I read this in The Guardian this morning and since I don’t draw unemployment or disability benefits I’m not up on any of these facts but was still surprised at how badly the US fared. I’m used to feeling thrilled that I live on this side of the pond now because the ADA makes life so much easier for me since I’ve been a wheelchair user. Not everything is better though according to this…….
Which are the best countries in the world to live in if you are unemployed or disabled?
With a population of just 1.5 million, Estonia does not have a very large welfare budget in either absolute or relative terms. However, unlike many countries, much of the Estonia’s welfare budget is administered online, keeping costs down. Citizens can apply for all relevant benefits once, without having to fill out lots of very similar forms.
For those out of work, there are two groups of benefits. To qualify for unemployment insurance benefit, claimants have to be registered unemployed with the Estonian Unemployment Insurance Fund, have made at least one year’s contributions over the preceding three years and to be out of work involuntarily. Workers contribute 1.4% of salary and employers pay 2.8%. Benefit levels are 50% of salary for the first 100 days, 40% thereafter. The insurance fund also continues to pay unemployed workers’ health insurance premiums.
The unemployment allowance is designed for people on low incomes who have worked, been self-employed, or studied for at least 180 days of the year. Recipients of the flat-rate allowance get €4.01 a day.
Estonia has a generous parental leave policy: parental benefits are paid for 435 days at 100% of parents’ average monthly income for the previous calendar year. Parents are also eligible for home care leave for children under three, with the entitlement to return to the same job. And unusually, in 2013 and again this year, it increased child benefit for families with three or more children, which now stands at €95.90 per month. There is also a new means-tested family benefit for poorer families in addition to child benefits.
For disabled people and the long-term sick, working age adults are eligible for incapacity benefits, with varying payment according to the severity of the disability or illness from €17-54 a month. This is supposed to go towards medical costs, transport and other expenses not covered by health insurance or other benefits. Citizens also receive health insurance. But the government is introducing reforms to the system in January 2016 to reduce the numbers who can qualify for benefits. In future there will be a single employment insurance fund, which administers work-capacity assessments, pays benefits, provides labour market services and links claimants to rehabilitation services and technical aids.
France’s unemployment benefits are among the most generous in Europe, payable even for net salaries of €6,959 (£5,021) per month. That may seem to favour high earners in a country where the average monthly net salary is just over €2,000, however a spokeswoman for UNEDIC, which administers the benefits says that less than 1,000 unemployed people receive the top amount, out of a total 2.6 million claimants. The current system, negotiated between unions and employers last year, kicks in after four months’ employment. Workers aged under 50 can claim unemployment benefit for two years, while those aged over 50 can claim for three years. On average, benefits are about 65% of employees’ salary. To qualify, people must be registered with the Pôle Emploi jobcentres and be actively seeking work. For those who haven’t worked for long enough to qualify, or at all, the RSA (Revenu de Solidarité Active) is a safety net, providing a minimum wage for the unemployed. A childless single person can receive €514 per month, and a couple with two children €1,079.
French sick pay can be claimed if employees have contributed to the state-run insurance scheme, the Assurance Maladie. The benefit totals 50% of the daily net wage. The conditions require beneficiaries to have worked for 200 hours over a period of three months before claiming the benefit or to have paid contributions on a salary of at least €9,754 for the six months beforehand. For example, if a worker receives a daily wage of €75, the daily allowance (paid fortnightly) will be €37.50 per day. Claimants with three dependent children or more receive 66% of their daily net wage. Unemployed people can also obtain sick pay at a daily maximum rate of €43 if they receive unemployment benefit or have been out of work for 12 months or less. However unemployment benefit is suspended for the period of sick pay to avoid a double allowance being paid.
Paid maternity leave in France, paid at 100% of salary (but capped at €540 per week) is available to mothers for a total of 16 weeks if they have contributed to the Assurance Maladie. The total allowance rises to 34 weeks for twins and 46 for triplets. Paternity leave of 11 days, also paid by social security depending on contributions, is available to fathers. France also provides child benefit for two children or more aged under 20, regardless of employment history. Until now, parents have received a flat rate of €129 per month for two children, rising to €461 for four, although negotiations currently under way may lead to a means-tested system. Tax credits – paid as a refund – are available for low earners with salaries below €16,251 for a single person or €32,498 for a couple. Half of costs paid for childcare and domestic workers – including cleaners, gardeners and IT help – can be deducted from an individual’s taxable income, up to a ceiling of €12,000.
Disability benefits are calculated according to the individual’s average salary over a 10-year period. If claimants can work, the rate is based on 30% of the claimant’s average salary over the decade and can range from €282 to €951 per month. For those no longer able to work, a higher rate of 50% is used, up to a ceiling of €1,585 per month. Those who cannot work and require care receive the same scale of benefits as this second group, but also get €1,104 per month to pay for a carer. Disabled adults who have never worked can claim a monthly allowance of between €403 (for a single person) and €666 (for a couple), as long as they do not have financial resources of more than €800 per month (for single person) and €1,600 (for couples). If the disabled person has worked for less than one year and has minimal resources, they can also claim the RSA as well as housing benefits. Disability benefits are also available for parents looking after disabled children under 20 who are living at home. They cover education, and the employment of a carer, but are means-tested and the benefits depend on the severity of the child’s disability.
Anne Penketh, Paris
Under the German social insurance system, unemployment premiums account for 3% of workers’ earnings – half paid by the employer. Anyone who has paid those premiums for at least one year over the past 24 months is entitled to unemployment benefit. Those with children can claim two-thirds of their previous salary, while those without children can claim 60%. The duration of benefit payments varies according to how long you have paid into the system and your age. Those under 50 can claim for one year, those aged 50-54 can claim for 15 months, those 55 or older for 18 months and two years for those over 58, as long as they have paid in for at least 48 months.Thereafter, if a person remains unemployed and wishes to continue claiming benefits, they receive a flat-rate unemployment benefit called Arbeitslosengeld II (ALG II), which is meant to ensure minimum income standards. Benefit levels are reviewed every January, to ensure they are in line with the cost of living. Claimants receive €391 per month if living alone or €353 for those who are married or in a cohabiting relationship. Those not living independently get €313, while 15- to 18-year-olds not at school, receive €296. Unemployed parents receive an additional allowance for each child: €261 for children aged seven to 14 and €229 for those under seven. Other allowances for those on ALG II include: €10 for nursery/school activities; the full cost of buying furniture and household equipment; while extra allowances for pregnant women, or those with specific health needs (such as orthopaedic shoes) are assessed on case-by-case basis.
But payments are automatically reduced by 30% for three months if a recipient refuses to accept suitable work offered, or makes no effort to find work, and by a further 30% if they repeat the same behaviour. A person can earn an extra €165 a month, working less than 15 hours, without it affecting their benefit.
If employees cannot work due to illness, employers will continue to pay their salary for six weeks, after which healthcare insurance, or Krankengeld, kicks in. Sick pay is financed by equal contributions from employer and employee of 15.6% of net salary and usually amounts to around 70% of the employee’s salary, payable for a maximum of 78 weeks over a three-year period. Employees can also claim up to 10 days sick pay per child. Those unable to work due to illness or injury receive payments of 80% of their prior net earnings for up to 78 weeks. In some cases, 100% is paid. Where the disability is longer-term, individuals receive a pension (regardless of age). Those who are unable to work more than 20% due to a work injury or an occupational disease (around 67 are officially listed) are entitled to a pension equal to just over two-thirds of their previous year’s earnings, up to a specified maximum. This is payable until the age of 65, unless the old-age pension kicks in before then. However, it is very difficult to claim successfully.
Health insurance covers all comprehensive medical care benefits, including the total cost of physical rehabilitation and necessary appliances. Those with a disability, who are unable to work more than three hours a day, are eligible for a disability pension as long as they have contributed to the social security scheme for a minimum of five years. Those unable to work more than six hours a day are entitled to a partial pension. The average disability pension is around €8,900. Disabled people are entitled to health treatment via the nationwide health insurance scheme at no extra cost, but must have been paying into the system prior to the disability. Seriously disabled people are entitled to further allowances and special employment protection.
Disabled children are automatically insured with their parents in the health insurance scheme without having to pay any additional costs. Children and students with disabilities are entitled to various rights, including wheelchair access and a sign language translator in certain circumstances. Companies receive benefits and tax breaks for employing people with disabilities. Grants are available of up to €2,557 per project to adapt the home of a disabled person to their individual needs. They are also entitled to housing benefit of up to €1,500, depending on the severity of the disability; help towards taxi fares to enable mobility and participation in normal life; and free public transport. There is also money to cover care at home, measured on three levels, according to an individual’s care needs.
Kate Connolly, Berlin
To qualify for jobseeker’s benefit, you must be aged under 66 and be unemployed for at least three days out of seven. You must also demonstrate to the Department of Social Protection that you are “capable of work” and have enough social insurance contributions. Individuals receive €188 per week, with extra payable for those with children. You can be disqualified from the benefit if you leave work voluntarily, lose your job through misconduct or are aged under 55 and receive redundancy of at least €55,000. There are also penalties for failure to attend meetings aimed to get you back to work.
The overarching criteria for disability allowance is that individuals are residents of Ireland and have a disability that is expected to last for at least one year and substantially restricts a person from undertaking work that would otherwise be suitable for them. “Deciding officers”, appointed under Irish social welfare legislation, determine who is entitled based on the merits of each individual case. Applicants are required to have their doctor complete a medical report which is reviewed by one of the department’s medical assessors. Payments are means-tested above €50,000 of any capital. The maximum payment for those aged 26 or over is €188 per week for individuals. Those with children receive extra.
If a disabled person goes back to rehabilitative work they can earn up to €350 a week and still receive the allowance. However, that individual must first get permission from the department before taking up that job. Henry McDonald, Dublin
In a nation where the unemployment rate is 12.9%, benefits for people who do not have work are seen as especially critical. The rules governing unemployment benefits were overhauled in 2013. In order to qualify for employment social allowance (Aspi), workers have to have been insured with the National Institute for Social Security for at least two years before their dismissal, and to have accumulated at least 52 weeks of contributions. Employees who have voluntarily resigned do not qualify.
The amount of benefit is calculated as a percentage of the gross income earned by a worker over their two previous years of work. An unemployed worker can expect to be paid 75% of their monthly earnings up to a ceiling of €1,180 per month in 2013. Those on higher salaries can expect to be paid 75% of this figure, plus an additional 25% of the difference between their monthly pay and that ceiling. Those who do not qualify for unemployment benefits can apply for a “mini Aspi” allowance if they made contributions to the scheme for at least 13 weeks in the year leading up to their dismissal. The amount of money unemployed people receive under the “mini Aspi” is granted for a shorter period. It is only granted for half the number of weeks a worker made contributions in the previous 12 months. While workers who were made redundant because of downsizing or the closure of a firm used to get paid a “redeployment” allowance, meant for people who are unable to find new jobs, that benefit will no longer be available by 2017. This benefit was used during the financial crisis for certain manufacturing sectors. People are also entitled to sick-leave benefits in Italy. “Cash sickness” benefits are paid from the fourth day of a reported illness and are paid for a maximum of 180 days per calendar year. Unlike unemployment benefits, this benefit is paid directly by the employer and is equal to half pay for the first 20 days of illness, and 67% thereafter.
There are about 2.6 million disabled people living in Italy, 4.8% of the population, who describe themselves as unable to perform essential daily tasks independently. Benefits for disabled people are recalculated every year based on inflation and the cost of living. In 2015, disabled Italians between the ages of 18 and 65 are entitled to €279.75 a month. They also receive tax breaks to buy certain goods such as special vehicles and adjustments to the home. In Italy generally, disabled people are not necessarily encouraged to work and the funds they are given are not enough to support an autonomous life, according to the Academic Network of European Disability Experts. Researchers at Academic Network of European Disability (ANED) found a great disparity in how different regions sought to promote independent living in Italy. A startlingly high number of disabled adults are at risk of poverty compared to their able-bodied peers. Data collected by the ANED found that the proportion of disabled adults who live at risk of poverty is 16.5%, compared with 6.6% for non-disabled people. And only 29% of disabled adults have jobs, according to 2009 data, compared with 65% of able-bodied adults.
Stephanie Kirchgaessner, Rome
People with physical or learning disabilities, as well as those with mental health conditions, are eligible for government assistance. According to the Japanese cabinet office, 7.4 million people belong in these three categories. Adults with severe physical and mental disabilities with an income of less than ¥3.4 million yen (£20,000) are eligible for ¥26,800 yen (£153) a month, while families with children under 20 with physical and mental disabilities can receive ¥50,050 or ¥33,330 a month depending on the severity of the disability. If the children require constant homecare, families receive an additional ¥14,180 , provided their total income is below a certain level. Disabled citizens are also eligible for discounts on public transport and telecom fees.
Retirees who have paid into the employees’ pension scheme and became disabled while they were working are eligible for money after they retire. Those aged over 20 who have paid into the national pension scheme premiums for more than two-thirds of the payment period receive up to ¥983,100 depending on the severity of their disabilities, according to Japan’s National Institute of Population and Social Security Research. Those with severe disabilities who were part of the employees’ pension scheme receive a pension 1.25 times that paid to a person without disabilities. In tandem with the national payments, local governments have the authority to offer supplementary cash for people with certain disabilities.In addition to pensions, Japan has a multifaceted system of residential and community-based care services for those with serious disabilities. People who lose their jobs receive 50-80% of their monthly pay. The employment insurance scheme applies to all companies with at least one employee and protects all workers until they reach retirement at 65. Unemployment benefit is divided into three types: to support those who suddenly find themselves out of work; to help job seekers back into work, and to assist those whose contracts mean they experience periods in and out of work. Those under 65 who are made redundant or are sacked due to circumstances created by their companies receive benefits for 90 days even if they worked for less than a year. If they worked more than a year, the payment duration varies depending on the age bracket. For instance, people between 45 and 59 who have worked more than 20 years are insured for almost 12 months, while those between 60 and 64 are covered for eight months. But recipients must have put in more than 20 hours a week for more than 31 days. Critics say prime minister Shinzo Abe’s cuts to the overall welfare budget by 0.6% starting this April could not have come at a worse time. As the income gap widens and society grows older, the number of households claiming livelihood subsidies rose to a record 1.62 million last October. Almost half the claimant households had elderly members over 65.
Justin McCurry and Chie Matsumoto, Tokyo
Compensation for sick leave in Norway is often described as the most generous in the world: employees receive 100% of salary from day one for up to a year. But sickness absence is high, seen as a symptom of hidden, structural unemployment. Almost 7% of the workforce are on sick leave at any given moment – by far the highest rate of work absence among full-time employees in the industrialised countries, the OECD says.
After a year claimants are assessed for disability benefits. This can be rapid, but it can also take a year or two while they go through a process of rehabilitation to try to get them into work. In contrast to many countries where disability benefits are only available for those in the labour market, here it is a universal right. Benefits are calculated at two-thirds of a person’s gross salary three to five years before the disability occurred. Those who have had very low or no wages, receive 40-50% of the average wage. Over 10% of all working-age adults receive permanent or temporary disability allowances, according to the OECD – a figure that rises to 14% if you include people receiving support to get them back into work after illness or injury. There is also means-tested support for each child in families in which a parent is a recipient of disability benefits.
In Sweden, by contrast, you now need to be very ill to qualify for sickness benefits for more than one year, says Kenneth Nelson, professor of sociology at the Swedish Institute for Social Research, Stockholm University: for the first time since the 1950s, Sweden’s long-term disability provision is now worse than the OECD average of around 80 weeks. In Denmark, disability pensions are means-tested, and housing allowances may be added to pensions. The Finnish system is more similar to the Swedish one – a basic guaranteed amount for those with low or no income, and a second part based on previous earnings. People on disability benefits in Finland may be eligible for extra child supplement, care supplement, housing allowance as well as social support for unexpected expenses.
People on disability benefits in Norway get extra help to pay for a carer, make adjustments to their homes (wider doors for wheelchairs etc), pay for taxis and so on. In Sweden, if you are in a car accident or similar, and end up with a disability, you may have the right to financial assistance for home adjustments, for example, to make it possible for you to move around in the house with a wheelchair, move the kitchen or a bedroom from upper to lower floor and so on. Unusually, if you build a new house in Sweden (quite a popular option among Swedes) you will not get planning permission if the house is not adjusted for such unexpected events – you need to have the kitchen on the ground floor, plus a bathroom accessible for a wheelchair, and at least the possibility to easily convert one room on the first floor to a bedroom, no matter whether anyone in your family has a disability. This amendment to construction law was introduced to reduce future claims for extra help for home adjustments in case of disability. Until the late 1980s, Nordic countries paid very high levels of out-of-work benefits, says professor Axel West Pedersen of the Institute for Social Research in Oslo. But “retrenchment” had already begun in the 80s and accelerated following the global recession of 1991. In Norway, unemployment benefits are financed from general taxation, while in Denmark, Finland and Sweden, unemployment insurance is voluntary, although non-insured unemployed people are entitled to cash benefits significantly lower than unemployment benefits.
In Norway, the unemployment safety net is less generous than other aspects of the welfare system, and the country’s rightwing government has insisted that “work should pay”. To be eligible you need to have been working for at least a year; benefits can be paid three days after losing your job. You can expect to receive almost 60% of salary, but high earners don’t receive much more than a proportion of the average wage. There is no minimum benefit. Those out of work can receive unemployment benefit for two years – the same as Finland and Denmark – after which they are moved on to a “social assistance” scheme for people outside the labour market. Claimants have been told to sell their cars and other assets before they can get any benefits. Municipalities can also require non-specific “activity” from recipients, which might include gardening or cleaning the streets.
But this benefit affects a very small number of people. Unemployment in Norway is under 4% , while for 15- to 24-year-olds it is under 8% – much lower than in many other countries in Europe. In Finland, Sweden and Denmark, it is 8.8%, 8.4% and 4.9% respectively.
Before the 1990s crash, Sweden led the world in terms of support for its unemployed, with compensation as high as 90% of net salary. This has fallen steadily – and rapidly since 2005 – and is now below the OECD average, standing at around 55% of net income thanks to a low ceiling on benefits.
One area where Sweden still leads Scandinavia, and probably the world, is parental leave and childcare. Swedish parents are entitled to 480 days (16 months) of parental leave for each child, with most of it on 80% of full pay; on average, fathers take about a quarter of this shared time off to be with the baby. When that ends, all-day, five-days-a-week childcare in well-resourced kindergartens costs as little as SKr 1,200 (£92) a month per child.
While Sweden has taken the axe to other areas of its welfare state, family policies have not suffered cutbacks. Nor is there any political debate about it – even economists believe it’s a good thing, not least in terms of increasing the labour force by helping both parents to remain in work.
David Crouch, Gothenburg
Unemployment benefits are fairly meagre in Russia, being offered for a maximum of 12 months and providing payment from 850 roubles (£8.50) per month up to a maximum of 4,900 roubles (about £50) per month. The exact amount a person receives depends on their previous work experience and the reason they are out of work. These benefits do not even begin to cover basic living costs: the minimum cost of living in Russia in 2014, as set by the government itself, was 8,283 roubles per month.). This is seen as the absolute minimum required to fulfil basic food and medical needs, although in major cities like Moscow the real figure is surely much higher. The legal minimum wage was a tiny 5,554 roubles, which rose by 7.4% to 5,965 roubles on 1 January this year.
For those out of work with serious illness or disability, the state pays sickness benefits as long as the illness first presented during work or within 30 days of terminating work, and as long as the work was fully legal and thus the person was paying social insurance through their employer. Sickness benefit can cover up to four consecutive months or five months in total in any calendar year. Depending on how long the person has been employed for, the payments will be between 60% and 100% of their normal salary. There is a catch, however: the total amount cannot exceed 415,000 roubles per year (£4,100), so those on high salaries will receive just a small portion of their salary. Low income families may be entitled to extra benefits, especially if they have three or more children or if the family includes a veteran of the second world war. Low-income families can also get discounts on certain foods and medicines, and some may qualify for a reduced utilities bill. Disability is grouped into three categories in Russia. Group one consists of people who have lost all of their working capacity and require constant care; group two are also people who have lost all their working capacity but do not require constant care, and group three includes people who have more than a 50% reduction in working capacity. Payments range from 2,974 roubles a month in the first group to3,170 roubles in the third group. For those with permanent disabilities, the sums are higher, up to 10,000 roubles per month, and higher if the person has dependents.
However, most disabled people struggle on the benefits they are allotted, especially as most Russian cities are extremely unfriendly to disabled people, with stairs, potholed pavements and several months of ice and snow a year. Of those disabled people who could supplement their allowances with work, many say they are unable to find a job due to workplace discrimination.
Shaun Walker, Moscow
This republic with a population of about 32,000, is a tiny state that lies in the heart of Italy, on the north eastern side of the Apennine Mountains. San Marino has been through a turbulent period in recent years following the financial crisis. A 2014 report by the IMF said GDP has fallen 30% since 2008 because of sharp declines in the banking, manufacturing and construction industries.
While it used to enjoy a low unemployment rate of about 3% five years ago, that number has since climbed to around 9%.
Unemployment benefits are based on a social insurance system and are offered to almost all employees, though not individuals who are self-employed.
The burden to pay for unemployment benefits is shared between workers – who contribute about 0.5% of their gross earnings – and employers – who contribute about 1.9% of payroll.
Employers also pay about 7% of payroll as their contribution toward temporary benefits. To be eligible for unemployment benefits, employers must have worked for at least 121 days in the last two years. Temporary benefits are paid out to people who lose their jobs due to unexpected circumstances, like a restructuring.
The amount of money an unemployed worker is paid depends on how long they have worked and their age.
If a person has worked between 121 and 242 days over the previous two years, the worker is paid 30% of their average earnings over the last four months for up to 90 days. If a worker has worked for more than 243 days and is 50 years old or less they are paid 60% of the average pay for the first six months of unemployment, and then half of average pay for two additional months. Workers who are over 50 get four additional months of benefits, or a full year, worth about 40%.
Stephanie Kirchgaessner, Rome
More than 8.5 million people receive payments from the government’s Unemployment Insurance Fund (UIF). Benefits are calculated on a sliding scale dependent on salary and range from 38% for highly paid workers to 58% for the lowest paid workers. Individuals can claim unemployment benefits if they have been dismissed, made redundant or if their contract has expired. Sickness benefits are only paid for two weeks.Employees cannot claim from the UIF if they have quit their job, do not report at set dates and times, refuse training and/ or advice offered by UIF staff. Employer and employee each contribute 1% of the employee’s salary. Employees must claim within six months after they have stopped working and can claim from the day they stop working until their UIF contributions are used up or they start working again. South African workers starting on R165,600 (£9,318) or less per year are taxed 18% of each rand. Those earning between R165,601 and R258,750 are taxed R29,808 plus 25% of the amount above R165,600. Legislation requires employers to insure their employees against industrial accidents and disabling or fatal illness.
Applicants for disability grant are assessed and diagnosed by a doctor who recommends whether their impairment is severe enough to qualify. The South African Social Security Agency makes the final decision. A disabled person is typically eligible for a grant of R1,350 (£76) per month – equivalent to 9% of South Africa’s average wage of R14,731 per month. There is a means test: claimants must not earn more than R5,150 rand per month if they are single or R10,300 per month if married. They must not have assets worth more than R891,000 if single or R1,782,000 if married.They are paid on a sliding scale – the more income an applicant has, the less they will receive for the grant. More than one million people were recipients of a disability grant in 2013/14. But Olwethu Sipuka, spokesperson for Disabled People South Africa, believes the money could be better spent on education to help disabled people gain skills and find jobs. He said: “The government thinks this is the best it can do. It’s not. We’re creating a developmental welfare state and in the long term it’s going to be unsustainable.”
South Africa has a target of 4% employment of disabled people in the private sector and 2% in the public sector, Sipuka added, but the current figures are 2.8% and 1% respectively.
David Smith, Johannesburg
As of March 2015 the latest official US jobless figure stood at 5.5%. In general this was seen as a sign of an economy bursting back to life despite many new jobs being part-time and low-paid and jobless rates for some groups remaining high (unemployment among young people was 10%, while for African American youth it was 29.6% for 16-19 year-olds and 18.9% for those aged between 20 and 24). Americans who find themselves out of work must contend with some of the least generous unemployment benefits of all advanced economies. Just over one in four unemployed workers in the US meets the strict eligibility criteria for the primary out-of-work benefit, unemployment insurance (UI). The criteria includes people proving they are out of work through “no fault” of their own and working for a designated period in the year prior to losing their job with the severity of eligibility requirements varying state-by-state. The duration of UI payments isn’t federally mandated so in a few states payments can run for as little as 14 weeks (12 fewer than the nationally recommended 26 weeks). Once the maximum possible period of payments comes to an end in any state most people are left high and dry. As the scheme is a contributory one, the amount someone receives in weekly unemployment benefits depends on previous earnings but the OECD puts the rate of average payments at near the bottom of the international table.
After the 2008 financial crisis the federal government passed emergency legislation incorporating an emergency unemployment compensation (EUC) element. This temporarily extended entitlement to unemployment benefits from 26 weeks to as much as 99. After pressure from Republicans in Congress, EUC was halted in January 2014 and the proportion of jobless working-age adults receiving UI benefits dropped to an almost record low of 31.7%.
For the long-term unemployed (those out of work for six months or more) the situation can be extremely challenging in the US if they don’t find work quickly. According to the Centre for American Progress, there were 6 million Americans “with no source of income other than food stamps” in the year with the latest available data (2011). Some extremely poor families may receive cash benefits from a programme called temporary cash assistance for needy families (TANF) but this is very tough to get.
The US system of benefits for disabled people could be used as a cautionary tale for anyone who wants to know what happens when state financial support for citizens with physical or mental impairments is paired down to the minimum.
The country has similar scaremongering about so-called scroungers and fakers familiar to anyone claiming benefits recently in Britain, but compared to most other advanced nations the US’s provision is so negligible and its criteria to qualify is so strict that, as Rebecca Vallas of the Centre for American Progress in Washington says, “it is almost offensive”. For a sense of how badly it compares Vallas points out that the definition of what qualifies as a disability in the US for benefits purposes “is basically the most stringent in the entire developed world”. One in five Americans has a disability (the current population is around 320 million). Despite huge barriers to work – including for people with milder disabilities – the vast majority of people receive nothing in the way of disability benefits. For many who don’t qualify food stamps (a federally funded programme for the most impoverished people) is an essential, if meagre lifeline.
There are two main benefits that disabled people can apply for, both of which are administered nationally by the social security administration. The is Social Security Disability Insurance, (SSDI) which is funded through worker and employer payroll contributions. Approximately 9 million working-age adults are currently in receipt of SSDI (with a small number of dependents qualifying for some additional assistance). Most claims (which call for strict medical assessments as well as meeting additional criteria) are denied. Only four in 10 people are eventually approved after all levels of appeals while a fifth of recipients live in poverty.
According to the OECD, SSDI payments average $1,140 per month (£777) and are much less than the benefits paid by most other advanced nations placing the US 30th out of 34 countries in international rankings. The US is also hovering towards the bottom of the league tables (27th) on the percentage of its GDP that goes on disability benefits (just 0.8% in 2009 compared to the UK’s 2.4% – before austerity and recent welfare reforms).
Supplemental Security Income (SSI), the second type of disability benefit and which is designed to meet the basic needs of the poorest disabled people, is paid to just under 5 million working age people with around 1.3 million disabled children also receiving payments. On average, working age adults on SSI receive $525 per month and for most it is their only source of income. People who are paid disability benefits generally receive some public health insurance but eligibility criteria varies between states.
Mary O’Hara, Los Angeles