International Best Practices in Social Security Systems

The research
The aim of this research is to identify international best practices in social security. The research begins with a quick scan of social security systems in Australia, Canada, Denmark, Finland, Germany, the Netherlands, New Zealand, Norway, Sweden, and the United Kingdom. This scan describes, for each country, the schemes, implementing organizations, and application procedures for social assistance, housing benefits, family benefits, healthcare benefits, and fiscal policies (if aimed at low-income households).

Based on this quick scan, the research proceeds with an analysis of six case studies that can be inspirational for social security policies. These case studies cover: the focus on education for young social assistance recipients in Denmark, the 225-hour work rule for social assistance recipient in Denmark, the separation of social assistance and (housing and family) benefits in Germany, refundable tax credits in New Zealand, the integration of social assistance and housing benefits in Sweden, and Universal Credit in the United Kingdom. These six case studies are assessed on their administrative burden, the effectiveness and targeting of income support, labour market participation, educational outcomes, income security, the financial position of the recipients, and the feasibility of implementation.

Method
This research was conducted through desk research, consulting various sources. For the broad scan, mainly EUROMOD Country Reports and OECD TaxBen Country Reports were consulted. For the case studies, primarily government websites, academic literature, and policy evaluations were used.

Results
Tax credits in New Zealand stand out in terms of operational efficiency and high take-up rates, and Danish activation policies for social assistance recipients stand out in terms of positive labour market outcomes. However, all case studies involve trade-offs among the various points on which the case studies are assessed. A common trade-off, especially observed in New Zealand and the United Kingdom, is that relatively successful policy measures are more challenging and costly to implement. Another common trade-off, particularly seen in Denmark and Germany, is that schemes targeting very specific groups entail higher administrative burdens. Finally, it appears that more effective income support correlates with a lower administrative burden for the applicant.