Government proposes reform of occupational injury insurance

In December 2001, the Swedish government presented a bill reforming the occupational injury insurance scheme. If adopted, the new provisions will make it easier to have occupational injury compensation claims accepted, and the handling of cases will be quicker. Furthermore, annuities for people permanently unable to work will be tied to the development of pay instead of prices.

On 14 December 2001, the government presented to parliament (Riksdag) a bill regarding changes in the occupational injury insurance scheme (SE9803174F). The trade unions, having long argued for a reform of the scheme, welcome the bill, but state that some issues still remain to be solved.

Current system

After the Occupational Injury Insurance Act came into effect in 1977, the number of reported injuries and diseases increased drastically in Sweden, as did the costs. That is one reason why the rules governing the possibility of having an injury or a disease recognised as having been caused by work were made much stricter in 1993. A much higher degree of probability was demanded, and claims were tried in a complex process in two stages, each with different criteria for what was to be regarded as sufficient proof of the injury or disease being caused by work. This made the application of the legislation quite complicated.

Furthermore, the special occupational injury benefit that was used to compensate people for total income loss was abolished in 1993. Instead, people received sickness benefits within the system of general health insurance, thus obtaining lower compensation. Unlike the special occupational injury benefit, sickness benefits involve a waiting period of one day before they are paid. Introducing waiting periods for people injured at work or falling ill because of work was quite controversial.

Under the current system, once it becomes clear that a person will not be able to work again, he or she is entitled to receive an annuity, but it can take quite a long time – sometimes several years – before a decision is taken.

Criticisms

The stricter rules introduced in 1993 resulted in a dramatic decline in reported cases, accepted claims and costs. They also led to heavy criticism, and the government admits that the system was less than perfect. Introducing the new bill on 14 December 2001 Ingela Thalén, the Minister for Social Security, said that she was happy to present a proposal for an occupational injury insurance scheme that she hoped would be fairer, more equal and provide more security for individuals than the current one.

One point of criticism was that the stricter rules make it very difficult to have musculo-skeletal disorders – considered to be the most important work-related health problem in Sweden - recognised as a work injuries. Women suffer from musculo-skeletal problems more often than men do, and consequently overall more men than women have their claims accepted by the social insurance office (SE0106106F).

The trade unions, among others, also criticised the fact that if people are working part-time when they are affected by an occupational injury or disease, the presumption is that they would have continued to work part-time. They thus receive less money, even though they may have exercised their legal right to work part-time because they had young children, and may have planned to return to full-time work later. The Confederation of Salaried Employees (Tjänstemännens Centralorganisation, TCO) thought that this breached EU sex equality legislation and reported it to the European Commission, which has not yet made any decision on the matter.

The main proposals

The government addresses several of the points of criticism in the new bill, although not all. The main proposals are as follows.

1. There will be new rules concerning what evidence is needed to prove that an injury or a disease is caused by work. Instead of trying each case in two stages with different criteria, there will be a single process, and the requirement for recognition is lowered from a 'high degree of probability' to 'predominant reasons'. This means, according to the government, that musculo-skeletal disorders will be accepted as work injuries much more often than today.

2. The waiting period before payment of benefit will be compensated, once the social insurance office has accepted a claim.

3. The annuity for people unable to work again will be indexed to follow the development of pay, instead of the development of prices. Tying the annuity to the development of prices gave those concerned an economic disadvantage compared with those still working, as real wages have risen, while prices have more or less remained the same during recent years.

4. The administration and handling of claims will be reorganised, in order to make the process quicker and more efficient. Today a decision concerning an annuity can only be taken when the disease that caused the injury is over, and naturally this can take quite a long time. According to the bill, the matter can be settled when it is clear that the reduction of work capacity is permanent, or that it can be presumed to last at least one year. The government also thinks that it may be a good idea to centralise the handling of compensation claims in a few specialised units of the social insurance office system.

5. Workers will have to make a written application to the social insurance office in order to have their claim taken into consideration. Until now, no such application has been demanded. The employer has a duty to report work injuries, but it may not be clear that an employee is seeking economic compensation.

6. The new rules concerning what constitutes 'proof' in assessing occupational injuries and illnesses will come into effect on 1 July 2002, if the bill is passed by parliament, and the other changes from 1 January 2003.

Reactions

The employers would have liked to keep the existing stricter rules on occupational injury insurance, but the trade unions are pleased that they are being changed. They never liked the measures introduced in 1993 and have fought against them since then. 'At last!' said Sture Nordh, the chair of TCO, when the proposal was presented. He considers the new bill especially important for women, who, according to TCO, have been discriminated against under the current system. However, TCO states that some issues remain to be resolved: there is no change to the situation of people who are working part time when they are injured or fall ill, for example. Both TCO and the Confederation of Swedish Trade Unions, (Landsorganisationen, LO) would also like to see strict time limits for the handling of a claim. 'We take it that this issue will be dealt with in the continued work on better administration of occupational injuries,' said Håkan Meijer, senior vice-chair of LO, in a press statement.

Commentary

The occupational injury insurance scheme was due to be reformed, given the sharp criticism that has been aimed at it since the stricter rules were introduced in 1993. The system has been complicated and difficult to apply, leading not only to suffering for individuals, but probably also to under-reporting of occupational injuries and diseases. This, in turn, may have had serious negative consequences for preventive work. However, a reformed system will hardly be enough. The number of reported cases of work-related diseases – especially those related to stress - has increased steadily during recent years. This is a challenge that needs a long-term solution: a working life organised in such a way that it is sustainable for both women and men. (Lena Skiöld, Arbetslivsinstitutet)