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Foreign workers face family aid cuts

Labour immigrants working in Norway, many of whom come from Poland, now face major cuts in the Norwegian financial support they receive for their children back  home. The country’s new conservative government wants to cut the support payments sent to families with children who don’t live in Norway.

Called kontantstøtte (literally “cash support”), the system was introduced controversially during an earlier center-right government led by the Christian Democrats party. The idea was to compensate parents who opted to stay home with their young children instead of placing them in day care centers. Since such parents saved the state money by not taking advantage of subsidized day care, the Christian Democrats argued, they should receive support for the work they saved the state from performing.

Other parties like Labour have argued strongly against the cash support system, claiming that it keeps many women home and out of the labour force, especially immigrant parents whose children could benefit from attending Norwegian day care centers. Still others argued that the state shouldn’t have to pay parents to essentially take care of their own children.

NOK 6,000 a month
The system has continued, however, also during the past eight years of a left-center Labour-led coalition. Under the new state budget proposal, the amount of state support for families with toddlers will also increase, to NOK 6,000 (USD 1,000) per month.

New debate broke out, however, over European Union-related rules that mean foreign workers in Norway also are eligible for the same amount of cash support for their children back home. Most of the payments sent overseas, reported newspaper Dagens Næringsliv (DN) on Wednesday, go to families in Poland who have one parent working in Norway: Of the roughly 1,000 families receiving “exports” of cash support for children, fully 710 were in Poland in 2011, with Swedes making up the next largest group of recipients, at 129, followed by families of Lithuanian workers (63).

New system sought
Given the difference in price levels between Norway and Poland or Lithuania, though, the Norwegian cash support can be rather lucrative in a country where some monthly salaries are less than NOK 6,000. Now Norway’s new labour minister, Robert Eriksson of the conservative Progress Party, wants to launch a new system that will still offer cash support for families abroad, in line with rules set by the European economic agreement (EØS) to which Norway must adhere, but in line with their local cost levels.

DN reported that will mean a major reduction in the financial support that can be sent to families in Poland, for example, from NOK 6,000 per month to NOK 2,200. Aid sent to the children of Swedish workers in Norway, the next largest group of labour immigrants who have received cash support for their families back home, would be higher, since prices are higher in Sweden than in Poland, but less than in Norway.

Norwegian workers with children living abroad also can arrange to receive the cash support, in line with the many Norwegians who receive it in Norway, but it would also be adjusted in line with prices where the children are living.

“We want to modernize and make the Norwegian social welfare system more robust,” Eriksson told DN. “I want to challenge export of our benefits and have asked the ministry to work as quickly as possible to find out how we can adjust the cash support in line with cost levels.”

Unemployment benefits and Norway’s other form of monthly child welfare payments (barnetrygd), also face what Eriksson calls “cost adjustment.”

‘Entirely possible’
Thomas Nordby, a partner in the law firm Arntzen de Besche who earlier worked for the government’s legal staff, told DN that he can’t understand why Norwegian governments haven’t adjust the cash support earlier. “It’s correct that all workers in Norway must have equal rights to receive cash support, but I believe it is entirely possible that the support can be regulated by an index in relation to costs in the country where it’s going,” said Nordby, who is an expert on EØS regulations.

That comforts Eriksson, if not the current recipients of such exported welfare benefits. “When one of the foremost experts in this area, who has worked for the government, believes this is possible, it gives us further inspiration to make this work,” Eriksson told DN.

Former Prime Minister Jens Stoltenberg of the Labour Party, who has opposed the entire cash support system, admitted that no proposal to regulate and reduce exported benefits came up during his eight years leading the government. He still argues, though, that adjusting the support in line with costs “only deals with part of the problem.” He would still like to see cash support reduced or eliminated. Berglund



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