Transcript Netherlands By Cory Nelan

The Netherlands:
Social Welfare System
By
Cory Nelan
General Overview
Location: Western Europe – Bordered by the North Sea, Belgium and Germany
Capital: Amsterdam
Population: 16,570,613 (2007)
National Languages: Dutch and Frisian (English Widespread)
Currency: Euro
Land Area: 13,104 sq. Miles ( 33,939 sq km) 2X New Jersey
(50% Below Sea Level)
Government: Parliamentary democracy under a constitutional monarch.
Literacy rate: 99%
Extremely Liberal Social Policies:
Ex) Prostitution and Marijuana are Legal
2000: 1st Country to legalize Same Sex Marriages
2002: Legalized Euthanasia
International Membership
• Promotes Rule of Law, Human Rights and
Democracy
– United Nations
– NATO – Since 1949
– European Union
• Founding Member of ECSC in 1951
– WTO
– IMF
– OSCE (Organization for Security and Co-operation in
Europe)
– CoE (Council of Europe)
– OECD
Netherlands
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GDP :
$638.9 billion
GDP / Capita:
$38,600
Real growth rate:
3.5%
Inflation rate:
1.6%
Unemployment:
4.1%
Labor force: 7.5 million
Exports: $465.3 billion
Imports: $402.4 billion
Net Gain: $62.9 billion
• *4.4% GDP and 3.3% Population
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*all Figures are 2007 unless specified.
EU Average
Total GDP: $14.45 Trillion
GDP / Capita: $32,900
Real Growth Rate: 3%
Inflation Rate: 1.8%
Unemployment Rate: 8.5%
Labor Force: 222.4 million
Economy
• Industry (19% of GDP): Types--agro-industries, steel and aluminum, metal
and engineering products, electric machinery and equipment, bulk
chemicals, natural gas, petroleum products, transport equipment,
microelectronics.
• Services (79% of GDP): Types--trade, hotels, restaurants, transport,
storage and communication, financial (banking and insurance) and
business services, care and other
• Agriculture (2.1% of GDP): Products--dairy, poultry, meat, flower bulbs,
cut flowers, vegetables and fruits, sugar beets, potatoes, wheat, barley.
• Large shipping activity: Well developed port: (Schiphol)
• Well known companies: Unilever, Gouda, Shell Nederland
Income Structure
• Gini Index: 30.9 out of 100
– Fairly compressed Social Income Structure
• EU-25 Gini Index:
– 31 out of 100
• US Gini Index (2005)
– 46.9 out of 100
• Minimum Monthly Income: 1,317.00 Euro (2007)
– (1317 X 12 = 15,804 Euro)
– http://www.fedee.com/minwage.html
• Dutch Population below poverty line: 10.5%
Labor Market Comparison
Employment rate in % population (15-64)
men
women
age 55-64
lower than secondary education
Share of part-time employment
men
women
Annual hours worked per employee
Unemployment rate
share long-term unemployed
Benefit recipient rate
The Netherlands
73
80
66
45
59
35
15
60
1357
4.6
33
16
EU-15
65
73
57
42
57
13
7
31
1578
8.0
42
14
US
71
77
65
60
58
17
8
19
1824
5.5
13
11
*OECD 2003 and OECD Employment Outlook 2005
http://www.euroframe.org/fileadmin/user_upload/euroframe/efn/autumn2007/Annex7_CPB.p
df
Taxation
Income Tax Brackets
• The first bracket: 33.65% on the first € 17,319
– 2.50% tax and 31.15% social security contributions.
• Bracket 2: 41.40% on the next € 13,803
– 10.25% tax and 31.15% social security contributions
• Bracket 3: 42% on the next € 21,942
– All proceeds are tax, No Social Security Benefits
• Bracket 4: 52% on the excess
– All Proceeds for tax, No Social Security Benefits
• 22% tax on interest earned per year
• 30% tax on profits earned from Savings or Investments
• Taxpayers aged 65+ first bracket taxed at 15.75%, second bracket 23.50%
• persons over the age of 65 are no longer required to pay pension
contributions
• http://www.minfin.nl/en/subjects,taxation/income-tax
US Income Tax Brackets (2008)
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$0 – 7825
$7826 – 31850
$31851 – 77100
$77101 – 160,850
$160,850 – 349,700
$349,700 – Above
•
http://www.moneychimp.com/featu
res/tax_brackets.htm
•10%
•15%
•25%
•28%
•33%
•35%
Other Forms of Taxation
• Wage Withholding Tax
– Tax a small amount of each paycheck
• Helps pay for Social Benefits Programs
• Corporate Income Tax
– 20% up to 1st 25,000 Euro, 25.5% over that
• Games of Chance Tax
– Winnings over 454 Euro: 29%
Social Outlook
Age Structure:
0-14 years: 17.6%
15-64 years: 67.8%
65 years and over: 14.6%
Median Age
total: 40 years
male: 39.2 years
female: 40.9 years (2008 est.)
The Netherlands' Social Security
System
• Consists of 2 mandatory contribution-based
insurance schemes and a non – contributory
welfare scheme
– National Insurance Scheme
– Employee Insurance Schemes
– National Assistance Scheme
Under the National Insurance Scheme
• General Old-age Pension Act
– 65+ to Qualify
– 70-90% of Net Minimum Wage Earned for Insurance Period Depending on Marital Status
• General Surviving Relatives Act
– benefits for widows and dependent children who have lost one or both parents
– Compensation based on the Deceased Insurance Period
• General Child Benefits Act
– financial benefit to assist in the cost of providing for children under the age of 18
• General Act on Exceptional Medical Expenses (Compensation)
– Insures medical risks not covered by Mandatory Insurance
– Hospitalization past 366th day, Long Term Nursing Care, Psychiatric Care
• Self-employed Person's Disablement Benefits Act
– Insures against the loss of income due to long term disablement
– Must be between 18-65
– Been 25% disabled for 52+ weeks, Support lasts up to 5 years
• Supplementary Benefits Act
– Additional benefits received if above benefits do not maintain Minimum Guaranteed
Income Level
•
http://www.fahcsia.gov.au/guides_acts/ssg/ssguide-10/ssguide-10.8/ssguide-10.8.1/ssguide-10.8.1.30.html
Employment Insurance Scheme
• Sickness Benefits Act
– Safety net payment for employees who do not or no longer have an employer
due to their sickness
– 1st 12 Months are covered, after that Qualify for Disabilities Benefit Act
– Receive 70% of Daily Income
• Disabilities Benefit Act
– Must be 65 or younger, 15% disabled for 52+ weeks
– Payment Depends of last earned wage and degree of disablement
– Claims made in 5 year periods
• Unemployment Benefit Act
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Ensures employees against the consequences of unemployment
Entitlement dependent on years worked before layoff (depends on industry)
Benefit Rate is 70% net minimum wage
Duration dependent on length of employment record
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http://www.fahcsia.gov.au/guides_acts/ssg/ssguide-10/ssguide-10.8/ssguide-10.8.1/ssguide-10.8.1.30.html
National Assistance Scheme
• National Assistance Act
– Benefits for those in need
– payable to a person who is not entitled to a
pension
– Insufficient income to provide for their essential
needs
– Monthly payments
• Rate Depends on Age, Marital Status and Living
Conditions
•
http://www.fahcsia.gov.au/guides_acts/ssg/ssguide-10/ssguide-10.8/ssguide-10.8.1/ssguide-10.8.1.30.html
Pros and Cons
• Public opinion is
satisfied with social
services
• Plenty of safety nets
• Unemployment rate is
lower than EU / US
• Production is
competitive
• Income Structure is
Compressed
• Happier People
•Population is aging – puts
stress on Social Benefits
System
•More takers than givers in
near future
•Reforms will be needed
•Number of people feel as
though current programs are
too generous
•Many recipients are not
earning compensation
•Wealthy are taxed extremely
high amounts
Social Programs
• “Many (Dutch) citizens who make use of welfare provisions or
benefits are marginalized and seen as second class citizens
(Social and Cultural Planning Office 2004). In this sense
equality does not really exist. To be seen as a first class citizen,
e.g. to conform to the norms of ‘standard’ citizens, implies
that you have a job and enjoy good health.”
(http://www.socwork.net/2007/2/articles/vanhouten)
Happiest Countries
1. Puerto Rico
2. Mexico
3. Denmark
4. Colombia
5. Ireland
6. Iceland
7. N. Ireland
8. Switzerland
9. Netherlands
10. Canada
“Statistical data to devise a ranking of the
world's happiest nations. Heading up the list:
Denmark, which rose to the top thanks to its
wealth, natural beauty, small size, quality
education, and good health care…Capitalism
— sometimes criticized for its heartlessness —
was far from a source of discontent, though
the top-scoring capitalist countries also
tended to have strong social services.”
Marina Kamenev
http://images.businessweek.com/ss/06/10/happiest_countries/index_
01.htm?chan=rss_topSlideShows_ssi_5
*US Ranks 23
http://thehappinessshow.com/HappiestCountries.htm
Bibliography
•
http://www.euroframe.org/fileadmin/user_upload/euroframe/efn/autumn2007
/Annex7_CPB.pdf
•
http://www.fahcsia.gov.au/guides_acts/ssg/ssguide-10/ssguide-10.8/ssguide10.8.1/ssguide-10.8.1.30.html
•
http://www.fedee.com/minwage.html
•
http://images.businessweek.com/ss/06/10/happiest_countries/index_01.htm?c
han=rss_topSlideShows_ssi_5
•
http://thehappinessshow.com/HappiestCountries.htm
•
http://www.minfin.nl/en/subjects,taxation/income-tax
•
http://www.moneychimp.com/features/tax_brackets.htm
•
http://www.socwork.net/2007/2/articles/vanhouten