OECD urges governments to reform their welfare programmes
The economic downturn will likely lead to a rise in the number of people on disability benefit, according to a new OECD report.
The report claims that governments should reform their sickness and disability benefit systems in order to help people get back to work and reduce the burden on public finances.
Angel Gurria, OECD Secretary-General, said, “Countries need to speed up their reforms to help people with a disability find a job.”
Disability benefits represent 10% of public social spending in most OECD countries, twice the cost of unemployment benefits before the crisis, with 6% of the working-age population currently claiming.
Once people move onto disability benefit, they almost never leave it for a job, according to a report.
Mental health issues are becoming the main cause of people claiming disability benefit, with up to one third of all new disability benefit claims over the past 15 years being due to a mental health condition.
Although most unemployed people with disability receive some public benefits, they are much more likely to live in poverty. In Australia, Canada, Ireland, Korea and the US, one in three people with a disability is poor.
The best way to help these people avoid poverty in these situations is to strengthen the financial incentives to work, said the OECD. “Reforming the tax and benefit system, so people with disability could do paid work and still receive some benefits, is key. Other ways to help include reforming benefit system obligations for employers, such as employers sharing the cost of paying sickness benefit for workers.”
The unemployment and sickness and disability benefit systems should also be harmonised, said the report, saving costs, stopping the frequent transfer of people between benefits and preventing disabled people being treated differently.