Hans Christian Holte has his work cut out for him when he takes over in August as the new head of Norway’s social welfare agency NAV. It’s been swamped with more than 400,000 new applications for unemployment benefits and emergency financial aid for Norwegians who’ve lost their jobs during the Corona crisis, while also emerging from scandal and thousands of claims for compensation.
After running Norway’s huge tax agency Skatteetaten for the past seven years, though, few doubt Holte’s qualifications. As head of the Norwegian equivalent of US’ often-feared Internal Revenue Service, Holte has humanized Norway’s tax agency, brought it firmly into the digital age and simplified lots of functions for both ordinary taxpayers and sole proprietors. Most salaried Norwegians now can receive their annual tax return mostly filled out, check it for any errors or needed additions, and receive any refund owed with a few days.
Holte will now move from his position of collecting money from Norwegians to doling it out. He’s got what Labour Minister Torbjørn Røe Isaksen called “solid experience from leading another large, nationwide agency with an important mission” that also affects all Norwegians. He’ll need that, when he assumes command of an overburdened NAV that’s been struggling yet managing to register tens of thousands of suddenly unemployed Norwegians every week. Claims have been pouting in since the Norwegian government all but shut down the country to limit the spread of Corona virus infection. Fully 15.4 percent of Norway’s labour force was officially categorized as “looking for work” by early this month.
Of that, around 340,000 were registered this week as officially unemployed (as opposed to being temporarily laid off), equating to 10.2 percent of the workforce. The numbers are extraordinary for Norway, which has long had a strong economy and extremely low unemployment. Everything changed overnight when the government’s Corona containment measures were put in place, then extended, and thousands of businesses were forced to close.
13 percent unemployment in Oslo alone
Newspaper Dagsvisen reported on Wednesday that in Oslo, considered the Corona epicenter in Norway, fully 51,000 people are out of work. That translates into an unemployment rate of 13.1 percent, more than double the 5 percent reported in Stavanger, for example. The current Oslo jobless rate compares to just 2.6 percent on March 10, two days before the shutdown was imposed on March 12.
Jobless numbers declined a bit nationwide after the Easter holidays, by around 3,000, but are still sky-high. Current NAV director Sigrun Vågeng could announce that the agency had seen new applications cut in half during the past two weeks, “but there’s still many coming in compared to the situation before the Corona measures were put in place.”
NAV is also getting applications from Norwegians who’ve never applied for any benefits of any kind in the past. Worrisome numbers of people need emergency financial aid known as dagpenger, because they have no source of income. NAV was able to initiate a new emergency solution for them two weeks ago, that allows suddenly laid-off and unemployed workers to apply for the financial aid in advance. The agency realized it lacked capacity to handle the flood of new claims pouring in “within a reasonable period.” Those applying for benefits on a Monday could get 60 percent of their former pay deposited into their accounts by Friday.
Pay out now, audit later
“It was incredibly important for us to get this in place since we knew we couldn’t process applications fast enough to pay out benefits for everyone applying,” Yngvar Åsholt of NAV told Dagsavisen. NAV will check the information provided by applicants, but there’s simply no time to process each application separately. Norwegians have been warned, meanwhile, that there will be audits and that anyone who works while receiving benefits can be punished with fines and compensation claims.
The flood of applications has also disrupted NAV’s work in processing counterclaims from Norwegians wrongly punished and prosecuted for traveling within Europe while receiving benefits. The so-called “NAV scandal” that rocked Norway late last year is far from being concluded, remains under investigation and involves thousands more claims to set things right. Since the Corona crisis hit, both the complaints and other claims facing the agency from European regulators have been made a lower priority.
NAV has received some rare compliments for how it has tackled all the new Corona claims, but its reputation was badly tarnished and Holte will be charged with bolstering its credibility. “I will work for a NAV that will be humble, open and accommodating in meeting its clients,” Holte stated when his appointment was announced late last week. “NAV is in a critical phase with many challenges, and I will gladly contribute to address those challenges in the best possible way.”