· web viewhave first-tier main assistance that is some mix of unemployment insurance,...

The structure and generosity of financial assistance for beneficiaries: How New Zealand compares with other OECD

countries

Michael FletcherJuly 2015

Contents

Executive Summary 3

I. Introduction 7

II. Financial assistance systems across the OECD 8Unemployment insurance Unemployment benefitsSocial assistanceCash housing assistanceAssistance to families with childrenUp-rating mechanisms

III. How New Zealand financial assistance levels compare with those of other OECD countries 13

IV. Conclusions 22

References 23

Appendix A: Data 24

Appendix B: Summary of financial assistance measures by country 25

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Executive Summary

1. Ensuring an acceptable minimum standard of living, minimising poverty and helping families manage spells of non-employment are fundamental goals of social security systems. At the same time, governments must make decisions about how they want to address the trade-off between these goals and the fiscal cost and potential work disincentives of welfare. Different countries treat this trade-off differently and use different mixes of instruments to achieve the intended outcome.

2. This report examines international experience in setting social assistance levels for beneficiaries and considers how New Zealand compares with other OECD countries. It addresses two main questions – how do different countries structure their financial assistance provisions for those not in work and how generous are New Zealand benefits compared to other OECD countries. Historical data have tended to lend support to the view that although New Zealand does not have the higher-rate unemployment insurance tier applying in most OECD countries, its minimum-assistance support was among the most generous in the OECD. For example, a 1996 OECD Economic Studies paper reports that in 1995 New Zealand’s net replacement rates for couples and single people were second and second-equal respectively among 21 OECD countries in the fourth and fifth years of unemployment (ie, after entitlement to insurance had expired) (Martin, 1996, p102). A key purpose of this report is to assess the extent to which that view is still justified.

3. The analysis is based on 2012 data and descriptive information contained in the OECD’s Benefits and Wages Policy database and covers unemployment insurance, unemployment benefits, social assistance, cash housing subsidies and family or child-related benefits. It first summarises the range of policies in force across OECD countries and then uses OECD data on four model family types to assess benefit generosity in 33 OECD countries. The focus is on the unemployed able-bodied working age population – disability and age pensions are beyond the scope of the analysis, as are employment-conditional and work-related payments such as childcare subsidies and paid parental leave.

Social assistance systems across the OECD

4. All 32 countries for which details are available1 have first-tier main assistance that is some mix of unemployment insurance, unemployment benefits and/or social assistance. Earnings-related unemployment insurance schemes exist in 26 countries with a further four having flat-rate insurance programmes. Only New Zealand and Australia have no public or publicly-mandated unemployment insurance programme2 (although the UK and Ireland flat-rate schemes have only some of the characteristics of insurance programmes). Generally where unemployment insurance schemes exist they are compulsory for most employees and legal coverage rates are estimated in Europe and North America at 70 – 80 percent of the

1 Programme information for Chile is not available.2 In New Zealand and Australia insurance can be bought in the private market.

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workforce. Schemes vary considerably in design but all have some form of prior-employment or contributions requirement and all limit the maximum entitlement duration. Maximum entitlement periods vary between 5 and 36 months, with most being between 9 and 24 months. Maximum payment rates vary between 40 percent (Turkey) and 90 percent (Denmark) of qualifying prior earnings. In addition, 13 OECD countries have what the OECD classifies as unemployment benefits. These are either lower-rate extensions of unemployment insurance or are, in effect, part of the minimum social assistance provisions (as, for example, in New Zealand).

5. Aside from third-tier and emergency provisions (which are not covered in this report) social assistance provides a minimum level of income for those with no other resources. Of the countries covered in this report, only three (Greece, Italy and Turkey) have no general social assistance system. In the remaining 29 countries, social assistance payments are payable as long as the need is deemed to continue (although other conditions or obligations may also apply) and are means-tested, usually on joint spousal income. Some countries also apply an assets-test or a stand-down period related to cash savings.

6. Three-quarters of the countries covered have cash housing subsidies, typically in addition to direct State or social housing provision. The significance of housing subsidies varies considerably both in prevalence and as a component of total support (Kemp 2012). Formulae for setting housing benefits are frequently complex with different rates, maxima and minima depending on some or all of rent, location, household size and dwelling size as well as income.

7. With the exception of Turkey, all OECD countries have some form of additional assistance for families with dependent children. More than half have a universal payment, typically coupled with one or more targeted payments. It is common for payments to vary with the age of the child, usually being higher for older children except where the payment is linked to a parental leave objective to support a parent being at home when children are young. Where there are different rates for second and subsequent children these are usually lower, although a few countries pay higher rates per child for larger families. Payment levels vary from being a substantial proportion of a beneficiary’s total income package (as for example in the UK) to being minimal (eg the Slovak Republic).

8. The OECD data provides very little information on how the various assistance parameters were originally set or how they are adjusted over time. Where insurance payments are set as a percentage of earnings payments, they will adjust automatically with the individual’s earnings and it appears that in most cases insurance maxima are also increased with wage movements. The annual data show social assistance rates are typically adjusted at least annually, and it appears this is often by reference to general price increases, or in a small number of cases some weighted average of wage and price changes. There appears to be various approaches to the up-rating of housing subsidies, with some linking changes to price or benefit rate increases (Bradshaw and Finch, 2004).

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The generosity of New Zealand’s financial assistance compared to other OECD countries

9. New Zealand’s financial assistance for those with no earnings represents 33 percent of the average wage in the case of the single person ‘model-family’ type; 54 percent for a sole parent with two children; 52 percent for a couple and 58 percent for a couple with children.3

10. In the minimum-assistance situation (ie, where there is no entitlement to unemployment insurance) the level of financial assistance in New Zealand is near the OECD median for single people, sole parents and couples with children and 6 percentage points above it for couples alone. New Zealand is less generous than the majority of OECD countries if unemployment insurance is included in the comparison (and at the rate applying at the beginning of a spell of unemployment). In the single person case, New Zealand is 31 st out of 33; for the sole parent family it is 28th; and for the couple and couple-with-children cases it is 25th.

11. Compared against those with full insurance entitlement, the gap between level of support in New Zealand and the most generous group countries is substantial. For example, in 12 OECD countries assistance is over 70 percent of the average wage in the both the families-with-children cases and in six cases this is true of all four family types.

12. On an equivalised disposable income basis New Zealand’s minimum assistance also ranks near the OECD median for the single, sole parent and couple parent families and a little above it in the couple-alone case. Equivalised assistance is similar across the four family types: 38 percent for the single person household, 42 percent for a sole parent with two children, 41 percent for a couple and 39 percent for a couple with children. These percentages are well below the commonly used 50 percent of median income poverty threshold. New Zealand is by no means alone in this – and is considerably more generous than some OECD countries – but it is notable that there are six OECD countries (Denmark, Finland, Iceland, Ireland, Netherlands and the UK) that have minimum assistance that is above this threshold for at least three family types (and in a few cases are above 60 percent).

13. To summarise, New Zealand’s minimum financial assistance for beneficiaries is mid-ranked across the OECD as a whole. New Zealand is more generous than most of the ex-Soviet bloc and the Southern European countries but is on the low side compared to the Western and Northern European and Anglophone countries. Moreover, taking into account the unemployment insurance schemes which exist in nearly all other OECD countries further raises the effective level of income an unemployed person will receive over a spell of without work. Using the OECD approach of averaging the level of support applicable across each month of unemployment implies the effective generosity of New Zealand’s system lies

3 The OECD estimates assume the household has no market income, receives all housing and child-related assistance it would be eligible for and that the earner had an unbroken work (and insurance contributions) history with earnings equal to the average wage. Calculations, which are net of income tax and social security contributions, are expressed as both a percentage of the countries’ average wage and its median equivalised disposable income. The average wage comparisons analyse the situation when the individual is first unemployed (and receiving unemployment insurance in countries that have it) and after 60 months when eligibility for insurance would have expired and the person would be on minimum assistance. In the median disposable income case the numerator is also equivalised to standardise across family structures.

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somewhere between the short- and long-term situation, that is somewhere broadly-speaking between the median and bottom quartile compared to other OECD countries.

14. Focusing only on Australia, the UK and Ireland, the three comparable countries that also have flat-rate systems shows New Zealand levels of assistance are broadly similar to Australia’s but less generous than either the UK or Ireland. Ireland’s higher levels of support are the result of higher first-tier benefits, while the UK has lower main benefits than does New Zealand (or Australia and Ireland) but compensates through larger housing assistance.

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I. Introduction

15. Ensuring an acceptable minimum standard of living, minimising poverty and helping families manage spells of non-employment are fundamental goals of social security systems. At the same time, Governments must balance the trade-offs between the level of financial assistance and the fiscal costs and potential work disincentives of welfare. The purpose of this report is to examine international experience in setting social assistance levels for beneficiaries and to consider how New Zealand compares with other OECD countries. It addresses two main questions – how do different countries set and structure their social assistance provisions for those not in work and how generous is New Zealand’s social assistance relative to other OECD countries.

16. Developed countries’ social assistance systems are complex and highly detailed. To maintain focus and manageability it has therefore been necessary to narrow the scope of the report. The emphasis is on investigating the major components of cash assistance to able-bodied working age people, specifically unemployment insurance, unemployment benefits, minimum social assistance for those not eligible for unemployment-related support, family or child-related assistance and cash housing benefits. Supplementary and discretionary support is not considered.4 In addition, the focus is on those who are wholly dependent on benefit, so in-work assistance, abatement regimes, childcare and out-of-school care subsidies are not covered. Also generally out of scope are wider features of welfare systems (eg, health subsidies and services) and labour market regulations (eg, redundancy payments), even though these may play a significant role in determining the overall standard of living of beneficiaries and their dependents. Workers compensation, accident insurance and support for the permanently disabled are also not considered in detail.

17. The data and information are drawn from three inter-related OECD sources: The country-by-country programme descriptions collated by the OECD, the programme-by-programme summary spreadsheets and the OECD’s calculations of the level of payments as a percentage of average wages and disposable incomes.5

18. The report is structured as follows. Section II summarises the structure of the major financial assistance provisions across OECD countries. It also reports the available information on how countries adjust assistance levels over time. Section III uses 2012 OECD data to examine the relative generosity of OECD country assistance and how New Zealand compares. A ‘model family’ approach is used investigating assistance for four family types – singles and couples, with and without dependent children. Section IV provides brief conclusions. Appendix A contains the data used in Section III and Appendix B summarises the main characteristics of each country’s programmes, such as eligibility, payment rates, maxima, minima and means-testing provisions.

4 At the individual level between-country variations in third-tier supplementary payments will have some effect but on average their contribution will be small. In New Zealand, hardship assistance comprises less than five percent of total working age welfare expenditure. Neither Immervoll (2010) nor Immervoll et al (2015) include third-tier assistance in their analyses.5 See http://www.oecd.org/els/soc/benefits-and-wages.htm

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http://www.oecd.org/els/soc/benefits-and-wages.htm

II. Financial assistance systems across the OECD

19. Although social security systems can be situated within broader welfare state ‘regimes’ or ‘types’ (eg, Esping-Andersen 1990; Korpi and Palme, 1998; Gough, 2001), they vary widely in the detail of their design and implementation making succinct, comparable summaries difficult. The purpose of this section is to provide contextual information summarising the diversity of financial assistance available to those without paid work in 32 OECD countries. The section describes unemployment insurance and unemployment benefit schemes, minimum social assistance programmes, cash housing subsidies and family- or child-related payments. It ends by briefly discussing the available information on how countries up-rate their payment rates over time.

Unemployment insurance

20. Thirty of the 32 countries detailed in Appendix B have unemployment insurance schemes. The two exceptions are New Zealand and Australia where, although private insurance is available in the market, there are no public or publicly-mandated schemes.

21. In nearly all countries that have them, unemployment insurance schemes are compulsory for the great majority of employees. Compulsion may be via a requirement to join a UI scheme or by way of automatic coverage of a state-provided scheme funded through a payroll tax or compulsory employer and employee levies. Only Denmark and Sweden have voluntary schemes, in both cases linked mostly to trade union membership6 (options exist in both cases to join non-union schemes). Finland has two insurance tiers, with the earnings-related component being optional. In a number of countries, casual and limited-hours part-time workers are not required to be part of a scheme (and/or are not covered). For example, Luxembourg has a minimum employment condition of 16 hours per week. Commonly, insurance is optional for the self-employed.

22. All the UI schemes have some form of prior-employment requirement before a person becomes eligible which may be expressed in terms of employment history, contributions history or both. Contributions/employment pre-conditions vary. Some have a minimum continuous membership period, such as nine months (Slovenia) or 12 months (Sweden, Japan). Most require a minimum cumulative duration of employment or contributions over a given prior period. These range from three months employment in the last 12 months (Iceland), to 12 months in the previous 24 months (eg, Austria, Portugal). A few look back over a longer period (eg, Hungary, 360 days in previous three years) and some have both employment and contributions requirements (eg Germany requires 12 months continuous prior employment and 12 months’ contributions over the past 24 months). Typically, schemes require people to re-qualify if their insurance entitlement has been exhausted by an earlier period of unemployment.

6 Sometimes known as the ‘Ghent system’.

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23. The maximum duration of UI payments varies from 5 months (Czech Republic) to three years (Iceland, Sweden), with most countries’ limits falling between 9 and 24 months. The ILO reports the average duration of entitlement among developed countries (a wider grouping than the OECD countries) as 55 weeks (ILO 2014). Understanding the implications of insurance entitlement durations is made more complex by the way many systems have different maxima for different people (eg age-related provisions) or family circumstances, or relate the rate of payment to duration of receipt. (see Appendix b for detail). In particular, twelve of the countries included in this report have step-downs in the rate of payment that are linked to duration so that the insurance payment falls closer to the minimum social assistance payment over time.7 The data presented in Section III relate to the initial, highest rate of insurance.

24. In 26 of the 30 UI schemes the rate of payment is related to prior earnings. The exceptions are UK, Ireland, Poland, and Greece. The UK and Ireland have flat-rate unemployment insurance payments payable at the same rate as unemployment/social assistance (but not means-tested against spousal income). Poland and Greece have flat rates which apply for a period before reverting to reliance on lower-rate unemployment assistance (Greece) or social assistance (Poland). The highest replacement rate is in Denmark, which pays 90 percent of previous gross earnings after deduction from earnings of eight percent social security payments. The lowest (initial) rate, 40 percent, is in Turkey. Most pay between 50 and 70 percent of earnings initially, with lower rates cutting in at between around three and nine months in the case of countries that have step-downs. A number of countries pay a higher rate where the insured has dependent children and a few countries pay more in cases of redundancy8 or have add-ons for retraining, job mobility, etc.

25. With one exception, all countries with UI systems place a cap on the maximum amount that can be received. The exception is Finland, which has a reduced rate of payment (20 percent) for earnings above a certain level. Capping is done either by setting a maximum insurable amount of earnings or by directly limiting the payout (and the levies). In some cases the cap is set as a percentage of average earnings, in others it is a specified amount. In a few countries the cap is a multiple of the basic social assistance payment (eg Portugal) or some other needs-based reference amount. Of the 26 countries with earnings-related rates, 16 have maxima between one-third and two-thirds of the average wage while 10 have higher maxima.

26. It is difficult to get accurate measures of the coverage of unemployment insurance schemes. Very few of the OECD country reports cite a coverage figure or UI membership rate. (An exception is Denmark, which estimates their voluntary scheme covers 90 percent of the workforce.) Workers with intermittent or casual employment and new labour market entrants will not generally meet the eligibility requirements and residency and other rules

7 In some instances, depending on prior earnings and other factors, UI payments can fall below the basic SA payment, which then becomes a top-up or alternative to UI receipt. 8 This report does not include analysis of the impact of redundancy payments but note that Ozkan (2010) argues that in some of the apparently less generous Southern European countries (particularly Spain, Portugal and Italy), redundancy payments are a widespread requirement and represent a significant component of assistance to the unemployed.

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such as minimum-hours requirements will affect others. ILO data suggest that in Europe (including Central and Eastern European countries) and North America legal coverage of unemployment insurance schemes is between 70 and 80 percent of the workforce (ILO REFERENCE). “Effective coverage”, measured as the ratio of current UI recipients to current unemployed is however much lower at 30 to 40 percent, due (among other reasons) to the combined effects of ineligibility and the time limits on insurance entitlements.

Unemployment benefits

27. Thirteen countries have what the OECD classifies as unemployment benefits or unemployment assistance separate from social assistance. The OECD includes in this group New Zealand, Australia, Ireland and the UK, which have flat-rate unemployment benefits that are best thought of as part of their core categorical social assistance system. Two others, France and Germany, also have unemployment benefits that are set at the same rate as is payable to a comparable individual/family on social assistance, while Greece has a flat rate UA payment (lower than UI) but no general social assistance provisions. The remaining six countries (Austria, Estonia, Finland, Hungary, Portugal and Sweden) have UA programmes paid at rates that are lower than UI but higher than the social assistance for other beneficiaries. These six “in-between” UA programmes fall into two categories: they are either like unemployment insurance, subject to an individual income-test as UI and time limited (Estonia and Hungary) or are like social assistance, unlimited (or renewable) but subject to a joint spousal income test (the other four).

Social assistance

28. Aside from third-tier temporary or emergency provisions, social assistance (SA) provides a minimum level of income for people with no other resources and as such play a major role in determining the country’s Social Protection Floor (Immervol, Jenkins and Konigs, 2015 p7). Of the 32 countries covered in Appendix B, only Greece, Italy and Turkey have no general social assistance system (and of these, only Turkey has neither cash housing assistance nor general child-related payments). 9 10 In all 29 of the remaining countries, social assistance payments are payable for as long as the need is assessed to still exist. (Recipients may also be required to meet other conditions.) Where other benefits, including unemployment insurance, are insufficient, social assistance is often (although not in all cases) available as a top-up (Immervoll, 2010, p11).

29. All the SA programmes are means-tested, usually on joint spousal income. A minority of countries also apply an assets test, either in the form of a cash assets eligibility cap (e.g. UK), a needs-test which considers access to all forms of resources (e.g. Chile) or indirectly via a stand-down period dependent on cash savings (Australia) (OECD, 2014).

9 Greece, Italy and Turkey all have age and disability/injury pensions10 The OECD includes the US Supplemental Nutritional Assistance Programme (SNAP), informally known as ‘food stamps’ as a social assistance payment.

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Cash housing assistance

30. Most countries’ social housing policies involve a mix of both supply-side housing provision and demand-side cash housing subsidies. The focus here is restricted to cash subsidies, although it is important to acknowledge that subsidised housing provision may be a significant element of the assistance package for beneficiaries in some countries.11

31. Stand-alone cash housing benefits exist in nearly all OECD countries (see Appendix B). Significant exceptions include Belgium, Canada (which incorporates housing assistance into its social assistance programme) and Spain and Italy, which rely primarily on means-tested tax relief. With the exception of Japan (where housing assistance is linked to employer-employee negotiations (Bradshaw and Finch, 2004), OECD countries’ housing benefits are all income-tested and most also vary with either or both household size and number of children.

32. Formulae for setting housing benefits are frequently complex, with different rates, minima and maxima depending on some or all of rent, location, household size, and dwelling size as well as income. Some countries link the amount of subsidy to actual rent while a few have standardised rates.

33. The significance of housing benefits as a component of income support is analysed by Griggs and Kemp (2012). They report that, across 15 EU countries, the proportion of tenant households receiving housing benefits varies from over 50 percent (France and Finland) to 2.3 percent (Spain and Portugal). Their analysis also shows that housing benefits’ contribution to recipients’ residual or after-housing costs disposable income is highly variable. Among the EU15 in the study, it is greatest in Britain and Sweden, and lowest in Italy, Germany and Ireland. Immervoll et al (2015) also highlight the contribution housing subsidies make to minimum assistance package in some countries.

Assistance to families with children

34. With the exception of Turkey, all the OECD countries covered in this report have some form of additional assistance for families with dependent children. The majority of countries have a universal family/child payment component, typically coupled with a targeted payment.

35. It is reasonably common for payment rates to vary with the age of the child, usually higher for older children, unless the payment is linked to a parental-leave objective to support a

11 A recent OECD Working Paper notes that “in a number of countries social housing accounts for the majority of the rental sector (e.g. Czech Republic, the Netherlands, Austria, the Nordic countries, the United Kingdom, Ireland and Poland), while in a few others social/public housing only plays a minor role in supplying housing to citizens (e.g. Portugal, Hungary, Luxembourg and Switzerland).” (Andrews et al, 2011, p16). New Zealand is at the low end of range for social housing provision.

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parent to be at home when children are young. Frequently there are different rates of payment for second and subsequent children, although there appears to be little consistency in the ratios across countries and in fact some countries apply negative economies of scale, paying a higher rate for subsequent children (eg Greece, France). Payment levels vary from being a substantial proportion of the total beneficiary minimum income package (the UK is one example) to being minimal (eg the Slovak Republic). Delivery of assistance for children is often, but by no means always, through the tax system.

36. Some countries build a loading into their child or family payments as part of their support for sole parent families while others have separate main benefit entitlements for sole parents, with a youngest child below a specified age. A few countries (eg, Ireland) have a sole parent payment similar to a main unemployment benefit but deliver it through a separately named sole parent family support payment. In European countries it is common for assistance for sole parents to be linked to the Child Support system by way of a child support ‘guarantee’. That is, support for children where parents are separated is expected in the first instance to be provided by the non-resident parent but where that parent does not pay or not in full, the State system guarantees the payment and then pursues the liable parent for the amount owing. New Zealand is also unusual in its Child Support system in that it still has full ‘claw-back’ of child support payments made in respect of children whose primary carer is on a sole parent benefit. (That is, New Zealand has no system of full or partial pass-on of child support payments to these children, except for any part of the child support payment that exceeds the total core benefit payment.)

Up-rating mechanisms

37. The OECD data and the country-by-country descriptions provide only limited information on how the various assistance parameters are adjusted over time. In respect of unemployment insurance, obviously, where set as a percentage of prior earnings, actual payments will adjust automatically with a person’s wages over the reference period. It appears, although the available information is not explicit, that typically insurance maxima are adjusted to maintain relativity with average wages. It is not clear whether countries that have a minimum insurance rate also index this to wage changes. In a number of cases, there is no minimum rate of insurance payment and social assistance provides a top-up if needed.

38. There is also little collated information available through the OECD regarding how countries have arrived at the basic rates of payment for social assistance and how these are uprated. One or two of the country descriptions indicate categories of costs the payments are intended to cover (eg, winter heating, an annual holiday) but how this is arrived at is unclear. In a few cases, rates are explicitly linked to other rates (eg, in Hungary the single rate of SA is set at 80 percent of the single age pension), but the basis for determining the primary rate is not specified. With respect to up-rating, the annual data show that in general core rates are increased at least annually and it appears this is often by reference to general price increases. In one or two cases the country descriptions note that a weighted average of wage and price movements is used (and in Luxembourg changes in social assistance rates are tied to changes in the statutory minimum wage).

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39. Regarding cash housing subsidies, Bradshaw and Finch (2004, Table 1, p90) report on uprating mechanisms for 18 OECD countries. The information is limited (and dated) but shows no consistency of approach. A number of countries (including, Denmark, Finland, Norway, UK) adjust rates annually, typically according to either changes in general prices or in line with other welfare benefit increases. Several countries are recorded as uprating by ‘government [or Ministerial] decision’ but it is not clear whether this is annually or from time to time.

III. How NZ financial assistance levels compare with those of other OECD countries

40. This section investigates levels of social assistance in New Zealand relative to those of other OECD countries. Before looking in detail at the OECD data by family type, it is useful to briefly consider aggregate social assistance expenditure as a percentage of GDP. Immervoll et al (2015, p13) report 2007 public social assistance data for OECD countries. The data are for all age groups and include health and ‘other’ social policy areas. Their figures show New Zealand expenditure at 18.6 percent of GDP compared with the OECD total of 19.2 percent. Restricting the areas of expenditure to cash payments only, New Zealand expenditure is 9.6 percent of GDP compared to the OECD total of 10.9 percent. Further restricting the analysis to income-tested payments shows a New Zealand figure of 3.3 percent compared to the OECD total of 3.7 percent. It should be noted however, that Immervoll et al argue that these comparisons are likely to produce a distorted picture of social assistance spending, due to variations in data quality, variations in what programmes and assistance are included and the fact that it is not possible to limit the data only to the working age population.

41. As discussed above, this paper uses a ‘model family’ approach drawing on data from the OECD’s tax/benefit modelling database. Four different household types are considered: a single person, a couple alone, a single person with two children and a couple with two children. In all cases the household is assumed to have no market income.12 The children are assumed to be four and six years old. The analysis assumes receipt of cash housing benefits13 and family or child payments the household would be entitled to. Income taxes and social security contributions payable when not in employment are subtracted to give a net disposable income before rent or other accommodation costs. Child Support receipts from non-resident parents are not included. Where entitlements vary by region the provisions applying in a ‘typical’ state or province are used. Data are for the 2012 year.14

12 And, for the purposes of calculating unemployment insurance, is assumed to have had one earner earning the average wage with an unbroken work and UI contributions history.13 A caveat is needed around the accounting for housing assistance. The OECD modeling assumption that rent is 20 percent of gross average earning (for all family types) translates to a rent of around $200 per week in New Zealand, a figure which would be low except perhaps for the single person case. More realistic housing cost assumptions would increase the level of assistance in New Zealand through higher Accommodation Supplement payments (although it would not improve the after-housing cost situation). As noted, a ‘stand-alone’ cash housing subsidy is a significant contributor to financial assistance packages in some countries and a non-existent or minor one in others. The overall impact on New Zealand’s ranking against other OECD countries of this housing cost assumption is ambiguous as it is unclear how many countries would rank higher and how many lower if country-specific accurate housing cost assumptions were used.

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42. A critical issue in comparing support across countries is the choice of denominator: what should the level of support be expressed as a proportion of? An earnings-based comparator, such as the average wage, is most relevant if the central question is how income available to an unemployed household compares with what it (or a similar household) would receive when in work. If the main focus is on poverty or the living standards of beneficiary households relative to others in the community then equivalised median household incomes are a more appropriate comparator. Demographic, labour market and other factors may all influence differences between the two measures. Policy may also have an effect since, for example, tax, tax credit and other social assistance measures available to working people will be captured in the median incomes measure but not included in average earnings.

43. The approach taken in this report is to consider both earnings and incomes comparators, using the OECD’s estimates. For the earnings comparison the average wage of full-time workers is used. Although the median wage would have the advantage of being less skewed by upper-end earnings, comparable median wage data are not available. For the incomes-based comparisons the denominator is the equivalised median disposable income in each country. The equivalisation scale used is the square root of the number of people in the household and is applied to both the numerator and the denominator, meaning that the percentages can be compared against relative poverty measures. This approach is similar to that taken by Immervoll (2010) and Immervoll et al (2015).

44. Figures 1 and 2 compare the assistance for the four family types with 32 other OECD countries using the average wage and median disposable incomes comparator respectively. For the average wage comparison Figure 1 shows both the situation at the beginning of a spell of unemployment (after any short stand-down period which might apply) and after the 60th month (ie, beyond the maximum duration of unemployment insurance). Figure 2 shows only the minimum assistance situation, as data for the with-insurance case are not available.

45. Looking first at Figure 1, New Zealand’s financial assistance for those with no earnings represents 33 percent of the average wage in the case of a single person; 54 percent for a sole parent with two children; 52 percent for a couple and 58 percent for a couple with children.

46. In the initial stage of unemployment (and assuming entitlement to insurance where relevant) New Zealand is less generous than the majority of OECD countries. In the single person case, New Zealand is 31st out of 33; for the sole parent family it is 28 th; and for the couple and couple-with-children cases it is 25th. For those with full insurance entitlement, the gap between level of support in New Zealand and the most generous group countries is substantial. For example, in 14 OECD countries assistance is over 70 percent of the average wage in the both the families-with-children cases and in five cases this is true of all four family types.

47. In the minimum-assistance situation, the level of financial assistance in New Zealand ranks near the middle of the OECD. Expressed as a percentage of the average wage, New Zealand

14 The OECD is due to release more up-to-date data shortly (Sean Gibson, Social Policy Division OECD, pers. comm. 5 March 2015).

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is near the OECD median for single people (18th), sole parents (16th) and couples with children (17th) and 6 percentage points above it for couples alone (11th).

Figure 1: Financial assistance for non-employed by family type, as percentage of average wage

(a) Single person, no children

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(b) Sole parent, two children

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Figure 1 (cont): Financial assistance for non-employed by family type, as percentage of average wage

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(d) Couple, two children

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Source: OECD Tax-benefit database (see text for modeling assumptions)

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48. On an equivalised disposable income basis New Zealand’s minimum assistance is similar across the four family types: 38 percent for the single person household, 42 percent for a sole parent with two children, 41 percent for a couple and 39 percent for a couple with children.

49. As with the average wage comparison, using median incomes as a comparator New Zealand ranks near the OECD median. It is 17th in the single person case, 15th for sole parents, and couples alone and 16th for couples with two children. In common with most OECD countries, New Zealand’s financial support falls well below the 50 percent of median incomes poverty threshold. There are however five OECD countries (Denmark, Iceland, Ireland, Netherlands and the UK) that have minimum assistance that is above this threshold for at least three family types (and in a few cases are above 60 percent). At the other end of the scale, the least generous provide assistance that is near to or less than 20 percent (and in Italy and Turkey there is no general minimum assistance, while Greece only provides any assistance where children are involved).

50. A notable feature of Figure 2 (and see Appendix A) is that there are not great differences across family type when looking at minimum income support. Broadly speaking, countries that are relatively generous for singles are also generous to couples and to both sole parents and couples with dependent children. Japan, Canada, USA and Chile are perhaps exceptions in that they are more generous to those with dependent children than to those without. Israel and Hungary are also ‘unequal’ (at least using this equivalence scale), being somewhat more generous to sole parent households than to others . These cases are however the exceptions, in general, whether the additional costs of extra household members are provided for in main benefits, housing assistance, family payments or a mix of all three, most countries achieve reasonably equal levels of minimum assistance across family types.

18

Figure 2: Financial assistance for non-employed by family type, as percentage of equivalised median incomes

(a) Single, no children

0

10

20

30

40

50

60

70

(b) Sole parent, two children

0

10

20

30

40

50

60

70

19

Figure 2: Financial assistance for non-employed by family type, as percentage of equivalised median incomes (cont)

(c) Couple, no children

0

10

20

30

40

50

60

70

(d) Couple, two children

0

10

20

30

40

50

60

70

Source: OECD Tax-benefit database (see text for modeling assumptions)

20

How the level of New Zealand’s financial assistance compares

51. Taken together, Figures 1 and 2 imply New Zealand’s minimum financial assistance for beneficiaries is mid-ranked by OECD standards. On both measures minimum financial assistance across all four family types is about average - close to the median of the 33 OECD countries covered here. New Zealand is more generous than most of the ex-Soviet bloc and the Southern European countries but on the low side compared to Western and Northern European countries.

52. Moreover, the prevalence of more generous unemployment insurance schemes in most other countries implies that the average level of assistance in New Zealand is effectively lower than median. In more than three-quarters of OECD countries, most people will be eligible for unemployment insurance paid at a higher rate than minimum assistance. In these cases, the level of assistance available over a spell of non-employment will be a weighted average of the rate(s) payable while on unemployment insurance and the rate received during the time (if any) spent on minimum assistance. By comparison, in New Zealand the entire spell will be spent on minimum assistance. As noted above, although we do not have precise coverage data, in most European countries, legal coverage of unemployment insurance programmes is between 70 and 80 percent, suggesting that a considerable proportion, probably a majority, of people entering unemployment would receive at least some insurance payments. The impact will often be substantial. To give an example, on social assistance a single person in New Zealand receives 33 percent of the average wage, about the same as the 35 percent s/he would receive in France. 15 If however in France that person qualified for six months’ unemployment insurance (the maximum period is 24 months), then over a one-year unemployment spell his/her assistance package would rise to an annualised equivalent of 50 percent of the average wage. In terms of the data in Figure 1, therefore New Zealand’s ranking relative to other OECD countries is more accurately seen as falling somewhere between the short- and long-term situation, that is somewhere between the median and bottom quartile compared to other OECD countries.

53. A second important difference is that countries with unemployment insurance (including the flat-rate insurance in the UK and Ireland) are effectively more generous than New Zealand towards couples because unemployment insurance is not subject to a spousal income test. Unlike in New Zealand, couples will continue to receive the insurance element of assistance even if the recipient’s spouse is in employment. In a world where it is common for couples, including couples with children, to both work, this is likely to make a significant difference to the overall cost to the couple of a spell of unemployment experienced by one partner.

54. It is useful to compare New Zealand to Australia, the UK, and Ireland – the other main countries that do not have an earnings-related insurance scheme. New Zealand is considerably less generous than Ireland and the United Kingdom in all cases. In both countries minimum assistance exceeds the 50 percent median disposable income threshold for all family types (and the 60 percent one in four cases) with the exception of couples alone in the UK for whom the figure is 49 percent. In contrast minimum assistance in Australia is broadly comparable to New Zealand and, like New Zealand, is below the 50

15 Using the same OECD assumptions as above.

21

percent mark for all families and about average for the OECD as a whole. Australia’s assistance is less generous than New Zealand’s when expressed as a percentage of average earnings, due presumably to higher average earnings in Australia.

55. There are notable differences between Australia and New Zealand on the one hand and UK and Ireland on the other in the composition of the package of assistance. Figure 3 shows each country’s assistance by component as a percentage of the equivalised (one-person household) median income. 16 Unlike Figure 2, the numerators (the assistance amounts) are not equivalised so as to show the increased payments for additional household members.17 As Figure 3 shows, Ireland achieves its high rankings primarily through relatively generous first-tier payments. The UK, on the other hand, has lower main benefits rates than New Zealand (or Australia and Ireland), but compensates through much larger housing benefits.18 New Zealand’s Family Tax Credit for beneficiary families is also less generous than either the UK’s or Australia’s family assistance payments.

Figure One: The components of assistance to beneficiaries as a percentage of equivalised median income, by household type, Ireland, the United Kingdom, Australia and New

Zealand, 2012

Ire UK Au NZ Ire UK Au NZ Ire UK Au NZ Ire UK Au NZsingle SPw2ch Couple CoupleW2ch

0%

20%

40%

60%

80%

100%

120%

Family

Housing

Main Benefit

Source: OECD Benefits and Wages Policy database (www.oecd.org/els/social/workincentives)

16 In Ireland, the first tier payment for sole parents is bundled up in the sole parent family payment, but is the same as the single person rate. Aaustralia does the same (or at least, its payment is recorded this way in the OECD data).17 Note that the component-by-component data in Figure 3 come from a different OECD source and there are some differences from those in Figure 2. 18 The data used here pre-date the recent UK social housing reforms, including the ‘bedroom tax’. Plus, as mentioned in Section II, the OECD modelling probably understates NZ housing assistance (although it may also do the same in respect of UK if typical rents there also exceed 20 percent of gross average earnings.

22

IV. Conclusions

56. The primary objective of this report is to compare the generosity of New Zealand’s benefit system with those of other OECD countries. Historical data have tended to lend support to the view that although New Zealand does not have a high-rate unemployment insurance tier, its minimum-assistance support was among the most generous in the OECD. For example, a 1996 OECD Economic Studies paper reports that in 1995 New Zealand’s net replacement rates for couples and single people were second and second-equal respectively among 21 OECD countries in the fourth and fifth years of unemployment (ie, after any entitlement to insurance had expired) (Martin, 1996, p102).19

57. The results reported in Section III above show that this is no longer the case. New Zealand’s minimum financial assistance for beneficiaries now ranks about the middle of the 33 OECD countries covered here. It is more generous than the majority of the Southern European and ex-Soviet bloc countries but ranks relatively poorly against the Western and Northern European countries in particular. This ranking is broadly consistent across both average-earnings and median-disposable-incomes measures.

58. If unemployment insurance is taken into account New Zealand’s relative position declines further. Twenty-six of the 33 OECD countries have earnings-related unemployment insurance schemes that provide a higher level of income replacement for a limited period of time (which varies across countries between 5 and 36 months). In many countries legal coverage of these schemes is estimated to be between 70 and 80 percent. Comparing New Zealand against the rest of the OECD on the assumption of entitlement to insurance and at the beginning of the unemployment period, New Zealand ranks between 25 th and 31st out of 33 across the four family types considered here. Following the OECD approach of averaging across the level of support applying in each month of unemployment, implies that New Zealand’s effective benefit generosity lies somewhere between the median applying in the minimum assistance case and the lower quartile ranking applying in the with-insurance situation.

59. Finally, across the four family types considered in this report (and based on the OECD’s modeling assumptions), New Zealand’s minimum assistance support equates to between 38 percent and 42 percent of equivalised median disposable incomes. These percentages are well below the commonly used 50 percent of median income poverty threshold. New Zealand is by no means alone in this – and is considerably more generous than some OECD countries – but it is notable that five OECD countries have minimum assistance support that exceeds this threshold in at least most cases.

19 Average pre-tax replacement rates across two earnings levels, average earnings and thw-thirds average earnings.

23

References

Andrews, D., Caldera Sanchez, A. and Johansson, A. (2011). Housing markets and structural policies in OECD countries, Economics Department Working Paper No. 836, Paris: OECD.

Bradshaw, J. and Finch, N. (2004). Housing benefits in 22 countries, Benefits, 10(2), 87-94.

Esping-Andersen, G. (1990). The three worlds of welfare capitalism, Cambridge: Polity Press.

Gough, I. (2001). Social assistance regimes: a cluster analysis. Journal of European Social Policy, 11(2), 165-170.

Griggs, J. and Kemp, P. (2012). Housing allowances as income support: Comparing European welfare regimes. International Journal of Housing Policy, 12(4), 391-412.

ILO (2014). World Social Protection Report 2014/15. (retrieved from: http://www.ilo.org/global/research/global-reports/world-social-security-report/2014/lang--en/index.htm).

Immervoll, H. (2010). Minimum-income benefits in OECD countries: Policy design, effectiveness and challenges, OECD Social, Employment and Migration Working Papers, No 100. Paris: OECD.

Immervoll, H., Jenkins, S. P. & Konigs, S. (2015). Are recipients of social assistance ‘benefit dependent’? Concepts, measurement and results for selected countries. OECD Social, Employment and Migration Working Papers, No. 162. Paris, OECD.

Martin, J. P. (1996). Measures of replacement rates for the purposes of international comparisons: A note. OECD Economic Studies, No. 26. Paris: OECD.

Ozkan, U. (2014). Comparing formal unemployment compensation systems in 15 OECD countries. Social Policy and Administration, 48(1), 44-66.

OECD (2014). Taxing wages: Annex: Methodology and limitations, Retrieved from www.oecd.org/ctp/tax-policy/Taxing-Wages- Methodology -2014.pdf . Paris: OECD.

24

http://www.oecd.org/ctp/tax-policy/Taxing-Wages-Methodology-2014.pdf

http://www.ilo.org/global/research/global-reports/world-social-security-report/2014/lang--en/index.htm

http://www.ilo.org/global/research/global-reports/world-social-security-report/2014/lang--en/index.htm

Appendix A: Data

Single person

One-earner

married couple

Lone parent

One-earner

married couple

Single person

One-earner

married couple

Lone parent

One-earner

married couple

Single person

Married couple

Lone parent

Married couple

Australia 28 46 51 57 28 46 51 57 36 41 46 45

Austria 55 56 67 75 51 52 65 75 42 40 48 48

Belgium 65 56 68 59 52 49 64 57 40 38 46 38

Canada 63 67 84 85 23 36 55 61 22 26 37 35

Chile 56 56 61 61 3 7 18 21 8 11 20 21

Czech Republic 71 69 72 68 37 47 51 59 46 42 37 40

Denmark 62 76 77 95 58 48 71 68 60 61 57 61

Estonia 55 56 60 60 24 31 37 43 30 29 31 31

Finland 57 66 77 76 45 60 61 76 53 50 48 48

France 66 67 71 68 35 40 47 52 38 36 37 36

Germany 59 59 71 74 35 46 56 62 43 46 51 51

Greece 26 27 31 31 0 0 9 3 0 0 8 2

Hungary 46 47 59 58 18 19 30 30 22 17 29 24

Iceland 64 69 76 77 49 65 63 74 52 56 44 50

Ireland 51 74 63 81 52 80 63 91 61 65 54 61

Israel* 90 90 87 90 18 36 51 48 26 36 50 36

Italy 56 60 69 70 0 0 0 0 0 0 0 0

Japan 52 72 74 74 43 60 81 83 41 43 58 53

Korea 43 42 43 41 16 26 35 40 26 31 34 35

Luxembourg 85 82 91 89 46 59 61 71 45 46 43 47

Netherlands 75 78 73 87 52 65 57 73 66 59 53 49

New Zealand 33 52 54 58 33 52 54 58 38 41 42 39

Norway 65 66 77 71 38 54 58 71 41 43 42 43

Poland 50 52 70 55 21 29 40 51 24 24 29 33

Portugal 75 75 77 76 17 24 32 37 23 24 27 28

Slovak Republic 65 59 93 58 19 29 38 41 18 21 24 24

Slovenia 66 70 77 75 34 48 60 63 28 29 40 39

Spain 58 58 72 72 23 28 32 32 30 28 27 24

Sweden 45 53 64 63 42 53 49 63 52 45 41 42

Switzerland 74 72 86 86 47 58 55 64 57 49 44 41

Turkey** 42 42 42 42 0 0 0 0 0 0 0 0

United Kingdom 38 46 66 73 38 46 66 73 57 49 60 58

United States 45 46 47 50 6 11 29 35 8 10 23 25

No children 2 children

Net income value in % of median (equivlaised) household incomes, 2012

(with cash housing and family assistance)


Net replacement rate, 100% of AW - Long-term (60th month)


Net replacement rate, 100% of AW -Initial (immediately after any

stand-down)

25

Appendix B: Summary of financial assistance measures by country

OECD countries

Employment (E) and contribution (C)conditions

Maximum duration (months)

Payment rate (% of earnings base). Initially,

& at end of entitlement (earnings base in

brackets)

Maximum

benefit. National Currency

(% of AW)

Minimum benefit. National Currency (% of AW)

Duration (months)

% of AW

Means-tested on:

Max amount for Head of household

Max amount for partner

Max amount per child (depends on no & age)

Other components (max as % of AW in brackets)

% of AWVaries with age & # of ch?

Income test or Universal? (Suppts in brackets)

Additional for Sole parents (Max as % of AW) (NB: not all available if no earnings)

Maximum benefit amount in % of AW(3)

Depends on

Australia -- -- -- -- -- No limit 18.0 F Asset & Inc Tests. Parenting payment for ch. Partner allowance

-- -- -- 7.2 (FTB:A) & 5.7 (FTB:B)

Age & #. F. income. (FTB:B on 2nd inc only)

5.4. Higher rate of Parentng Payment, plus FTB:B if inc <$150k

5.2 HH size/type, income, rent

Austria E+C: 1 year in 2.

9 55. (Net) 16,316 (42.4)

-- No limit 39.0 F Asset & Inc Tests. Add-on for ch.

17.4 8.9 4.3 Rent 5.9 Age & #. Universal. Plus supp for low-inc Fs

0.9. Same as 'sole earner' tax credit.

8.3 HH size/type, income, rent, location, dwelling size

Belgium E+C: 468 days in 27 months.

Unlimited 60; 53.8 after 12 months.

(Gross)

15,887 (37)

10,159 (23)

20.1 6.7 3.5 - 8.5 2.9 Age & #. Universal. Tax credit if unused

-- no general scheme

Canada E+C: 595 hours in 1 year.

11 55 (Gross) 23,764 (53)

-- 15.7 11.4 1.3 - 1.4 Rent and regularly occurring special needs

3.0 + 4.7+2.5

#. 3 programmes incl provincial F. income test

up to 4.7. Sole parents receive couple rate of Tax credits


Czech Republic

E+C:12 months in 3 years.

5 65; 50 - 45 after 2 & 4

months (Net)

Approx. 167,000

(58)

-- 13.1 9.8 6.7 - 9.4 2.5 Age. Family income relative to minimum living standard.

7.3 HH size/type, income, rent, location

Unemployment Insurance Unemployment Assistance Social assistance Family/Child Assistance Housing benefits

26

OECD countries





brackets)

Maximum


(% of AW)


Duration (months)

% of AW

Means-tested on:









Depends on

Denmark E: 52 weeks in 3 years. C: membership fee. Voluntary

24 90 (Gross less 8% SSC)

195,516 (52)

160416 (43)

31.5 31.5 10.0 (1st ch.)

Rent 3.6 Universal 2.6. Child Support guarantee

10.1 HH size/type, income, rent, dwelling size

Estonia E+C: 12 months in 3 years.

12 50; 40 after 101 days (Gross)

Approx. 230,000

(150)

26,100 (17)

270 days max

8.1 Indiv Inc test 7.9 6.3 6.3 Allowance for lone parents (1.6)

2.4 #. Universal 2.4 Plus SA supplement

-- HH size/type, income, rent, location

Finland E: 34 weeks in 28 months,C: 10 months. Voluntary

23 Basic benefit (16.8% of AW) plus 45% of

earnings exceeding

basic benefit to 82% of AW

None -- No limit 16.8 F income test. Add-on for ch.

12.7 8.9 6.7 - 8.0 Rent, health care, work related expenses.

3.0 #. Universal 5.4. no means test.

15.6 HH size/type, income, rent, location, dwelling sizeFrance C: 4 months in

28 months.24 57-75 (Gross) 79,487

(227)9,829 (28) 6 months

(renewable)

15.6 F. Income 15.8 7.9 4.7 - 6.3 2.1 Age & #. Universal 4.9. income-test


Germany E: 12 months,C: 12 months in 2 years.

12 60 (Net) 38,880 (92)

-- No limit 10.2 F Asset & Inc Tests. Add-on for ch.

10.2 9.1 6.1 - 8.1 Extra allowances for additional needs, rent, heating costs.

5.2 + 4.0 #. Universal, plus inc tested supp

up to 3.1 via ax allowance. 3.7 suppt to UA. 3.8 CS guuarantee.


Greece E+C: 125 days in 14 months or 200 days in 2 years.

12 Flat rate benefit (27.1%

of AW).

-- -- Every 3 months in 3 instalments

15.4 F income test -- -- -- 0.5 #. Universal 2.6 CS guarantee

14.8 HH size/type, income


27

OECD countries





brackets)

Maximum


(% of AW)


Duration (months)

% of AW

Means-tested on:









Depends on

Hungary E+C: 365 days in 4 years.

9 60; 60% of Min Wage (Gross)

1,058,400 (42)

529,200 (21)

3 or 6 months

14.0 Indiv Inc test 12.3 11.0 8.6 - 9.8 5.8 #. Universal 0.7 higher FB rate

-- HH size/type, income, dwelling size

Iceland E+C: 3 months in the last 12.

36 Fixed rate (34.1% of AW)

for 10 days, then 70% of earnings for

65 days, then

2,911,632 (55)

448, 500 (8.5)

28.7 17.2 nil Unemployed age 18-24 living at home (14.3). Funeral

2.9 + 1.2 #. F. Income test. Supp for < 7yr olds

1.9 higher FB rate


Ireland C: 39 weeks in 1 year (or 26 "reckonable" contributions in 2 years).104 weeks contributions paid since starting work

12 Fixed amount (31.5% of AW).

-- -- No limit 31.5 F Asset & Inc Tests. 21% AW per adult + 5% per ch.

31.5 20.9 4.8 Rent/mortgage interest supplement.

5.6 #. Universal 15.8 =50% UI benefit. Income-tested. 6.0 supp to tax credit. (plus 3.0 via lower inc tax if earning)


Israel E+C: 12 months in 18 months.

6 32-80 (Gross) 96,180 (85)

-- 16.9 6.3 0.0 - 2.5 Higher rates for lone parents.

1.7 #. (-ve) Universal 9.3 Higher rate of SA


Italy(6) C: 52 weeks in 2 years.

8 60; 50 after 6 months (Gross)

12,879 (45)

-- -- -- -- 3.9 + 2.8 #. Household taxable income. Plus wastable tax credit

[amount?] via higher tax credit


Japan E+C: 6 months in 1 year (at least 11 days each month).

9 50-80 (Gross) 2,516,400 (53)

-- 21.0 11.3 6.6 - 11.5 lone-parent aid, medical & other. Child additional aid 3.3 Housing: 13.5-21.1AW

3.3 Universal. Plus supp as part of SA

10.5 supplementary lone-parent benefit via SA

-- no general scheme Incl in SA)


28

OECD countries





brackets)

Maximum


(% of AW)


Duration (months)

% of AW

Means-tested on:









Depends on

Korea E+C: 6 months in 18.

7 50 (Gross) 14,400,000 (39)

7,693,920 (21)

13.7 9.6 6.9 - 6.9 Medical care, educational, childbirth, funeral, housing

-- -- 1.6 'child raising support'


Luxem- bourg

E+C: 26 weeks in 1 year.

12 80 (Gross) 39,584 (80)

-- 29.9 14.9 2.7 Rent allowance.

5.7 Age & #. Universal 1.5 tax credit -- no general scheme

Nether- lands

E+C: 26 weeks in 36, plus 52 days in 4 of 5 years.


36,131 (80)

13,763 (30)

33.1 10.0 -- Supplement for lone parent (8.1) / annual bonus to stimulate work acceptance (municipal) (up to 5)

2.5 + 2.7 Age Universal, plus targeted top-up F. income test

2.1 wastable tax credit


New Zealand

-- -- -- -- -- No limit 24.0 F. Income test. Rates depend on F. type

-- -- -- 9.3 Age Family income.

11.0. DPB. 7.0 HH size/type, income, rent, location

Norway E+C: Earnings above a minimum level.(7)

24 62.4 (Gross) 283,199 (60)

70,800 (15)

Add-on for ch. 13.2 8.7 5.0 - 8.4 Housing benefit depending on family situation 11.2-24.7AW. Supp for heating.

2.5 Universal 32.0 if child under 4 yrs. 2.5 additional FB payment. 1.7 FB supplement.



29

OECD countries





brackets)

Maximum


(% of AW)


Duration (months)

% of AW

Means-tested on:









Depends on

Poland E+C: 365 days in 18 months and earnings > minimum wage.

12 Fixed amount 29.6% of AW; 23.2% of AW

after 3 months

-- -- 13.9 9.4 11.7 Permanent benefit depending for those permanently unable to work.

3.0 Age & #. Net income per family member.

5.6 FB supplement


Portugal E+C: 450 days in 24 months.

24 65 (Gross) 15,091 5,030 (29) 12 (after UI) or 24

23.2 F. Income 13.1 13.1 6.6 Additional adults (9.2)

3.3 Family gross income (including some benefits)

1.3 wastable tax credit plus FB supplement.


Slovak Republic

E+C: 3 years in 4 years.

6 50 (Gross) 13,207 (142)

-- 7.8 5.8 6.7 - 13.8 (1st ch. Only, plus supp if >4 ch)

Health care, housing, protective and activation allowances

2.8 Universal 13.1 income tested CS replacement/ guarantee.


Slovenia E+C: 12 months in 18 months.

9 70; 60 aftern 3 months) (Gross)

12,041 (71)

4,013 (24) 16.3 11.4 4.9 One-off extraordinary assistance for material threat

8.1 #. Gross income 0.8 FB supplement


Spain C: 360 days in 6 years.


13,046 (53)

5,964 (24) -- -- -- 18.2 5.5 3.6 -- 1.2 Gross family income.

nil --

Sweden E: 6 months in last year, C: been a member of an insurance fund for 12

35 80; 70 aftter 9 Months; 65 for

Job/Devt Guarantee

after 14 months

176,800 (48)

83,200 (23)

14 (then Job/Devt Guarantee).

22.6 Individual Income test.

12.0 7.7 5.8 - 9.6 Medical costs, transport, child care, etc. Housing

3.4 #. Universal 4.1 sole parent benefit plus CS advance payment.



30

OECD countries





brackets)

Maximum


(% of AW)


Duration (months)

% of AW

Means-tested on:









Depends on

Switzer- land

E+C: 12 months in 2 years.

18 70 (Gross) 88,200 (104)

-- 13.5 7.2 4.5 Supplement from 3rd person aged >16 (3.8).

3.5 Age. Universal nil -- no general scheme

Turkey E: 600 days in 3 yearsE+C: 120 days continuously, immediately before unemployment.

10 40 (Gross) 7,300 (34)

3,650 (17) -- -- -- -- -- nil --

United Kingdom

C: 12 months in 2 years.

6 Fixed amount (9.9% of AW).

-- -- No limit 9.9 F. income test. Add-on for spouse.

9.9 5.7 2.6 (F. supp)

-- 3.1 & 8.3 Universal plus targeted CTC

Only if working


United States

E: 20 weeks (plus minimum earnings requirement).

23 53.3 (Gross) 18,824 (41)

6, 084 (13)

5.3 4.4 4.2 -- 2.3 #. Yes 5.9 max through tax allowance if earning.

-- No federal scheme


31

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