are calculated under labour market measures.

The Swedish figures also include refugees.


155 OTHER SOCIAL BENEFITS Table 9.3 Number of individuals receiving social assistance, in total and as percentage of the population, per 1 December, 1995-1998 Denmark Finland1) Norway Total number 1995 1997 1998 As percentage of the population 1995 1997 1998 1 Households in November.

97,399 95,655 86,079 2.4 2.3 2.1 140,776 146,255 129,013 5.2 5.4 4.7 76,054 67,735 61495 2.3 2.0 2.0 Table 9.4 Individuals receiving social assistance during the year, by age.
Total and as percentage of their age group, 1998 Recipients Recipients in per cent according to age Total 18-24 years 25-39 years 40-54 years 55-64 years 65+ years Denmark Recipients, total New, total Finland Recipients, total New, total Iceland Recipients, total New, total Norway Recipients, total New, total Sweden Recipients, total New, total OTHER SOCIAL BENEFITS Table 9.5 Families receiving social assistance during the year as percent- age of all families, by type of family, 1998 Denmark Finland Iceland Norway Sweden Families by type (per cent) Single men – with children – without children Single women – with children – without children Married/cohabiting couples – with children – without children Total 10.3 – with children 9.3 – without children Note: Cf.
Table 9.2.

Figures for Denmark include 2,828 people whose family type has not been specified.
6.4 11.9 4.8 11.4 12.4 11.1 5.5 6.4 5.2 3.2 4.8 2.6 Table 9.6 Average amount of social assistance per family per month, 1998 (PPP-Euro) Family type Single people – with children – without children Married/cohabiting couple – with children – without children Denmark Finland Iceland Norway Sweden OTHER SOCIAL BENEFITS Assistance to Refugees in the Nordic Countries – Refugees receive social assistance or similar benefits The five Nordic countries have all acceded to the Geneva Convention on the Right to Political Asylum/Refugee Status for people who, due to race, nationality, political views or special social affiliation, are persecuted in their home countries.
Apart from the above mentioned grounds, refugees may be granted residence permits in the Nordic countries on humanitarian grounds.

People who are granted asylum may, in all the countries, be granted resi- dence permits to close relatives, the so-called reunion of families.

A common feature of the Nordic countries is that a social safety net has been established and that a number of measures for the integration of refu- gees received into the country has been implemented.
The rules do, how- ever, vary considerably from one country to another.

At present, most of the asylum seekers or refugees received into the Nordic countries are people who have arrived at the borders applying for asylum.

The statistics include both people who have arrived at the border of the country concerned and applied for asylum without being rejected, and convention refugees.

Reunions of families are, however, not included in the statistics.
The large number of residence permits granted to refugees in Denmark in 1995, is due to refugees from Ex-Yugoslavia, who had been granted a temporary residence permit, applying for and being granted resi- dence permits.

In Denmark, asylum seekers get board and lodging plus pocket money during their stay at an asylum centre.

Refugees, however, who have been granted a residence permit, receive social assistance according to current legislation.
Central Government fully reimburses local authorities’ expendi- ture on social assistance for the first eighteen months after the residence permit has been granted, and at 75 per cent for the following 5 years.

In Finland, Central Government covers local authorities’ expenditure on refugees for the first three years of the refugees’ stay.

In Iceland, refugees are granted social assistance from the moment of re- ception.
In Norway, people who have been received in a government refugee cen- tre are granted a maintenance allowance according to special rules applying to people staying at such centres.

In Sweden, refugees receive a special benefit from the moment they are 158 OTHER SOCIAL BENEFITS received into the country, in the form of social assistance or an initial benefit to refugees.
Central Government reimburses local authorities’ expenditure on this benefit for three calendar years following the calendar year in which a refugee seeking asylum was granted residence and work permit.
Table 9.7 Number of refugees received who have been granted residence permit in the Nordic countries, 1990-1998 1990 1995 1997 1998 Denmark Finland Iceland Norway Sweden 3,044 20,347 5,954 4,781 639 1,012 942 651 41 5 21 21 3,867 4,602 3,471 4,221 12,800 5,600 9,596 8,193 Table 9.8 Number of asylum seekers, 1990-1998 1990 1995 1997 1998 Denmark Finland Iceland Norway Sweden 5,292 5,104 5,092 5,699 2,743 854 973 1,272 7 4 6 24 3,692 1,460 2,271 8,374 29,420 9,047 9,662 12,844 Services This section only deals with services that are not aimed at any particular sector, such as services offered to substance abusers.
These offers are pro- vided both by the health care services and by the social assistance system.

In all the Nordic countries, there are also a number of services not spe- cifically aimed at any of the previously mentioned target groups.

These may include unspecified services provided by the social authorities, help in case of crises, family counselling, centres for battered women, hospices, homes for the homeless and others with social problems who may need temporary accommodation.
159 OTHER SOCIAL BENEFITS Treatment of Alcohol and Drug Abuse – Several kinds of treatment are available Treatment of substance abusers is administered by special institutions for abusers.

There are both institutions for alcohol abusers and institutions for drug addicts.

Some of these are private institutions that have agreements with the public authorities concerning running costs.

In all the countries, part of the treatment is provided by the psychiatric treatment system.
In all five countries, out-patient treatment is provided, and in some of the countries efforts are made to include families and social networks in the treatment.

Both in Denmark, Finland and Sweden, compulsory treatment may be initiated if an abuser is deemed to be a danger to him/herself or to people in his or her environment.
In Norway, people who jeopardize themselves physically or mentally due to an extensive and permanent abuse, may, where other measures have failed, be compulsorily admitted to an institu- tion for up to three months for examination and outlining of treatment.

It is difficult to assess the number of abusers and the treatment of them, as treatment of abusers cannot be statistically separated from other somatic and psychiatric treatment.
Expenditure on and Financing of Other Social Benefits Differences and similarities in the expenditure on social benefits Expenditure on other social benefits is highest in Denmark, followed by Sweden and Norway, and lowest in Iceland measured in PPP per capita.

The relatively high expenditure in Denmark is a result of non-insured people, who are not entitled to unemployment benefit, receiving cash bene- fit.
In Finland and Sweden such people are granted a cash labour-market benefit that may be supplemented by social assistance if need be.

A large part of the expenditure on social assistance in Finland and Sweden are sup- plementing benefits to the unemployed.

Besides, the number of refugees and asylum seekers received into the country also plays a part, as they in all 160 OTHER SOCIAL BENEFITS the countries receive social assistance or some other income-substituting benefit.
There are also certain differences between the countries as to whether abusers are treated in special institutions or in the general somatic and psychiatric treatment system.

Development in the expenditure on other social benefits from 1997 to 1998 In Denmark, the expenditure on cash assistance, including to refugees, de- clined from 1997 to 1998.

This decline must be seen in connection with the decrease in the unemployment rate and the increase in activation and reha- bilitation.
In Finland, the expenditure on social assistance decreased substantially as a result of the decrease in the unemployment rate.

In Iceland, the expenditure on other social benefits declined by 3 per cent from 1997 to 1998.

There was, however, a steeper decline in the ex- penditure on cash assistance by about 16 per cent, which was due to an im- provement in the economy.
Furthermore, a better service is provided in the municipalities, which also influences the decrease in the expenditure on cash assistance.

In Norway, the expenditure on social assistance continues to decrease.

The lower expenditure is first and foremost a result of the improved condi- tions in the labour market.

While there is a drop in the expenditure, the number of people receiving social assistance for a longer period of time, in- creases.
Central Government’s and the local authorities’ expenditure on re- ception of refugees and immigrants increased by almost 20 per cent from 1997 to 1998.

In Sweden, the improved conditions in the labour market, as well as a stabilization of the influx of refugees into the country, have lead to a reduc- tion in the expenditure on social assistance.
161 OTHER SOCIAL BENEFITS Table 9.9 Expenditure on and financing of other social benefits, 1998 Denmark Finland Iceland Norway Sweden Cash benefits, million KR/FIM A. Income-substituting/sup- plementing benefits a.

Of which social assistance B.

Other benefits Cash benefits, total Services, million KR/FIM A.

Institutions, etc.

B.
Rehabilitation and treat- ment of misusers C. Other 6,515 2,661 954 3,667 11,446 .. 4,408 10,923 2,558 - 2,661 921 155 1,109 3,667 197 3,863 11,446 313 11,759 678 143 895 332 436 562 - 531 937 580 700 1,687 1,643 2,127 3,809 Services, total 1,715 1,330 1,280 3,861 6,873 Total expenditure, million KR/FIM Expenditure as percentage of GDP Financed by (per cent) – Public authorities – Employers – Insured (contributions and special taxes) Changes 1997-1998 in terms of 1998 prices – Million KR/FIM – Per cent 12,638 1.1 3,991 0.6 2,389 0.4 7,724 0.7 18,632 1.0 100 - - 100 - - 92.5 5.3 2.2 100 - - 100 - - -854 -6.3 -447 -10.7 -84 -3.4 154 2.0 -335 -1.8 Table 9.10 Expenditure on other social cash benefits and services in PPP/capita, 1998 Cash benefits, total Services, total Other social benefits, total Denmark Finland 218 34 253 74 37 111 162 Iceland Norway Sweden 71 70 141 122 72 194 43 50 93 SOCIAL EXPENDITURE Chapter 10 Social Expenditure Following a description in the previous chapters of the social protection sys- tems, an overall survey of the social expenditure is presented in this chapter.
As stated in Chapter 2, the Nordic social expenditure statistics follow the calculation method used by EUROSTAT as from the previous edition of Social Protection in the Nordic Countries.

The Nordic countries’ and the EU’s expenditure on social affairs meas- ured in relation to the Gross Domestic Product (GDP) and per capita in PPP-Euro, broken down by functions, is shown in the two following tables.
It should be noted that EUROSTAT has not used the adjusted GDP for the countries who have switched to the ESA95/SNA93 systems.

Table 10.1 Social expenditure as percentage of the GDP in the EU, Iceland and Norway, 1997 Denmark Finland Iceland Norway Sweden 31.4 29.3 18.3 25.7 33.7 Note: See Table 4.1.
Austria Belgium France Germany Greece Ireland 28.8 28.5 30.8 29.9 23.6 17.5 25.9 Italy 24.8 Luxembourg The Netherlands 30.3 22.5 Portugal Spain 21.4 United Kingdom 26.8 163 SOCIAL EXPENDITURE Table 10.2 Social expenditure per capita in the EU, Iceland and Norway, 1997.
PPP-Euro Families and children Unem- ployment Illness Old age, disability Housing Other social Total and survivors benefits Denmark Finland Iceland Norway Sweden Austria Belgium France Germany Greece Ireland Italy Luxembourg The Netherlands Portugal Spain United Kingdom - The account of the social expenditure has been divided into four sections.
Firstly, an account is given of the social expenditure trends from 1990 to 1998; secondly, the financing of the total social expenditure is shown, fol- lowed by a survey of the purposes of the social expenditure, and finally, the significance of taxation in relation to the total social expenditure is shown.

The Swedish figures for 1990 have been calculated by means of the previ- ous NOSOSCO specification, while the other countries have used the specification in the ESSPROS manual.
Social Expenditure Trends, 1990-1998 The development in the social expenditure, in total and per capita, in cur- rent and fixed prices as well as in relation to the gross domestic product (GDP) and in purchasing power parities (PPP-Euro) since 1990, appears from the tables below.

It should be noted that all the countries now use the ESA95/SNA-93 classification when calculating the GDP (cf.

Chapter 2), which has resulted in corrections in respect of the gross domestic products.
164 SOCIAL EXPENDITURE Table 10.3 Social expenditure, in total and per capita, 1990-1998 Social expenditure Social expenditure per inhabitant Social expenditure per inhabitant aged 15-64 years At current prices, million KR/FIM At 1998 prices, million KR/FIM At current prices KR/FIM At 1998 prices KR/FIM At current prices KR/FIM At 1998 prices KR/FIM Denmark 1990 1995 1997 1998 Finland 1990 1995 1997 1998 Iceland 1990 1995 1997 1998 Norway 1990 1995 1997 1998 Sweden SOCIAL EXPENDITURE Table 10.4 Social expenditure in relation to the GDP, 1990-19981) GDP, million KR/FIM Social expenditure as percentage of
 the GDP Index for social expenditure in relation to the GDP (1990 = 100) Denmark 1990 1995 1997 1998 Finland 1990 1995 1997 1998 Iceland 1990 1995 1997 1998 Norway 1990 1995 1997 1998 825,310 1,009,756 1,111,958 1,163,820 523,034 564,566 635,532 686,742 364,402 451,548 529,951 586,673 722,705 928,745 1,089,032 1,107,082 Sweden 1990 1,410,607 1995 1,713,316 1997 1,813,128 1,890,202 1998 1 The GDP has been revised.
Table 10.5 Social expenditure per capita, 1990-1998 (PPP-Euro in terms of 1998-prices) Denmark Finland Iceland Norway Sweden 5,730 7,011 6,923 6,978 4,379 5,231 5,276 5,240 3,266 3,610 3,861 4,160 4,340 5,005 5,314 5,652 6,272 6,202 6,341 6,557 1990 1995 1997 1998 166 SOCIAL EXPENDITURE Financing of the Social Expenditure In order to illustrate the financing of the social expenditure in the Nordic statistics, the direct financing of services and benefits and the current con- tributions paid into social funds are included.
Contrary to previous editions, interest and other capital gains are now included in the social expenditure statistics.

Interest and capital gains are mainly to be found in the funds es- tablished to guarantee pensions, but also in other social insurance schemes.

This will be further dealt with in the following section.
Distribution of current contributions by sources of financing Current contributions to the financing of the social expenditure are, in the Nordic statistics, broken down by the sources contributing to the individual benefits, i.e.

public authorities, employers, as well as contributions and spe- cial taxes payable by the insured.

As mentioned in Chapter 2, the social costs are listed as net amounts, which means that investments, etc., and user charges payable for social services have not been included.
The distribution of current contributions to the financing of social ex- penditure during the years 1990-1998 is shown in Table 10.6.
167 SOCIAL EXPENDITURE Table 10.6 Current contributions to the financing of the social expenditure in per cent, broken down by contributions made by Central Government, local authorities, employers and the insured, 1990-1998 Employers Public au- thorities, to- tal The insured (contri- butions and special taxes) Other financing Total 80 71 68 66 41 46 45 44 67 61 57 53 63 62 62 61 .. 48 48 49 8 9 8 9 44 34 35 37 26 31 35 39 24 22 24 24 .. 38 39 35 5 14 18 18 8 14 13 13 7 8 8 8 13 15 15 14 .. 5 7 10 7 6 6 6 7 7 7 7 – – – – – – – 1 .. 8 6 6 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 Denmark 1990 1995 1997 1998 Finland 1990 1995 1997 1998 Iceland 1990 1995 1997 1998 Norway 1990 1995 1997 1998 Sweden 1990 1995 1997 1998 168 SOCIAL EXPENDITURE Figure 10.1 Current contributions to the financing of the social expendi- ture, 1990 and 1998 Per cent 100 1990 1998 1990 1998 1990 1998 1990 1998 1995 1998 90 80 70 60 50 40 30 20 10 0 Denmark Finland Iceland Norway Sweden Public authorities Employers The insured (contributions and special taxes Other financing Block Grants and Government Reimbursement to Local and County Authorities In all the Nordic countries, the local authorities are responsible for the ad- ministration of part of the social services and benefits.
The local authorities have direct contact with citizens and recipients of social benefits, and it is also local authorities that, in the first instance, meet the costs of services and benefits.

Local and county authorities receive block grants and/or reimbursement from Central Government.

A block grant may be given as a general contri- bution or may be ear-marked for specific purposes.
Block grants may, for instance, be calculated on the basis of the number of inhabitants and their age distribution, or according to the tax base in the various municipalities.

Government reimbursement may be fixed by law as percentage shares of municipal expenditure or as fixed amounts.

Government reimbursement may also be calculated as the difference between expenditure and other con- tributions, including municipal contributions.
In Denmark, local authorities manage the main part of the social cash benefits and meet the costs of those benefits in the first instance.

The costs 169 SOCIAL EXPENDITURE are subsequently reimbursed, fully or partly, by Central Government.

In the other Nordic countries, social benefits are mainly managed by government or other central bodies.
The majority of the social services are, in all Nordic countries, managed by the local or county authorities, who meet the costs in the first instance and subsequently receive block grants from Central Government.

Funds for Pension Purposes The contributions financing the social expenditure are normally spent on current payments in the course of the year, but are, especially in relation to pensions, also used for the building up of funds.
The purpose of the funds, which have gradually gained in significance, may be to guarantee that means are available for future payments (premium reserve systems).

The building up of funds may also occur in distribution systems (where the costs should, in principle, be covered by the contribu- tions of the current year) so as to create a buffer to level variations in in- coming and outgoing payments over time.
In Norway, social expenditure, including expenditure on supplementary pensions, is currently financed by the public budget, and the expenditure is consequently excluded from Table 10.7.

The Social Security Fund is an in- dependent, public fund and does not contribute direct to the financing of the running costs of the social security service.

170 SOCIAL EXPENDITURE Table 10.7 Development in funds for pension purposes, 1990-1998.
Billion KR/FIM in terms of 1998 prices Basic pension Supplemen- tary pension Additional pension Amount of the funds Denmark1) At the beginning of the year, 1990 At the end of the year, 1990 At the beginning of the year, 1998 At the end of the year, 1998 Finland2) At the beginning of the year, 1990 At the end of the year, 1990 At the beginning of the year, 1998 At the end of the year, 1998 Iceland At the beginning of the year, 1990 At the end of the year, 1990 At the beginning of the year, 1998 At the end of the year, 1998 - - - - 0.8 0.7 1.5 2.0 0.1 0.1 - - 94.5 101.3 187.2 199.7 116.4 139.4 261.4 287.7 128.5 157.5 352.7 407.3 139.5 150.7 244.6 265.1 38.0 42.0 39.7 41.2 - - - - Sweden 224.5 At the beginning of the year, 1990 244.5 At the end of the year, 1990 485.2 At the beginning of the year, 1998 At the end of the year, 1998 559.4 1 As from 1998, accounting policies have been adapted to the legislation in respect of as- 9.5 11.1 6.3 .
3) 516.3 521.2 619.8 641.5 sessment of property, assets, etc.

The size of the fund at the end of the year 1998 is includ- ing the temporary pension saving scheme, but excluding the Employees’ Capital Pension Fund.

2 The additional pensions are exclusive of the pension funds and societies that are adminis- tered by the life insurance schemes.

3 The Part-Pension Fund was phased out during 1998.
171 SOCIAL EXPENDITURE Social Expenditure by Type and Purpose Social expenditure is divided by type in cash benefits and services.

By dis- tributing the benefits according to purpose, the division is made according to the social needs or risks that the benefit is primarily aimed at relieving.

The distribution of the social expenditure according to the purpose of the benefit is rather stable in each country.
New legislation and changes in Table 10.8 The social expenditure in per cent, broken down by main groups, 1995-1998 Denmark Finland Iceland Norway Sweden 19951) Families and children Unemployment Illness Old age Disability Survivors Housing Other social benefits Total 1997 Families and children Unemployment Illness Old age Disability Survivors Housing Other social benefits Total Families and children Unemployment Illness Old age Disability Survivors Housing Other social benefits Total 1 Services in connection with illness, to the elderly, and the disabled have not been corrected.
SOCIAL EXPENDITURE the social patterns have, however, given rise to shifts in the distribution.

The comparison of the countries shows some differences in the distribution of the social expenditure according to purpose.
The main reason for this is differences in the individual countries’ assessment of the importance of benefits for various purposes.
Table 10.9 Social expenditure, in per cent broken down by type and pur- pose, 1998 Denmark Finland Iceland Norway Sweden Families and children Cash benefits Services Total Unemployment Cash benefits Services Total Illness Cash benefits Services Total Old age Cash benefits Services Total Disability Cash benefits Services Total Survivors Cash benefits Services Total Housing Services Total Other social benefits Cash benefits Services Total Cash benefits, total Services, total Social expenditure, total SOCIAL EXPENDITURE Taxation Rules and the Impact of Taxation on Social Expenditure Social cash benefits may be either exempt from tax or subject to tax.
In all the countries, it is of great significance whether the benefits are tax-free or taxable, as the level of taxation is relatively high.

The proportion of the tax- able cash benefits of the total cash benefit amount has increased over the last few years in all five countries.

There are, however, considerable differ- ences from one country to another.

The largest tax-free cash benefit amounts are granted to families and children.
Other social benefits (social assistance) are subject to tax in Denmark and Iceland, but are exempt from tax in the other Nordic countries.

According to the ESSPROS specification, housing benefits are services.
Table 10.10 Cash benefits exempt from tax/subject to tax, total and as per- centage of the GDP, 1995-1998 Cash benefits exempt from tax Cash benefits subject to tax Total, million KR/FIM As percent- age of GDP Total, million KR/FIM As percent- age of GDP Denmark Finland Iceland Norway Sweden 1997 Denmark Finland Iceland Norway Sweden 1998 Denmark Finland Iceland Norway Sweden 174 SOCIAL EXPENDITURE Table 10.11 Taxation of cash benefits, 1998 Social expenditure, million KR/FIM Of which cash benefits, million KR/FIM 1.
2.

Cash bene- fits exempt from tax, as percentage of total cash benefits 3.

Cash bene- fits subject to tax, as percentage of total cash benefits 4.

Families and children Illness Denmark I. II.

Unemployment III.

IV.

Old age V. Disability VI.

Survivors VII.

Housing VIII.

Other social benefits IX.

Administration Total I.-IX.

Families and children Illness Finland I. II.

Unemployment III.

IV.

Old age V. Disability VI.

Survivors VII.

Housing VIII.

Other social benefits IX.


Administration Total I.-IX.

Families and children Illness Iceland I. II.

Unemployment III.

IV.

Old age V. Disability VI.

Survivors VII.

Housing VIII.

Other social benefits IX.

Administration Total I.-IX.


 - 10,923 - 211,919 14,007 19,929 7,951 50,024 20,872 7,221 - 2,661 - 122,665 7,089 2,434 7,664 21,936 8,625 3,152 - 1,109 - 52,693 65 - - 2 17 100 .

10 .

9 64 2 - 4 7 3 .

98 .

13 67 7 - - 8 6 .

- .

12 35 100 100 98 83 - .

90 .


91 36 98 100 96 93 97 .

2 .

87 33 93 100 100 92 94 .

100 .

88 / … to be continued 175 SOCIAL EXPENDITURE Table 10.12 ... continued Families and children Illness Norway I. II.

Unemployment III.

IV.

Old age V. Disability VI.

Survivors VII.

Housing VIII.

Other social benefits IX.

Administration Total I.-IX.

Families and children Illness Sweden I. II.

Unemployment III.

IV.

Old age V. Disability VI.

Survivors VII.

Housing VIII.

Other social benefits IX.


Administration Total I.-IX.

Social expenditure, million KR/FIM Of which cash benefits, million KR/FIM 1.

2.

Cash bene- fits exempt from tax, as percentage of total cash benefits 3.

Cash bene- fits subject to tax, as percentage of total cash benefits 4.
40,236 8,928 98,367 94,777 46,957 4,127 2,223 7,724 6,209 309,548 66,812 57,802 145,208 230,454 71,987 14,073 15,356 18632 9,402 629,726 24,882 5,432 29,956 66,496 37,804 3,909 - 3,863 - 172,342 33,992 50,417 31,743 178,710 46,679 14,073 - 11,759 - 355,344 62 - - - 6 - .

95 .

14 58 - - - 2 - .

100 .

6 38 100 100 100 94 100 .

5 .

86 42 100 100 100 98 100 .

- .


94 176 DIFFERENCES AND SIMILARITIES IN SOCIAL EXPENDITURE Chapter 11 Differences and similarities in the Social Expenditure on the Elderly, the Disabled and Survivors Introduction Expenditure on the elderly, the disabled and survivors make up the largest total item of the social expenditure in all the Nordic countries, also when measured against the GDP.
Measured in purchasing power parities, Den- mark and Sweden spend almost the same, Finland and Norway somewhat less and Iceland the least.

However, the differences in the total expenditure cover rather large differences in the expenditure levels in the varous single areas, which is partly due to the way in which old-age policy has been or- ganised.

But the the differences are also caused by differences in the priority given by the countries to the individual areas.
On this background, NOSOSCO decided at its annual plenary session in august 1999 that this year’s theme section should attempt to uncover in more detail the differences and similarities in the social expenditure used on the elderly, the disabled and survivors.

In carrying out such a task one encounters a number of problems, how- ever.
Athough one attempts, by means of the ESSPROS manual, to calcu- late social expenditure in a uniform way, it is in reality often difficult to separate expenditure on the elderly and the disabled, for instance.

177 DIFFERENCES AND SIMILARITIES IN SOCIAL EXPENDITURE Table 11.1 Expenditure on cash benefits and services to the elderly, the dis- abled and survivors 1998.
PPP/capita and percentages of GDP Denmark Finland Iceland Norway Sweden Cash benefits to elderly peo- ple Services to elderly people Elderly people, total Cash benefits to the disabled Services to the disabled Disabled, total Survivors, total Cash benefits and services, total As percentages of GDP Similarly, difficulties arise in the definition of respective target groups, such as young disabled people, the elderly and survivors, including a clear distinction of which groups of individuals receive the respective cash bene- fits and services, and how big a share goes to the respective target groups.
It is therefore difficult to give an exact explanation of the differences and similarities, but as the following will show, differences are caused by some countries being more generous in some areas than others, and by the exis- tence of differences in priorities and needs in individual areas.
To carry out the analysis, a working group was set up with the following members: Ministry of Social Affairs, Denmark Ministry of Social Affairs and Health, Finland Per Kampmann Tiina Heino Hrönn Ottosdóttir Directorate of Social Security, Iceland Anita M Sivertsen Ministry of Health and Social Affairs, Norway Linda Gustafsson Ministry of Health and Social Affairs, Sweden Mårten Lagergren Ministry of Health and Social Affairs, Sweden (chairman of the working group) Johannes Nielsen NOSOSCO´s secretariat 178 DIFFERENCES AND SIMILARITIES IN SOCIAL EXPENDITURE Cash benefits to the elderly Table 11.2 Expenditure on cash benefits to the elderly, PPP/capita and per- centages of GDP 1998 A. Old-age pensions Of which: - a.
Basic pension/ Guaranteed minimum pension - b.

Employment pen- sion - c. Supplementary pension B.

Special old-age pension C. Partial retirement pension D. Other Cash benefits total Percentage of GDP Denmark Finland Iceland Norway Sweden 1,581 1,277 850 1,209 1,854 1,058 81 442 584 5 0 2,170 9.3 315 915 47 87 9 23 1,396 7.3 491 359 - - - - 850 3.7 551 518 140 6 - - 1,215 6.0 548 926 380 - 3 0 1,861 9.5 All the Nordic countries have considerable expenditure on cash benefits for the elderly.
Expenditure varies from 3.7 per cent of the GDP in Iceland to 9.5 per cent of the GDP in Sweden.

Denmark has the highest expendi- ture on cash benefits to the elderly measured in PPP/capita, followed by Sweden.

As for old-age pensions, Sweden has the highest expenditure measured in PPP/capita, followed by Denmark.

Expenditure in Finland is largely on the same level as in Norway.
Basic/guaranteed minimum pension, employment pensions and supple- mentary pensions make up varying portions of the total expenditure on old- age pensions in the five countries.

The correlation between pension schemes varies somewhat among the countries as well, cf.

Chapter 7.

Em- ployment pensions play the largest part in the Swedish and Finnish pension systems and are getting more important in Iceland and Norway, while sup- plementary pensions are most important in Denmark and Sweden.
In Denmark, the basic pension makes up 67 per cent of the total expenditure on old-age pensions while the expenditure on the guaranteed minimum 179 DIFFERENCES AND SIMILARITIES IN SOCIAL EXPENDITURE pension is only approximately 25 per cent in Finland.

Employment pen- sions account for only 5 per cent of the total expenditure in Denmark, but 72 per cent in Finland.
In Iceland and Norway, the expenditure on the basic pension is somewhat higher than on the employment pension while the em- ployment pension in Sweden accounts for 50 per cent and the ba- sic/guaranteed minimum pension accounts for 30 per cent of the total ex- penditure.

The latter is allegedly connected with the employment pension system being fully developed in Sweden.
In Finland, the housing benefit is a part of the pension system, while the housing benefit is paid out separately in the other countries.

The expenditure on housing benefit is therefore in the case of Finland included in the pension expenditure.

Supplementary pension schemes are normally set up through collective agreements and are mostly granted to public employees.

The expenditure on the supplementary pension schemes varies considerably between coun- tries.
In Denmark, anticipatory pensioners are not entitled to employment pension, but may receive supplementary pensions.

These, however, are hard to separate from the supplementary pensions to the elderly, for which reason the expenditure on the supplementary pensions to anticipatory pen- sioners is included under the elderly.

In Denmark, the supplementary pen- sions account for approximately 28 per cent of the total expenditure on old- age pensions.
Public employees in Finland have no supplementary pension schemes and the supplementary pension schemes do not play a significant part in Finland.

In Iceland, there are no longer any supplementary pension schemes.

There are considerable variations in the level of the special old-age pen- sions.
The high expenditure on special old-age pensions in Denmark is mainly due to the voluntary early retirement scheme, under which members of an unemployment insurance fund aged 60-66 years may voluntarily leave the labour market (see Chapter 7).

There is also a special transition allow- ance for long-term unemployed recipients of unemployment benefit aged between 50 and 59 years, which they may receive until they qualify for vol- untary early retirement.
This scheme was closed for new recipients at the end of 1995.

Special old-age pensions in Denmark also include the ordinary anticipatory pension, of which a large part is health related (disability pen- sions).

In addition, no pension is paid to surviving spouses in Denmark, but an ordinary anticipatory pension may be granted on social criteria.
In Finland the special old-age pensions include early old-age pension and pensions to farmers, while in the case of Norway, there is the expenditure on state subsidies for agreement regulated pensions (ARP).

This is a scheme un- der which people in active employment under certain conditions are allowed 180 DIFFERENCES AND SIMILARITIES IN SOCIAL EXPENDITURE to retire from the age of 62 with a full pension until the pensionable age of 67.
In Denmark, Finland and Sweden, it is possible to receive partial retire- ment pension, and the benefit is granted to people who wish to gradually re- tire from the labour market before the normal pensionable age.

The age limit for partial retirement pension is 60 years in Denmark, 56 years in Fin- land and 61 years in Sweden.
The expenditure on partial retirement pen- sion is highest in Sweden, but the partial retirement pensions are being phased out, and no new partial retirement pensions will be granted after 2000.

In Finland, partial retirement pensions are granted solely from the employment pension schemes.

Other expenditure in Finland is primarily pensions to war veterans.
Table 11.3 Selected key figures 1998 Denmark 67 years Finland 65 years Iceland 67 years Norway Sweden 67 years 65 years 79,100 47,893 21,936 66,192 178,067 709 847 28 631 1,598 111,565 56,544 783,429 104,900 112,062 11,818 8,130 8,313 8,487 10,328 Pension age Old-age pension, to- tal.

Mill.
Mill.

Kr/FIM Old-age pensioners (1.000)1) Expenditure per pensioner in Kr/FIM Expenditure per pen- sioner in PPP/Euro Disposable income for pensioners in typical cases as percentage of income when working 1998 63 52 - Singles - Couples Taxation in relation to actively em- ployed people 1 Excluding special old-age pensioners.
As actively employed 64 66 85 76 62 57 82 82 Lower taxation As actively employed Lower taxation Lower taxation In Sweden, the population aged 65 years and over make up 18 per cent of the total population.

In Norway, it is 15 per cent, in Denmark 15 per cent, in Finland 14 per cent and in Iceland only 12 per cent.
The expendi- ture on old-age pensions measured in PPP per pensioner is highest in Den- 181 DIFFERENCES AND SIMILARITIES IN SOCIAL EXPENDITURE mark, followed by Sweden and Norway and lowest in Finland and Iceland.

For Danish pensions, it should be noted that they are fully taxed as earned income, which is also reflected in the relatively low compensation rates.

This is, however, also related to the importance of the supplementary pen- sions.
The low expenditure in Iceland is very much due to the actual re- tirement age being much higher than in the other Nordic countries.

This means that part of those who receive pension are paid a reduced amount, both due to income from work and to the amount of the employment pen- sion.
Additionally, it should be noted that special rules for taxation of pensions and other cash benefits such as housing benefit to pensioners affect the dis- posable income differently for single pensioners and for couples compared to previous income when employed in typical cases (see Appendix 2).
Denmark, which has the highest expenditure per old-age pensioner, gen- erally has the lowest level of compensation, which, as mentioned, is due to the full taxation of pensions and the fact that supplementary pensions, which play a significant part, are not included in the calculations.

Sweden has both a high expenditure per pensioner and a high level of compensa- tion.

Iceland, which has the lowest expenditure has a relatively high com- pensation level, which is caused by a generally low taxation.
In Finland the compensation level is generally the same for singles and couples.

The high compensation level must, however, be seen in connection with favourable taxation rules and the housing benefit for pensioners being a part of the pension system.

Expenditure on Services to the Elderly There are major differences in the expenditure on services to the elderly among the Nordic countries.
The service expenditure in PPP per capita is highest in Norway and Sweden, somewhat lower in Denmark and consid- erably lower in Iceland and especially in Finland.

The expenditure in Nor- way and Sweden is about 25 per cent higher than the average for all the Nordic countries, while the expenditure in Denmark is roughly correspond- ing to the average.
The expenditure in Iceland is almost 30 per cent below the average, while the expenditure in Finland only corresponds to just below 40 per cent of the average expenditure per capita in the Nordic countries as a whole.

However, if the beds in the health centres were included, the Fin- nish expenditure would be at the same level as it is in Iceland.
182 DIFFERENCES AND SIMILARITIES IN SOCIAL EXPENDITURE Table 11.4 Expenditure on services to the elderly, PPP per capita 1998 Institutions Carrying out daily tasks Other Total Expenditure as a per- centage of the GDP Denmark 126 291 10 427 1.8 Finland1) 76 47 29 152 0.8 Iceland 283 Norway 323 Sweden 399 22 19 324 1.4 169 24 516 2.6 126 14 539 2.7 1 The expenditure on beds for the elderly in health centres was approximately FIM 1.3 bil- lion corresponding to 1.2 per cent of the GDP.
It is not possible to compare the expenditure on institutions, etc.

for the elderly and help to carry out daily tasks between the Nordic countries.

The expenditure on institutions for the elderly in Denmark mainly includes only the expenditure on the institution itself, that is the residential part of the in- stitution, while the expenditure on nursing and care for residents is included under help for carrying out daily tasks.
In addition, the institution expendi- ture for several of the countries is a mix of the nursing expenditure and the actual rent expenditure, as rent is included in some cases, not in others.

Fi- nally, the Finnish institution expenditure becomes more than twice as high if the cost of beds at health centres is included.

Another reason for the Fin- nish expenditure being so low is that only institutions with 24-hour care are included under places at institutions.
The expenditure on service housing is included under other expenditure.

On this background, only the total expenditure on services to the elderly is compared between the Nordic countries in the following.

The differences in the expenditure is among other things connected to differences in the percentage of elderly people in the populations of the Nordic countries.
The percentage of people aged 65 and over is highest in Sweden, where they make up approximately 18 per cent, and lowest in Ice- land, where they make up only approximately 12 per cent.

The differences in the expenditure on services between the Nordic countries will therefore be somewhat altered when the expenditure is calculated in PPP per capita for the age group 65 years and over.
183 DIFFERENCES AND SIMILARITIES IN SOCIAL EXPENDITURE Table 11.5 Social service expenditure on the elderly, PPP per capita aged 65 and over, 1998 Denmark Finland Iceland Norway Sweden Per capita aged 65 and over Per capita aged 80 and over 2,865 1,036 2,801 3,321 3,097 10,896 4,600 12,171 12,302 11,091 Expenditure in PPP per capita for the age group 65 years and over is highest in Norway and somewhat lower in Sweden.
Expenditure in Den- mark is slightly below that in Norway, but not much less than in Sweden.

Expenditure in Iceland is almost at a level with Denmark, while expenditure in Finland is still considerably lower than in the rest of the Nordic countries.

Expenditure on services to the elderly depends especially on the number of people aged 80 years and over, since people in this age group have the highest need for nursing and care.
The percentage of elderly aged 80 years and over is highest in Sweden and lowest in Iceland.

Expenditure per capita aged 80 and over is slightly higher in Norway and Iceland than in Sweden and Denmark.

Norway still has the highest expenditure and Finland the lowest.
Part of the difference between the Nordic countries is connected to the way expenditure on social services to the elderly is calculated: • Expenditure on home nursing in Sweden is partially included under ex- penditure on services to the elderly, as municipal expenditure on home nursing (50 per cent) is included under services to the elderly, while county expenditure (50 per cent) is included under health.

For the other countries all expenditure on home nursing is included under health.
• Whereas the elderly in the other Nordic countries live in nursing homes and other institutions or in service housing under the social sector, a sig- nificant part of the elderly in Finland are in the wards of the health cen- tres.

Expenditure on nursing homes is included under health expendi- ture.

• A significant part of the expenditure on services is made up of wages to personnel caring for the elderly.
The wage level for health personnel in Denmark and Norway is higher than it is in the other Nordic countries and may therefore to a certain extent explain some of the differences.

In addition, the number of staff plays a part.

184 DIFFERENCES AND SIMILARITIES IN SOCIAL EXPENDITURE • Expenditure on services to the elderly are, like all other expenditure in the Nordic statistics, stated after deduction of the user charges for a stay at an institution and for home help.
User charges payable for a stay at an institution in Finland are approximately 21 per cent and for home help approximately 15 per cent, which is slightly higher than in the other Nordic countries.

User charges payable for home help in Iceland are ap- proximately 8 per cent.

In Denmark permanent home help is free of charge and makes up by far the largest part of all home help to the eld- erly.
User charges payable for a stay at an institution cannot be calcu- lated separately in Sweden, but make up a total of approximately 9 per cent of the gross expenditure.

In Denmark user charges payable for a stay at an institution amount to approximately 10 per cent.

• Among other things, the amount of user charges payable for a stay at an institution depends on whether pensioners in nursing homes are paid an allowance, or are paid their pension, in which case they must pay more for their stay.
The net expenditure on institutions will, all other factors being equal, be higher in countries where residents are paid an allowance than in countries where residents receive their pension in full.

In Norway, residents at municipal old-age and nursing homes are paid an allowance, while county and state institutions do not charge any user charges.

Residents here receive a reduced pension.

In the other countries, residents receive their pension in full.
Differences in the expenditure on services to the elderly is naturally also connected to differences in the number of the elderly who live in institu- tions, and the number of elderly receiving home help.

Table 11.6 Percentage of elderly aged 65/67 and over living in institutions and/or receiving home help, 1998 Denmark1) Finland2) Iceland3) Norway4) Sweden5) In institutions Home help 9.0 23.7 6.5 11.2 9.6 19.3 11.1 15.9 7.7 8.2 1 The age group is 67 and over.
2 Recipients of home help are households over 65 years.

3 In institutions only residents in nursing and old-age homes are included.

Recipients of home help is the age group 65-79 years.

4 The age group is 67 years and over.

5 In institutions only people permanently residing in an institution are included.

Recipients of home help are calculated as at November 1st 1998, and only those living in their own resi- dence.
185 DIFFERENCES AND SIMILARITIES IN SOCIAL EXPENDITURE The proportion of the elderly aged 65/67 years and over living in institu- tions, etc., is highest in Norway followed by Iceland.

It is a little lower in Denmark and Sweden and particularly in Finland.

The proportion of the elderly receiving home help on the other hand is clearly highest in Denmark.

It is somewhat lower in Iceland and Norway and considerably lower in Sweden and Finland.
Compared to the total number of people living in institutions, etc., or re- ceiving home help, expenditure on services to the elderly is estimated to be highest in Sweden followed by Norway.

Expenditure is slightly lower in Ice- land and Denmark and considerably lower in Finland.

Expenditure on home help per recipient is generally considerably lower than expenditure per resident in an institution/nursing home.
The differ- ence in expenditure per recipient of home help/resident in an institution is thus to a certain extent connected to the balance between care in one’s own home and care in an institution between the Nordic countries.

This is part of the reason for the relatively low expenditure in Denmark.

The relatively high expenditure in Sweden is, among other things, related to recipients of home help on average receiving help for more hours than in the other countries.
Cash benefits to the Disabled Expenditure on cash benefits to the disabled varies considerably between the Nordic countries.

Norway spends the most followed by Finland, while Den- mark and Sweden are largely at the same level and Iceland spends the least.

186 DIFFERENCES AND SIMILARITIES IN SOCIAL EXPENDITURE Table 11.7 Expenditure on cash benefits to the disabled in PPP/capita and per cent of GDP 1998.
Denmark Finland Iceland Norway Sweden A. Disability/anticipatory pension, total 348 426 328 512 449 Of which: - a. Basic/ minimum pension - b.

Employment pension - c. Supplementary pen- sion B.


Early retirement bene- fit due to reduced working capacity C. Care allowance D. Financial integration of the disabled E. Other Total As percentage of GDP 348 - - 35 - 66 38 487 2.2 108 315 3 87 12 7 51 583 3.0 231 97 - - - - 6 334 1.5 209 260 43 - 43 116 20 691 3.4 141 246 62 - 27 10 - 486 2.5 Disability/Anticipatory pensions The basic pension, employment pension and supplementary pension are of different importance in the Nordic countries.
In Denmark, anticipatory pen- sioners are not entitled to employment pension, but may receive supplemen- tary pensions.

These, however, are difficult to separate from supplementary pensions to the elderly, for which reason expenditure on supplementary an- ticipatory pensions is included under the elderly.

The basic pension plays the most important part in Iceland since basic pensions account for 68 per cent of the expenditure on disability pension.
In Finland the basic pension has a 25 per cent share of the total payments.

Employment pension therefore plays the most important part as is also the case in Sweden.

In Norway, the basic and employment pensions carry almost the same weight.

The supplementary pen- sions play the largest part in Sweden followed by Norway.

The total expenditure on disability/anticipatory pension is also affected by the housing benefit, which in Finland is part of the pension system.
In all the countries, housing benefit is granted on means-tested criteria.

187 DIFFERENCES AND SIMILARITIES IN SOCIAL EXPENDITURE It should be noted that the total expenditure on cash benefits is highest in countries, except in Finland, where there are other cash benefits besides dis- ability/anticipatory pension.

Disability/anticipatory pensions do not play an equally important part in all the countries.
The proportion of disability/anticipatory pensioners among those aged 16/18-64 years is highest in Finland with 8.5 per cent of the population and lowest in Denmark with 4.3 per cent.

The relatively low number of anticipatory pensioners in Denmark is especially due to the gen- eral anticipatory pension being included as a special old-age pension in this publication.
The average disability/anticipatory pension is highest in Denmark fol- lowed by Finland, Norway and Sweden, the latter three being at almost the same level and Iceland being at the lowest level.

The high level in Denmark is due to only the highest and intermediate anticipatory pensions being in- cluded since the general anticipatory pension, as mentioned above, is in- cluded under the special old-age pensions.

Furthermore, taxation of pen- sions are higher in Denmark than in the other countries.
Table 11.8 Selected key figures, 1998 Pensionable age Expenditure on disability/ anticipatory pensions, to- tal.
Million Kr/FIM Disability/anticipatory pensioners (1,000) Percentage of disability/ anticipatory pensioners of the working age population Expenditure per pensioner in Kr/FIM Expenditure per pensioner in PPP/Euro Disposable income for a single pensioner in typical cases as percentage of in- come when working Taxation in relation to ac- tively employed Denmark Finland1) Iceland2) Norway Sweden 18-66 years 16-64 years 16-66 years 16-66 years 16-64 years 19,212 16,706 8,168 27,995 43,076 165 288 9 258 422 4.3 8.5 5.3 8.2 7.6 116,436 57,997 877,808 108,508 102,076 12,344 8,339 9,315 8,779 9,408 83 As actively employed 64 Lower taxation .. As actively employed 65 Lower taxation 81 Lower taxation 1 Including individual anticipatory pensions.
2 Icelandic figures are calculated.

Neither the recipients of disability benefit nor the expendi- ture on this are included.

188 DIFFERENCES AND SIMILARITIES IN SOCIAL EXPENDITURE Care allowance There is a care allowance payable to the disabled in all the Nordic countries as part of the pension.

In addition, in both Norway and Sweden different supplementary care allowances and benefits are given to the disabled, which to a minor extent is also the case in Finland, but not in Denmark and Ice- land.
The payment of wages to people aiding a disabled person is included under expenditure on services.

Integration of the disabled in working life In all the Nordic countries the disabled receive a benefit (wages or daily cash benefits) when they carry out a job adapted to their situation, or when they undergo vocational training.

Especially in Norway, but to a certain de- gree also in Denmark, large cash benefits are paid in connection with reha- bilitation.
Other cash benefits Under other expenditure mainly the expenditure in connection with military and war pensions in Denmark, Finland and Norway is included.

In Den- mark, cash benefits towards payment of extra expenses for disabled children and adults are also included, while Iceland and Sweden do not state any ex- penditure under other cash benefits.

Services for the disabled In all the Nordic countries services are provided to the disabled.
Services are for instance care or help in institutions or sheltered housing, transport ser- vice schemes and technical aids.

The total expenditure on services varies among the Nordic countries, measured in PPP per capita.

The highest ex- penditure is found in Sweden, followed by Denmark, while expenditure is lowest in Finland and Iceland.

The service expenditure in the table below is broken down by institutions etc.

help to carry out daily tasks, rehabilitation and other.
Apart from levels varying between countries, there are also great differences in the distribution of services.

This difference is partly due to difficulties in accounting proce- dures, but also to differences in priorities between countries.

189 DIFFERENCES AND SIMILARITIES IN SOCIAL EXPENDITURE Table 11.9 Expenditure on services to the disabled in PPP/capita 1998 Denmark Finland Iceland Norway Sweden Institutions, etc.
Help to carry out daily tasks Rehabilitation Other Total 1401) 492) 29 44 262 21 313) 52 44 148 59 4 87 7 157 124) 415) 102 13 168 98 6) 82 7) 16 67 263 0.8 1.1 As percentage of GDP 1 Aged under 67 years.

Including housing for the elderly.

2 People under the age of 67.

3 Households.

4 Residents in an institution aged 0-66 5 People under the age of 67 6 November 1998 and only people permanently residing in an institution.
7 People residing in their own homes as at 1 November 1998 and receiving home help.

0.8 0.7 1.3 The Finnish institution expenditure only includes expenditure in connec- tion with stays in institutions since service housing, etc., is included under other.

As for the elderly, expenditure in connection with stays in institutions is difficult to compare.
A very uniform picture is seen, in per cent of the target group of how many people stay in institutions, while there are considerable differences in the number of recipients of home help.
190 DIFFERENCES AND SIMILARITIES IN SOCIAL EXPENDITURE Table 11.10 People aged 0-64 years and disabled people either living in in- stitutions/service housing or receiving home help, 1998 Denmark Finland Iceland Norway Sweden Aged 0-64 (1.000) 4,510 4,398 243 3,742 7,311 Aged 0-64 in institutions, total As percentage of target group Aged 0-64 receiving home help As percentage of target group Total number of re- cipients 16,1301) 15,103 823 13,0923) 25,2524) 0.3 0.3 0.3 0.3 0.3 28,2721) 41,6062) 3,631 25,0103) 14,6974) 0.6 1.0 1.5 0.7 0.2 44,402 56,709 4,454 38,102 39,949 0.9 1.3 As percentage of target group 1 People under the age of 67.
2 Households.

Of the 41,606 6,292 were disabled.

3 People in institutions include residents in housing for nursing and care purposes and resi- dents in institutions aged 0-66.

Recipients of home help are people under the age of 67.

4 Residents in institutions are stated as at 1 November 1998 and only permanent residents.

Home help includes residents in own homes who had been granted home help as at 1 No- vember 1998.
0.5 1.8 1.0 The variation seen in the number of recipients of home help is allegedly caused by both Norway and Iceland including households/people who are not disabled, but are temporarily disabled because of illness and the like and therefore receive home help.

One explanation that may be given for the low net expenditure in Fin- land and Iceland is considerably higher user charges payable when staying in an institution than in the other countries.
Another explanation might be marked differences in the need for care of residents in institutions in Fin- land, and wages in Finland and Iceland on one hand and the three other Nordic countries on the other.

A third explanation might be significant dif- ferences in the service level including the number of staff.

All the countries have to a certain extent escort schemes for the disabled.

Here Sweden differs markedly from the other countries with an expenditure of SEK 4.5 billion.
for 7,670 people (SEK 586,701 per person).

Sweden is far more generous than the other countries.

191 DIFFERENCES AND SIMILARITIES IN SOCIAL EXPENDITURE Social expenditure on survivors The increasing participation of women in the labour market has signifi- cantly changed the economic situation of widows in the Nordic countries in recent decades.

Furthermore, pensions to widows/widowers have fallen drastically, with the exception of Finland, among other things due to law re- forms.
• In Denmark, pensions to widows and widowers have been abolished.

In- stead widows/widowers may receive ordinary anticipatory pension if they are entitled to it.

Married pensioners receive a survivor’s pension when a spouse dies.

Expenditure on these are, however, not calculated separately but together with other expenditure on pensions.
• The special pension to widows and widowers was abolished as a basic pension in Iceland in 1996 and the expenditure will fall during the com- ing years as widows and widowers are becoming old-age pensioners.

Widows and widowers may, however, receive a benefit for 6 months af- ter the death of their spouse.

Survivors who are breadwinners may be granted a benefit for 12 months, and this period may be extended to 48 months if a survivor provides for two or more children.
After 18 months the benefit is means-tested.

• In Sweden, the pension to widows and widowers is also being phased out.

In all the Nordic countries children under 18 years receive children’s pen- sion if one or both parents have died.

With the exception of Denmark the benefit may be extended to the age of 20 if a child is receiving education.

In Norway, this only applies if both parents have died.
In Denmark, a special child allowance is granted to orphans and to children who have lost one of their parents.

The expenditure on this is calculated together with the other types of child allowance (cf.

Chapter 4.).

192 DIFFERENCES AND SIMILARITIES IN SOCIAL EXPENDITURE Table 11.11 Expenditure on survivors.

PPP/capita and as percentage of GDP 1998 Denmark Cash benefits, total Of which: A.

Pensions to survivors Of which: - a.

Basic pension/Guaran- teed minimum pension - b.


Employment pension - c. Supplementary pen- sion B.

Death Grants C. Other Services, total A.

Funeral grants B.
Funeral grants B.

Other Total expenditure As percentage of GDP - - - - - - - 4 4 - 4 0.0 Finland 202 Iceland Norway Sweden 71 147 122 196 120 7 180 9 6 - 1 1 - 203 1.1 10 110 - 2 - - - - 122 0.5 71 22 17 32 - - 4 4 - 75 0.4 147 8 129 10 - - - - - 147 0.7 In all the Nordic countries, pensions to survivors make up a very small part of the total social expenditure, also when measured against the GDP.

There are big differences between countries, however.
In PPP per capita Finland spends the most, followed by Sweden and Iceland.

Like the other pensions, survivor’s pension is made up of basic pension, employment pension and supplementary pension.

The rules are the same as for old-age and disability/anticipatory pensioners which means that the ba- sic pension for survivors depends on any other pension received.

Basic pension to survivors makes up a minor part of the total pension payments in all the countries.
Employment pension, on the other hand, is the most important pension with the exception of Norway.

Special cash benefits to survivors in the case of death are given only in Finland.

The services provided to survivors are very modest.

The number of recipients varies between countries, there being most widows/widowers receiving pension in Finland and fewest in Sweden.

The same applies to recipients of children’s pension, of which there are the most in Finland.
The level of benefit for surviving spouses is highest in Norway, while the highest children’s pension is paid in Sweden.

193 DIFFERENCES AND SIMILARITIES IN SOCIAL EXPENDITURE Table 11.12 Number of survivors and average amount paid per survivor 1998 Denmark Finland Iceland1) Norway Sweden - 7,800 247,005 Survivors receiving survivors pension Average monthly amount in PPP/Euro Children receiving children’s pension Average monthly amount in PPP/Euro 1 Includes only employment pension.
Number of recipients has been calculated.

17,664 13,594 28,879 29,288 1,300 426 224 326 130 117 296 79 .
440,000 331 30,118 226 Conclusion Of important explanations to the differences in the social expenditure on the elderly, the following may be stressed: • The fact that Denmark in total spends most on social cash benefits to the elderly is mainly caused by the special old-age pensions, as people, who in Denmark receive ordinary anticipatory pension, transition allow- ance or voluntary early retirement benefit, will typically be somewhere else in the social system in the other countries.
In Finland, it will typi- cally be unemployment pension, which is discussed in Chapter 5, and in Norway there is a large number of recipients of sickness benefit, which is discussed in Chapter 6.

• When viewing the burden of social cash benefits measured as a percent- age of the GDP, the expenditure is highest in Sweden, while it is lowest in Iceland because of the late withdrawal from the labour market.
The high expenditure in Sweden must be seen in connection with the em- ployment pension system being fully developed.

• Compensation (pension payment) compared to previous income when working is highest in Sweden and Iceland and lowest in Denmark and Norway.

However, it should be noticed that supplementary pensions, which are not included in the compensation calculations, play a consid- erable part for large groups of pension recipients in Denmark.
Another important aspect is the tax burden which is lightest in Iceland and heaviest in Denmark.

194 DIFFERENCES AND SIMILARITIES IN SOCIAL EXPENDITURE The most important explanations of the differences in the expenditure on social services to the elderly are: • Differences in the way expenditure on institutions and on nursing and care of the elderly is calculated.
• Differences in whether the elderly in institutions are paid their pension in full and subsequently pay for rent and various services themselves, or whether they are paid an allowance instead (Norway).

• Differences in user charges, which is larger in Finland than in the other countries • Differences in the wage level and number of staff within the care sector, where both wages and number of staff may be significant.

• Differences in the service level i.e.


differences in the number of elderly people living in an institution, etc., and the number of people receiving home help.

It is also important to which extent the countries aim at nurs- ing and caring for the elderly in their own homes or in institutions, etc..

The need for care of residents in institutions is also an important factor.
The most important differences in the cash benefits to the disabled are the following: • Cash benefits to the disabled are highest in Norway where there is also a relatively high number of anticipatory pensioners.

Furthermore Norway spends much on rehabilitation and grants special care allowances at a high level.
• The relative number of disability/anticipatory pensioners is highest in Finland, but Finland has only the second highest expenditure on disabil- ity/anticipatory pensioners among the Nordic countries.

This is because the level of disability/anticipatory pension in Finland is average.

• Denmark has relatively the smallest number of anticipatory pensioners, which is because ordinary anticipatory pensions are counted as special old-age pensions, but the cash benefits to the disabled are at a Nordic level.
This is because the level of the anticipatory pensions included is very high in Denmark compared to the other Nordic countries.

Fur- thermore, large amounts are spent on rehabilitation in Denmark.

195 DIFFERENCES AND SIMILARITIES IN SOCIAL EXPENDITURE • Sweden has a relatively high proportion of anticipatory pensioners, but benefits to anticipatory pensioners is at the same level as in Finland and Norway.
In addition various kinds of allowances are granted to anticipa- tory pensioners and the disabled in Sweden.

• The only cash benefit to disability pensioners in Iceland is disability pen- sion.

The most important explanations to differences in the expenditure on ser- vices to the disabled are the following: • As for the elderly, there are differences in the institution expenditure, calculation of staff etc.
• The high priority given to rehabilitation by Norway, and • The very high Swedish expenditure on escort schemes for the disabled.

The most important explanations of differences in expenditure on survivors pension are: • • that survivor’s pension plays a various parts in the individual countries.

to which extent the schemes are being phased out, such as is the case in Iceland and Sweden.
These are the most important explanations to the differences and simi- larities found in the expenditure on the elderly, the disabled and survivors.

Part may be attributed to different priorities made over longer periods of time, such as for instance different extents of the supplementary and sup- plementary pension schemes.
Differences in the economic trends among the countries which have caused differences in the priority given to the integration of the disabled, and for that matter the elderly as well, into the labour market.
Differences in the composition of populations and finally differences in the organisation of policy, where benefits that in principle are almost equivalent, may be granted on the basis of for instance labour market laws, laws on sick- ness benefits or laws concerning other social benefits (social assistance).
196 CALCULATION BASIS FOR INCOME DISTRIBUTION Appendix 1 Calculation Basis for Income Distribution The tables on income distribution on NOSOSCO’s home page and the fig- ures in Chapters 3, 4 and 7 are based on the following: Calculations of Quartiles The calculations were based on all households.

The quartiles were calcu- lated on the basis of the equivalent disposable income, i.e.

the income was adjusted as to the number of people to subsist on it in the various families.
The correction was made by dividing the household income by the number of family members.

In Figure 3.2, the first quartile is made up of the households earning the lowest incomes, whereas the households earning the highest incomes make up the fourth quartile.

In Figures 3.3 and 3.4, the average disposable income was calculated for single people and couples, respectively, broken down by quartiles converted into PPP-Euro.
Moreover, the gross income was included and broken down in percentages by the factor income and the social services and benefits, and the tax in percentage of the gross income in 1997.

Also here, the quartiles were fixed on the basis of the disposable income for all households.

Households A household consists of individuals living together and sharing the house- hold economy.

The households were calculated on the basis of information from interviews ( In Denmark registers).
Adult children living together with their parents count as being members of their parents’ households.

This 197 CALCULATION BASIS FOR INCOME DISTRIBUTION does not, however, apply to Iceland, where children over the age of 15 years are regarded as self-contained households.

Single people One-person households consist, with the exception of Iceland, of one adult (over 17 years) and any children living at the same address, irrespective of their ages.
Cohabiting people Cohabiting couples consist of 2 adults (over 17 years) and any children liv- ing at the same address, irrespective of their ages.

Children Children are regarded as children until they reach the age of 17 years.

Households Broken Down by Age In the tables and figures where households have been broken down by age, it is the age of the head of the family who counts.

The head of the family is defined as the person earning the most.
Factor Income The factor income consists of gainful employment, income from self- employment, and capital income.

Employers contributions to social security schemes were not included in the wages.

Tax Tax comprise income tax, property tax, and households’ contributions to social security schemes.

198 CALCULATION BASIS FOR INCOME DISTRIBUTION Social Cash Benefits Social cash benefits comprise both taxable and tax-exempt cash benefits.
These may be income-substituting benefits such as daily cash benefits or pensions, and/or income-supplementing cash benefits such as housing benefits and child allowances.

Disposable Income The disposable income is composed of factor income plus social cash bene- fits less tax.
199 DESCRIPTION OF TYPICAL CASES Appendix 2 Description of Typical Cases The calculations of typical cases (see NOSOSCO’s home page: www.nom- nos.dk) forming the basis of tables and figures on compensation in the event of loss of income in this and the previous two publications have been revised considerably compared with the previous editions of Social Security in the Nordic Countries.

The calculation of disposable income thus includes both housing benefits and charges payable for day care of children.
As the amount of both hous- ing benefits and charges payable for day care depend on the income, they become significant in relation to compensation payable in connection with the social occurrences included in the calculations of the typical cases.

The average pay for an industrial worker (Average Production Worker – APW) is used.

This wage average was calculated by the OECD and is used in most comparative studies.
The following family types and income levels have been used: Single parent with one child: APW 50%, 75%, 100%, 125%, and 150%.

(I, II, III, IV, and V).

Single person with no children: APW 50%, 75%, 100%, 125%, and 150%.

Couple with two children: Couple with no children: (I, II, III, IV, and V).

APW 75% and 50% - 100% and 75% - 125% and 100% - 150% and 125%.

(I, II, III, and IV).

APW 75% and 50% - 100% and 75% - 125% and 100% - 150% and 125%.

(I, II, III, and IV).


The following applies to the individual typical cases: 200 DESCRIPTION OF TYPICAL CASES Typical Case 0 Income and tax regarding typical cases for an APW, 1998 Employer’s costs In order better to be able to illustrate the overall taxation in the Nordic countries in terms of both income tax and social contributions, employer’s costs, i.e.

gross wages plus statutory social contributions, have been in- cluded.

Consequently, two accounts of the net income (i.e.


gross wages less income tax and social contributions payable by employees) in relation to “gross income” were prepared: net income in relation to the employer’s costs and net income in relation to the gross wages.

The employers’ contri- butions for Norway correspond to that payable in Oslo.

In respect of Denmark, employers’ statutory social contributions cannot be calculated.
It is, however, estimated that for an employee with a salary corresponding to that of an APW, the contributions constitute about 1½ per cent of the salary.

This estimate is only used in typical case 0 for single peo- ple earning a salary corresponding to that of an APW.

In the calculation of the lowest APW values social assistance has not been included, even though people with such an income would be entitled to this.

Tax payment Average national rates of taxation have been used, i.e.
the average municipal rates of taxation including the average church tax percentages.

Children’s ages and use of day care institutions Child allowances and charges payable for day care institutions are calcu- lated on the basis of the following family types: • Single parent with an infant of 0 years, i.e.

a new-born baby in typical case I.

• Single parent with a child of five, i.e.

a pre-school child attending a day care institution.

• Couple with two children aged five and nine, i.e.
a pre-school child at- tending a day care institution and a child attending school, still needing af- ter-school care.

Payment for the day care institution is, where possible, calculated on the basis of average charges and national rules governing payment.

For Nor- 201 DESCRIPTION OF TYPICAL CASES way, the rates applying in Oslo have been used, and for Iceland the rates applying in Reykjavík have been used.
In all the typical cases, it is assumed that the children are attending day care institutions, with the exception of the infant in typical case I.

It is also assumed that the children in typical cases II and III are in day care institu- tions.
As to child allowances, these include, in addition to the child allowances proper payable to single parents and couples with children, maintenance al- lowances to single parents with children, corresponding to the amount of the allowances payable in advance by the social security scheme, cf.

Chapter 4.

Housing costs and housing benefits It is assumed in all the cases that the families live in rented accommodation.
The amount of the housing cost/rent depends on the family type, but is in- dependent of the amount of the income.

Housing costs include only the rent and no other costs such as heating, gas, or electricity.

Therefore, calcu- lations of heating supplements, for instance, to which pensioners in Den- mark with low incomes are entitled, have not been included.

It has not been possible to determine the amount of the rent for the indi- vidual family types in a consistent way for all the countries.
In some coun- tries, the rent was determined on the basis of an estimate of the expenses for rented accommodation for the individual family types and calculations of the average rent per square meter at a national level, whereas it in other countries was based on rent surveys for various family types within certain municipal groups.
The rent for the individual family types is merely used to calculate the amount of any housing benefit, whereas the rent itself is not included in the calculation of the disposable income.

As far as Iceland and Norway are con- cerned, calculations of housing benefits are not included.

This is due partly to the housing benefit being of limited importance, and partly to it being fi- xed on the basis of an assessment of the individual families’ need.
Gross income The gross income is the income from work and excludes, for instance, child allowance and housing benefit.

202 DESCRIPTION OF TYPICAL CASES Disposable income The disposable income is calculated as gross income plus child allowance and housing benefit less income tax, social security contributions payable by employees, and charges payable for day care institutions.
The social security contributions payable by employees include, in the case of Denmark, Fin- land, and Sweden, contributions to the voluntary unemployment insurance scheme in the shape of membership fees to the unemployment funds.

Un- ion contributions have, however, not been included in the calculations.

Disposable incomes are calculated on a yearly basis, both for employees in work and in connection with receipt of various social benefits.
The calcu- lations are based on the assumption that the people in question receive the social benefits throughout the year, even if this in some cases is not possible (e.g.

maternity benefit).

The listed incomes per month are the annual fig- ures divided by 12.

The degrees of compensation in connection with social occurrences are calculated as the disposable income in connection with receipt of the social benefit in per cent of the disposable income from work.
Typical Case I Level of compensation for typical cases in connection with childbirth, 1998 The following family types have been used: • Single parent with a new-born baby receiving daily cash benefit, seen in relation to a single person with no children.

• Couple with two children (five and nine years old) in addition to the new-born, where the person earning the highest income receives daily cash benefit, seen in relation to a couple with two children (five and nine years old) where both adults work.
• Couple with a new-born baby where the person earning the highest in- come receives daily cash benefit, seen in relation to a couple with no children where both work.
203 DESCRIPTION OF TYPICAL CASES Typical Case II Level of compensation for insured people for typical cases in connection with unemployment, 1998 Calculations have been included for the level of compensation for all four family types: a single parent with one child receiving unemployment bene- fit; a single person with no children receiving unemployment benefit; a cou- ple with two children where the person earning the highest income receives unemployment benefit; and a couple with no children where the person earning the highest income receives unemployment benefit.
Additional so- cial assistance has been included in the cases where the family in question is entitled to it.

Typical Case III Level of compensation for non-insured people for typical cases in connection with unemployment, 1998 Calculations of levels of compensation have been included for a single par- ent with one child and for a single person with no children.

In both cases, the adult is assumed to be at least 30 years of age.
Typical Case IV Level of compensation for typical cases in connection with illness, 1998 Calculations have been included for levels of compensation for all four fam- ily types, cf.

typical case II.
typical case II.

204 DESCRIPTION OF TYPICAL CASES Typical Case V Level of compensation for typical cases in connection with old- age pension, including supplementary pension at maximum qualifying period, 1998 Calculations have been included for the level of compensation for a single person with no children and a couple with no children, respectively, where both are old-age pensioners.

The supplementary pension has been included with the maximum amount obtainable in 1998.
Typical Case VI Level of compensation for typical cases in connection with anticipatory pension, including supplementary pension at maximum qualifying period, 1998 The calculation has been made for a single 50 year-old anticipatory pen- sioner with no children who was fully employed, until he was awarded an- ticipatory pension (i.e.

maximum qualifying period for a 50 year-old).

Moreover, it is assumed that the person in question has completely lost his working capacity.
205 FURTHER INFORMATION Appendix 3 Further information Further statistical information on the social security systems in the Nordic countries is obtainable from the individual statistical offices in the respective countries.
Further information is obtainable from the following: DENMARK Danish Immigration Service Ryesgade 53 DK-2100 Copenhagen Ø Phone +45 35 36 66 00 Fax +45 35 36 19 16 Web: www.udlst.dk Danish Labour Market Supplementary Pension Kongens Vænge 8 DK-3400 Hillerød Phone +45 48 20 48 20 Fax +45 48 20 48 00 Web: www.atp.dk Danish National Institute of Social Research Herluf Trolles Gade 11 DK-1052 Copenhagen K Phone +45 33 48 08 00 Fax +45 33 48 08 33 Web: www.sfi.dk 206 Directorate of Unemployment Insurance Finsensvej 78 DK-2000 Frederiksberg Phone +45 38 10 60 11 Fax +45 31 19 38 90 Web: www.dfa.dk Directorate General for Employ- ment, Placement and Vocational Training Blegdamsvej 56 P.O.
Box 2722 DK-2100 Copenhagen Ø Phone +45 35 28 81 00 Fax +45 35 36 24 11 Web: www.ams.dk Ministry of Social Affairs Holmens Kanal 22 DK-1060 Copenhagen K Phone +45 33 92 93 00 Fax +45 33 93 25 18 Web: www.sm.dk FURTHER INFORMATION National Board of Health Amaliegade 13 P.O.
Box 2020 DK-1012 Copenhagen K Phone +45 33 91 16 01 Fax +45 33 93 16 36 Web: www.sst.dk Statistics Denmark Sejrøgade 11 DK-2100 Copenhagen Ø Phone +45 39 17 39 17 Fax +45 39 17 39 99 Web: www.dst.dk Social Appeals Board Amaliegade 25 P.O.
Boks 3042 DK-1021 Copenhagen K Phone +45 33 41 12 00 Fax + 45 33 41 14 00 Web: www.dsa.dk FINLAND Central Pension Security Institute Fin 00065 Central Pension Secu- rity Institute FIN-00521 Helsinki Phone +358 9 1511 Fax +358 9 1481 172 Web: www.etk.fi Social Insurance Institution P.O.

Box 450 FIN-00101 Helsinki Phone +358 9 43411 Fax +358 9 4341 530 Web: www.kela.fi Ministry of Social Affairs and Health P.O.
Box 33 FIN- 00023 Government Phone +358 9 1601 Fax +358 9 160 3824 Web: www.vi.fi/stm/english /index.htm STAKES P.O.
Box 220 FIN-00531 Helsinki Tel +358 9 39671 Fax +358 9 3967 2324 Web: www.stakes.fi Statistics Finland FIN-00022 Statistikcentralen Phone +358 9 17341 Fax +358 9 1734 3522 Web: www.stat.fi ICELAND National Association of Pension Funds Suðurlandsbraut 30 IS-108 Reykjavík Phone +354 581 4977 Fax +354 581 4332 Web: www.ll.is National Economic Institute Kalkofsvegi 1 IS-150 Reykjavík Phone +354 569 9500 Fax +354 562 6540 Web: www.ths.is 207 FURTHER INFORMATION State Social Security Institute Laugavegi 114 IS-150 Reykjavík Phone +354 560 4400 Fax +354 562 4535 Web: www.tr.is Directorate of Labor Hafnarhúsinu Tryggvagötu IS-150 Reykjavík Phone +354 511 2500 Fax +354 511 2520 Web: www.vinnumalastofnun.is National Wage Control Committee Borgartúni 22 IS-105 Reykjavík Phone +354 562 1470 Fax +354 562 4570 Ministry of Health and Social Se- curity Laugavegi 116 IS-108 Reykjavík Phone +354 560 9700 Fax +354 551 9165 Web: www.stjr.is/htr Statistics Iceland Skuggasundi 3 IS-150 Reykjavík Phone +354 560 9800 Fax +354 562 8865 Web: www.statice.is 208 NORWAY Directorate of Labour C.J.
Hambroes plass P.O.

Box 8127 Dep.

N-0032 Oslo Phone +47 23 35 24 00 Fax +47 23 35 27 50 Web: www.aetat.no Ministry of Social Affairs and Health P.O.

Box 8011 Dep.

N-0030 Oslo Phone +47 22 24 90 90 Fax +47 22 24 95 75 Web: www.dep.no/shd National Insurance Administration Drammensveien 60 N-0241 Oslo Phone +47 22 92 70 00 Fax +47 22 92 73 00 Web: www.trygdeetaten.no Norwegian Board of Health Calmeyers gate 1 P.O.

Box 8128 Dep.
Box 8128 Dep.

N-0032 Oslo Phone +47 22 34 90 90 Fax +47 22 34 95 90 Web: www.helsetilsynet.no Statistics Norway Kongens gate 6 P.O.

Box 8131 Dep.

N-0033 Oslo Phone +47 22 86 45 00 Fax +47 22 86 49 88 Web: www.ssb.no SWEDEN National Board of Occupational Safety and Health S-171 84 Solna Phone +46 8 730 90 00 Fax +46 8 730 19 67 Web: www.arbsky.se Swedish Immigration Board P.O.
Box 6113 S-600 06 Norrköping Phone +46 11 15 60 00 Fax +46 11 10 81 55 Web: www.siv se National Labour Market Board S-113 99 Stockholm Phone +46 8 5860 60 00 Fax +46 8 5860 64 99 Web: www.amv.se/ams Ministry of Health and Social Affairs 103 33 Stockholm Phone + 46 8 405 10 00 Fax + 46 8 723 11 91 Web: www.regeringen.se/info- rosenbad/departement/social.html National Board of Health and Welfare S-106 30 Stockholm Phone +46 8 55 55 30 00 Fax +46 8 55 55 32 52 Web: www.sos.se FURTHER INFORMATION National Social Insurance Board S-103 51 Stockholm Phone +46 8 786 90 00 Fax +46 8 786 95 80 Web: www.rfv.se Statistics Sweden P.O.
Box 24300 S-104 51 Stockholm Phone +46 8 506 940 00 Fax +46 8 661 52 61 Web: www.scb.se OTHER EUROSTAT Office for Official Publications of the European Communities L-2985 Luxembourg Luxembourg Web: Europa.eu.int/en/int/en/comm /eurostat Nordic Medico-Statistical Com- mittee (NOMESCO) Sejrøgade 11 DK-2100 Copenhagen Ø Denmark Web: www.nom-nos.dk OECD Unité des Services à la Clientèle Service des Publications 2, rue André-Pascal F-75775 Paris Cedex 16 France Web: www.oecd.org 209 FURTHER INFORMATION World Health Organization Regional Office for Europe Scherfigsvej 8 DK-2100 Copenhagen Ø Denmark Web: www.who.dk 210 PUBLICATIONS ISSUED BY NOSOSCO Publications Issued by NOSOSCO Samordning af de nordiske landes statistik vedrørende den sociale lovgivning.
Betænkning afgivet af den af de nordiske socialministerier nedsatte ekspert- komité.

1. del.

Om opstilling af en ensartet oversigt over de sociale udgifter.

København 1951.

Samordning av de nordiske lands statistikk vedrørende den sociale lovgivning.

Rapport fra den av de nordiske sosialministerier nedsatte ekspertkomité.

2. del.

Omfanget av de sosiale tiltak.

Oslo 1951.

Samordning av de nordiske lands statistikk vedrørende den sosiale lovgivning.
Utgifter til sosiale formål i 1949 og 1950 og omfanget av sosiale tiltak i 1949 i Danmark, Finland, Norge og Sverige.

Oslo 1953.

Samordning af de nordiske landes statistik vedrørende den sociale lovgivning.

Nordisk Statistisk Skriftserie nr.

2.

København 1955.

Samordnad nordisk statistik rörande sociallagstiftningen.

Nordisk Statistisk Skriftserie nr.

4.

Stockholm 1957.

Statistikk vedrørende den sosiale lovgivning i de nordiske land 1956 (1956/57).

Nordisk Statistisk Skriftserie nr.

6.


Oslo 1959.

Social Welfare Statistics of the Northern Countries 1956 (1956/57).

Statistical Reports of the Northern Countries no.

6.

Oslo 1960.

Samordnad nordisk statistik rörande sociallagstiftningen.

Nordisk Statistisk Skriftserie nr.

8.

Stockholm 1961.

Samordning af de nordiske landes statistik vedrørende den sociale lovgivning 1960 (1960/61).

Nordisk Statistisk Skriftserie nr.

9.

København 1963.
9.

København 1963.

211 PUBLICATIONS ISSUED BY NOSOSCO Sosial sikkerhet i de nordiske land.

Utgifter og omfanget av visse sosiale tiltak 1962 (1962/63).

Nordisk Statistisk Skriftserie nr.

11.

Oslo 1963.

Social Security in the Nordic Countries.

Expenditure on and scope of certain so- cial security measures 1962 (1962/63).

Statistical Reports of the Nordic Countries no.

11.

Oslo 1964.

Social trygghet i de nordiska länderna.

Utgifter och verksamhetens omfattning 1964 (1964/65).
Nordisk Statistisk Skriftserie nr.

13.

Stockholm 1967.

Social Security in the Nordic Countries.

Expenditure on and scope of certain so- cial security measures 1964 (1964/65).

Statistical Reports of the Nordic Countries no.

13.

Stockholm 1968.

Social tryghed i de nordiske lande.

Den sociale virksomheds udgifter og omfang 1966 (1966/67).

Nordisk Statistisk Skriftserie nr.

16.

København 1969.

Social Security in the Nordic Countries.


Expenditure on and scope of certain so- cial security measures 1966 (1966/67).

Statistical Reports of the Nordic Countries no.

16.

Copenhagen 1970.

Sosial sikkerhet i de nordiske land.

Utgifter til og omfanget av visse sosiale tiltak 1968 (1968/69).

Nordisk Statistisk Skriftserie nr.

22.

Oslo 1971.

Social Security in the Nordic Countries.

Expenditure on and scope of certain so- cial security measures 1968 (1968/69).
Statistical Reports of the Nordic Countries no.

22.

Oslo 1971.

Social trygghet i de nordiska länderna.

Utgifter och verksamhetens omfattning 1970 (1970/71).

Nordisk Statistisk Skriftserie nr.

24.

Stockholm 1973.

Social tryghed i de nordiske lande.

Udgifter og virksomhedens omfang 1972 (1972/73).

Nordisk Statistisk Skriftserie nr.

29.

København 1975.

Social Security in the Nordic Countries.

Expenditure on and scope of certain so- cial security measures 1972 (1972/73).
Statistical Reports of the Nordic Countries no.

29.

Copenhagen 1976.

Sosial trygghet i de nordiske land.

Utgifter og virksomhetens omfang 1974 (1974/75).

Nordisk Statistisk Skriftserie nr.

34.

Bergen 1978.

212 PUBLICATIONS ISSUED BY NOSOSCO Social trygghet i de nordiska länderna.

Verksamhetens omfattning, utgifter och finansiering 1978.

Nordisk Statistisk Skriftserie nr.

37.

Stockholm 1980.

Social Security in the Nordic Countries.

Scope and expenditures 1978.


Statisti- cal Reports of the Nordic Countries no.

38.

Stockholm 1981.

Margaretha Aarnio: Socialförsäkringen och de arbetsoförmögna i Norden.

En analys av de huvudsakliga förmånssystem vid arbetsoförmåga och långvarig arbetslöshet i de nordiska länderna.

NU 1982:15.

Helsingfors 1982.

Sammenligning af udgifter til sociale kontantydelser i Norden.

En undersøgelse af beskatningens betydning for tværnationale sammenligninger af sociale udgifter.
Nordisk Statistisk Sekretariat.

Tekniske rapporter nr.

33.

Køben- havn 1983.

Social trygghet i de nordiska länderna.

Omfattning, utgifter och finansiering 1981.

Nordisk Statistisk Skriftserie nr.

43.

Helsingfors 1984.

Social Security in the Nordic Countries.

Scope, expenditure and financing 1981.

Statistical Reports of the Nordic Countries no.

44.

Helsinki 1984.

Social tryghed i de nordiske lande.

Omfang, udgifter og finansiering 1984.

Nordisk Statistisk Skriftserie nr.

47.

København 1986.


Social Security in the Nordic Countries.

Scope, expenditure and financing 1984.

Statistical Reports of the Nordic Countries no.

48.

Copenhagen 1987.

Social tryghed i de nordiske lande.

Omfang, udgifter og finansiering 1987.

Nordisk Statistisk Skriftserie nr.

50.

København 1989.

Social Security in the Nordic Countries.

Scope, expenditure and financing 1987.

Statistical Reports of the Nordic Countries no.

51.

Copenhagen 1990.

Rita Knudsen: Familieydelser i Norden 1989.


Nordisk Statistisk Sekretariat.

Tekniske rapporter nr.

52.

København 1990.

Sosial trygghet i de nordiske land.

Omfang, utgifter og finansiering 1990.

Nor- disk Statistisk Skriftserie nr.

58.

København 1992.

213 PUBLICATIONS ISSUED BY NOSOSCO Social Security in the Nordic Countries.

Scope, expenditure and financing 1990.

Booklet.

Copenhagen 1992.

Social Security in the Nordic Countries.

Scope, expenditure and financing 1990.


Statistical Reports of the Nordic Countries no.

59.

Copenhagen 1993.

Nordiskt seminarium kring statistik om service och omsorger för äldre.

Sigtuna, Sverige, 7-9 september 1992.

I samarbejde med Nordisk Statistisk Sekreta- riat.

Tekniske rapporter nr.

57.

København 1993.

Social Security in the Nordic Countries.

Scope, expenditure and financing.

Booklet.

Nordic Social-Statistical Committee.

Copenhagen 1995.

Social tryghed i de nordiske lande.


Omfang, udgifter og finansiering 1993.

Nordisk Socialstatistisk Komité nr.

1:95.

København 1995.

Social Security in the Nordic Countries.

Scope, expenditure and financing 1993.

Nordic Social-Statistical Committee no.

2:95.

Copenhagen 1995.

Social tryghed i de nordiske lande.

Omfang, udgifter og finansiering 1994.

Nordisk Socialstatistisk Komité nr.

3:96.

København 1996.

Nordisk socialstatistik 1946-1996.

Nordisk Socialstatistisk Komité nr.

4:96.


København 1996.

Social Security in the Nordic Countries.

Scope, expenditure and financing 1994.

Nordic Social-Statistical Committee no.

5:96.

Copenhagen 1996.

Social tryghed i de nordiske lande.

Omfang, udgifter og finansiering 1995.

Nordisk Socialstatistisk Komité nr.

6:97.

København 1997.

Social Protection in the Nordic Countries 1995.

Scope, expenditure and financ- ing.

Nordic Social-Statistical Committee no.

7:97.

Copenhagen 1997.


Social tryghed i de nordiske lande.

Omfang, udgifter og finansiering 1996.

Nordisk Socialstatistisk Komité nr.

8:98.

København 1998.

Social Protection in the Nordic Countries 1996.

Scope, expenditure and financ- ing.

Nordic Social-Statistical Committee no.

9:98.

Copenhagen 1998.

214 PUBLICATIONS ISSUED BY NOSOSCO Förtida utträde från arbetslivet 1987-1996.

En jämförelse mellan de nordiska länderna.

Nordisk Socialstatistisk Komité no.

10:99.

København 1999.


Social tryghed i de nordiske lande.

Omfang, udgifter og finansiering 1997.

Nordisk Socialstatistisk Komité nr.

11:99.

København 1999.

Social Protection in the Nordic Countries.

Scope, expenditure and financing 1997.

Nordic Social-Statistical Committee no.

12:99.

Copenhagen 1999.

Social tryghed i de nordiske lande.

Omfang, udgifter og finansiering 1998.

Nordisk Socialstatistisk Komité nr.

13:00.

København 2000.

Social Protection in the Nordic Countries 1998.


Scope, expenditure and fi- nancing.

Nordic Social-Statistical Committee no.

14:00.

Copenhagen 2000.

215