Five percent of Swedes on sickness benefits

New figures from Sweden’s Social Insurance Agency (Försäkringskassan) show that the number of Swedes between 40- and 49-years-old receiving either sickness compensation (sjukersättning) has nearly doubled since 1991, the Dagens Nyheter (DN) newspaper reports.

At the end of 2008, around 530,000 people, more than 5 percent people of Sweden’s entire population, were receiving one of the two benefits -- sickness compensation or activity compensation (aktivitetsersättning) -- designed to compensate people who can no longer work full time due to illness or injury.

Of that figure, 150,000 were receiving only partial benefits.

Activity compensation is available to people between 19- and 29-years old and is intended to “support young people who cannot work due to illness or some other disability”, according to the agency.

Sickness compensation, on the other hand, is available to workers aged 30 and above who have had their ability to work permanently reduced by at least a quarter due to illness or disability.

Sickness compensation can be partial, permanent, or time-limited.

In drawing up the report, Försäkringskassan analyzed what led people to start accepting benefits and how their economic situation has changed from 1991 to 2006.

The figures haven’t changed appreciably since 2006, said Ulrik Lidwall, an analyst with the agency, told the newspaper.

He is concerned, however, that Swedes are starting to take sickness compensation at increasingly younger ages and that the number of households with children included among those who rely on benefits payments to survive has more than tripled since 1991, from 8,000 to 27,000.

The investigation also revealed that one in three single parents with sickness compensation has a low standard of living, compared with less than one in ten from the early 1990s.

“It’s really tragic because we’re talking about people who have a long time left before they reach retirement,” Lidwall told DN.

“You have to be careful not to generalize, but the economic situation for many people with sickness compensation increases the risk that many children will be deprived of a good start in life.”

In addition, the value of sickness and activity compensation benefits are only guaranteed to increase along with general price rises, meaning the purchasing power of benefits recipients is successively eroded in comparison to workers who see their wages increase faster than the pace of inflation.

“An early entry into sickness and activity compensation brings with it a much greater risk for a life of relative poverty. In the long run, it can also lead to a significantly lower standard of living as a pensioner,” said Lidwall in a statement.

Sweden’s social insurance minister Cristina Husmark Pehrsson agrees.

“There ought to be a law prohibiting young people who have had activity compensation from automatically receiving sickness compensation when they turn 30. It creates a risk for a permanent poverty trap,” she told the TT news agency.

In September, the government announced the allocation of 17 billion kronor ($2.36 billion) in the autumn budget for initiatives to prepare the long-term sick for a return to the workplace.

Earlier that month, the Social Insurance Agency released figures showing that 4,400 Swedes lost their right to sickness benefits in the first half of 2009 as the agency tightened its regulations.