Sweden Finland Austria

’Standard’ events in connection with children
1-3.
The couple has 1, 2 or 3 children, 1 to 6 years old.
4.
The couple gets the second child (at the beginning of the year).
1. Calculation covering the maximum period of maternity leave in each country.
2. Calculation covering a common period of maternity leave for all 8 countries.
Calculations
The calculations cover the gross compensation percentage for the transfers compensating
the loss of working income (the net compensation percentage if the compensation is based
on net income) and the change in disposable income caused by each ’standard’ event. For
pensioners it is the usual net compensation percentages or net replacement rates, which are
calculated.
This is not relevant for all the events. E.g. the compensation percentage and the change in
disposable income for the pensioner without former occupation have, strictly speaking, no
meaning, since there is no loss of income at ’retirement’. The interpretation in this case is
relative to the disposable income of the APW. The compensation percentage is also
irrelevant where family allowances for children are concerned.
The ’maximum period of former occupation’ is by itself not a well defined concept. In this
study the maximum period is 45 years, unless the rules say otherwise (in Sweden the

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period is 30 years, and further years in occupation have no influence on the additional
pensions in the present pension system, in Austria it is 40 years). This has the implication,
that in some cases, e.g. for the Danish additional pension scheme, it is not possible to have
had 45 years of membership when retiring in 1997. The interpretation of the calculation in
this case is the maximum possible amount the pensioner can get, when he or she retires in
1997 at the official retirement age.
There is another ’timing-problem’ in the case where the couple gets the second child. It is
assumed that it is possible to get the child and have it for a whole year, and also to receive
maternity leave benefits from some time before the birth, all within the same year. This is
hardly possible, but it is, anyhow, the assumption.
The impact of the ’events’ are calculated based upon current income, i.e. 1997 income,
disregarding that former income is the proper basis in many cases. Special rules concerning
payment for vacation have also been disregarded, all income is used as basis for calcula-
tion of income related benefits.
Results
The results of the calculations are presented in a compressed form in the attached tables,
cf. Chapter 2, section 2.3. There are only results for two points in the income distribution,
those of the single APW and the APW-couple. It is the isolated effect of each event, which
is shown. Many of the ’standard’ events have the effect of reducing disposable income.
Other means tested benefits, e.g. for housing, would then increase. These kinds of effects
are not included in the results, which in this case can be interpreted as showing the maxi-
mum effects on disposable income. Progress in technology will soon make it possible to
present results containing much more variation and complexity.