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

amy

can we have the new one pls?

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.

21

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

23

What the UK needs is not so much ‘Welfare to Work’ as

‘Welfare through Work’. Nothing keeps a person healthier and

happier than work.