Insured life events

Welfare issues Collective agreements supplement the statutory insurance cover, in particular in connection with the following life events: sickness, work injuries, unemployment, death at working age, old-age pensions, parental leave.


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Sickness

Sickness is defined both in law and in collective agreements as incapacity for work on medical grounds. In other words, sickness-related insurance covers all absence from work due to physical or mental illness or accidents.

Most of the loss of income during sick leave periods up to about one year is compensated by sickness benefit paid out of the universal statutory sickness insurance system. However, the first day of the period is a qualifying day, and after that the employer pays sick pay for the first two weeks. If the incapacity appears likely to continue for a long time, the social insurance offices pay the employee a sickness allowance (or activity allowance in the case of employees up to the age of 30) instead of sickness benefit. 

Supplementary benefits under collective agreements are payable to recipients of both sickness benefit and sickness/activity allowances. A negotiated group health insurance scheme is in operation in two of the collective bargaining sectors. In the other two sectors a supplementary allowance is paid out of the occupational pension system to employees on sick leave. Despite the variations in the insurance solutions, they have a common purpose: benefits paid out under collective agreements raise the level of compensation.  The insurance also provides compensation for the portion of salary above the income ceiling in force in the statutory sickness insurance system, for both periods with sickness benefit (in all bargaining sectors except that for privately employed manual workers) and for periods with sickness allowance (all sectors).

Work injuries

Employees who are injured at, or as a result of, work are entitled to higher compensation than is the case with other sick leave. The reason for this is that it is difficult or impossible for employees to do anything about the risks that they may be exposed to at work.

The statutory benefits payable in connection with work injuries are governed by the Occupational Injuries Act (LAF). Agreements in all the collective bargaining sectors in the Swedish labour market also provide for supplementary insurance cover in this area. The dominant collective insurance scheme is the No-Fault Liability Insurance Scheme for Occupational Injury (TFA or TFA-KL). Government employees are covered by the Personal Injury Agreement for Government Employees. The rules on compensation vary depending on the type of work injury. A distinction is made between accidents at work, occupational diseases and commuting accidents. Injured employees may, for instance, receive compensation for expenses, pain and suffering, medical invalidity and future loss of income.

Unemployment

Unemployment benefit is administered by unemployment benefit offices, most of which are operated by trade unions. Employees who meet the length of employment qualification and are members of the unemployment insurance fund receive unemployment benefit in relation to their previous income. 

The income ceiling in the unemployment benefit system is lower than in other social insurance systems, and as a result an increasing number of unemployed persons receive a low level of compensation. Apart from the compensation paid out by unemployment benefit offices, some collective agreements support employees who become unemployed as a result of redundancies due to the closure or downsizing of the company where they worked.

The agreements normally provide both cash benefit and support in the form of individual measures of various kinds. Such agreements, which may be called job security agreements, career transition agreements or redundancy support agreements, are now in force in all collective bargaining sectors. 

Death at working age

The death of an employee of working age imposes a greater financial burden on the survivors than that of a retired person. The social insurance system provides survivor pensions both for partners and children, but they are not sufficient to compensate for the household's loss of income. 

Various kinds of occupational group life insurance schemes are therefore in operation in all the collective bargaining sectors. These agreements are broadly similar, but there are differences as regards the definition of beneficiaries, i.e. those who are entitled to compensation.

The amount of compensation depends on the length of employment, the number of hours worked, the employee's age and who the survivors are. The younger the employee, the higher the compensation, especially if he/she leaves dependent children. However, funeral assistance is always paid to the estate of the deceased regardless of the period of employment and the survivors. In addition, in several bargaining sectors compensation is also paid to survivors under an occupational pension scheme.

Old-age pensions

All residents of Sweden are entitled to a pension under the statutory national pension scheme. Starting in 1999, this consists of an income-related component and a supplementary component calculated in accordance with transitional rules linked to the previous pension system, as well as a premium pension component. For those who are only entitled to a low income-related pension, or have not earned any pension rights at all, the national pension is topped up to a guaranteed minimum (guarantee pension).

The national pension is supplemented by an occupational pension scheme in each collective bargaining sector, i.e.:

  • the SAF-LO Collective Pension Agreement
  • the Supplementary Pension Scheme for Salaried Employees in
  • Industry and Commerce (ITP)
  • the Collectively Negotiated Local Government Pension
  • Scheme (AKAP-KL)
  • the Government Sector Collective Agreement on
  • Pensions (PA16).

There is considerable variation between the collectively negotiated pension schemes, although there are also some similarities.

All collectively negotiated pension schemes allow the employees to choose a fund manager for at least part of the pension amount. The size of this individual portion – which in
two collective bargaining sectors represents the entire pension – depends on the size of the premiums paid by the employer in the form of annual pension provision, the length of the period during which they are paid, and how the funds are managed.

Parental leave with a new-born/adopted child

For all collective bargaining sectors, there are agreements about supplementary parental benefit/parental pay which supplements the statutory parental benefit for a certain number of months’ absence from work for the care of a new-born or adopted child.

The agreements vary depending on sector. Compensation can be paid out by an insurance scheme (for example, Föräldrapenningtillägg, FPT (Additional Parental Benefit) which is part of the collective agreement for private or cooperative employees) or it can be paid out directly by the employer.

Generally speaking, a collective agreement will supplement statutory parental benefit with an additional 10 percent of compensation and also give compensation for the portion of income that is higher than the parental benefit scheme’s income ceiling. The aim is that the employee will attain a compensation degree that is in total 90 percent of his/her earnings.