Cash sickness benefit schemes have historically been among the first social security measures put in place. As the coronavirus crisis unfolds, such schemes are receiving renewed attention, and governments are expanding them significantly.
The original objectives of cash sickness benefit schemes are to provide income replacement and prevent poverty in the case of temporary bad health, to enable a proper recovery before return to work and to reduce employer liabilities. This responds directly to the needs of both workers and employers.
Due to a shifting focus on the financing, provision and reform of health care services, cash sickness benefits have received relatively little attention in recent years. It is all the more significant therefore that this short-term benefit scheme is now at the centre of government measures to address the health, economic and social impact of the coronavirus crisis.
As part of these national strategies to counter the impact of COVID-19, cash sickness benefits are key instruments to:
- delay the spread of the virus by financially enabling persons to stay at home in case of a coronavirus infection, quarantine or flu-like symptoms;
- compensate side-effects of society-wide restrictions, for instance by ensuring continued income for parents with caring responsibilities related to school closures;
- support companies by reducing their financial obligations and human resource expenditures, as a complementary measure to short-term work and partial unemployment schemes;
- prevent poverty and job losses due to absence from work.
These objectives go well beyond the original purpose of cash sickness benefit schemes. A number of governments have since the beginning of the coronavirus crisis adapted the coverage, scope, eligibility conditions and implementation approaches of existing schemes. More concretely, the following measures, which are usually limited to workers affected directly or indirectly by the coronavirus, can be observed:
- extension of access to sickness benefits to hitherto uncovered workers, and identification of solutions to provide coverage to independent workers;
- increase in benefit levels and/or the length of payment;
- introduction of new eligibility criteria beyond medically assessed incapacity for work:
- prevention criteria: for persons in quarantine without symptoms, those who have light flu-like symptoms, or those who are at risk of having a severe course of disease;
- care criteria: for parents whose children are affected by school closures and who are unable to telework;
- economic criteria: for companies that must put employees on leave due to reductions in demand, in countries without unemployment benefits;
- relaxation of eligibility conditions:
- the waiver of waiting periods to access benefits;
- the waiver of the need to produce a medical certificate or to undergo a physical examination by a doctor;
- administrative flexibility:
- the possibility for online application for sickness benefits, either based on a self-declaration or a telephone/online consultation with a medical professional;
- possibility of retroactive requests and payments for persons in quarantine even if they are unable to submit a full benefit application;
- reduction of employer costs related to paid leave obligations:
- the waiver of the obligation of employers required in some countries to provide paid leave for a defined period before sickness benefits are paid;
- where such waiver is not implemented, a reimbursement of paid leave costs through tax credits or direct payments.
A number of governments have taken one or several of these measures. In Ireland, for instance, the waiting period to access cash sickness benefits has been waived for persons who are infected by the coronavirus or medically required to self-isolate. In addition, the benefit amount has been raised substantially. Other countries that have waived waiting period include Denmark, Canada, Sweden and the United States.
Measures in Japan include the extension of access to cash sickness benefits for persons who are in quarantine or diagnosed with the coronavirus, and the requirement for obtaining a medical certificate has been waived in these cases. In Spain, special measures have also been taken for independent workers to ensure income replacement in the case of coronavirus infection or quarantine.
In France, the National Sickness Insurance Fund took action at an early stage by creating an online application system for sickness benefits. In addition to other measures, sickness benefits have been expanded to parents who need to stay at home to take care of children and are not able to telework. In these cases, neither waiting periods nor eligibility tests are being applied.
Social security institutions are at the centre of the implementation of these measures, and are often the first contact point for workers and employers. ISSA member institutions are making considerable efforts to deal with a substantially increased number of cash sickness benefit applications and to adapt rapidly to changes to eligibility conditions. Simplified application systems in France, telephone-based or online medical assessments in Germany and Norway and efforts to strengthen online information and communication channels in Italy are examples for such measures.
For more and update examples, please consult the ISSA media monitor.