OECD demands more reforms to disability scheme

Disabled people need to get back to work says the OECD Keystone

The Organisation for Economic Cooperation and Development (OECD) has called on Switzerland to pursue reforms of its invalidity benefit system.

The scheme, which is undergoing its fifth revision, needs to provide more incentives to get people off benefits and back into work.

The OECD’s remarks were contained in a report released on Tuesday comparing invalidity insurance schemes in Poland, Norway and Switzerland. The organisation plans to review nine other countries’ systems in the near future.

The main problem encountered in all three states was a tendency to transfer some workers out of the job market and into the invalidity benefit system.

“Unemployment has been dropping in most countries, while the number of people receiving disability benefits has risen,” said OECD analyst Christopher Prinz in Bern.

Not enough attention is being paid either to getting people off benefits and back into the job market.

“The results of Swiss policies so far have been only partially successful,” said the OECD experts. The number of people receiving new disability benefits has fallen over the past two years, but this decline is insufficient to reduce the overall number of beneficiaries.

Long term

The OECD also sees further issues in the longer term. It says that to ensure that there are enough workers to sustain the social security system as the population gets older, the authorities will have to find ways of getting people with health problems back to work.

Around half the people receiving invalidity benefits in Switzerland are unemployed. However, compared with other OECD countries, the Swiss do better than most.

The benefits paid out to people suffering from disabilities are also considered to be another contentious point.

While the sums received have increased over the past few years, the number of invalids living below the poverty line has risen likewise.

Mental health

Switzerland’s invalidity insurance scheme is blighted by the growth of the number of people suffering mental problems. Around 40 per cent of new beneficiaries fall into this category. According to the OECD, this is because the authorities are using disability benefits to deal with social and unemployment issues.

In its report, the organisation said this could be due to “weaknesses in the definition of disability and in the assessment and rehabilitation process”. Its experts admit that the latest revision of the invalidity scheme could improve the situation.

But they add that the reform would have a bigger impact if sick people were dealt with sooner. Health insurers and employers need to be given more incentives to get workers back into jobs.

Employers could, for example, be forced to draw up reinsertion programmes for employees suffering from long-term problems, as is already the case in a number of OECD countries. They could also take on a share of the costs associated with untreated health conditions.

Beneficiaries of invalidity benefits should also be given more incentives to rejoin the workforce.

However, the OECD is not suggesting that companies have mandatory quotas of disabled employees.

swissinfo with agencies

Key facts

The mandatory state invalidity benefit scheme was set up in 1959.
The scheme is financed by a 1.4% deduction from salaries. The federal authorities provide additional funding.
5.2% of the population was eligible for invalidity benefits in 2004 against 3.2% in 1992.

Revision underway

The Swiss invalidity benefit scheme plunged into the red in the early 1990s. Recent figures showed a SFr1.7 billion deficit, with debts totalling SFr7.8 billion.

The government has made proposals with its fifth major revision of the scheme to put an end to the chronic deficits. It wants a 20-per-cent drop in the number of new applicants and candidates should face tougher screenings.

The proposed measures also focus on the re-integration of claimants into the job market both by putting more pressure on the individuals concerned and by effectively lowering payments.

The centre-left Social Democratic Party and the trade unions describe the reform as unfair, because it puts the onus for re-integration mainly on benefit claimants and not on employers and companies.

The rightwing Swiss People’s Party has, on the other hand, criticised the amendments as being too weak. It said the perceived abuses of the social security could only be stopped by tougher measures.