FRANCE The

Trends
Table 3: The number of days with sickness benefit per insured by age and sex 1998-2001
Year 40-44 45-49 50-54 55-59 60-64 All ages
Women 1998 15.1 18.2 22.3 26.9 20.1 13.7
1999 18.8 22.6 27.6 33.5 27.0 17.3
2000 23.8 28.0 33.4 39.8 33.6 21.4
2001 28.3 32.2 37.9 44.0 39.9 25.0
Men 1998 9.1 11.1 14.1 19.3 17.7 8.7
1999 10.8 13.2 16.6 22.7 22.3 10.5
2000 12.9 15.8 19.4 25.6 26.8 12.5
2001 14.9 17.9 21.7 27.8 30.4 14.2
only with the new system. The most important change is that
pensions are to be more closely linked to contributions, i.e. wage
income. Another important aspect of the pension system with
relevance to the financial burden due to increases in life expectancy
is that, at the time of pensioning, the pension sum is divided by the
number of expected remaining years of life.
In the public pension system, one may choose to be pensioned (fulltime
or part-time) from the age of 61. One is free to work after 65.
Until 2003 there was no stipulation in law on the right to work until
a given age, even if 65 was considered to be the norm and was the
upper age limit in the Employment Protection Law. In January 2003
an amendment to the Employment Protection Law gave employees
the right to work until the age of 67. In 2001 the rather favourable
system of part-time pensions was abolished. As pensions in the new
system are more closely related to contributions, one should
conclude that the economic incentive to take early part-time pension
has now diminished substantially. Both these recent changes in the
pension system attempt to induce a greater participation in the
labour market. However, it is pointed out by Wadensjö (2002) that
much work among the elderly is part-time. In 2000 part-time work
accounted for 9% of employed men and 35% of employed women
aged 55-59. For the age group 60-64 the corresponding percentages
were 24% for men and 48% for women. These are large figures both
compared to other countries and other age groups in Sweden. Thus,
it is far from clear that the changes in part-time pension will result in
an increase of the employment rates.
There have been considerable changes in three of the four main
occupational pension schemes (schemes for white and blue-collar
private employees and employees of central and local government).
Palmer and Wadensjö (2003) interpret the new occupational
pension schemes as following the tendency of the public pension
system to more closely link benefits to contributions. There has been
no change in the employment requirements for full occupation
pension. This remains at 30 years to be counted after the age of 28.
Disability Pension
Since January 2003 there is a new system for disability pensions that
will apply even to those who were pensioned earlier. The new
measures involve a change of name where the word “pension” is
removed and “sickness benefit” and “activity benefit” are the terms
in the new dual system. This reflects the change in emphasis and the
administration of the new system is removed from the Pension Unit
to the Sickness Unit at the National Insurance Board. It is only
persons between the ages of 30 and 64 who may receive “sickness
benefit”. Those between 19 and 29 may receive “activity benefit”
which is always limited in time. In the previous system one could, in
Source: The National Insurance Board
principle, receive disability pension from the age of 18. The criteria
for granting the benefit are the same as before and since January
1997, only medical, not labour market, criteria are valid.
In both cases the benefit is increased but is now subject to tax and,
according to the National Insurance Board, the net amounts will
remain roughly the same, though this is a matter of some
controversy. The level of benefit is income related but with a
guaranteed basic amount for those on low incomes.
Sickness benefit
On 21 January 2003, the Minister of Employment presented new
measures in an attempt to curtail the very high levels of sickness
benefit outlined above. The number of people on sickness benefit
has increased rapidly in the last decade and this is currently the most
prominent issue of debate in the Swedish labour market. As was
seen in Table 3, those over 55 years of age are clearly overrepresented
in the sickness benefit data. The Government has set a
target of reducing the number of people on sickness benefit by 50%
by 2008. The new proposals are expected to become law in August
2003.
Currently all employers pay the first two weeks of benefit, and the
Government intends to eventually place the entire costs for sickness
benefit on the employer. The current proposal, however, will apply
to public employers only. The impact will be considerable as the
public sector accounts for just under 30% of employment and
employees in the public sector have higher rates of sickness. The
motive behind this proposal is to place incentives on employers to
improve the environment at work and so reduce sickness absence. In
return payroll taxes for public employers will be reduced. This
proposal has met with very strong opposition from employers.
Shortly before the proposal was made public, the private employer
federation withdrew from the tripartite body set up to discuss the
issue of reform of the sickness benefit system.
Other aspects of the proposal include a new institutional framework
for rehabilitation measures where the National Insurance Board is
to co-operate more closely with the National Labour Board. There
is also to be a closer medical control of sickness claims and the
authorities are to more actively examine whether sickness absence
could be part-time instead of full-time. The proposals have met with
widespread opposition.
152 Spring 2003 | European Employment Observatory Review