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The Netherlands: Social Welfare System By Cory Nelan.

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Presentation on theme: "The Netherlands: Social Welfare System By Cory Nelan."— Presentation transcript:

1 The Netherlands: Social Welfare System By Cory Nelan

2 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: 1 st Country to legalize Same Sex Marriages 2002: Legalized Euthanasia General Overview

3 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

4 Netherlands 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 *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

5 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

6 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 http://www.fedee.com/minwage.html Dutch Population below poverty line: 10.5%

7 Labor Market Comparison The Netherlands EU-15 US Employment rate in % population (15-64) 73 65 71 men 80 73 77 women 66 57 65 age 55-64 45 42 60 lower than secondary education 59 57 58 Share of part-time employment 35 13 17 men 15 7 8 women 60 31 19 Annual hours worked per employee 1357 1578 1824 Unemployment rate 4.6 8.0 5.5 share long-term unemployed 33 42 13 Benefit recipient rate 16 14 11 *OECD 2003 and OECD Employment Outlook 2005 http://www.euroframe.org/fileadmin/user_upload/euroframe/efn/autumn2007/Annex7_CPB.p df

8 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

9 US Income Tax Brackets (2008) $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%

10 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 1 st 25,000 Euro, 25.5% over that Games of Chance Tax – Winnings over 454 Euro: 29%

11 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.)

12 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

13 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 366 th 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

14 Employment Insurance Scheme Sickness Benefits Act – Safety net payment for employees who do not or no longer have an employer due to their sickness – 1 st 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 – 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 – http://www.fahcsia.gov.au/guides_acts/ssg/ssguide-10/ssguide-10.8/ssguide-10.8.1/ssguide-10.8.1.30.html

15 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

16 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

17 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)http://www.socwork.net/2007/2/articles/vanhouten

18 Happiest Countries 1. Puerto Rico 2. Mexico 3. Denmark 4. Colombia 5. Ireland 6. Iceland 7. N. Ireland 8. Switzerland 9. Netherlands 10. Canada *US Ranks 23 http://thehappinessshow.com/HappiestCountries.htm “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

19 Bibliography http://www.euroframe.org/fileadmin/user_upload/euroframe/efn/autumn2007 /Annex7_CPB.pdf 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/ssguide- 10.8.1/ssguide-10.8.1.30.html http://www.fahcsia.gov.au/guides_acts/ssg/ssguide-10/ssguide-10.8/ssguide- 10.8.1/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://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


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