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New choices in the field of work and income

News item | 16-09-2003

New legislation on invalidity insurance, more people back to work, better combinations of work and care, and a smaller administrative burden. These are the priorities for the Ministry of Social Affairs and Employment

The new policy focus is on boosting employment and encouraging pay restraint. The government is calling on the social partners to agree arrangements for multi-year pay restraint and to avoid large increases in pension contributions.

Work

• The new system of invalidity insurance due to come into force in 2006 aims to get as many claimants as possible back to work. In future, only those who are permanently and completely incapable of working will be entitled to draw 70% of their previous pay. People whose degree of invalidity is assessed at less than 35% will continue to work for their employer. In addition, more stringent rules will be introduced for assessing the degree of invalidity.
• For those judged partially incapacitated, new arrangements will make it more advantageous to return to work, or to work more hours.
• Over the next four years, an extra €100 million will be earmarked to help people drawing invalidity benefit to return to work. 
• To encourage older people to continue in work, various cuts will be made. These will include abolishing the tax incentive for early retirement and pre-pension schemes. In addition, from 2004 people aged 57½ years and older will once again be obliged to seek work.

Incomes
In 2004 individual disposable incomes will decline by an average of between 0 and 1 per cent. There will be compensation for households which are particularly hard-hit by measures in the healthcare field, such as the elderly and the chronically sick. Full linkage of the minimum wage and benefits to private and public-sector pay can only be achieved if the ratio between non-active and active members of the population is less than 70:100. Otherwise, they will be linked to public sector pay.

Work and care
Over 182,500 extra childcare places are to be made available by the end of 2004 (up 10,000). Starting in 2005, an extra €100 million will be invested in organised childcare.

In 2004, the total budget of the Ministry of Social Affairs and Employment will be €20.6 billion.