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The Welfare Watch in Iceland

August 2010

Lára Björnsdóttir,

Chair of the Welfare WatchMinistry of Social Affairs and Social Security

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The Welfare Watchin Iceland

Simple advice in times of crises!

• Exercise, eat, sleep and mingle • Stay active in leisure and work

• Look at the bright sides of life

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The Welfare Watch

• October 2008 in Iceland:• The banks collapsed• The Icelandic nation lost its credibility abroad• Common feelings amongst the Icelandic people:

Anger- disbelief - desperation – lack of confidence – sadness

• How could this happen – who is to blame?• Is everything lost? • What about our childrens future ?

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The Welfare Watchin Iceland 2009

• Three governments from October 2008• A coalition government (from 2007) until January

2009• A minority government in 80 days from February

2009• A left wing government from May 2009• All these governments “promised” to protect the

Welfare system • It is easier said than done!

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The Welfare Watch

• The Government of Iceland decided (after the election in February 2009) to establish a Welfare Watch in order to monitor the consequences of the financial crisis on individuals and families.

• A Steering group of:

19 representatives among others from six ministries, Social Partners, NGOs, Union of Local Authorities, The City of Reykjavík, the Directorate of Health, the Directorate of Labor and the Council of Equal rights of man and women

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The Welfare WatchSteering group

Main objectives:• Collect information on what has already been put

into action

• Collect information regarding the consequences of the financial crisis

• Present recommendations to the Minister

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The Welfare Watch

• A Steering Group of 19 members• 10 Working Groups• Approximately 100 individuals have taken active

part in the work

• Cooperation from all directions – Information from the community to the Welfare Watch and on to

the government– Information from the WelfareWatch to the community

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The Welfare WatchThe working groups on:

Children (under 18 years)

Youth and Young Persons (15–25 years)

Marginalised Individuals and Groups

The Unemployed

The Financial Situation of the Families

Health in Times of Crisis

Social Indicators

Research

The Mass Media

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The Welfare WatchSpecial Focus

The Red Thread in the Steering group and all working groups:

• Focus on the Childrens Welfare in all areas– Young Families with Children

• Unemployment is the most serious situation– Longterm unemployment– Unemployment among young people

• Cooperation should be underlined in all areas – Include NGOs, volunteers and use the social capital as well as

possible

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The Welfare WatchFirst Report to the Minister in March 2009

Based on the input from the working groups

• Few consequences had emerged• Most individuals were employed (over 90%)• Childrens and youth attendance in the schools

was stable• There were no visible health problems emerging

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The Welfare-watchFirst Rapport to the Minister in March 2009

However...

• 17 thousand individuals were unemployed (9.1%)

• 600 children had parents where both were unemployed

• Economic problems in families, especially because of bonded loans and loans in foreign currency

• Insecurity, anxiety and fear of the future

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The Welfare-watchSecond Report to the Minister in August 2009

10 months after the collapse of the Icelandic banks• 14 thousand unemployed (8%) • 47% of the unemployed were longterm

unemployed (6 months +)• 400 children are in families were both parents

are unemployed

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The Welfare WatchAugust 2010

• Unemployment rate 7.5% • 51% without formal education (only elimentary school) • 13.578 - men 7.234 - women 6.289 • 17% young people 16 – 24 years old (75% of them only

elimentary school)• Approx. 14% part time working + benefits• Longterm unemployment approx. 60%• Still 3-400 children with both parents unemployed

Unemployed on social benefits are not counted with these numbers

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The Welfare WatchSecond Report to the Minister in August 2009

• Economic problems are increasing in families, because of bonded loans and loans in foreign currency

• Increased work-load within the Local Authorities Social Services:– Child Protection– Financial Assistance– Social Guidance/Counselling

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The Welfare WatchRecommendations

• Ensure that children have meals in schools• User friendly access to counselling and quality guidance

for families and children• Financial assistance to families should be coordinated

athwart on state, local authorities and NGOs• Assistance provided in order to ensure youngsters at risk

appropriate education• Special job-offers/job guidance to young unemployed

persons

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The Welfare WatchRecommendations

• Prevent that persons will become stuck in the public social services leading to poverty

• Social Indicators should be established– Work in progress

• Set down Miniminum income standards• Volunteer work and other contributions from NGOs

should be coordinated and the social capital utilised to the utmost

• Secure access for the marginalised to health care• Carry out research concerning child protection in three

local authorities

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The Welfare WatchRecommendations

• Increased cooperation between the local authorities social services and the Directorate of Labor.

• Watch out for the basic services provided by the state and local authorities

• Put special emphasis on assistance to marginalised groups

• Improve financial assistance– Comprehensive overview is necessary for those in

most need

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Focus on Vulnerable Groups

• Sensitive families with young children: single parents, the handicapped, the chronically ill, the disabled, old people living in poverty, immigrants, the unemployed and those who depend on social assistance from the local authorities for their survival.

• The populatin of Iceland is quite young: children are ap. 25% of the nation. 7.800 children live in families that are below the poverty at risk rate, that is 10% of the icelandic children.

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Measures taken by the Government due to household depts

• General measures, which are available to everyone and aim at reducing the payment burden households face due to price-indexed and currency-indexed mortgage and automobile loans

• More specific measures, aimed at those who require major debt restructuring and/or relief. The Parliament enacted laws to strengthen the restructuring framework, which included, among other things, provisions for establishing the Debtors Representative, which will be responsible for assisting households in payment difficulties and act on their behalf.

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Special measures to avoid that young people become permanently stuck outside the labour market

• The campaign “Young people in action” The Ministry of Social Affairs launched the project with the aim to provide all young people (16 – 25 years) who have been unemployed for 3 months or longer a variety of activities. The Parliament decided to spend 1.3 billion ISK on the project. As of june 90% of the target group is active (work, programs and schools)

• This summer a total of 800 new jobs have been offered to students that have been unable to find jobs this summer and for persons receiving unemployment benefits. Young students and some of the unemployed are now actively working in a varity of jobs for the local authorities and the state. (350 m.isk. )

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General situation in Iceland 2010

• Historically low unemployment rate (1 %-2%) In July 2010 7.6%• Approx.10% of the nation is at risk to be below the minimum income

standards, which is very low according to european standards. • 7% of icelandic households say they are in difficulties with morgage

or rent payments and 10% were in arrears on other loans in 2009.• For the first time since the end of the 19. century there is a decrease

population a total of ½ % (between 2008 and 2009) – However there has been an 1.6% increase on average last 5

years. • The development seems to bee towards increased inequality among

the population and this is happening faster in Iceland than in the other OECD countries

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Examples of actions taken by the Welfare Watch

• Letter to the MPs in June 2010Discussions and debate in the Parliament do not reflect the situation in the community – WW challenges them to focus on those who are most serious situations and prioritize accordingly

• Letter to all local authorities fall 2009

Lunch to be provided to all school children

• Survey of local authorities social Services March 2009trends in rent benefits and financial assistance in 2008-2009

• 2009 – 2010 Examination of number of cases reported to the Child Welfare Committees

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What has happened in the Welfare system?

• Both State/Government and Municipalities have been forced to cut down expences

• Also in some areas of the welfare system• It has however been obvious that in all instances

it has been tried to do as little harm as possible• The Welfare Whatch got the task to define “basic

services” which people can not do without both in the Municipalities and within The State.

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What will be the consequences?Can the Welfare Watch prevent anything?

• In a rich country like Iceland it can be hard to see the consequences of economical crises on the Welfare system and the population until after many years

• However we can learn from other countries and our own findings and try to inform and influence ministers and government

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The Welfare WatchThe main guidelines

• Recommendations should at all times be based on quality information and research

• The society as a whole must be committed to the activities and to the restoration of the Icelandic society.

• A Social Contract has to be accomplished in the Icelandic society