The state is partially ready for the work capacity reform

Toomas Mattson | 2/15/2017 | 11:00 AM

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TALLINN, 15 February 2017 – In the opinion of the National Audit Office, the state is partially ready for the implementation of the work capacity support system – it has developed the capability of assessing the work capacity of and providing services and aids to people with reduced work capacity. The ultimate success of the capacity for work reform depends on whether or not employers will hire people with reduced work capacity and whether preventing the loss of work capacity, incl. reducing the increasing number of occupational accidents, is possible. Our governments haven’t been able to establish an occupational accident and disease insurance system over the last 25 years either.

The Unemployment Insurance Fund and the Social Insurance Board have managed to implement their plans and the provision of the services (e.g. rehabilitation, sheltered employment) and aids accessible since 2016 has gone well. Staff training has contributed to this. For example, all of the 232 advisers working at the Unemployment Insurance Fund have passed the basic training required for instructing people with reduced work capacity and 48 of them have received more thorough training. The accessibility of aids has improved considerably, because the Social Insurance Board started providing them instead of 15 county governments. This led to the disappearance of waiting lists and people with reduced work capacity usually get their aids within the prescribed 30 days.
The Unemployment Insurance Fund is ready to assess work capacity in all counties, because the necessary people have been found everywhere and enough doctors have been trained to use the new assessment methodology. The University of Tartu is obliged to train a new doctor if one them were to stop carrying out the assessments.
The audit revealed that there have also been several problems in the preparation of the reform.

The preparedness of employers to hire people with reduced work capacity is low. As the reform is carried out, it must be kept in mind that even if a person with reduced work capacity has received the necessary services and assistance from the state, their employment depends on the preparedness of employers to hire them. The audit revealed that the preparedness of employers to do this is partial: 31% of employers are prepared to hire people with reduced work capacity. 44% found it to be impossible and the remaining employers were uncertain.
According to the representatives of employers, the first obstacle is the fact that the skills and qualifications of people with reduced work capacity do not correspond to the needs. Also, the people who belong among non-working disability pensioners at present are mainly people whose loss of work capacity is extensive, who have complicated diagnoses (e.g. mental disorder) and who are not used to working. This means that preparing them for working is difficult and takes more time. Also, the working environment probably needs to be adapted more in the case of these people. The Ministry of Social Affairs has also admitted that one of the most significant risks to the success of the work capacity reform is the low preparedness of employers to hire more people with decreased work capacity.

It’s difficult for local governments to find support persons, their wages are very low. The second significant obstacle to the success of the reform is the different capacity of local governments to provide social services that support finding jobs and going to work. Many local governments were unable to provide the services to the necessary extent before the reform, but the need for them will increase further. For example, a quarter of local governments are able to provide a personal assistant and half of them can provide a support person when necessary. The need for such assistance is bigger and keeps increasing in the course of the work capacity reform – the quantity of people who need personal assistants will increase by ca 60% and the quantity of people who need support persons by ca 50%. According to local government associations, finding personal assistants is a problem mainly in rural areas, because there are very few or no such persons in these parts of the country. The low wages paid to support persons or personal assistants are another obstacle to finding suitable people.

Preventing the loss of work capacity is of key importance, incl. reducing the number of occupational accidents and establishing a system of occupational accident and disease insurance. Although it’s important that the state prepares the people with reduced work capacity for going to work and helps them find jobs, it’s usually dealing with consequences. The National Audit Office is of the opinion that the work capacity reform can be deemed a success if it includes the establishment of a system where loss of work capacity can be prevented.
The audit revealed that no attention has been given to the development of such a system in the course of preparations. However, 2016 was the year with the highest number of occupational accidents in the last decade. The main reason in the opinion of the Labour Inspectorate is that Estonian employers have little interest in meeting the requirements for working environments and making the working environments better. The Labour Inspectorate adds that if employers have to pay for making the changes themselves, they prefer not to make them even if the existing conditions may damage the health of the employees. Saving money will remain impossible if a prevention system is not implemented and the main focus is on dealing with consequences. The money for covering these expenses comes from all taxpayers via the health, pension or unemployment insurance system.

The present information system is inadequate, some data are missing and the quality of others is poor. Firstly, the information system for assessing work capacity did not start functioning as planned during the preparations. The SKAIS 2 information system required for sharing service and allowance data was not completed by the end of 2016 as planned and a temporary solution to the old information system SKAIS 1 was developed due to the delay. This has required 1.2 million euros of extra money, but has not solved all of the problems. For example, the solution cannot be used to make mass pension data requests that the Unemployment Insurance Fund needs in order to pay our work capacity allowances correctly. This can result in unjustified payments.
Also, work capacity cannot be assessed with the health information system in almost half of all cases, because some data are missing from the information system and the quality of existing data is poor. This means that data must be requested from healthcare institutions and doctors. This increases the workload of the Unemployment Insurance Fund and people must wait longer for the work capacity assessment decisions.

Background

  • The purpose of the work capacity reform is to create the opportunity for people with reduced work capacity to be active in society and help them find jobs that meet their needs.
  • There were 97,459 disability pensioners in Estonia at the start of 2016 and their number increased by 61% from 2005-2015. 14,490 people were declared permanently incapacitated for work for the first time in 2015.
  • According to initial data, 4,919 occupational accidents occurred in 2016 and 24 of them resulted in death. The circumstances of 160 cases are being investigated. The number of occupational accidents increased by 68% from 2009-2016.
  • More than 300 million euros per year is spent on the social tax incentives of disability pensioners and working people with reduced work capacity.

Number of disability pensioners per thousand people living in a local government as at 31 December 2015

Number of disability pensioners  per thousand working-age persons living in the local government as at 31 December 2015

Source: National Audit Office on the basis of data from the Social Insurance Board and Statistics Estonia

  • 199 million euros has been calculated for the establishment of the new system of work capacity assessment and support from 2014-2020 European Union funds comprise 169 million euros of this. 30 million euros comes from the budget of the State Treasury and the Unemployment Insurance Fund.
  • As a result of the work capacity reform, the system of helping people reduced work capacity will be financed from unemployment insurance money instead of pension insurance.

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The National Audit Office assessed whether the preparations for the implementation of the work capacity reform have been successful and the state is ready to implement the new system of supporting work capacity.

 

Toomas Mattson
Communication Manager of the National Audit Office
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+372 513 4900
toomas.mattson@riigikontroll.ee
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  • Posted: 2/15/2017 11:00 AM
  • Last Update: 4/7/2017 10:40 AM
  • Last Review: 4/7/2017 10:40 AM

Number of disability pensioners per thousand working-age persons living in the local government as at 31 December 2015

National Audit Office

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