Comparing Social Welfare Systems: UK and Germany
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Published: Tue, 14 Aug 2018
This paper will seek to compare the social welfare systems of England and Germany with regard to how they cater for the elderly. The paper will approach the issue by firstly discussing the theoretical underpinnings of the welfare state in both England and Germany. This initial theoretical analysis is important because it sets the foundation to understand the way in which social welfare policy in both countries approach care of the elderly. The paper will then provide a comparative analysis of the welfare issues affecting the elderly such as national insurance, elderly care, pension provisions, health care and other pertinent variables. This comparison will then seek to establish defining characteristics of each model towards elderly care.
One of the most prolific scholarly expositions on welfare systems and their ideological frameworks come from Epsing-Anderson who postulated that there are three distinct regimes of welfare systems. These he identified as Liberal, Corporatist and Social Democratic. Within this model, he located Germany as a Corporatist- Conservative regime and the United Kingdom as a Liberal welfare regime. Nevertheless, despite arguing how welfare states have developed and can be characterized under these three trajectories, Epsing-Anderson maintains that “the welfare state cannot be regarded as the sum total of social policies, it is more than a numerical cumulation of discrete programmes”. With this in mind, the paper will now consider the theoretical underpinnings of Germany as a Corporatist-Conservative regime.
Germany maintains a welfare system that is usually classified as the classical Bismarckian welfare state. This intimates that the welfare system in Germany is structured among class and occupational lines and subsequently a high degree of stratification, along the lines of market participation exists. The state, rather than the market, is the most important agency in the delivery of welfare and benefits are provided through a network of public, quasi public, private and voluntary organisations. The German welfare state is characterized by a dominance of mandatory social insurance schemes such as health, unemployment, pensions, disability and long care. These schemes are predominantly contribution based benefits with the state partly contributing to public pension schemes, unemployment insurance and social assistance.
Another feature of the German conservative welfare system is that it ascribes the male breadwinner model with significant corrections. It is steeped in the social policy dictates of Catholicism and this is demonstrated by a commitment to ‘the preservation of status differentials’ by emphasising self-help and to the preservation of a traditional family model. Women’s benefits are inextricably linked to their spouse, which in modern day society, places women at a disadvantage because they may have spent years caring for elderly relatives, or childrearing and widows pensions are inherently low.
However, the German welfare state has had to adapt to the new realties of modern society where more women are remaining single, divorce rates are higher and individuals have to work for much longer. The oft practiced early retirement feature of the German welfare state has also seen adjustments as families, especially women now need to reconcile salaried work commitments along with duties towards their loved ones in order to ensure a good standard of living in today’s market led economy. These changes have had an effect on how elderly care is administered and ordered within the German welfare sate. Before the issue of care for the elderly with the German welfare state model is explored, the paper will now examine the characteristics of the UK welfare state.
Converse to the German corporatist-conservative welfare state model, the United Kingdom is largely been historically characterized as an example of a liberal welfare model. However as Epsing-Anderson stated earlier, no one regime is a pure typology, instead they are usually a hybrid form albeit with an overarching ideology. Modern day societies demand that so called welfare regimes undergo pragmatic shifts to adjust to social, political and economic shifts. In light of these changes the UK welfare system is viewed as a liberal socialist welfare system.
Firstly, the welfare system in the UK places a distinct emphasis on market-based social insurance and it uses of means-testing for the “fair” distribution of benefits. It regards as fair the distribution of more benefits to the poor or vulnerable who are viewed as more deserving. In this regard, welfare is oriented towards a class of the poor dependent or what is called the ‘residual welfare state’. The consequence of this is that, there is a low degree of de-commodification, meaning, benefits are limited and stigmatised by the general populace as the model assumes that high levels of benefit will reduce incentives to work. A high degree of stratification exists within the UK welfare state, wherein, the state plays an active role in social relations.
One of the factors impacting the classification of the UK as a liberal social democratic welfare state regime is the existence of in-kind services such as free health care which is delivered through the National Health Service (NHS) and the prevalence of subsidised social housing to vulnerable groups, such as the elderly, single parents and the homeless.
One of the most impacting changes within the liberal social democratic social welfare regime of the UK was pension reform in the 1980’s. These reforms saw the government cutting back on contributions that were earnings liked to retirement incomes and the heightened encouragement of private schemes as a necessary supplement. Many employers took advantage of the new low regulations on pension schemes and did not offer sufficient coverage adequate for a decent retirement standard of living and quality of life. Subsequently, the UK government has not been able to negotiate adequate pension conditions with private employers on behalf of workers. All these changes within the liberal oriented UK welfare state model necessitates the discussion on how the elderly is affected.
The aforementioned discussion on the typology of the welfare state in both Germany and the UK was necessary to this paper, as it sets the stage to understand how the elderly are treated within these two ideological frameworks. It also allows for an analysis on how modern day society has altered or shifted these ideological welfare state positions. To this end, the paper will now consider the comparative analysis with a focus on the various modes of care and policies towards the elderly in both Germany and the UK.
One of the most important modes of care for the elderly is the provision of good health care. In societies where younger children have had to buy into active participation in a market based economy, the elderly becomes a particularly vulnerable group. Wegner explains this aptly when he states:
“The absence of supportive health and social services contributes to several important problems: (1) the quality of care may fall short of adequate standards, resulting in instances neglect or abuse; (2) the strain of care giving places caregivers themselves at risk for many health problems; and (3) the heavy burden falling on a single caregiver eventually results in a greater reliance on institutional care than may be necessary.”
Germany’s historically conservative welfare state ideology, dictated that the family should be the main care-giver and support system for the elderly. However, with the elderly population living alone in Germany is the highest in the OECD and the European Union. Sensing that this tend would have been inevitable, Germany launched a long term care insurance scheme in 1994 which targeted the elderly. This scheme functions on a pay as you go basis and is strictly aimed at those in need of social assistance. It is “financed through earmarked social insurance contributions and organized as a separate branch of social insurance”. Some features of the scheme are: community based care, payment to caregivers and nursing homes, home modifications, personal assistance and general household assistance. In some instance, the elderly are also covered under the state’s accident and pension insurance schemes.
Interestingly, Taylor-Gooby notes that space was still made to retain conservative values with the introduction of the long-term care assistance as legislation such as cash reimbursement without any form of monitoring to encourage family supported care giving practices.
In contrast, the elderly in the UK receive completely free health care under the statutory National Health Service which is free to all citizens post World War II. However, as previously discussed, the UK underwent serious cutbacks in pension provisions in the 1980’s and this has placed a significant number of retirement age pensioners at risk of poverty. Furthermore, the government also cut back in the number of public beds available for care in hospitals. This has in some ways encouraged caregiving from family members for the elderly, but like Germany, may younger family members have to reconcile paid employment with their desire to care for their loved ones. This has placed considerable strain on the NHS as the elderly suffer many injuries from largely having to care for themselves. The strain on the NHS reached such a crescendo that some doctors even recommended not treating the very old. The NHS has come under great criticism for its treatment of the elderly, consequently the government, is trying to achieve the goals of its 10 year plan to reform care of the elderly in the UK which is documented in the National Service Framework for Older People. The inspection report “Living Well into Later Life” recommended that the NHS needed to do more to encourage wellbeing and active ageing among the elderly. Specifically, while the NHS system is fraught with irregularities, vulnerable persons such as the elderly are increasingly being given more attention within the UK welfare state, with appeals for more state intervention, as opposed to the closed family oriented model of Germany.
Housing is another important issue for the elderly. In Germany, the tradition of home care has affected the number of elderly persons who leave the home environment for care. Only 4% of the over 65 year old age group live in a nursing home or other forms of institutional care, despite the high number of elderly Germans living alone. Much of these attitudes towards institutional care are grounded in German legislation as the constitution is based on the principle of “subsidiarity” whereby responsibility for welfare needs rests squarely with families, then local or federal authorities, that order.
The German long term care insurance “pays for personal care, medical help and social care” in a nursing institution for the elderly only when familial help is no longer possible. It avoids paying for accommodation and subsistence costs and the total payment does not “exceed 75 percent of the total cost.”. Dallinger maintains that housing for the elderly in Germany is usually determined along social class lines. She makes this assertion because the higher and middle class are usually financially able to employ paid care or help for their elderly family members and therefore institutional care is usually only sought by those who cannot afford such care. Nonetheless, Dallinger points out that the increase of German women entering the labour market has necessitated a greater demand on the need for the elderly to rely on the welfare state for care assistance, since younger women were the traditional caregivers.
Housing for the elderly in the UK suffers similar challenges as younger family members do not have the time to care for their elderly relatives because of the gradual individualization of the society. This places the elderly at risk of social exclusion and being marginalized within modern day Britain. Consequently, the government has reduced the cost of housing council tax for the elderly and has provided them additionally benefits such as free transportation to encourage them to remain at home, while fostering active lives. Additionally, the “Living Well into Later Life” inspection report found a renewed push by the government to encourage older persons to stay in their own homes by providing them with paid personal caregivers. Furthermore an outreach group called “Supporting People” was actively advocating for the building of more sheltered housing facilities for the elderly. However, it is appropriate to say that the issue of elderly housing in the UK receives more state intervention and welfare services than it does in Germany.
This paper previously discussed how state cutbacks on pensions in the UK have placed the elderly in a particularly vulnerable retirement position. The UK now sees a pension scenario where those who are better off financially are able to buy into private pension schemes, and those who cannot afford have to rely on what is now a “diminishing” pension returns at retirement via the state. Furthermore, many individuals who were advised by pension salesmen, bought into private schemes yet saw their entire pension investments diminish in the mid to late 90’s when many private companies went bust because of being unregulated.
Taylor-Gooby asserts that in Germany, retirement income which traditionally came from public pensions, has seen a shift since a 2001 pension reform initiative in the state. The German state has moved towards provision of a mixture of public-private pension scheme, along with great encouragement to citizens that public pensions will not suffice pre-retirement standard of living, thus plugging supplementary private schemes. Noting the failure of such schemes in the UK in the 90’s, Germany has sought to have stricter regulations on private pension providers. Furthermore, in line with its conservative ideology, women are given pension credits under the German welfare scheme for time taken off work for childrearing.
It is therefore conclusive to say that while the UK and Germany have ideologically different perspectives on how their welfare state is structured, both countries have had to adapt to socio-economic changes within their societies and aim to provide better care for the elderly. The pressures of a rapidly aging population, the individualization of both societies has caused the elderly population to become increasingly isolated and at risk of being severely socially excluded and marginalized. Consequently social policies that inform traditional welfare states have become more pragmatic in their approaches while still trying to retain their ideological perspectives.
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