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The Eqitable Redistribution White Paper

On the distribution of income and living conditions in Norway. Summary of White Paper no. 50, 1998-99 ( I-0976 E)

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Summary of White paper no. 50 (1998-1999)

The Equitable Redistribution White Paper

On the distribution of income and living conditions in Norway

Contents

Kap 1. BACKGROUND AND OBJECTS

Kap 2. VALUES AND OBJECTIVES

Kap 3. THE DISTRIBUTION OF INCOME AND LIVING STANDARS

3.1 Income 3.2 Education and employment 3.3 Health 3.4 Housing 3.5 Regional distribution - economic living standards in urban areas 3.6 Accumulation of living standards

Kap 4. GOALS AND STRATEGIES

4.1 Fair and effective taxation 4.2 Labour-market and the work approach in welfare policy - More flexible work approach in welfare policy 4.3 More goal-oriented social and health services 4.4 More social housing policy 4.5 A more finely-meshed safety net 4.6 A simpler, more user-oriented and better coordinated assistance scheme This page was last updated November 18, 1999 by the editors

1. Background and objects

A new distributional offensive

With the publication of the White paper, the Bondevik Government wishes to reintroduce social distribution as a key political objective. During the ten-year period prior to the last change of government, most people have become more prosperous. The richest individuals have seen the greatest increase in prosperity, while the poorest have been left trailing behind and the gap between these groups has widened. The Government wishes to reverse this trend, by safeguarding values pertaining to solidarity, by providing better services and benefits to those who are most economically disadvantaged, and by means of a fairer system of taxation.

In the Voksenkollen Declaration, which was agreed when the present government was formed, the centrist parties set themselves the goal of writing a White paper:
"The differences in economic living standards between the rich and poor have widened in the 1990sÉ A centrist government will take these increased disparities seriously and will present a White paper in order to investigate the full extent of this problem. Proposals will be submitted regarding necessary measures aimed at countering the trend towards a society with increased inequality."

This White paper mainly covers developments during the period 1986-1997, and has a broad-based approach with a focus on ensuring that everyone has a reasonable share of the material resources in society, and that these resources are distributed more justly than is currently the case. It is necessary to create sound and secure employment opportunities, good housing conditions and high-quality dwellings, a right to a satisfactory education, essential health and social services, and a social safety net for all. This report represents an important part of the Government’s distributional policy.

contents

This page was last updated November 18, 1999 by the editors

2. Values and objectives

One main objective of the Government’s welfare policy is to provide security for society’s most disadvantaged groups. By means of the White paper, the Government wishes to gear our social security and welfare systems more to those who are most economically disadvantaged.

The Government is committed to a welfare state that provides:
• Security for all
• Improved distribution of incomes and living standards
• Equal rights and obligations for all
• An equal range of high-quality services
• Better opportunities for work for the most economically disadvantaged
• A more finely-meshed social safety net

The Government will maintain a strong public responsibility for the welfare system, but will also pursue policies that support the family and voluntary organisations.

contents

This page was last updated November 18, 1999 by the editors

3. The distribution of income and living standards

Most people are better off…
• The vast majority of the population enjoys good economic living standards, and the majority of people have seen their living standards improve in most areas in the 1980s and 1990s. Levels of income and wealth have risen, and there are clear improvements in the material standard of living.
• The population’s level of education has increased significantly, there has been a strong growth in employment levels, unemployment has fallen to a low level, and the population’s general state of health has improved. Most people have good housing.
• The share of the population whose overall living standards are considered good or very good has increased.

But…
• Differences in income in Norway have increased during the period 1986-1997. Income inequality appears to have increased more in Norway than in most other OECD-countries, but the data for comparison is somewhat uncertain. The number of people with a low income 1 has remained stable or increased slightly.
• Developments have tended towards a marginalization of some groups of the population, where poor financial resources to a greater or lesser degree coincide with low levels of education, weak links with the labour market, poor health and relatively poor housing conditions.
• Some people have a more permanently low income 1 and poor living standards in several of the most important areas.
• The distribution of wealth, inheritance and household income is even more unequal than the distribution of income and this inequality has increased.

1)Low-income households are those with an income (per consumer unit) of less than half that of the household with an equal number of households with a higher income than itself, and an equal number of households with a lower income than itself (median income). Which households are deemed as having a low income will also depend on the choice of equivalence scale (conversion of household income to income per person in the household).

3.1 Income

The population’s average income (after tax) rose in real terms by 13 per cent between 1986 and 1997. The income of the ten per cent of the population with the highest income rose by 34 per cent, while the income of the ten per cent of the population with the lowest income increased by 5–6 per cent (excluding students). The share of people with a low income1 has increased from 3.1 to 4.7 per cent during the same period.

Couples with young children (0–6 years), couples over 45 years of age without children and single individuals over the age of 65 have recorded the strongest increase in income (20–25 per cent), while single individuals under the age of 45 and families with older children have had the lowest increase (just over 9 per cent). Other types of households, including single-parent households, have seen a real increase in income of between 10 and 14 per cent.

Wage earnings are by far the most important source of income for the vast majority of households, and wage developments play an important role in determining how economic conditions vary between different populations groups. Wage earnings as part of total income are lowest for those with lowest incomes and greatest for those with more average incomes. Average wage differentials in the population have been reduced in the 1980s and 1990s, among other things as a result of the fact that wage differentials between men and women on average have been reduced.

Figure 1Distribution of income 1986–1997. Equivalent household income. Decile shares.

Why is there increasing inequality?
• Between 1986 and 1997, the increase in income has, in relative terms, been greatest for those with the highest incomes, cf. figure 1. The most important reason for the greater increase in high incomes is that capital incomes have increased relatively more than other incomes and that capital incomes have been more unevenly distributed in the 1990s. This is due in particular to a sharp increase in dividend payments and gains from the sale of shares etc.
• Participation in the labour force has fallen among certain groups, and the number of people receiving benefits has increased significantly during the same period. More people have become dependent on public transfers as their main source of income. People in employment generally have a higher income and better overall living standards than those who are not in employment. A lack of affiliation with the labour market is therefore the most important reason for low income.
• There have been changes to family structure and income, which is especially evident in the sharp increase in the number of single-person households and single parents.

Further details about individuals with a high income
The highest income group primarily comprises people in households with no children, where two adults are in employment. People with very high incomes and a sharp rise in income receive far more of their income from capital income than others. People with a high income have also recorded the strongest increase in wealth, inheritance and income from dwellings.

Who has a low income?
There is a clear overrepresentation of single individuals under 45 years and single parents among those with a low household income. In relative terms, more women than men have a low income. Since 1986, the number of men with a low income has risen, while the number of women has remained stable throughout the period.

There has been a change in the composition of the low-income group during the period. Among other things, the average age of those people with a low income has changed, from an overrepresentation of elderly people in 1986 to a large share of relatively young people in 1997.

There is an overrepresentation of non-western immigrants and people receiving various public benefits among those with low incomes. This is true of people who receive social welfare benefits, single parents receiving transitional benefits, unemployed persons, people with long-term illnesses receiving rehabilitation benefits and certain groups receiving invalidity benefits. Handicapped people and old-age pensioners are to a lesser degree represented among those people with low incomes, but many of them have incomes that are marginally above the low-income limit.

Some people have a permanently low income
Around 50-100,000 people, or approximately 1-2 per cent of the Norwegian population, are poor in the sense that they have a relatively low income over a long period of time:

Around 2 per cent of the population – approx. 90,000 people – have a cumulative 5-year income (after tax) that is lower than half of the median income of the population. In particular, there is an overrepresentation of single persons below 45 years and, to a somewhat lesser degree, couples with small children among those people with a low income in the five-year distribution (according to the equivalency scale used here).

Around 1.5 per cent of the population – approx. 60,000 persons – have a cumulative 10-year income (after tax) that is lower than half of the median income of the population. Among people with a low ten-year income, we find an overrepresentation of single individuals below 45 years and parents of small children, including single parents (acording to the equivalency scale used here). In addition, recipients of social welfare and immigrants from non-western countries in particular comprise major groups among those with a permanently low income.

The most important cause of low income is primarily a weak affiliation with the labour market, often owing to a low level of education or a lack of approved occupational skills, poor health or social problems.

Social welfare benefits
Long-term receiving of social welfare benefits is another indicator of a permanent income problem. Among long-term recipients of social welfare benefits, we also find an overrepresentation of single men, immigrants (particularly refugees), single parents receiving transitional benefits and certain other groups that have to supplement national insurance benefits with social welfare benefits. Around 0.75 per cent of the population – approx. 35,000 persons – have received social welfare benefits in at least three out of the last seven years. The number of people who receive social welfare benefits over a long period of time has risen, as has the average period of support.

Figure 2Expenditure on social care (1997-Nkr (millions)) and the number of benefit recipients

Services
Access to publicly financed services (e.g. health and social services) may to some extent ÇcompensateÈ for a low income, and public services have been developed significantly in the 1980s and 1990s. Nursing and care services represent one example of services that have a strong redistributional effect. Public subsidization decreases the higher the level of income, and there is a predominance of low-income groups in receipt of such services. Another example of services with a strong redistributional effect is kindergarten services, which makes it easier for women to remain in employment, have their own income, and thus affect the distribution of income between the sexes.

3.2 Education and employment

One of the most noticeable features of societal development in the last 10-15 years is the increase in the general level of education. One main trend in the educational pattern during this period is the sharp rise in the number of women in higher education. More women than men are currently pursuing a higher education, but women often finished their studies at a lower level than men do. The sharp increase in education levels in the 1980s and 1990s has led to a greater disparity between the different generations’ level of education, since the older age groups generally have a lower level of formal education than the younger age groups. Certain other groups have a low level of education in relation to the rest of the population. This is true of, among others, non-western immigrants, single parents and some people with social and health problems. Social background continues to be an important factor in determining an individual’s choice of education and completion of studies.

Education increases an individual’s chances of achieving good living standards in other areas. People with a high level of education participate significantly more in the labour force and enjoy a higher income than people with a limited level of formal education.

In recent years, there has also been a marked increase in the size of the labour force. Between 1993 and 1998, the number of people in employment rose by around 225,000. Eight out of ten persons of working age (25-66 years) are now in employment (1998). Key features of this development over the last 10-20 years are an increase in the number of people in employment and increased working hours among women, particularly among women with small children. Nevertheless, there are still clear inequalities between men and women, especially in terms of working hours. There are also inequalities between men and women when it comes to choice of career, and the choices made today deviate very little from the traditional pattern.

Figure 3:Employment and unemployment Source: Statistics Norway.

In parallel with the sharp increase in the number of people in employment in the 1990s, the number of people out of work has fallen, after unemployment levels increased towards the end of the 1980s and peaked in 1993. The number of long-term unemployed people has fallen considerably in recent years. Among young people, however, participation in the labour force is lower and unemployment levels higher compared with the average levels for the working population. The same also applies to handicapped people, refugees and immigrants from non-western countries. There has also been an increase in the number of people experiencing problems in the labour market for health and/or social reasons. The number of people receiving invalidity pensions has increased more sharply than the rise in the average age of the population would tend to indicate. The average age of people who retire from the labour force owing to invalidity has fallen. In addition, there have been increases in sickness absenteeism and in the number of people in rehabilitation. The number of people who take early retirement has also increased in the 1990s. Although this has something to do with improved opportunities for taking early retirement, it may also be a sign that the requirements of occupational life have been too stringent for some older employees.

The differences in employment patterns among people with low and high levels of education appear to have increased in the 1980s and 1990s. People with a low level of education are more exposed to occupational upheaval during periods of recession, and to changes in occupational patterns. There are many indications that more people with a low level of formal education are falling outside of occupational life and receiving benefits at an earlier stage of life than was commonplace earlier.

3.3 Health

In a long-term perspective, the population’s general state of health has improved. The life expectancy of both men and women has increased continuously since the Second World War. Other measurements of the population’s state of health such as self-experienced health, level of functioning and the individual’s assessment of his/her state of health, however, remained relatively unchanged between 1985 and 1995.

Muscular and skeletal diseases and mental illness are the two dominant ailments suffered by the population.

There are clear differences regarding health and gender. While women generally live longer than men do, women also report more frequently that they have health problems, and more women than men report long-lasting illnesses that reduce their quality of life. Women, particularly women among the younger age groups, receive invalidity pensions more often than men, they have a higher level of sickness absenteeism, consume more medication and use health services more frequently than men.

Studies indicate that in certain areas social inequality with regard to state of health may have increased in the 1980s and 1990s. The gap appears to have been reduced among the working population, while the disparity between the economically active and economically inactive sections of the population has increased.

The state of health of people who are economically inactive and receive public subsistence benefits (the long-term unemployed, recipients of social welfare benefits etc.), and particularly recipients of social security benefits for reasons of illness, is reportedly worse than the state of health of people who are economically active. The state of health of the working population has improved, while the state of health for people who are economically inactive shows no improvement or has deteriorated. The causes of this are complicated, but possible explanations may be different behaviour with regard to health and the more stringent requirements of occupational life, which means a higher threshold for participation in the labour force.

3.4 Housing

Developments within the housing sector in the 1980s and 1990s have resulted in good living conditions for most people. In particular, the standard of housing has improved. Most people also live in a safer local environment.

Some people have far poorer housing conditions than others in one or more areas, often owing to high living expenses and low incomes.

Single individuals and some single parents have poorer housing conditions than couples with and without children. Single parent households have by far the highest living expenses in relation to their income, primarily because they have relatively low incomes. Families with small children generally have the highest mortgages, and these families have seen the greatest increase in mortgage levels in the 1990s.

Recipients of social welfare benefits and the long-term unemployed are distinguished by their relatively poor housing conditions, and the housing situation for non-western immigrants is generally poorer than for the rest of the population. For immigrants, housing problems may be due to discrimination in the housing market and/or the fact that they reside in specific urban areas where the housing stock is of a low standard. The housing standard for young, single individuals receiving invalidity pensions who do not reside with a family is poorer than for people within the same age group who are not disabled. The problems experienced by handicapped people in relation to housing are primarily related to the lack of accessibility to and proper adaptation of dwellings. Around 6,200 persons were registered as homeless in 1997.

3.5 Regional distribution – economic living standards in urban areas

Levels of income within the population are clearly lower in rural areas than they are in towns and urban areas, while the housing situation is often better in rural areas. There are minor inequalities between rural areas and towns/urban areas as regards employment and unemployment. It would appear that there has been an equalization of overall living standards between urban and rural areas, even though income differentials have increased somewhat in favour of the urban areas.

It is in the larger towns, particularly in Oslo, that one finds people with the worst and best living standards. Norway’s housing problems are also concentrated here.

The greatest geographical differences in incomes and living standards are found within the larger cities, particularly between inner east Oslo and inner west Oslo. Inner east Oslo has a high percentage of inhabitants with low incomes, unemployed people, many recipients of social welfare benefits, recipients of invalidity pensions, single parents receiving transitional benefits, children in care and a concentration of immigrants. Inequalities in the distribution of income have increased more sharply within the larger cities (particularly in Oslo) than they have nationwide.

3.6 Accumulation of living standards

Good and poor living standards have a tendency to accumulate among sections of the population. The share of those people whose overall living standards are good has increased a little in the 1980s and 1990s. The share of the population whose overall living standards are poor has remained constant or risen slightly in certain groups during this period.

People whose overall living standards are poor have complex problems. They have low incomes and are often marginalized in relation to the labour market. They also have a low level of education, relatively poor housing and are often disadvantaged in other areas, too. One typical feature of the living standards scenario in the 1990s is that poor living conditions and marginalization do not encompass entire social groups, but apply to a small and variable minority within different groups.

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This page was last updated November 18, 1999 by the editors

4. Goals and strategies

A society without major economic and social inequality is an asset in itself, and may help to prevent social conflict. The Government is concerned about the increase in inequality and the fact that a minority of the population has poor living standards and is trailing behind the rest of the population as far as developments in welfare are concerned. The Government wishes to implement measures that will help the most disadvantaged members of society, through the redistribution of income from people with the highest incomes.

With the publication of the White paper, the Government wishes to announce strategies and initiatives aimed at reducing inequalities in economic resources and living standards, with a particular focus on improving conditions for those people who are most disadvantaged.

By means of measures announced in this White paper, the Government wishes to address the causes of these problems. The Government will therefore assign priority to measures that can lead to improved affiliation with the labour market, and services that can support the medium-term objective of making individuals as self-sufficient as possible. The Government also aims to secure good housing conditions for all since this is an important condition for ensuring good living standards and quality of life. For a number of people, participation in the labour force and improved services will represent an unrealistic solution to their problems. The Government therefore wishes to produce a more finely-meshed social safety net, with a view to providing these people with a more secure income.

The greatest challenge facing income distribution policy is that of reversing a trend that leads to the permanent marginalization of certain social groups. These groups are the principal target for the Government’s strategies and income distribution policy measures.

Target groups for the reform measures
One common feature of the target groups is that the problems they face with regard to living standards are more or less permanent, and often relate to several aspects of living standards at the same time. Many people in these groups have a permanent low income and financial problems. A low income means that they experience problems in the housing market. These groups have little or no affiliation with the labour market and many people suffer from health or social problems as well. The groups are not mutually exclusive; rather they overlap one another to a greater or lesser degree.

• Households with permanently low incomes
• Economically disadvantaged families with children
• Economically disadvantaged immigrants
• People with psychiatric problems
• Substance abusers
• The homeless
• The long-term unemployed and occupationally handicapped workers
• Economically disadvantaged people receiving invalidity benefits and handicapped people

Strategies and measures in income distribution policy
The Government’s principal strategy for reducing inequalities in incomes and living standards, and for improving conditions for those people who are most economically disadvantaged, is primarily to continue to develop welfare through

• Fair and effective taxation
• More flexible welfare-to-work schemes
• A more socially-aware housing policy
• Improved public services
• A more finely-meshed social safety net

The Government is also committed to a simpler, more user-oriented and better coordinated system of social welfare.

A stable and healthy economy is a necessary condition in order to ensure that these strategies are successful. The country’s economic policy must support stable economic development, the objective of employment for all, and sound and stable framework conditions for individuals and companies. The Government will attach particular importance to securing a basis for permanent full employment and a low level of employment.

4.1 Fair and effective taxation

The Government attaches importance to the principle of taxation according to one’s ability. The analyses contained in the White paper demonstrate that this principle is not always fully applicable today. The Government will consider making changes to the tax system, among other things in the light of these analyses and Norwegian Official Report (NOU) 1999:7 «On Flat-rate Taxation». The Government wishes to attach considerable importance to the redistributional effects of the tax rules.

The Government will work to produce tax rules that will improve the distribution of income between those with high incomes and those with low incomes.

4.2 Labour-market and the work approach in welfare policy – more flexibility

The Government’s objective is for as many people as possible to take an active part in the labour force, to pursue an education and to receive training so that they are able to care for themselves through their own work. Everyone shall enjoy equal rights to an adequate education regardless of their social background, place of residence, gender and financial ability. A policy that promotes education, a high level of employment and good and secure jobs for all is a fundamental strategy for equalization and good living standards.

In cooperation with the employers’ and employees’ organisations, the Government wishes to continue and to strengthen the recent positive trend in respect of employment. In order to achieve this, it is important that the size and content of the labour-market programmes are such that they correspond with the needs of those who still face problems in the labour market. The level of measures must always be considered in the light of labour-market developments.

In respect of unemployed people with complex problems, a coordinated effort from several authorities is required. Among those groups that find it difficult to gain access to the labour market are certain groups of young people and the long-term unemployed. This is also true of non-western immigrants/refugees, owing among other things to inadequate Norwegian language skills, or because of occupational discrimination. The Government therefore wishes to continue its prioritization of and efforts in respect of these groups so that more people may find employment.

The basis of the work approach in welfare policy is that work shall be the natural first choice of all people of working age. In the opinion of the Government, the work approach is primarily a correct choice since it signalises that the right to work shall also apply to groups who, for various reasons, may experience problems in the labour market. A high level of participation in the labour force is also necessary in order to finance the increase in future expenditure on pensions and to provide essential, good-quality health and care services without imposing too high a tax burden.

It would appear, however, that many people of working age today are unable to give full service or participate in the labour force on a full-time basis, owing to poor health or social problems. Some of these people are sufficiently fit for work that they are not entitled to an invalidity pension. Many people nevertheless end up on invalidity pension, often after a long period spent drifting between various short-term transfer schemes. The analyses presented in the White paper also show that the number of handicapped people in employment has fallen in the 1990s.

The Government wants the labour market to provide greater room for people with permanent health problems or various types and degrees of occupational handicaps. The Government will pave the way for a more flexible and permanent arrangement that will allow more people to be in employment.

The Government would like to see more flexible welfare-to-work schemes, and will therefore implement a number of goal-oriented measures in respect of groups that today have difficulty in gaining a permanent foothold in the labour market:

Permanent wage supplements for people with a reduced and variable capacity for work
The Government wishes to introduce a five-year wage subsidy trial with a view to permanent integration into ordinary working life. The target group for this measure is occupationally handicapped job seekers with a reduced and variable capacity for work owing to chronic muscular and skeletal ailments and psychiatric illness, with limited prospects of permanent improvement.

• Lower degree of occupational disability as a condition for receiving invalidity pensions
The Government wishes to initiate a three-year trial for granting invalidity pensions with a degree of occupational disability as low 30 per cent disability. Initially, this trial will apply for a limited period of three years and include a few counties. The objective is to give a greater number of people the opportunity to use more of their capacity for work while at the same time allowing them to enjoy financial security in relation to their reduced capacity for work.

With a background in, among other things, the sharp rise in the number of new occupationally handicapped people in recent years, the Government does not wish to see a general liberalisation of the medical conditions in the invalidity pension scheme.

• Network project for the reactivation of recipients of invalidity pensions
The objective is that people who are occupationally handicapped shall support and motivate one another to be self-sufficient through their own work. The Government wishes to implement trials involving such networking projects/self-help groups in three–four counties.

• Municipal responsibility for occupational programmes for long-term recipients of social welfare benefits
The Government wishes to implement trials in which selected municipalities will be given overall responsibility for securing all forms of active help to recipients of social welfare benefits. The purpose of this trial is to provide a closer link between income security and motivational schemes in order to assist more people into employment. Selected municipalities will be given responsibility for securing all forms for active assistance to recipients of social welfare benefits who require help in finding employment. It is a requirement that the terms and conditions for distributing social welfare benefits may be used actively in this trial.

• Introductory benefits for immigrants
In order to improve immigrants’ ties with the labour market, it is necessary to strengthen the link between public benefits and participation in qualifying programmes for the labour force. The Government therefore wishes to introduce a special form of benefit that will be paid out to this group by the municipalities as financial compensation for participation in an agreed qualifying programme. The Government will appoint a committee to draft a bill regarding the provision of benefits to immigrants who have recently arrived in Norway.

• Public committee to investigate sickness absenteeism and access to disability pensions
In order to slow down access to illness-related benefits, and preferably reverse this trend, the Government has appointed a broad-based public committee to investigate, among other things, the causes of the increase in sickness absenteeism and access to disability pensions. The committee will present its recommendations by June 2000.

In the Rehabilitation White paper (White paper no. 21 (1998-99)), importance is attached to the municipality’s responsibility for rehabilitation of the health of the individual. In the Plan of Action for Handicapped People (White paper no. 8 (1998-99)), the Government has paved the way for the introduction of specific measures enabling more handicapped people to enter the labour force.

In the opinion of the Government, it is also important to focus on educational measures, so that more people may qualify for employment. The Government proposes:

• Improved opportunities for vocational education for single parents
The Government wishes to relax the education requirement for entitlement to educational benefits in the National Insurance scheme, to give more single parents the opportunity to secure for themselves adequate vocational skills beyond upper secondary school.

• Improved upper secondary training for handicapped youths
The Government wishes to pave the way for a smoother transition for handicapped youth to participation in the workforce and to paid employment after upper secondary education. This was also discussed in White paper no. 32 (1998-99). The Government will therefore make sure that an overall plan is drawn up for handicapped youths who require assistance from several authorities, with a view to giving them coordinated, planned funding for training/rehabilitation.

• Follow-up of the Skill Reform
The long-term unemployed and people who have difficulty in achieving permanent ties with the labour market often have a low level of education, and often end up permanently isolated from the workforce long before they have reached ordinary pensionable age. The Government wishes to follow up the Skill Reform (White paper no. 42 (1997-98)), focusing in particular on adult people with a low level of education. The Government wishes to submit a bill concerning the right to free basic education and the duty of the county municipality to provide an upper secondary education to all adults who require one.

4.3 More goal-oriented social and health services

The Government wishes to secure an equal range of high-quality public services for all individuals, independent of their residence, age, income and social background.

Social services
The overriding objective of the social services is to promote financial and social security, improve living standards for disadvantaged individuals, to help to create increased equal worth and equality, and to prevent social problems. One objective is to divert the present focus from the passive transfer of income to active measures aimed at providing help for self-help.

In order to improve the quality of the social services, the Government will, among other things:

• Increase the competence and quality of the social services
In following the plan of action «Knowledge and Bridge-building» (1998-2001), the Government wishes to implement measures intended to strengthen skills in the social services, to reduce random discrimination, to make the social services more user-friendly and accessible and to strengthen its work with people with complex problems.

• Improve the quality of measures for substance abusers
The Government wishes to try out new, more caring measures for substance abusers who are unable to avail themselves of other options, and to encourage trials involving new aftercare initiatives. In addition, it is important to assess measures that may help to reduce injuries and deaths among the most serious cases of substance abuse. The Government will also strengthen general preventive measures against substance abuse, among other things in connection with the Plan of Action for Reduced Substance Use (1998-2000).

Health services
A well-developed health service with a particular focus on preventive measures and initiatives aimed at promoting health is necessary in order to achieve a good general state of health among the population and is important in relation to the goal of equal distribution of living standards. The Government wishes to secure an equal range of high-quality health services for all.

• Improved financial situation for patients in psychiatric hospitals
The Government wishes to relax the condition that stays in psychiatric hospitals of more than five months lead to a reduction in disability pension from the second calendar month. The Government proposes that this benefit should only be reduced if the stay lasts for more than one year. The Government also wishes to increase the maximum income allowance, to bring this in line with the amount that pensioners in municipal institutions are allowed to retain.

• Better health services for handicapped people
The Government is aiming to raise the living standards of those handicapped people who currently have the lowest living standards. This will be done by, among other things, testing measures designed to improve the monitoring of handicapped people who themselves do not wish to visit the health service, and through development work intended to improve accessibility to health services.

The Government wishes to establish a scheme whereby patients will be assigned a regular primary doctor from the year 2001. This scheme is designed to help provide better access to and distribution of high-quality medical services. The scheme will improve health services, particularly for people with long-term and chronic illnesses. A regular primary doctor will also provide better options for people with complex needs. The Escalation Plan for Mental Health 1999-2006, which the Government presented in the spring of 1998, will in coming years lead to a considerable escalation of services available to people suffering from psychiatric illnesses.

In late1999/early 2000, the Government will submit a White paper concerning the basic values governing the health service. The primary focus of this report will be how the health service can assist in securing an equal range of high-quality services for everyone in Norway in the future.

Nursing and care services
The Government’s overriding objective for the nursing and care services is to secure essential services for each individual in accordance with his/her needs, to improve the range and quality of the services, provide more flexible and equal services for all people and to allow greater room for user-participation and personal freedom of choice.

The municipal nursing and care services shall secure the needs for nursing and care services for elderly and handicapped people, including mentally handicapped people and people with psychiatric problems. Recruiting staff with the correct type of skills, improving the efficiency of resource utilisation and the quality of the services offered are key areas of focus in this respect. This shall be followed up in the Action Plan for Health and Social Service Personnel (1998-2001).

In connection with the follow-up of White paper no. 50 (1996-1997): Action Plan for Caring for the Elderly, the comprehensive expansion of nursing home places and strengthening of the home-help services for elderly and handicapped people in the municipalities has been planned.

The Government has submitted a Plan of Action for Handicapped People 1998-2000 (White paper no. 8 (1998-99)) which deals with objectives, strategies and measures designed to improve conditions for people with handicaps. Among other things, the Ministry of Health and Social Affairs will present a bill concerning user-controlled personal assistance. The intention is that this service will be offered by municipalities in the same way as other forms of practical help and support.

User charges have to some extent been introduced for a variety of public services, within such areas as the health service, and nursing and care sectors. The Government has begun the process of reviewing the use of user charges in order to find schemes that may shield chronic patients in a better manner.

The Government will present a White paper «Care 2000» in late 1999/early 2000 which will discuss important choices regarding both the underlying values of care work and its direction, in respect of services, skills, recruitment and user participation.

4.4 A more socially-oriented housing policy

The overriding objective of this Government’s housing policy is to create sound and inexpensive housing in a good living environment. In addition, the Government also aims to support the notion that individuals may own their own dwellings, alone or together with others, and to assist in creating a differentiated rental market in accordance with the needs of the population. It is the Government’s objective that the distribution of housing shall be better than that provided by the distribution of assets and income alone. It is an important objective for the Government that everyone shall have the opportunity to obtain for himself or herself a dwelling that is large enough and is functional and healthy.

• Better housing support for disadvantaged families with children
The Government is committed to making further improvements to the housing support scheme for families with children. Initially, the Government will adapt the housing support scheme to better suit the challenges in urban areas by, among other things, raising the upper limit for housing expenses in Norway’s four largest cities.

• Better housing support for single individuals receiving social welfare benefits
The Government will also consider giving more single people the right to housing support. In particular, this will help single recipients of social welfare benefits. The Government will investigate more closely the connection between housing support and social welfare, and the consequences an extension of the central government housing support schemes may have for social welfare payments.

• Better housing support for young disabled people
The Government aims to improve the housing support scheme for young disabled people, by raising the upper limit for housing expenses in Norway’s four largest cities.

• Special measures for the homeless
The Government wishes to assign priority to measures designed to prevent homelessness and measures aimed at helping the homeless. As part of this process, the largest cities in Norway will be invited to take part in the development work with a view to offering the homeless a more coordinated service. In order to strengthen initiatives directed at the homeless, the Government will:
- Increase the amount of subsidies available from the State Housing Bank for use by municipalities in their work with people with special disadvantages in the housing market.
- Attach increased importance to the development of alternatives to the use of hostels.
- Implement trials involving multi-occupied houses for the homeless, and to view this in connection with the escalation plan for mental health.
- Develop good models for professional monitoring of the individual user and systems for ensuring the quality of operations at the hostels.
- Strengthen the focus on tailored daytime activity measures for people with limited opportunities to obtain their own dwellings, and to strengthen cooperation between various parts of the social care service in this area.

The Government wishes to provide a more comprehensive and better-organised sheltered housing service for disadvantaged people. To this end, the Government will follow up White paper no. 49 (1997-98) «Concerning the Establishment of Dwellings for Young People and Disadvantaged Individuals». The Government will also implement a broad-based public investigation on housing policy and follow this up with a White paper.

4.5 A more finely-meshed safety net

Transfers in the welfare system primarily have a good equalizing effect, and constitute a large part of the income of groups with low incomes.

Social security
Social security provides financial security by securing income and compensating for special expenses in the event of unemployment, pregnancy and birth, for single parents, and in case of illness and injury, old age and death. Social security also contributes to the redistribution of income and help for self-help.

The increase in the basic amount will raise the income of pensioners who receive only the basic pension from the National Insurance by a percentage similar to that of the projected wage increase for the working population. This is in keeping with those principles and objectives that otherwise form the basis of the income policy programme.

The Government assumes that social security shall continue to be the key element in the total system of pensions and benefits, because it provides security for the individual and helps to equalize incomes in society. The Government wishes to retain the main features of the public pensions system.

Increased minimum pension 1998
At the Government’s suggestion, the minimum national insurance pension was increased by NOK 12,000 per year from 1 May 1998. This increase has raised the basic security of the national insurance considerably, and has improved the incomes of a large group of pensioners with relatively low incomes. A total of 330,000 people who receive only the basic pension have boosted their incomes to varying degrees as a result of this measure. The increase in income has been greatest for those pensioners with the lowest incomes. For the 20 per cent of pensioners with the lowest incomes and for single pensioners in particular, this has meant a great increase in income. This is particularly true of women. The increase in the minimum pension is thus a goal-oriented and good measure.

Even though the main features of the social security and benefits schemes are firmly in place, there is a need for improved security for the incomes of some groups.

• Increase the means-tested child allowance in the national insurance pension
A number of disabled individuals, particularly younger people receiving disability pensions with responsibility for children, have financial problems and receive social welfare benefits over long periods of time in addition to their pension. The Government therefore wishes to increase the means-tested child allowance paid to old-age pensioners and people receiving disability benefits with low incomes and responsibility for raising children.

• Improved payments for women in part-time employment in the event of an application for disability pension
Married and cohabiting people who work part time today receive very little in relation to their previous income when they apply for a disability pension, This is because they are assessed both in relation to their occupational life and against the work they perform in the home. The Government wishes to change this scheme, and would like to disregard the assessment of work in the home when granting disability pensions to women in part-time employment.

• Benefits of limited duration for married women who have cared for family members
Married women who have for many years performed the heavy duty of caring for sick members of their family may encounter difficulties when the recipient of the care dies or moves, since they have few ties with the labour force. Today these women fall outside the scope of those benefit schemes that allow the recipient a period of adjustment after the period of care has ended. The Government therefore wishes to introduce a benefit scheme of limited duration for this group, similar to the scheme in place for single parents.

• Better National Insurance survivor benefits for divorced survivors
The Government wishes to improve the financial situation of elderly divorced women whose divorced spouse dies more than five years after the divorce. If the spouse dies before five years have passed, the survivor is entitled to transitional benefits. This should also apply after long marriages, where the survivor has been financially dependent on contributions from the deceased.

• Improved assistance benefits for single parents with sick or handicapped children
Single parents with children who suffer from a protracted illness or who are handicapped today have their assistance benefits reduced if they also receive supplementary child benefit from the National Insurance. The Government wishes to amend this, so that single parents receiving supplementary child benefit can also receive assistance benefits.

The benefit schemes for single parents were changed significantly in 1998, among other things in the form of shorter benefit periods, higher benefits and a greater requirement regarding occupational activity. The Government will evaluate possible changes in the duration of transitional benefits in connection with re-evaluation of the reform in the year 2001.

• Improved basic benefit when using a vehicle financed by the National Insurance
It often emerges that the basic benefit that handicapped people are entitled to receive when they have a vehicle financed by the National Insurance is not sufficient to cover the vehicle’s actual running expenses. The Government wishes to provide better coverage of motor vehicle expenses through a more goal-oriented system of basic benefits.

Social welfare benefits etc.

The Government is committed to the fact that social welfare benefits shall continue to be a subsidiary scheme under the aegis of the manipulates, and that this system is based on assessments of the individual.

The Government nevertheless wishes to make certain changes to the social welfare benefits scheme, in order to create greater equality and a fairer scheme:

• A stronger normalization of social welfare benefits
The Government wishes to introduce recommended central government norms for the granting of social welfare. Taking the municipal right of self-determination into consideration, and because local adjustments often represent good solutions, this means that the central government norms should be recommended, and not binding.

When granting benefits, the Government will encourage greater use of conditions, in order to encourage the recipient of social welfare benefits to seek employment.

• Social welfare and family allowance
According to the principles that form the basis of social welfare payments, family allowance counts as income when assessing the need for assistance among families with children. Practices differ, however, from municipality to municipality. The Government recommends that municipalities treat family allowance payments as part of the income basis when providing social welfare. The Government recommends that expenses towards subsistence for children and expenses that follow from the duty to care for children be taken into account when designing the recommended norms.

• Social welfare and cash payments to families with children
The objective of providing cash payments for families with small children is to give the parents of small children an improved financial position so that they have more time to care for their own children and to provide greater choice when it comes to care solutions. In order to make this freedom of choice genuine, the Government recommends to the municipalities that cash payments for families with small children shall be deducted from the income base when assessing social welfare benefits. The scheme for payment of cash payments to families with small children will be reviewed.

The Government wishes to see the improved safeguarding of income for people who are permanent recipients of social welfare benefits.

• Improved support for people who have spent only a short period of time in Norway
The Government wishes to introduce a new, supplementary support scheme for people who have not lived in Norway for the required period or have not earned the right to a pension in Norway. This scheme shall apply to people who live in Norway and who meet the conditions for receiving long-term benefits under the National Insurance scheme (with the exception of the residency requirement). The scheme would provide means-tested benefits with a view to securing a total income equivalent to the minimum pension from the National Insurance scheme, and would be administered by the social security offices.

• Guaranteed minimum income
The Government will appoint a committee to investigate the issue of a guaranteed minimum income. The committee’s report shall be linked to the social schemes that are currently in place and to the proposal in the Equalization Report concerning the normalisation of social welfare, and, on this basis, give consideration to improved coordination and simplification of the benefits scheme.

4.6 A simpler, more user-oriented and better coordinated social care scheme

The public assistance scheme is chiefly organised in accordance with the sector principle. Many public agencies are responsible for various aspects of people’s living standards, e.g. the social security agency, the labour market agency, the health service, social services and the follow-up service for upper secondary schools. Complex problems require coordination and collaboration. An administration that is inaccessible and lacks coordination will particularly affect the weakest members of society, i.e. users with complex problems and needs.

The Government has implemented a number of measures to make the public assistance scheme simpler and more user-oriented in order to help groups that have problems in relation to the benefits schemes. Important initiatives include improved coordination between public services and a better user service. User-participation involves both a right and a duty for the user. To a greater degree than is the case today, the Government wishes to focus on the user of public services. Information and service are two key concepts in this context. It shall be easier for users to know where to go to get help.

Among other things, the Government wishes to:
- Implement initiatives with user offices
- Improve the level of service available to users by means of public service offices
- Introduce service guarantees in all public agencies
- Continue to focus on the development and strengthening of voluntary agencies

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This page was last updated November 18, 1999 by the editors