Financial strategies

Financial strategies

Two new financial incentives, Prohef and the Zelfzoekmodel, are compared against the existing tax reduction arrangement. The experiment should make clear if the two newly introduced financial reintegration strategies deliver more performance.

Employers' participation in these new Operatie Pelios strategies does not affect the availability of regular tax reductions (Kortingsregeling) not does it affect their ability to benefit from the REA law.

Prohef

In the 80s, ir. P. van Elswijk developed the concept 'New Social Market Economy'. This concept concerns a different method of financing social security and is also known as the 'Elswijk Plan' or the 'Prohefsystematiek'. In comparison with the current method of financing, the concept differs in two important aspects:

• Production levy: an enlargement of the taxable base to the company's net added value.
• Employment bonus: a fixed amount that the employer may subtract from the production levy for each full time employee in his service.

The marginal salary costs will decrease because of the employment bonus and the number of jobs is expected to increase. The greatest effects are expected at the bottom of the labour market, since it becomes possible to return people with a productivity below the minimum wage into the regular production process. In Operatie Pelios, the Prohefsystematiek is aimed towards the target audience of people with occupational disabilities.

The Prohefsystematiek in Operatie Pelios means that a compensation is determined with the employer after a certain period according to a levy percentage. This levy percentage is composed of a levy over the realized added value of an entire division of a company (production levy) on the one hand, and a levy discount for each employee (levy discount) on the other hand. For employees with occupational disabilities, an additional levy discount is agreed upon. The final levy percentage is computed by dividing the sum of the levy discounts by the added value.

Zelfzoekmodel

A second financial strategy in the experiment concerns the Zelfzoekmodel ("self-search model"). In the Zelfzoekmodel, clients with occupational disabilities receive a one-time amount of money. The amount depends on the nature and severity of the occupational disability. After having completed an intensive training, clients may determine themselves how to use these financial means in order to find jobs. One common use is buying extra facilities.

Such facilities may include necessary extra provisions not covered for by the REA law, such as a vehicle. In the Zelfzoekmodel, the client may also use his or her own social network in order to search for a job independently.

In order to pay for this, the client may use the finances that are at his or her disposal. These expenses are subject to approval by an independent advisor. Specific criteria include that the proposed expenses be reasonable, as well as directly related to finding and keeping a job.

Tax reduction (Kortingsregeling)

The government's new 2002 Tax Plan enables employers to receive tax reductions for hiring and keeping employees with occupational disabilities. In addition, the REA law provides for the refund of additional costs employers may face in the reintegration of people with occupational disablitities. The reintegration strategy that helps employers use these provisions is called "Kortingsregeling" ("Reduction Scheme") in Operatie Pelios.

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