Sweden's sick leave policy drawing criticism

STOCKHOLM, Sweden - Sweden exudes good health and well-being insummer. The air smells of pine trees and people of all ages bicycleand stroll well after dinner under the late-setting sun.

But as Swedes return from country cottages and Mediterraneanbeaches and prepare for an election Sept. 15, they are grappling witha vexing problem: one of every six working-age Swedes is off workbecause of illness or injury.

The number of people on government-paid sick leave has doubled infive years, and welfare benefits for the sick and disabled now exceedthe government's military and education budgets combined.

In all, about 340,000 Swedes - one in every 26 of a population of8.9 million - are getting sick pay from the National Social InsuranceBoard, a third for longer than a year. An additional 470,000 are ondisability pensions - early-retirement benefits paid by thegovernment to those who stop working before the retirement age of 65.These often are bigger than regular pensions.

Sick Swedes - and what makes them sick - are one of the mainelection issues.

The governing center-left Social Democratic Party, seeking toextend an eight-year spell in office, has commissioned studies andwritten reports saying job conditions are getting harder and morestressful.

Opponents, led by the center-right Moderate and ChristianDemocratic parties, say the government is looking for a cure in allthe wrong places. The problem, they say, is not workers' health butcushy welfare policies that are eroding the work ethic.

Whatever the explanation, the cost - about $12 billion a year, or16 percent of this year's national budget - worries officials.

"I don't think we can accept any higher costs. Then we risk havingto change compensation levels and the sickness insurance loses itsfunction and legitimacy," said Rolf Lundgren, chief economic analystat the National Social Insurance Board, which picks up the tab fromthe employer after a worker's second week of absence due to sickness.

Sweden has long been viewed by many as a model welfare state,characterized by high taxes, extensive government benefits and arelatively small gap between rich and poor.

Although social benefits were scaled back somewhat during arecession in the mid-1990s, subsidized health care and compensationpay for unemployment or parental leave. The system is financed bysome of the highest taxes in the world on income, wealth, propertyand purchases.

Sick leave amounts to 80 percent of a worker's pay. The maximumbenefit is 623 kronor a day, or about $65. After taxes that adds upto about $1,500 a month - about what many workers get for four 40-hour weeks. Sick leave pay is subject to income tax, which rangesfrom 30 to 60 percent.

Opponents of the generous policies say that paid sick leave hascome to be seen as an entitlement rather than a benefit and thatfrivolous claims are partly to blame for the abrupt rise in sickleave since 1997.