scrubbedexpat099

and they didn't take the piss.

An idyllic world indeed.

Michael

I think some of that has to do with state laws. In California, employees are required to have short term disability insurance either through the state or through the employer (can't cost more than what it costs through the state and must have at least the same amount of benefits). In California, the cost is 1% of income to a maximum amount of $1088 per year and the state pays 70% of a person's salary for up to 6 months.

In the companies that I worked for, they had private insurance and if I remember correctly, the payout was 80% of salary. Some companies supplement the insurance payout to 100%. However the companies that I worked for didn't but the employee had the option of paying for the insurance before or after taxes. If the insurance was paid after taxes, then the benefit were free of federal and state taxes.

In California pregnancy disability leave (part of short term disability) also pays for time off but significantly less than 6 months. However one girl I worked with was out nearly 6 months (but she had some complications so maybe the standard SDI kicked in) and she received full tax free benefits during the entire time. For her, she made more than if she continued to work since both her and her husband had 6 figure salaries and were taxed at a high marginal tax bracket.

Compared to most other states, California pays better disability benefits but you have to pay 1% of your salary to $100,880 for those benefits. I suspect that if the state increased the payment to 100% of income for 1 year and 9 months of pregnancy leave, the cost would probably be 2% or more of your salary. The question is do people want to pay 2% or more of their salary for their entire work life for those additional benefits? Most high tech companies provide optional long term disability (LTD) which covers the employee as long as he/she is unable to work at a much lower cost to the employee.

In my case when I was working, all the costs of my benefits (the best medical insurance (a PPO with $0 deductible, low co-pays, low drug co-pays, and low maximum out of pocket), STD, LTD, and life insurance) were covered by the companies flexible benefits program (a fixed amount given tax free to each employee to cover benefits) and I even received money (which was taxed) out of the program since I didn't use the total amount. If STD was paid by the flexible benefits program and the person wanted after tax benefits for STD, then the amount paid for STD was taxable. However I suspect that since I quit working, the medical coverage now takes much more of the flexible benefits dollars allocated to employees and not like the good old days when out of pocket medical expenses were not a major consideration.

Bob

That's not bad going.

I know someone who applied to go on short term disability to have a back operation and then rehab after.

It was then that he found out he was a couple days short of being at the place 12 months, before the benefit kicks in. He was terminated the next morning with the loss of his medical insurance and he never did get the operation as he couldn't afford COBRA. He's now barely walking with sticks, he previously just had a bad limp, from being run over and having back surgery, he needed new rods put into his back this time around.

N1cky

It's stories like this that make you realize how shit the system is here, and how wonderful the NHS is. Scary stuff

Michael

That is one of the variations between states. In California, you are covered by STD from day 1 but that is probably one of the reasons why it costs 1% of your salary. It used to cost 1/2% but as they expanded the program to cover pregnancy leave and other things, the cost apparently rose to 1%. Also in California, terminating an employee won't stop the benefits whether through private or state insurance for either STD or LTD. Once a person is on STD, they are eligible for LTD (if enrolled when employed) if the illness continues beyond 6 months. STD is pretty easy to get since all it requires is a doctors statement saying that the person can't work. LTD is more complicated since the person has to be deemed disabled by social security and benefits paid for LTD to kick in. So for LTD, it may take a while for social security to be approved but benefits (both social security and LTD) are back dated to the end of STD. I have a BIL that has been getting both social security and LTD for over 20 years (back problems) but in a couple of years, he'll probably be poorer since LTD usually ends at age 65 and he only has less than 20 years of work towards social security contributions.

scrubbedexpat099

This was a relation of somebody I know but he had it worked so that he could claim benefits in both NYS and Florida, switched between both.

dlake02

You are talking MONEY again. Not everything in life has to do with MONEY.

This book that people believe in a lot more here than in any other western country even has words in along the lines of "blessed are the meek" and "the love of money is the root of all evil." Remember ????

Now, think hard. You have a choice of being poor, unemployed and sick in, France, the UK, the USA. The measure of a country is how well it treats it's most vulnerable.

Which would you choose ?

Giantaxe

I'd make a choice based on a number of factors including a country's safety net and the likelihood that a country's economic policies were such that I had a higher probability of ceasing being poor and unemployed through my own efforts. If I had to choose right now between France, the UK and the USA - leaving aside other factors - it would be a hard choice. I think I would rule out France given its current economic policies seem to be confining a far higher percentage of its population to permanent unemployment and the taxes it uses to fund its safety net are simply unsustainable. A safety net doesn't magically grow on trees, even in France, so the idea that it is not connected to "money" is a little comical. Between the US and the UK, I would lean slightly towards the UK, largely because the percentage of GDP that the US spends on healthcare is completely out of kilter.

Steerpike

Giantaxe makes an important point. It's easy to say "The measure of a country is how well it treats it's most vulnerable", but if a country's efforts to treat those most vulnerable end up causing more people to be vulnerable, then something is not working right. For the record I'm a 'left-of-Obama', Obamacare supporting liberal, but I understand that you have to balance the provision of a safety-net with the funding of that safety-net.

I despise the 'lower taxation leads to greater wealth for everyone' simplistic nonsense of the right, and I despise the 'Daily Mail' rhetoric that everyone on benefits is a scrounger. But there has to be a balance. The US is a little too far one way, the UK and most of Europe is too far the other. I believe that the US can, with a little more Democratic control of congress, get where it needs to be a lot easier than Europe can, because many European countries have implemented policies that are almost impossible to undo.

I haven't lived in the UK for 30 years but my brother and all my family live there. My brother - as apolitical as they come - tells me it is simply too easy 'not to work' in the UK; the protections have transformed from a safety net to a comfort net. As an aside ... I have about 20k pounds in the UK that I really don't need. I am trying to give it to my mom, who is not well off and who skimps on food / essentials to a degree that concerns me. EVERYONE - and I mean, EVERYONE - is advising me not to give it to her because it will prevent her from getting "the benefits she deserves". The degree to which the protections are seen as an entitlement in this case are rather telling ...

If the US can get Obamacare implemented - warts and all - I think we will be on our way to addressing the biggest issue of all.

dlake02

Not sure I agree. This sort-of points to the "Trickle-down" theory of Thatcher/Reagan which has largely been discredited.

In countries that allowed unchecked growth of wealth, we've seen the rich get MUCH richer (and in smaller numbers), social mobility decrease and the middle-classes and poor get significantly poorer.

I haven't heard the phrase here, but "squeezed middle" sums up the UK position nicely. The level of abject poverty that I see on a daily basis in the US, I don't really see anywhere else in the western world, quite frankly.

So, this isn't just a last-resort "safety-net;" you cannot rely on private philanthropy alone as quite often, the money comes with strings attached. This is about having a civic pride which I just don't see that people value here. The UK is FAR from perfect in this respect, but the US plumbs new depths, IMHO.

SarahG

My husband has been in his new job for almost 18 months. In his old job he had 10 days vacation and around half the federal holidays. Sick leave was pretty much non existent. In his new job he has 20 days vacation, almost all the federal holidays, about 5 days 'sick leave' (in a use it or lose it scheme) and can earn extra vacation through volunteering. He took 2 weeks off in July for us to go to California and is having 2 weeks off at Christmas as his parents are coming over to see us.

Michael

It's not quite as simple as that. In the US, UK, Switzerland, Denmark, and Sweden, the top 5% own 50%-60% of the wealth of the country. Two of those countries have an extremely strong social safety net with Denmark (56% of the wealth owned by the top 5%) having the highest taxes per gdp in the world.

What conclusions can be drawn from that? The only thing that seems to make sense is that in some countries there is a vast redistribution of wealth among the lower 95% probably with high VAT, gasoline, excise, and other taxes that doesn't have a heavy effect on the most wealthy. If an unskilled laborer or someone going to college lives in Denmark, he/she is probably better off than any of the other countries. However that college graduate will unlikely make significantly more than the unskilled labor after taxes but like most developed countries with a strong safety net, the same top 5% will likely always control the vast majority of the wealth of the country.

We all use our own numbers to justify our ideology but it is most likely as the strength of the safety net increases, the heaviest tax burden is primarily felt by the middle class.

scrubbedexpat099

The heaviest tax burden is primarily felt by the middle class.

Michael

What is interesting is that income in developed countries is typically about 66% of gdp. Therefore high tax countries need to have high VAT, gasoline, and other direct levied taxes to pay for social welfare programs otherwise it would appear that 80% of all income could be needed to pay for the programs. Interesting that people seem to have money that doesn't exist.

For example, prior to the great recession, Denmark levied taxes equaling 54% of gdp and if income was the typical 66% of gdp for developed countries and only income taxes were levied, 82% of all income in Denmark would be taxes.

So even a low tax developed country (about 30% of gdp) in theory taxes nearly 50% of all income. I don't know how that 66% figure is calculated but it is from the OECD reports.

kins

But it's just one story.

I have one that's completely opposite. A colleague had brain surgery, followed by a stroke, followed by a year of intensive rehab. His health insurance paid for it all. He was on STD for six months then LTD for six months. The company kept his job open for the year, took him back working from home part time initially, until he was ready to go full time and come back to the office. If he hadn't been able to return to work he'd have stayed on LTD for life, at 60% of his former salary.

For comparison I have a friend who works for the government in the UK who cannot get them to give her even the most basic tools she needs to do her job because she has vision problems. Ironically one of the services her department offers is advice to private companies on how to adapt the workplace for people with disabilities.

Does either of these prove that one country is better than the other? Not really.