The Norwegian Social Insurance Scheme

A Survey

January 1999

• The Norwegian Social Insurance Scheme
• 1. Personal Scope of the National Insurance Scheme
• 2. Benefits
• 3. Financing
• 4. Old Age Pension
• 5. Survivors' Benefits
• 6. Disability Benefits
• 7. Rehabilitation Benefits
• 8. Medical Benefits During Sickness and Maternity
• 9. Daily Cash Benefits in the Case of Sickness and Maternity Etc.
• 10. Daily Cash Benefits During Unemployment
• 11. Benefits in the Case of Occupational Injury
• 12. Benefits to Single Parents
• 13. Funeral Grant
• 14. Advance Payment of Maintenance Payment for Children
• 15. Family Allowances
• 16. Cash Benefit for Families with Small Children
• 17. Taxation of Social Security Benefits
• 18. Social Security Agreements

The Norwegian Social Insurance Scheme

The main general social insurance schemes in Norway are the National Insurance Scheme, the Family Allowance Scheme and the Scheme for Cash Benefit for Families with Small Children.

Benefits from the National Insurance Scheme are granted according to the National Insurance Act of 28 February 1997.

Family allowances are granted according to an act of 24 October 1946.

Cash benefit for families with small children is granted according to an act of 26 June 1998.

1. Personal Scope of the National Insurance Scheme

Compulsorily insured under the National Insurance Scheme are all persons resident or working in Norway. The same applies to persons living in Svalbard (Spitsbergen) and Jan Mayen who are employed by a Norwegian employer or who were insured under the National Insurance Act prior to their stay in these areas. Compulsorily insured are also certain categories of Norwegian citizens working abroad.

Citizens from EEA countries working on Norwegian ships, except hotel and restaurant staff on cruise ships in the Norwegian International Ship's Register, are compulsorily insured. Foreign (not EEA) citizens not resident in Norway or any other Nordic country, who are employed on ships in foreign trade, registered in the regular Norwegian Ship's Register, are compulsory insured only with regard to entitlement to occupational injury benefits and funeral grants. Persons of the same category, but employed on ships in the Norwegian International Ship's Register, are not compulsorily insured for any contingency.

Employees on permanent or movable installations on the Norwegian Continental Shelf who are not resident in Norway or the Nordic countries are entitled to occupational injury benefits. Employees on permanent or movable installations on the Continental Shelf who are resident in the Nordic countries are members of the National Insurance Scheme with entitlement to all benefits.

Excluded from compulsory insurance are foreign citizens who are paid employees of a foreign state or of an international organisation. Under specified conditions the same applies to persons with a short-term employment in the Realm and persons exclusively in receipt of pension from abroad etc.

The compulsory insurance coverage is maintained during a temporary stay abroad. A stay abroad of less than one year is regarded as temporary. If the person concerned takes paid work abroad, however, the insurance coverage terminates.

Persons who according to the above mentioned regulations are not insured, but are either staying in Norway or are staying outside Norway and have been insured in Norway for at least three of the last five calendar years preceding the application, and having close connections with the Norwegian society, may apply for voluntary insurance.

2. Benefits

Persons insured under the National Insurance Scheme are entitled to old-age (see under 4), survivors' (see under 5) and disability pensions (see under 6), basic benefit and attendance benefit in case of disablement (see under 6), rehabilitation benefits (see under 7), occupational injury benefits (see under 11), benefits to single parents (see under 12), cash benefits in case of sickness, maternity, adoption (see under 9) and unemployment (see under 10), medical benefits in case of sickness and maternity (see under 8) and funeral grant (see under 13).

Many benefits from the National Insurance Scheme are determined in relation to a basic amount (B.a). This amount is adjusted by the Parliament once or more times each year, in accordance with changes in the general income level. The main adjustment takes place 1 May each year. In 1998 the average B.a. was NOK 44 413, and the B.a. per 1 January 1999 is NOK 45 370.

The rates of benefits given below apply per 1 January 1999.

3. Financing

The National Insurance Scheme is financed by contributions from employees, self-employed persons and other members, employers' contributions and contributions from the state. Contribution rates and state grants are decided by the Parliament. Figures given here apply for 1999.

The following benefits are financed by contributions from the state only: Lump sum grants in case of maternity and adoption, grants to improve the functional ability of daily life, basic benefit, attendance benefit, guaranteed supplementary pension for persons disabled at birth or early in life, educational benefits, child care benefits, transitional benefits for survivors and single, divorced and separated supporters, benefits for surviving family nurses, means-tested supplements to funeral grants and advance payments of maintenance payment for children that exceed the reimbursement from the person liable.

Contributions from employees and self-employed persons are calculated on the basis of pensionable income. Contributions on pensionable income are not paid on income less than NOK 21 400. The contributions shall not exceed 25 per cent of income exceeding this threshold amount.

Cash benefits in the case of sickness, maternity and unemployment are taken into account as pensionable income.

The contribution rate of employees is 7.8 per cent of pensionable income (gross wage income). The rate of a self-employed person's contribution is 10.7 per cent of pensionable income (income from self-employment) up to 12 B.a., and 7.8 per cent of income exceeding 12 B.a. As a main rule there will not be charged a contribution on pensionable income exceeding an upper limit of 16 B.a., 75 B.a. and/or 134 B.a., respectively, as laid down for certain categories of self-employed persons. The contribution rate for other kinds of personal income (pensions etc.) is 3.0 per cent.

The employer's contribution is assessed as a percentage of paid out wages. The contributions are differentiated according to the regional zone in which the employees reside. There are five regional zones based on geographical situation and level of economic development. The employer's contributions are 14.1 per cent, 10.6 per cent, 6.4 per cent, 5.1 per cent and 0 per cent according to the zone. An additional employer's contribution of 12.5 per cent is calculated on wages exceeding 16 B.a. (NOK 725 920).

Total expenses of the National Insurance Scheme in 1998 were NOK 145 250 million. The amount represents approximately 35.3 per cent of the combined State and National Insurance budgets and 13.2 per cent of the Gross Domestic Product. The state grants to the National Insurance Scheme were in 1998 NOK 39 882 million, equal to 27.5 per cent of the Scheme's total expenses.

Family allowances and the cash benefit for families with small children are financed over the State Budget.

4. Old Age Pension

The retirement age is 67.

The old-age pension may be partly deferred until the age of 70. If the insured person maintains an earned income, which exceeds the B.a., the pension is reduced by 40 per cent of the exceeding income.

Old-age pension consists of a basic pension, a supplementary pension and/or a special supplement, and possible supplements for children and spouse (income-tested).

A minimum old-age pension consists of a basic pension and a special supplement. For an unmarried pensioner the minimum old-age pension is NOK 81 360 a year per 1 January 1999. The minimum old-age pension for a married pensioner who receives supplement for spouse under 60 years of age is NOK 104 040 a year and NOK 140 040 if the supported spouse is over 60 years of age. If both spouses receive minimum old-age pensions, the pension is NOK 70 020 a year for each spouse.

4.1 Basic Pension and Supplements for Spouse and Children

Persons, who are insured for pension purposes and who have a total insurance period of three years between the age of 16 and the year they become 66, are entitled to a basic pension. The condition of present insurance affiliation does not apply to persons who have been insured for at least 20 years (on the basis of periods of residence etc.) or are entitled to a supplementary pension, cf. 4.2.

The basic pension is calculated on the basis of the insurance period, and is independent of previous income and contributions paid. A full basic pension requires an insurance period of minimum 40 years. If the insurance period is shorter, the basic pension will be proportionally reduced. For persons who are not insured for pension purposes and who have less than 20 years of insurance (based on residence periods etc.), the basic pension is calculated on the basis of the same number of years as the supplementary pension.

As a starting point, a full basic pension equals 100 per cent of the B.a. (NOK 45 370). However, the full basic pension will be 75 per cent of the B.a. (NOK 34 028) if the pensioner's spouse (or a cohabitant whom he/she previously was married to, has children together with or has been living with for at least 12 of the last 18 months) receives pension or has a yearly income exceeding 2 B.a. (NOK 90 740).

A pensioner supporting a spouse (or a cohabitant whom he/she was previously married to or has children together with) who is not a pensioner is entitled to a supplement up to 50 per cent of his/her basic pension. The supplement is income-tested and reduced with 50 per cent of income in excess of the minimum pension for couples plus 25 per cent of the B.a.

An old-age pensioner supporting children under 18 years of age may receive a supplement of up to 30 per cent of the B.a. (NOK 13 611) for each child. The supplement is income-tested in the same way as the supplement for a spouse, but the income that the pensioner can have without the supplement being reduced, is increased by 25 per cent of the B.a. for each child.

4.2 Supplementary Pension

The supplementary pension scheme was introduced in 1967. The aim of the scheme is to prevent a marked decline in the standard of living upon retirement.

A person is entitled to a supplementary pension if his/her annual income exceeded the average B.a. of any year for three years after 1966. Full credit (pension points) is given for income up to 6 B.a. (NOK 272 220). Furthermore, 1/3 of income between 6 B.a. and 12 B.a. (NOK 544 440) is credited as pensionable income for these years. Before 1992 income up to 8 B.a. was credited at full rate and income between 8 B.a. and 12 B.a. at 1/3. Income exceeding 12 B.a. is disregarded.

The amount of the supplementary pension depends on the number of pension earning years and the yearly pension points. A full supplementary pension requires as a general rule 40 pension-earning years. In the case of less than 40 pension-earning years, the pension is reduced proportionally.

Pension points are computed for each calendar year by dividing the pensionable income up to 6 B.a. (before 1992 8 B.a.) minus one B.a., with the B.a. Income between 6 B.a. (before 1992 8 B.a.) and 12 B.a. is divided by 3 B.a.

Example: If the pensionable income was six times the average B.a. in 1998:

6 x NOK 44 413 - NOK 44 413 = 5 pension points

NOK 42 413

The maximum of pension points, which could be credited for any one year before 1992, was 8.33. For earnings from year 1992 on, the maximal pension point is 7.

A full annual supplementary pension is 42 per cent (supplementary pension percentage) of the amount which appears when the current B.a. is multiplied by the average pension point figure for the person's twenty best income years (final pension point). If the person concerned has earned pension points for less than twenty years, the average of all pension point figures credited is used. For years prior to 1992 the supplementary pension percentage is 45.

Example: With an average pension point figure of 7, the supplementary pension from

1 January 1999 is:

1) With 40 pension earning years:

NOK 45 370 x 7 x 45 x 25 + 45 370 x 7 x 42 x 15 = NOK 139 344

100 x 40 100 x 40

2) With 15 pension earning years (prior to 1992):

NOK 45 370 x 7 x 45 x 15 = NOK 53 592

100 x 40

Maximum supplementary pension granted is NOK 170 069.

Many elderly people have had no possibilities of earning a full supplementary pension. In consequence, special transitional provisions have been introduced regarding people born before 1937. It is required that the persons concerned have completed a certain insurance period prior to 1967. The transitional provisions only apply for annually earned income within 5 B.a. (NOK 226 850) each calendar year. For a person born in one of the years 1898-1917, twenty pension earning years are required for entitlement to a full supplementary pension. A person born in one of the years 1918-1936 is entitled to a full supplementary pension if he/she has earned pension points each year from 1967 to the year of his/her 69 ^th> birthday. For income between five B.a. and 12 B.a., the 40-year requirement applies.

Persons who are taking unpaid care of children under 7 years of age and of disabled, sick and elderly persons at home are credited a pension point figure up to 3.00 in the supplementary pension scheme. This corresponds to pension entitlements based on an income from work of NOK 181 480.

Surviving spouse etc. (cf. Section 5.1) will at age 67 transfer to old age pension, and receive his/her personally acquired supplementary pension, or 55 per cent of the aggregated supplementary pension of the survivor him-/herself and the deceased person's supplementary pension, if this is more favourable.

4.3 Special Supplement

Pensioners who have no, or only a small, supplementary pension, are entitled to a special supplement from the National Insurance Scheme. A full special supplement is payable if the insurance period is at least 40 years. The special supplement is reduced proportionally in the case of a shorter period. A supplementary pension is deducted from the special supplement.

For an unmarried pensioner, or a pensioner whose spouse is not a National Insurance pensioner, the special supplement equals 79.33 per cent of the B.a. (NOK 35 992). If the supported spouse is 60 years or older, the special supplement equals 158.66 per cent of the B.a. (NOK 71 984). If both spouses receives a minimum pension, the special supplement is the same as for singles, i.e. 79.33 per cent of the B.a. each (NOK 35 992).

For a pensioner married to a pensioner who has a supplementary pension which is higher than the special supplement, the special supplement equals 74 per cent of the B.a. (NOK 33 574). However, the total supplementary pension and special supplement shall not represent a lower amount than twice the special supplement according to ordinary rate, i.e. 158.66 per cent of the B.a. (NOK 71 984). The same provisions apply to cohabitants that previously have been married to each other or have children together.

5. Survivors' Benefits

5.1 Benefits to Surviving Spouse

A surviving spouse (or cohabitant who previously has been married to or has children with the deceased) under 67 is entitled to pension benefits if he/she is insured with entitlement to pension benefits and the deceased was insured and able to work for at least three years immediately prior to death. The surviving spouse is also entitled to benefits if the deceased had been drawing a pension for a period of at least three years prior to his/her death. These benefits are payable as long as the beneficiary is still insured with entitlement to pension benefits or if the deceased had earned a supplementary pension, in which case a corresponding basic pension is granted. Furthermore, the condition that the survivor shall be insured for the granting of a basic pension is waived if either the survivor or the deceased has been a resident in the Realm for at least 20 years.

Survivor's pension is granted to a surviving spouse etc. if the marriage lasted for five years or the survivor has or previously had children with the deceased or is taking care of the children of the deceased and the aggregated duration of the marriage and the period of care after the death is at least five years.

A divorced spouse etc. who has not remarried at the time of the death of the former spouse, is entitled to benefits according to the same rules provided that the death occurs within five years after the divorce, and the marriage has lasted for at least 25 years or 15 years if there were children in the marriage. The benefits terminate if the beneficiary remarries.

A full survivor's pension consists of a basic pension equal to the B.a., and 55 per cent of the supplementary pension which the deceased received, or would have been entitled to, as totally disabled or as an old-age pensioner.

If the deceased, due to the length of the insurance period, would have got or had a reduced basic pension, the survivor's basic pension is reduced proportionally.

Special supplement is granted as for old-age pensions.

The survivor's pension is subject to an income test. If the surviving spouse etc. in fact has, or may be expected to get, an annual income exceeding 50 per cent of the B.a., the pension will be equal to the difference between a full pension and 40 per cent of the exceeding income.

A transitional benefit is granted to a surviving spouse etc. who temporarily is incapable of maintaining him/herself by working. The transitional benefit is determined according to the same rules as a survivor's pension.

An education benefit is granted to a surviving spouse etc. who needs education or vocational training to be able to maintain him-/herself.

Child care benefit is granted to a surviving spouse etc. who, due to education or work away from home, must leave the necessary care of the children to someone else. The benefit equals 70 per cent of the expenses for child care, but is limited to NOK 28 284 for the first child, NOK 36 900 for two children and 41 820 for three or more children. The benefit is reduced by 50 per cent if the surviving spouse etc. has income between 6 B.a. (NOK 272 220) and 8 B.a. (NOK 362 960). If the surviving spouse etc. has income exceeding 8 B.a., he/she receives no child care benefit.

When a surviving spouse etc. must move to find work, grants are made to cover removal expenses.

Education benefit, child care benefit and grants to cover removal expenses may be granted even if the deceased did not fulfil the requirement of three years of insurance immediately prior to the contingency, provided that the survivor is insured with entitlement to pension benefits. These benefits are only paid as long as the survivor continues to be insured in this respect.

5.2 Children's Pension

A child under 18, insured with entitlement to pension benefits, is entitled to a children's pension if one or both parents are deceased. It is a condition that the deceased was insured with entitlement to pension benefits for three years immediately prior to the death. The surviving child is also entitled to benefits if the deceased had been drawing a pension for a period of at least three years immediately prior to his/her death. Children undergoing education receive the pension up to twenty years of age if both parents are deceased.

If one parent is dead, the full annual children's pension for the first child equals 40 per cent of the B.a. (NOK 18 148), and to each subsequent child 25 per cent of the B.a. (NOK 11 343).

If both parents are dead, the first child receives a children's pension equal to the survivor's pension which would have been paid to the parent who was entitled to the highest pension. The full children's pension for the second child equals 40 per cent of the B.a., and 25 per cent of the B.a. for each subsequent child.

When there are two or more children, the pensions are added together and divided equally among the children.

Children's pension assessed as a percentage of the B.a. is granted at reduced rate in accordance with the reduction a possible basic pension to a surviving spouse is subjected to due to uncompleted insurance periods (ref. 5.1).

6. Disability Benefits

Disability benefits comprise basic benefit, attendance benefit and disability pension.

An insured person with a disability is entitled to basic benefit and attendance benefit.

A basic benefit is granted if the disability involves significant extra expenses. There are six basic benefit rates, which are adjusted each year by Parliament. Annual rates in 1999 are:

NOK 6 036, NOK 9 204, NOK 12 096, NOK 17 808, NOK 24 144 and NOK 30 180.

An attendance benefit is granted if the disabled person needs special attention or nursing. There are four attendance benefit rates, which are adjusted by Parliament. Annual rates in 1999 are:

NOK 10 800, NOK 21 600, NOK 43 200 and NOK 64 800.

The three highest rates are only granted to persons under the age of 18.

The basic benefit and the attendance benefit are reduced accordingly if granted in addition to a National Insurance pension that is reduced due to reduced insurance periods.

An insured person between 18 and 67, whose working capacity is permanently reduced by at least 50 per cent due to illness, injury or defect, is entitled to a disability pension if he/she has been insured with entitlement to pension benefits for at least three years up to the contingency. These benefits are payable as long as the beneficiary is still insured, or if he/she is entitled to a supplementary pension, in which case a basic pension, corresponding to the number of years pension points are credited for, is also granted. Furthermore, the condition of being insured concerning the payment of basic pension is waived if the person has been a resident in the Realm for at least 20 years.

The disability pension consists of a basic pension and a supplementary pension and/or special supplement (as for old-age pensions).

Future insurance periods and future pension points up to and including the year of the persons 66 ^th> birthday are taken into account. Limitations apply in the case of previous periods of some substance abroad. Future pension points are assessed on the basis of income before the disability occurred. Otherwise the basic pension and the supplementary pension are calculated as for old-age pensions.

Insured persons born disabled or having become disabled before reaching the age of 26, are credited future pension points by a minimum of 3.3 (corresponding to an earned income of 4.3 B.a.) if the beneficiary was born after 1940. However, the requirements of sickness and documentation are stricter than the requirements used for the general determination of disability.

Insured persons born in the years 1931-1940 who were born disabled or became disabled before reaching the age of 26, are granted a guaranteed minimum supplementary pension on the basis of a final pension point of 3.3.

In the case of partial disability, the pension is reduced proportionally.

A supplement of up to 50 per cent of the pensioner's basic pension is on certain conditions granted for a supported spouse. A supplement of up to 30 per cent of the B.a. is on certain conditions granted for each supported child under the age of 18. These supplements are income-tested. A guaranteed supplement is granted with regard to supplements granted before the introduction of income testing.

For persons that have been granted pension before 1992 with future earning of pension points, the already calculated pension points from the year 1992 on, will be recalculated according to the new provisions of obtaining points as described in chapter 4.2. A guaranteed supplement is granted in the case of disability pensions granted prior to 1992, in order to prevent a reduction of the nominal amount of the pension. This supplement will gradually be reduced as a result of future increases of the B.a.

Temporary disability benefit may be granted before a final decision is made on granting a disability pension if it is probable that such a pension will be granted.

7. Rehabilitation Benefits

An insured person under 67 is entitled to rehabilitation benefits if he/she is resident in Norway and has been insured for three years immediately prior to claiming the benefit. An insurance period of one year is sufficient if the claimant has been physically and mentally capable of performing normal work during that year.

Rehabilitation benefits are granted if the person concerned has a permanently reduced working capacity or substantially limited opportunities in the choice of occupation or place of work. Benefits are also granted for the improvement of the general functional capacity if this is substantially reduced due to illness, injury or defect.

Rehabilitation allowance is granted to an insured person, who is entitled to daily cash benefits in case of sickness, after the period of entitlement to daily cash benefits has expired. Rehabilitation allowance is also granted to an insured person who is not entitled to daily cash benefits in case of sickness, but who has been unable to work for one year. Rehabilitation allowance is generally only granted for a period of 52 consecutive weeks. Vocational rehabilitation allowance is granted to an insured person who is undergoing vocational rehabilitation. Vocational rehabilitation allowance is furthermore granted during waiting periods before rehabilitation measures get started and after completed rehabilitation before suitable work is found.

The level of the rehabilitation allowance and vocational rehabilitation allowance corresponds to the disability pension. However, during continued medical treatment after the payment period of sickness benefits has lapsed, a partial rehabilitation allowance can be granted if the working capacity is reduced by 20 per cent or more. Special supplement is not granted, but supplements for supported spouse and children are granted.

Rehabilitation benefits are granted to cover the insured person's expenses in connection with rehabilitation measures. Benefits are granted inter alia for education at schools, courses or business enterprises, if this will have a decisive influence on the insured person's working possibilities. A person who has substantially and permanently reduced general functional capacity, may be granted the necessary and appropriate benefits (e.g. interpretation services, guide dogs etc.) in order to improve the ability to manage the situation of daily life.

Furthermore, expenses for technical aids and for purchasing of cars are covered. Transportation expenses and expenses incurred by the running of technical aids, are covered through the basic benefit (see under 6).

8. Medical Benefits During Sickness and Maternity

All insured persons are granted free accommodation and treatment, including medicines, in hospitals. This follows from the provisions of the Hospital's Act and the Act on Mental Health Care. In the case of treatment given outside hospitals, the provisions of the Act on Municipal Health Care and the National Insurance Act apply.

The patient has to pay a share of the cost of treatment by a general practitioner or a specialist outside hospital, for treatment by a psychologist, for prescriptions of important drugs and for transportation expenses in connection with examination or treatment. The municipality and/or the National Insurance cover the main part of the expenses. The cost-sharing amount e.g. for an adult in connection with treatment by a general practitioner is NOK 102 for each consultation, and 36 per cent of the expenses of important medicaments (maximum NOK 330 per prescription). For reiterated prescriptions a new cost-sharing amount shall be paid when a supply equal to three months' consumption has been received.

There are certain exemptions from the cost-sharing provisions for special diseases and groups of people.

A ceiling for cost-sharing has been introduced. The ceiling is fixed by Parliament for one year at a time, for 1999 it is fixed to NOK 1 320. After the ceiling has been reached, a card is issued giving entitlement to free treatment and benefits as mentioned for the rest of the calendar year.

Cost-sharing amounts for children under the age of 16 are added to those of a parent in order to reach the ceiling. Children under the age of 7 are exempted from cost-sharing for treatment given by physician or physiotherapist, certain medicines and travel expenses.

Necessary medical examinations during pregnancy and after confinement are free. In case of delivery at home, a birth allowance of NOK 1 765 is granted.

9. Daily Cash Benefits in the Case of Sickness and Maternity etc.

9.1 Daily Cash Benefits in the Case of Sickness

An insured person who has an annual income of at least 1.25 B.a. (NOK 56 713) is entitled to daily cash benefits in the case of sickness if he/she is incapable of working due to sickness. It is, as a general rule, required that the occupational activity has lasted for at least 14 days.

Daily cash benefits for employees equal 100 per cent of pensionable income, and are paid from the first day of sickness for a period of 260 days (52 weeks). Daily cash benefits in the case of sickness are paid by the employer for the first 16 calendar days, and thereafter by the National Insurance Scheme. During the period in which daily cash benefits are paid by the employer, no minimum income level is required. Income exceeding 6 B.a. (NOK 272 220) is not taken into account.

Self-employed persons get sickness benefits corresponding to 65 per cent of pensionable income from the 15th day of sickness for a period of 250 days (50 weeks). By voluntarily paying a higher rate of contributions, self-employed persons may receive 65 per cent of pensionable income from the first day of sickness or 100 per cent from the fifteenth day of sickness or the first day of sickness.

9.2 Daily Cash Benefits in the Case of Absence from Work

Due to Care for a Sick Child etc.

An insured employee who is absent from work due to necessary care for a sick child, is entitled to daily cash benefits up to ten days, or fifteen days if there are more than two children, during a calendar year. Single parents are entitled to such benefits up to 20 days, or 30 days if there are more than two children, during a calendar year. Parents may receive such benefits up to and including the year of the child's 12 ^th> birthday.

In the case of disabled or chronically sick children, the period of entitlement to benefits may be extended to 20 days, or 40 days for single parents, during a calendar year. Parents may receive such benefits up to and including the year of the child's 18 ^th> birthday.

When only one of the parents has custody of the child, the period of entitlement to benefits may, under certain conditions, be divided between them.

An insured employee is entitled to daily cash benefits during necessary care for children under 12 years of age, respectively 18 years of age, if the person having the daily child care is sick.

Daily cash benefits in the case of absence from work due to care for a child are calculated as daily cash benefits for the person's own sickness and paid by the employer up to ten days during a calendar year.

Due to Care for a Hospitalised Child etc. or a Close Relative during the Terminal Phase or during Training Courses

An insured occupationally active parent of a hospitalised child under 12 years of age is entitled to daily cash benefits from the National Insurance Scheme from the eight day of hospitalisation if the child is hospitalised due to a less serious sickness. If the child needs continuous attendance by one of the parents, benefits may be granted also after the discharge from hospital. Benefits are granted to only one of the parents at a time. Benefits are granted for disabled or chronically sick children up to 18 years of age.

An insured occupationally active parent of a hospitalised child under 18 years of age suffering from a serious or potentially fatal disease is entitled to daily cash benefits from the National Insurance Scheme if he/she must stay at the hospital while the child is hospitalised or at home because the child needs continuous attendance by one of the parents. No upper age limit applies in the case of mentally handicapped children.

Daily cash benefits are granted for as long as the treatment and the rehabilitation of the child require.

An insured occupationally active person taking care of close relatives at home during the terminal phase is entitled to daily cash benefits from the National Insurance Scheme for a period of up to 20 days for each patient.

An insured occupationally active parent is entitled to cash benefits during approved training courses which he/she attends in order to take better care of a disabled or chronically sick child for as long as necessary in relation to the child.

Daily cash benefits in the case of absence from work due to care for a hospitalised child etc. or a close relative during the terminal phase, or during training courses are always paid by the National Insurance Scheme as for the person's own sickness, but without the waiting period for self-employed persons etc.

9.3 Daily Cash benefits in the Case of Maternity and Maternity Grant

An insured woman who has been in paid employment for six out of the ten month preceding confinement (from August 1 1999 the condition of paid employment is related to the commencement of the period of paid leave), is entitled to daily cash benefits in the case of maternity for 42 weeks (210 days). Daily cash benefits in the case of maternity equal daily cash benefits in the case of sickness (100 per cent of covered earnings). The period of paid leave may, upon preference, be prolonged to 52 weeks (260 days) combined with a reduced compensation rate (80 per cent of covered earnings). The mother must make use of three weeks of the benefit period prior to confinement. Benefits are payable from 12 weeks before confinement.

An employee who, according to law, has to refrain from working for a certain period prior to confinement due to hazardous working conditions/environment, is entitled to paid leave from the time she stops working, without reducing the entitlement to paid leave after confinement.

In the case of multiple births, the mother is entitled to full daily cash benefits for five more weeks (seven weeks with reduced rate) for each child exceeding the first.

It is required that the mother takes at least six weeks leave immediately following confinement. If the mother resumes work before the period of paid maternity leave has elapsed, the father is entitled to the daily cash benefits for the remaining period. Four weeks of the total cash benefit period are reserved for the father. The condition for granting daily cash benefits to the father is that he stays at home to take care of the child. The requirement of a preceding work period must in these cases also be met by the father.

A mother not entitled to daily cash benefits receives a maternity grant of NOK 32 138.

When adopting a child below the age of 15, the adoptive parents are entitled to daily cash benefits for 39 weeks (195 days), with the same amount and on the same conditions as for sickness benefit. The period may be prolonged to 49 weeks (245 days) with reduced benefits (80 per cent of covered earnings).

The requirements for entitlement to the daily cash benefit in case of adoption equals the conditions for entitlement to daily cash benefit in case of maternity. The period of benefit may be shared between the parents according to their own preferences. The father must, however, make use of at least four weeks of the cash benefit period.

When parental responsibility is given according to the rules of the Children's Act in situations where one or both of the parents have died, benefits and paid leave are granted according to the rules which apply in the case of adoption.

If the requirements for daily cash benefits in case of adoption are not met, an adoption grant of NOK 32 138, is granted. An allowance of NOK 22 000 is allocated over the state budget to cover expenses incurred by adopting a child from abroad.

The benefits are not payable in the case of adoption of stepchildren.

A time account arrangement makes it possible for employees and self-employed persons and others (provided that he/she is entitled to a parental or adoption benefit) who give birth or adopt children to draw partial maternity/adoption benefits combined with reduced work hours.

Based on the total permitted leave of absence period of 42 weeks with full salary compensation - or 52 weeks with 80 per cent salary compensation - parents can take up to 29 or 39 weeks leave of absence using the time account.

The arrangement includes the following combinations of reduced work hours and maternity benefits:

Leave of absence can be taken in the form of shorter workdays or fewer workdays per week.

The period of reduced work time, combined with payment of partial benefits, can neither exceed 2 years (104 weeks), nor be shorter than 12 weeks.

Both the mother and the father can make use of the time account system.

The time account arrangement requires a written agreement between employees and employers. An employee, who wants to make use of the time account system, must notify his/her employer at least four weeks before the commencement of full time absence.

10. Daily Cash Benefits During Unemployment

Daily cash benefits during unemployment compensate loss of income due to unemployment. Working hours must have been reduced by at least 40 per cent compared to previous working hours.

The insured person must be a bona fide applicant for work, i.e. capable of work and registered at the employment office. He/she must also, at short notice and in any part of Norway, be available for any type of part- or full-time work or labour market measure that he/she is physically and mentally capable of doing. The person concerned may be entitled to unemployment benefits even if he/she does not fully meet the availability requirement due to circumstances such as age, health or work of caring nature. Benefits may temporarily be suspended if the person concerned is considered to be unemployed by his/her own choice, i.e. if he/she has given notice voluntarily, refused to take a suitable job, refused to participate in labour market measures or failed to attend to the employment office when summoned.

Previously earned income is a condition for entitlement to daily cash benefits. The person concerned must have had an income from work of at least 1.25 B.a. (NOK 56 713) the preceding calendar year or an income from work which at least equals the B.a. (NOK 45 370) as an average during the three preceding calendar years.

Daily cash benefits are granted if the person concerned has been unemployed three of the last ten days while being registered at the employment office.

The calculation of daily cash benefits is based on income from work, income from labour market measures and income from daily cash benefits during unemployment, sickness, maternity and adoption. The calculation basis is the highest of the income of the preceding calendar year or the average over the three preceding calendar years. The maximal benefit basis is 6 B.a. (NOK 272 220). The benefit rate per day is 0.24 per cent of the calculation basis and is paid five days a week. This will normally give an annual compensation of 62.4 per cent of the calculation basis.

A supplement of NOK 17 per day is granted for each dependent child under the age of 18. A holiday supplement of 9.5 per cent of unemployment benefits received the preceding calendar year is granted if the beneficiary received benefits for more than eight weeks during that year.

The benefit period varies depending on earlier income from work. Income from work amounting to at least 2 B.a. (NOK 90 740) gives a benefit period of 156 weeks (3 years). Income amounting to less than 2 B.a. gives a benefit period of 78 weeks (1.5 years). When the initial benefit period has expired, a subsequent benefit period may immediately be granted provided that the requirements concerning previous income are met.

Persons above the age of 64 are guaranteed a calculation basis of at least 3 B.a. (NOK 136 110), and benefits are paid without time limitation until the age of 67. Above the age of 64, also self-employed persons are entitled to unemployment benefits.

11. Benefits in the Case of Occupational Injury

Employees and certain other groups, e.g. military personnel and pupils/students are obligatory covered for occupational injury under the National Insurance Scheme. Self-employed persons and freelancers may take out voluntary insurance.

An insured person who is the victim of an occupational injury is entitled to benefits according to special rules generally more favourable than the ordinary rules. This applies to medical benefit etc. as well as pensions. In addition to any other benefits, a compensation for non economic loss (reduced quality of life) may be granted on the basis of the medical nature and degree of the injury (maximum compensation from the Social Insurance Scheme is 75 per cent of the B.a. (NOK 34 028) a year.

Injury, sickness or death caused by an accident at work are regarded as occupational injury. Certain diseases contracted in an occupational context, including certain climatic and epidemic diseases, are regarded as equal with occupational injury. Fatigue injuries and mental suffering caused by continuos strain are not regarded as occupational injury.

As a main rule the injury or sickness must occur while working at the place of work during working hours.

Employees are also covered by an occupational injury compensation act outside the framework of the National Insurance legislation.

12. Benefits to Single Parents

Single parents are entitled to benefits if unmarried, divorced or separated and not living together with a person whom he/she have or have had children together with, or with the other parent or a person who cannot be excluded from being the other parent, or a person whom he/she has been living with for at least 12 of the last 18 months.

It is required that the single parent has been insured for three years immediately prior to claiming the benefits, and that both the parent and the child are resident and staying in Norway. Exemptions may be granted from these conditions.

Benefits to single parents comprise childcare benefit, education benefit, transitional benefit, special supplement and grants to cover removal expenses for persons who are alone in supporting children. All benefits are granted according to the same rules and mainly on the same conditions as for a surviving spouse, cf. Section 5.1 Benefits to surviving spouse.

13. Funeral Grant

A lump-sum grant in the case of death is granted by the National Insurance Scheme to cover expenses in connection with the funeral. The benefit is NOK 4 000.

A means-tested supplement up to NOK 8 000 may be granted.

14. Advance Payment of Maintenance Payment for Children

Advance payment of maintenance payment is made under the National Insurance Scheme for all children under the age of 18, resident in Norway, if the child is not living together with both parents, and if the maintenance payment from a parent is to be collected through The Maintenance Contribution Collecting Agency. The advance amount is NOK 1 070 a month, equal to the minimum maintenance payment. The advance is payable abroad to the same extent as benefits to single parents under chapter 15 of the National Insurance Act.

15. Family Allowances

Family allowances are granted for children resident in Norway under the age of 16.

The yearly rates from 1 January 1999 are:

NOK 11 112 for the first and second child

NOK 13 092 for the third and each subsequent child.

An annual supplement of NOK 7 884 per child is granted for children under 3 years of age in addition to the ordinary rates. However, this supplement is not payable before the child is 13 months old.

Beneficiaries living in the Arctic regions of the Realm, is granted an annual supplement of NOK 3 792 per child.

Single parents are entitled to allowance for one more child than they actually have (extra allowance). Cohabitants who have children together or have been living together for at least 12 of the last 18 months are not entitled to the extra allowance.

Single parents with children under the age of 3, who, according to the Family Allowance Act, are entitled to allowance for one child more than they actually have, and in addition are entitled to a full transitional benefit according to the National Insurance Act, are entitled to an extra annual supplement of NOK 7 884. This extra annual supplement is granted per provider, regardless of how many children under the age of 3 he/she has.

16. Cash Benefit for Families with Small Children

The cash benefit scheme was introduced on 1 August 1998 for families with children aged one to two. Two-year olds are included in the scheme from 1 January 1999. The benefit is given without means-testing or taxation. The most important condition for receiving the full rate of the cash benefit is that the child is not in a day care centre that receives a state grant. If the child according to agreement is in the day care centre less than 30 hours weekly, the family will be entitled to a reduced cash benefit.

The cash benefit is calculated according to the following rates:

17. Taxation of Social Security Benefits

Benefits from the National Insurance Scheme are taxed as income except for the lump-sum grants and the benefits in kind.

However, special tax provisions apply to old-age, survivors, and disability pensioners with income below a certain minimum limit. Persons within these groups are not liable to pay tax or national insurance contributions on income. The same applies to survivors and single supporters who receive transitional benefits and persons receiving temporary disability benefit.

Pensioners with income exceeding the minimum limits are liable to tax calculated according to special tax limitation provisions. Consequently tax and National Insurance contributions on net income for this group shall not exceed 55 per cent of the income exceeding the minimum limits.

Old-age pensioners and disability pensioners with income exceeding the limits for which the special tax limitation provisions apply, are entitled to a special deduction in the income, reducing the tax on the net income with NOK 4 939 (1999).

In addition to the special tax provisions, pensioners are liable to pay a lower National Insurance contribution than employees etc., cf. Section 3.

Family allowances and cash benefits for families with small children are not taxed as income.

18. Social Security Agreements

Norway has ratified bilateral social security agreements with the following countries:

Austria, Canada, Chile, France, Greece, Hungary (Medical Care), Italy, Luxembourg, the Netherlands, Portugal, Slovenia, Switzerland, Turkey, the United Kingdom and the USA. An agreement with Quebec has also been concluded.

Moreover, there is a social security convention between the Nordic countries.

1 January 1994 the EEA Agreement came into force. It applies for the fifteen EU countries (Austria, Belgium, Denmark, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, the Netherlands, Portugal, Spain, Sweden and the United Kingdom) and three EFTA countries (Iceland, Liechtenstein and Norway).

These agreements may extend or limit the provisions otherwise in force.