Monika Haukanõmm

A growing problem in Estonia as well as the main topic of discussion in recent years has been the rapid growth of persons receiving pension for incapacity for work and persons with disabilities. Various institutions (the National Audit Office, Praxis Center for Policy Studies, the OECD, European Commission) are constantly making recommendations about reforming the current systems, otherwise the sustainability of the social system will be in danger and the persons’ ability to cope will worsen. The current system is accused of non-activity and inducing passivity, in other words – the person’s activity is not supported, nor are persons motivated to return to the labour market.

One of the macro level indicators of health and quality of life is the proportion of persons with official incapacity for work and persons with disabilities in general population. The proportion might not in itself indicate quality of life, but the need for assistance. While the proportion of persons with disabilities made up 10.7% of the population as of 1 January 2013, which is 137,710 persons (9.6% in 2011), the 1 January 2014 statistics show 10.9% of population is made up of persons with disabilities, which amounts to 144,136  persons.[1] The proportion of persons in the society receiving pension for incapacity for work also need to be considered in addition to persons with disabilities to specify the target group in order to appreciate the seriousness of the socioeconomic situation. The target groups of persons receiving pension for incapacity for work and persons with disabilities who are of working age overlap in part, on estimation a half of the first group also have a degree of disability assigned to them. 94,325 persons of working age (ages 16—62) have been assigned a disability of 40—100% as of beginning of 2014, which makes 12% of the population of working age (the OECD average for 2012 was 6.6%).[2] Predictions state that if the current system continues there will be about 124,000 persons receiving incapacity for work in 2016, and 176,000 persons receiving incapacity for work by 2020.[3] According to the Statistical Office’s 2012 labour force survey just 38,000 or 39% of persons receiving incapacity for work are employed on the labour market. Nearly 32,000 of them are working full time and the rest (6000 of them) work part time.[4]

The number of older persons with disabilities is rising quickly along with the aging of the population and the increase of average life expectancy. Therefore, the more there are older people, the more there are persons with long-term illnesses in the population. The larger part of persons with disabilities is not made up of persons of working age, but of older people, which is why it is particularly important to start paying attention to that part of the population. Persons with disabilities of retirement age have currently not been paid much attention and no substantial steps have been taken to improve the situation of this target group.

In addition to the state, the local governments also play an important part in guaranteeing the coping of persons receiving incapacity for work and persons with disabilities. Unfortunately the capacity of local governments to support persons who need help varies, as does the accessibility of help, as a result of which the people are treated unequally.

Political and institutional developments

2013 can be considered a year characterized by extensive preparatory activities for implementing the largest reform in social security in the past few years – the system supporting capacity for work. In July 2013 the government approved the principles for supporting the capacity for work reform, which aims to assist persons of working age (aged 16—63 years) who have damaged their health and persons with disabilities find and keep suitable work. Prevention of loss of capacity for work, motivating people to stay active within the extent of their preserved capacity for work, also assisting employers with improving the work environment and hiring persons with loss of capacity for work and keeping them employed were also set as aims.

The reason behind this amendment is clearly the ever increasing number of persons receiving pension for incapacity for work who are predominantly non-active (2/3 are not employed) and must make do with small pensions for incapacity for work paid by the state. Considering the rapid increase of number of persons receiving pension for incapacity for work and therefore also increasing expenses to incapacity pensions, support and social services, Estonia’s current incapacity for work and social security scheme are unsustainable.

Three central principles for the new system were set when the work on the reform began, implementation of which the state promised complete support for:

  1. persons of working age who have damaged their health must be kept on the labour market, as it is possible to work with a diminished capacity for work;
  2. people must prevent health risks with their behaviour and be ready to take part in measures helping them return to the labour market or continue at their current job;
  3. employers must implement activities to improve the work environment and create opportunities to facilitate work for persons with health problems.

A successful launch of an extensive social reform is necessary and unavoidable and all the parties – persons who have damaged their health and persons with disabilities, employers, experts, state officials – understand the fact that it is impossible to go on in the same way. This reform is important as it concerns 100,000 persons of working age who have damaged their health, persons with disabilities, members of their families, practitioners as well as the employers.

Work that fits their capacity enables persons who have damaged their health and persons with disabilities achieve a standard of life that is more similar to that of working people, as it is not possible to achieve it on incapacity pension and support alone in any of the countries. Work also offers social and professional self-realisation and a chance to feel like an equal member of society. It is a question of human dignity and the desire to feel like a full member of society in charge of his or her life. The reform alters the status of these people in society – from needy to active participants. While the current scheme means 60% of persons receiving pension for incapacity for work do not earn an income, which a social tax could apply to, the new scheme is expected to increase the proportion of employment of persons with diminished capacity for work. Therefore, it is set as a goal that 50% of persons with partial incapacity for work are employed.

In a situation where there are not enough employees – with the population aging and the number of people incapable of work increasing the employers have realised that the “army” of persons with health damage and disabilities are a so far untapped resource, and that is the case in the entire world. The employers are increasingly coming to the realisation that persons with disabilities are often more motivated and loyal than “healthy people”. However, there is no need to get lost in illusions as they are nevertheless just people and have the same weaknesses as “healthy” people.

Then again, the primary motivation of the state is the worry over sustainability of the current social system. Investment in the education, rehabilitation and methods of employment of the target group creates more tax payers. The goal is to decrease spending from state budget in comparison to what would be spent on incapacity pensions and support with the current system. While the preliminary predictions state the costs would grow from 253.1 million euros in 2014 to 619.9 million euros by 2022, the application of the new system would slow down the growth of expenses, and according to the predictions the costs would amount to 405.5 euros by 2022. Therefore, the expected saving applying the new system would be about 214.4 million euros.

We have reached a good starting point where all the parties understand the inevitability of the initiated reform, but in order to achieve success and reach the goals the society’s attitude towards the needy has to be changed, also the fears of the employers stemming from lack of knowledge have to be reduced, and the way persons with disabilities think has to be guided. There is no justification for charitable approach of helping poor unfortunate people in the 21st century, but there is a foundation based on human rights. According to the human rights based approach the persons with disabilities are not victims deserving compassion and care of the society, but equal members of the society who have the same human rights as everyone else. Therefore, the protection of human rights of persons with disabilities in not the choice of the state, but a duty stemming from human rights, according to which the society has a positive duty to guarantee that persons with disabilities can participate in the society as independently as possible, and that conditions have been created for them to stand up for their rights. The change of paradigm of thinking takes time as the topic of equal opportunities, rights and obligations of persons with disabilities is a relatively new phenomenon in the world – it has existed for barely a century.

If we would like to be able to say years from now that the capacity for work reform was successful we must observe the employment of persons with health damages wider than just as a matter of work. It is also necessary to contribute to the education system much more in a way that every person with disabilities receives the best education, offering necessary support and adjustments during the entire duration of studies. Only then can we get persons with health damages onto the labour market on equal terms with other persons. As in the rest of the society, there are people of varying skills and interests among persons with disabilities. Therefore, people have to be given a chance to use their potential and contribute to society.

But then the social services would have to be equally accessible in different regions, in social services offered by the state as well as the local governments. Capacity for work reform cannot be brought to life if the social services do not support the purposes of working and the stand-off between the state and local governments persists.

The last but not the least important key aspect for success is the simplicity and logic of the new system. All opportunities that information technology offers must be used in order to rule out situations where the person must visit various agencies and institutions to go through with the process. Sending people from one agency to another must be precluded and various application processes must be merged.

Although the reform is considered to be important there is a number of dangers, which, if not reduced, may worsen the economic situation of a person of working age with health damage and bring about psychological problems. Whether it be worsening of the economic situation, losing health insurance, worsening of health because of working, or stress. It is considered unfair that the income also reduces for persons receiving pension for incapacity for work who work right now, who have greater expenses on their treatment because they are going to work. Older people, people with mental disorders, who find it harder to find work are also considered a risk group. Neither are all local governments in Estonia equal in their capabilities, which is why some people with diminished capacity for work are in a substantially less favourable position due to regional problems. A significant part in solving this problem was seen in organisation of assessment system for capacity for work. Things have to be weighed carefully so that a large quantity of despaired and poor people are not created by this.

Despite the fact that a direct positive effect for the persons with diminished capacity for work is not seen, the experts and employers see the reform as a positive for the state and the society in general. Then again, there is hope that the motivation of persons with diminished capacity for work will rise significantly as the new system offers much more and more substantial activity for the target group. The employers have realised that if all the necessary requirements are met the new system would motivate them to hire more persons than they are  currently hiring. An opportunity was seen here for small companies in particular, who, in current situation give up the thought of hiring persons with diminished capacity for work because they require adjustments for work rooms and spaces, and that causes too many expenses and complications. But if the state would offer support and finance these extra expenses, the motivation of such companies could rise significantly.

At the same time the employers warn that any expenses and increased costs coming out of the employers’ pockets will be met with great resistance as any extra resources of companies are currently firstly invested in development of the company and not social projects. Hiring persons with disabilities is seen rather as a good deed than a profitable undertaking.

Implementation of the incapacity pension reform is going to improve the situation of employers as there will be more people on the labour market. It is a concern that in five years the employers will have to face a labour crisis, as there are not enough workers to fill all the places now already. There is a lack of steady, qualified workers specifically. The current persons with diminished capacity for work are seen to have great potential, as experience shows that if they are motivated they are very good, reliable and stable employees. The employers would like that to see that it’s made sure the persons of diminished capacity for work who enter the labour market receive the necessary qualifications (according to the needs of the employers) and find the motivation and the courage to work.

Statistics and surveys

Surveys on persons with incapacity for work and persons with disabilities were also spurred by the work incapacity reform. A survey (a preliminary assessment) was carried out by Saar Poll OÜ in 2013 on the effects of the incapacity pension act.[5] The aim was to assess the effects of the planned incapacity for work system and to point out needs and expectations of various participants. It transpired from the analysis of the effects that the strength of the new system is the focus on persons’ capacity for work, which increases the motivation of the target group as well as the employers’ readiness to hire persons with diminished capacity for work. It was also pointed out that implementation of the new system requries a wider discussion of the topic than just focusing on the labour market, for example, the education system’s preparedness to teach students with educational special needs, the uneven and unfocused offering of social services, offering health services on time and in sufficient extent, improvements to work environment, etc.

University of Tartu faculty of law professor of labour law Merle Muda compiled a survey on the analysis of international practices on actions of the employers to keep persons with diminished capacity for work employed and to preserve their position.[6] The objective of the survey was to analyse examples of international practices on actions of employers to keep persons with diminished capacity for work employed and to preserve their position in the context of Estonian law. In comparison to other states, Estonian legislation does not place significant duties on employers in regards to hiring and employing persons with diminished capacity for work, which signifies the attitude that persons receiving pension for incapacity for work are not welcome on the labour market.

Statistics Estonia published the compilation „Social Trends“ no. 6 in October of 2013,[7] which covers measuring quality of life, and also initiates discussion on how to define and measure economic and social development of the society. One of the measures for quality of life is the economic wellbeing, which directly entails incomes, and also indicators, which show economic wellbeing less directly, such as living conditions, presence of certain durable goods and everyday consumer opportunities. The opportunities for a worthwhile existence are objectively indicated by the rate of relative poverty. According to the concept of relative poverty the people, families or social groups are considered poor when the resources at their disposal do not enable nutrition, living and participation in social life as customary or generally accepted in that society. The trait of persons with disabilities was not examined separately in this survey, although persons with disabilities whose main source of income is the state incapacity pension (pension for incapacity for work or old-age pension) and various social support paid to persons with disabilities, live in an economically difficult situation and their consumer opportunities are meagre.

Noteworthy public discussions

The preparations to work capacity for work reform have initiated wider public debate on the status and inclusion of persons receiving pension for incapacity for work. In the past year the topic has been discussed in media from different angles more than ever and the awareness of the society as a whole has improved, and the attitude has become more understanding, even tolerant. The change of emphasis in discussions is perhaps the most important shift – instead of the “charitable” attitude where the needy are merely consumers of services and goods, who need help, the approach based on human rights is adopted more and more. According to the human rights based approach the persons with disabilities are not victims deserving compassion and care of the society, but full and equal members of the society. A person is a person despite the extent of their capacity for work or disability, their special needs have to be considered, and this is not a voluntary choice of the society, but an obligation. Every person is valuable and matters.

More and more parties are included in discussions in preparation for the capacity for work reform who have not actively participated in these topics before (employers, trade unions, the Estonian Unemployment Insurance Fund, human resources experts, occupational health doctors, etc). There have been more and more attempts to include the target group in decision making processes, but certainly even more direct representatives of the target group need to be included among the persons making decisions.

Trends in 2013

The developments of 2013 stemmed from the capacity for work reform, which continues to be the government’s most important priority. Significant human resources as well as financial means are contributed to launching of the capacity for work reform. At the same time constraints are becoming more prominent and the parties are increasingly expressing their worry that a reform of such importance cannot be implemented hastily. The state is also preparing for changes in the rehabilitation system and offering of technical aids in the course of preparation for the capacity for work reform. At the same time it is important to improve the movement of various policies in one direction and the ability to see a common goal. The education, social and health policies must support the objectives of work policies and not work against the goals that have been set.

The reform will test the various sectors’ (education, social, medical, labour) and levels’ (state, local government, employer, service provider, representative organisation, person) preparedness to cooperate and see a further common goal, which, in the long run ought to improve the quality of life of persons of working age who have disabilities, and guarantee social progress of the society.

 


[1] Data of the Social Insurance Board. Calculations of the Social Insurance Board. Available at: www.sotsiaalkindlustusamet.ee.

[2] OECD (2012). OECD Economic Surveys: Estonia 2012. October 2012. Overview. Available at:

http://www.oecd.org/eco/surveys/Estonia%20overview.pdf.

[4] Statistics Estonia. Eesti tööjõu Uuring 2012 [Estonia’s workforce survey 2012].

[6] Available at: http://www.sm.ee/fileadmin/meedia/Dokumendid/Toovaldkond/uurimus_koos_ESF_teavitusega.pdf.

[7] Statistics Estonia website. Available at:  http://www.stat.ee/65393.

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