an international approach to getting people back to work
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The reform of long term sickness absence. an international approach to getting people back to work. Welfare to Work Convention 2011, Manchester, 1 July 2011 Hans Ouwehand, Director Calder Holding. The Netherlands pre 1990. Passive system: Generous benefits /no incentives for employers - PowerPoint PPT PresentationTRANSCRIPT
an international approach to getting people back to work
Welfare to Work Convention 2011,Manchester, 1 July 2011
Hans Ouwehand, Director Calder Holding
The reform of long term sickness absence
The Netherlands pre 1990
• Passive system: Generous benefits /no incentives for employers
• Prediction that disability benefits recipients would rise to 1 million, out of a population
of 16 million.
Prime Minister Lubbers 1990: “the Netherlands are ill”
• Employers and unions (ab)used disability legislation to enable restructures
• In times of high unemployment, people with disabilities but capable of work given full
disability benefits. Unemployment risk in disability regime.
From Hammock...
...to trampoline
Reconstruction of disability legislation
• 1994 TZ/Arbo: Employers and employees responsible for health and safety policies.
• 1996 Wublz: Employer assumes risk – 1 year sick pay at full salary
• 1998 Pemba: Differentiation of insurance premiums based on risk
• 2002 Gatekeeper legislation: Flow chart
• 2003 VLZ: Employer responsibility extended to 2 years
• 2004 Herbo: Re-assesssment of 450,000 disability benefit recipients
• 2006 WIA: New legislation for disability
Gatekeeper process
Changes
• Big incentive for employers
• Private Insurance companies get involved
• Creation of private Occupational Health and Welfare to Work market
• Occupational Health specialists and GPs brought together to agree shared standards
• Moreover: mind shift in society
Results – Disability Benefits
0
10
20
30
40
50
60
70
80
90
100
1997 1999 2001 2003 2005 2007 2009
On Flow
Off Flow
Forecasts
Unchanged policy
IWA
Dis
ab
ility
be
ne
fits
cost
s €
,0
00
Year
Results
• 2010: WAO/WIA 580,000 instead of predicted 800,000 or the dreaded 1 million
• 2009: 65% of partialy able are sustainable at work
– Gatekeeper law: on-flow fell from 100,000 to 58,000 in the years 2002-2004
(53,000 new claims and 5,000 re-opened cases) (-42%).
– Extending occupational sick pay from one to two years: 25-35% reduction, i.e.
13,000 fewer claimants.
– Stricter disability assessments: 12% reduction, i.e. 5,000 fewer claimants.
– Together, these reforms saw a 61% reduction in benefits payments
– The WIA itself led to 7,000 less benefits
Surgery Succeeded,
or did a few patients die along the way???
Down side
• Complex system with many exceptions and fragmented interventions.
• Increase of Young Disabled and disabled without an employer.
• Those who are incapacitated by less than 35% ineligible for disability benefits -
disability risk transfered to unemployment regime (reverse of the 80’s, same as in
Germany).
• Too much emphasis on retaining your current job. Decrease of mobility. “Employer
and employee are condemned to each other.”
Solution
Not another reconstruction but recognition of the drawbacks:
• Attention for young disabled and employees without an employer.
• More focus on mobility to other employers/sectors.
• Integrated and early stage approach to back to work interventions.
The journey to ESA
• 300,000 people claiming sickness-related benefits flow onto ESA each year
(50% of total)
– Majority mental health/musculoskeletal conditions
– Low-skill/low paid jobs over-represented
– SMEs over-represented
• No significant incentive for employer
– Minimum liability £81.60 per week x 28 weeks = £2,285
• SMEs don’t know how to support workers back to work – and are worried about
privacy and being seen to be harassing workers
The journey to ESA
• Attention for young disabled and employees without an employer.
• More focus on mobility to other employers/sectors.
• Integrated and early stage approach to back to work interventions.
Learning lessons
Different starting points
• Netherlands: generous, insurance–based system, linked to individual incomes
– Insurers play an influential role, politically and socially.
• UK: universal entitlement, limited protection
– Limited contributions–based support via National Insurance
– Few employees covered by voluntary income insurance
Key elements for success
• More incentives for employers, employees and insurance companies helps
• Employers must play a role in employee lifestyle and health
• Bring together all organisations that stand to lose from sickness/disability
absence – e.g., defined benefit pension schemes/NHS/health insurers
• Culture shift needed – employers, individuals, medical practitioners, government.
Hypothesis 1
The UK and The Netherlands have a different socio-economic context. Being effective and
successful in battling long term sickness absence in the UK presupposes a different set of incentives for employers and employees.
20
Hypothesis 2
Getting other stakeholders than employers on board is key to success.
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Hypothesis 3
At the end of the day, the focus has shifted from curative to preventive
action. A mindshift needs to be brought about with employers and employees,
i.e. society.
22
Hypothesis 4
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What the UK needs is not so much ‘Welfare to Work’ as
‘Welfare through Work’. Nothing keeps a person healthier and
happier than work.