Insurance based welfare?

The Herald reports:

Employers may be asked to pay part of the costs if their employees have to go on sickness or disability welfare benefits under an insurance-based reform of the welfare system flagged in a new report today.

A working group on reducing welfare dependence chaired by economist Paula Rebstock, in its first report, says employers need to be more actively involved in managing their workers’ health issues – keeping them well, and getting them back to work quickly after an illness.

It cites a system in the Netherlands where employers have to pay for most of the costs of their former workers on sickness and disability benefits.

Ms Rebstock said sharing the costs with employers would be “part and parcel” with a possible move towards funding welfare benefits through a social insurance system as in most developed countries.

Her group’s report is cautious about shifting welfare on to an insurance basis, one of the issues it is required to address in its terms of reference.

But Ms Rebstock said the group felt an insurance approach would give everyone involved in the system – employers, Government and beneficiaries – an incentive to get people back to work as soon as possible.

I’m cautious about shifting costs to employers, but I think the pros and cons of such a model are worth exploring. The status quo where the proportion of the working age population on sickness or invalids benefits increases year after year is not sustainable.

I’ve tried to find an copy of the actual report by the working group, but have not yet been able to.

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