Prepared by Birgir Arnason.
The FAS provides cash benefits to families with children. Although governed by different legislation than the NIS, here it is for simplicity subsumed in the NIS.
Unemployment benefits are discussed in Chapter 4.
Norwegian benefit levels are generally somewhat lower than in Sweden but on a par with those in Denmark and Finland.
Including unemployment benefits but excluding family allowances.
Ministry of Health and Social Welfare, St. meld. Nr. 1. Velferdsmeldingen, June 1995. An summary in English is available as Welfare towards 2030. This white paper was partly motivated by the looming challenge to the pension system associated with the aging of the population in the next century; that issue is dealt with in chapter y.
This section draws on Ministry of Health and Social Affairs, The Norwegian Social Insurance Scheme. A Survey, January 1995.
Some tax advantages are provided for pension saving in occupational and private plans.
The formal retirement age in Norway is 67. Retirement may deferred until the age of 70. While there are no provisions for early retirement under the NIS, the effective retirement age is in fact 61.
For shorter periods, the basic pension is reduced proportionally.
This arrangement places a strict ceiling on the pension credit that can be gained in any particular year. Prior to 1992, income up to 8 times the basic amount was given full pension credit and income between 8 and 12 times the basic amount 1/3 credit.
Under earlier arrangements it was possible to earn entitlements up to 4 times the basic amount.
This implies that this latter group is guaranteed a disability pension of around Nkr 85,000 per year, or the equivalent of US$14,000.
Family allowances are not taxed.
For self-employed persons, the contribution rate is 10.7 percent for incomes up to twelve times the basic amount and 7.8 percent of income between twelve and thirty four times the basic amount; no contributions are made on incomes beyond this level.
Indexing pensions to prices rather than to wages was rejected as this would essentially lead to a flattening out of pensions.
The tax advantages associated with occupational and private pension schemes would generally not be extended.
See Chapter 8 for a discussion of some of the long-term challenges Norway faces.