Social and Economic Policies towards Older People in EU Countries - Assignment Example

Compare and contrast social and economic policies towards older people in two EU countries. What lessons might be learnt? Immortality is what we leave behind which influences future generations. If some part of us, as individual beings, continues to live in lives beyond our own we have achieved one dimension of immortality (Hirsch, 2003). The motivation to leave such a mark is profoundly central to the human condition and to all cultures and societies. The contract between the generations is a notion as old as history and one reformulated in every age. Evidence shows that people making a transition after the age of fifty faces multiple pressures and have limited control over their lives (Litwin, 1996). There are those who live in abject acceptance of their situation, this should not in any case make one underestimate the potential harm that could occur as a result of inadequate opportunities at this stage of life, especially among those that are already members of a socially disadvantaged group. In addition to the risks of is material hardships in old age where people are unable to provide adequately for retirement, those that experience untimely and unhappy dislocation from the labor market can at times suffer considerable psychological damage. It has been found that compared with the perceived network type, this agentic type has more feelings of loneliness but higher levels of satisfaction with emotional support. This one could state is more or less consistent with the life situation of people in this particular age group: almost one in two people live alone and have good functional capacity. Must be acknowledged that in this century there have been significant improvements in the financial position of retired people. But researchers still report unacceptable levels of old age poverty. (Midwinter 1997). The combination of economic recession, pension system maturation and population ageing has put pressures in public spending and in some countries, even threatened a fiscal crisis. As a result, most EC countries have either taken action to limit pension spends or at least are considering such actions. But although cost containment seems to be the main engine driving discussions about pension reform, it is not the only one, nor is it the only factor explaining such developments. It is thus possible to distinguish two contrasting motivations behind current or planned adjustment in the scope and coverage of pensions and a third that combines the two of them. Across the European Union countries the evidence suggests that this proportion of self-sustaining pensioners will increase modestly. But there will be a group of around one third who will either run out of savings or face major care costs beyond state provision, for which they cannot pay. It is inevitable that the practices of the past 25 years of enforcing early retirement will create a cohort of impoverished older people, who may have up to 40 years of living without earned income. Such a group will present a mixture of financial, social, health and psychological pathologies which will wholly negate the ‘savings’ made by their enforced exit from the work force. Both these individuals and the many others with little or no old age provision (notably those who have run modest small businesses) will find it imperative to earn money from economic activity Most of the EU countries are characterized today by an increasingly ageing population. Britain for example, shares population ageing with other EU countries and like them several regions have seen their populations getting old before the end of the last century. Between 2000 and 2005, the increase in the numbers aged 80+ would be above 25 per cent in Belgium and France and almost as much in Austria and Italy (Loretto, Vickerstaff and White, 2007). The policy implications of demographic change are not just a matter of the absolute numbers in different age groups. Increasing longetivity is an indicator of social and economic progress. Over the last twenty years there has been an accelerating trend toward early Labour force exit among older workers. In several member countries of EU, this has been encouraged by public policy in response to rising unemployment. Now, some states are facing the problem of how to reverse this trend in order to compensate for a fall in the supply of young Labour market entrants so that there could be reduction in the costs of early retirements. For Britain, the figures show that in 2006, a total of 8.8 million people in UL were aged between 50 and state pension age (currently 60 for women and 65 for men). Of these 30 per cnet-2.6 million are no longer working and 1.3 million claim incapacity benefits and yet another 140, 000 claim unemployment benefits (Johnson and Slater, 1993). There has also been an increase in one-person households given the fact that divorce rates in Britain are higher compared to the other countries of EU. The most marked growth in living alone has happened among population aged 75 years and over. Britain has in essence, limited the rise of pension costs by altering the public pensions contracts in some way. This has manifested itself in changes such as adjusting contributions or inflation proofing conditions and by raising the retirement age. Britain has also introduced tax incentives to encourage employees themselves to make personal pension savings as a means of reducing reliance on the public pension schemes. Keeping these statistics in mind the Jobcentre Plus scheme was launched. This scheme lies at the heart of labor reforms. The scheme is a result of a merger between employment services and parts of the Benefits agency dealing with working-age benefits. The idea in the new scheme is that when individuals of a working age make a benefit claim, they are asked to discuss not only the benefits that they get but also how they could move into work (Izuhara, 2003). This is in fact a direct manifestation of a country attempting to adjust to a population that is increasingly ageing. Wit the introduction of the Jobcentre Plus, new incapacity claimants are required to participate in a work-focused interview. New Deal 50+ is a less far reaching programme. It is one of the families New Deal programmes introduced by Labour since 1997 and was first announced in 1999 with a national roll-out following in 2000. The other programme is the New Deal for disabled people. This is because of the considerable overlap between older people without jobs and those on incapacity benefits. The idea therefore has been to reduce state spending on pension benefits and incapacity funds and utilize the population and its work abilities in whichever way is possible. The British social policy up until 1968 was run by a variety of legislations that took care of the needs of the elderly, and local authorities had no power to provide for their welfare. This began to change with the passing of the 1971 resolution bringing Section 45 of the Health Services and Public Health Act, 1986 into promulgation. The step was seen to an extent as a tidying up section that authorized all welfare provisions together. It also made it mandatory for the Minister of Health to ensure that residential homes were provided for those ‘in need of care and attention’ (Jones, 1971). It has been a general view in the country that the old people are deserving of social care and attention. To this end therefore, they have often been the major focus for social policy and because UK is an ageing society the importance of the subject is most likely to increase further. For much of the post war period, old age in Britain has been defined statistically as above 65. Having kept this in mind, the reform agenda as far as social reform is concerned as far as old people are concerned has been largely restricted to pension reform. This was first attempted by creating a partnership between the state and the private sector so that public expenditure on by the state in pensions shifted towards the private sector. The Pension Credit scheme was thought up and implemented as well. In March, 2001, the National Service Framework for Older People was outlined building upon a more positive treatment in policy of later life generally but the Labour government. It set out eight standards addressing the health care needs of older people and principle among these is the rooting out of age discrimination in the delivery of health care; provision of person-centered care; promoting health and independence or older people and matching services to individual needs (Alcock, Erskine and May, 2001). Germany too suffers from the same syndrome that is now affecting the British polity- a population that is increasingly old and comes with its related hazards of pension expenditure and a society that was largely starting to be dependant on care and benefits programs (Mares, 2003). For almost a decade, early retirement remained confined to the realm of firm-level negotiations between management and work councils. At the beginning of the 1980s however, political questions about the designs of a national level entry retirement policy erupted on the center of the German political scene. This was driven by a political offensive for reduction in working time led by German trade unions. Faced with deterioration of employment performance indices of the German economy, trade unions started demanding the introduction of a set of policies reducing working time and redistributing the available jobs to a larger number of the unemployed (Mollenkorpf and Walker, 2007). This would therefore mean that prioritizations started taking center stage over allowing old people care. Change came to the German pension system at the end of the 1990s when the German pension system was perceived as being consistive of three pillars. The first essential of the system was the statutory pension scheme. This was in most cases mandatory and applicable to retirement safeguards; disability benefits were also part of this. The scheme provided more than 80 per cent of all retirement income. It was also inclusive of all gainfully employed. The emphasis on the scheme was the scheme of “social justice” (Sozialstaatsprinzip), from which social security for the aged can be deducted (Andersen et al. 2003). Company based pension schemes constituted a second pillar covering about 2/3 of all employees (more men than women) with invested balances summing up to 250,000 million Deutsche Mark (Whiteside 2006). Contributions as well as the involvement of individual employers and employees varied significantly; in addition, coverage differed in different branches (Aust et al. 2002, Schmähl 2003). As a third pillar, voluntary capital funded savings were available on the free market. Here, a great variety of types exists. These are sometimes tax-privileged, such as the risk pooling life insurances. The second and the third pillar each contributed 10 % to the overall pension expenditures at the end of the 1990s. Change came in the form of the Schroeder government reforms that were instituted in 2001. The federal grant as far as the expenditure on pension and benefits schemes were concerned despite the fact that these would mean automatically mean that the measures would add expenditures of the system. This would also enable a lowering of the contribution rate from 20.3 % to 19.3 %. Fiscal incentives for private pensions were strengthened. From the year 2008 onwards, contributions of up to 4 % of the individual gross income have been subsidized. There will also be further incentives and top-ones for low income earners and parents. Another 4 % can be made subject to company based pension schemes – these subsidies increased due to concessions to the trade unions. Furthermore, the plan to introduce a minimum pension was dropped because of critique from the CDU; in return means-testing for pensioners relying on social assistance became less strict. Other major proposals were kept: the reform package included a change in survivors’ pensions and a further reduction of replacement rates by an indexation of pensions to prices in 2000 and 2001, a fixation of pension insurance contributions (at a maximum of 20 % in 2030 and 22 % in 2030) and another increase of the federal grant. This would therefore [place the two systems of governance in terms of priorities and the manner of deciding on social care and pension incentives for the elderly at two ends of the spectrum. For Britain, the priority has been to ensure that the expenditure on public spending be reduced so that the inflationary pressure on the government schemes is brought under control. Germany on the other hand has displayed a remarkable tenacity as far as social and economic care for the elderly is concerned in as much as the country is taking its social care and benefits schemes in a serious manner even if this has meant a compromise on the public spending budgets. The interesting part of the comparison is the fact that ideology does not even come into the picture with the labor government being stationary at London. Prioritization and governing is therefore the debate that becomes an evident learning point from a comparison of the older help system in Britain and Germany. References: Mollenkorpf H and Walker A, 2007, Quality of life in old age: international and multi-disciplinary perspectives, pub, Springer Books, pp98-100 Jones K, 1971, The Year Book of Social Policy in Britain, 1971, pub, Routledge, pp145-146 Alcock P, Erskine A and May M, 2001, The student's companion to social policy The student's companion to social policy, pub, Wiley.com, pp308-310 Mares I, 2003, The politics of social risk: business and welfare state development, pub, Cambridge University Press, pp56-59 Whiteside N, 2006, Adapting private pensions to public purposes: historical perspectives on the politics of reform, pub, Journal of European Studies, Vol.16 No.1, pp43-54. Aust A, Bönker F, Wollman H, 2002, Welfare State Reform in Germany from 1982 to the Present, pub, Report for the 2002 WRAMSOC Conference Hirsch D, 2003, Crossroads after 50: improving choices in work and retirement, pub, The Policy Press, pp120-125  Johnson J and Slater R, 1993, Ageing and After life, pub, Sage Publications, pp269-280 Midwinter, E. (1997) Pensioned Off: Retirement and Income Examined. Buckingham: Open University Press Loretto, W., Vickerstaff, S. and White, P. (2007) The Future for Older Workers: New Perspectives, pub, Bristol: the Policy Press, pp65-72 Izuhara M, 2003, Comparing social policies: exploring new perspectives in Britain and Japan, pub, The Policy Press, pp50-54 Litwin H, 1996, The social networks of older people: a cross-national analysis, pub, Greenwood Publishing Group, pp114-116   Read More