Where self-employed workers are covered under a completely separate social protection regime, the reasons are often more historic than pragmatic. In France, for example, the self-employed initially opposed their integration into the general social insurance system. Instead, occupational schemes were established, the scope of which varies across professions. This led to very unequal coverage of dependent employees and the self- employed: while compulsory, occupational retirement schemes have existed since the 1960s, self-employed workers have only been entitled to sickness benefits since 2016.
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Panel A. Number of exclusive para-subordinate collaborators (in 1 000s, left axis) and social security
contribution rates of exclusive para-subordinate collaborators (in percent, right axis), Italy, 2008-2016
Exclusive collaborators (left axis)
Contribution rate of exclusive collaborators (right axis)
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Panel B. Number of independent contractors (in 1 000s, left axis) and social security contribution rates of independent contractors (in percent), Austria, 2005-2016
Independent contractors (left axis)
They remain uncovered for some risks including occupational accidents and unemployment, although voluntary options have been introduced in recent years (Chapter 4). This interplay of several autonomous schemes and a complex system of contribution rates and entitlements obscure the relationship between gross and net wages and hinder the mobility of workers across jobs and occupations.
To lower administration costs and improve service delivery, several independent schemes were merged into the Régime social des indépendants (RSI). The RSI remained autonomous in that it was run by elected representatives of its members. It does not have the administrative capacity to collect contributions itsself, but delegates this to URSSAF, a network of private bodies that collect social contributions for dependent employees.3
This requires intense coordination between the two bodies, which could not be achieved, resulting in insufficient collection of contributions, erroneous overcharging of members and delayed payments. These major malfunctions led to the dissolution of the RSI; it is set to be completely absorbed by the general social security system by 2020 (Chapter 4). Some countries also have special, more generous schemes for artists and other creatives who often have unstable employment patterns and may thus struggle to accumulate the contribution periods necessary to receive social protection benefits. This section discusses two of these schemes: the German artists’ insurance, which charges consumers employer contributions, and the French intermittents du spectacle scheme.
1.6.1. Customers contribute to social protection: the German artists’ insurance
The German writers’ and artists’ insurance scheme directly addresses the double
contribution issue by levying social security contributions upon customers of artistic
services. Qualifying writers and artists only pay employee social security contributions that make up half of the scheme’s total budget. A public subsidy, justified by private households’ consumption of art and writing, covers 20% of the overall cost. Institutions that rely on the services of artists and writers (e.g. publishers, theatres, libraries or private companies) cover the remaining 30%, proportional to their use of artists’ and writers’ services – the Ministry of Employment and Social Affairs calculates the contribution rate annually, depending on the number of insured artists and the artist and writer fees reported by institutions.
Membership is mandatory but low-earning artists and those with high incomes or private insurance can be exempted. Customer contributions are levied on all expenditure on services commissioned from artists and writers, however, in order to not create distortions on the market for artistic work. This also mitigates some of the cost savings of contracting instead of hiring artists and writers.
Compliance and administrative costs seem comparable to those in the general system. Companies are required by law to declare their expenditure on artistic and writing services. The German Pension Fund is in charge of company inspections for the artists’ insurance, which it carries out in the course of every regular social security compliance inspection since 2015. This keeps administrative costs low and led to a jump in contributing companies by 50 000 within two years. Employers’ associations claim that costs for administering fund contributions can run as high as 70-100% of overall contributions, but it is not clear whether these estimates are realistic, or how they compare to administering social security contributions for regular employees.
Fund membership has continually risen over the past twenty years and stands at 0.5% of total employment in Germany. In line with an increase in Fund membership, the public
subsidy has almost quadrupled. While there are no data on how many self-employed artists’ and writers would qualify for the scheme if they applied – admittance is based on reaching a minimum required income in a listed profession – labour force survey estimates based on the number of self-employed artists indicate a coverage rate of about one-third.
While the artists’ insurance scheme seems effective in securing customers’ contributions to artists’ social protection, providing artists with adequate pension entitlements remains challenging. Declared earnings are very low: in 2016, on average, male artists earned just 54% and female artists just 40% of overall average gross earnings in Germany. Combined with the unstable career patterns of many artists and writers, pension contributions on these incomes do not give rise to pensions sufficient to prevent old-age poverty.
Most self-employed artists and writers combine their artistic work with other income, and those at the low end of the income distribution seem to self-select into the fund. A high share of enrolees report incomes just above the minimum threshold for eligibility, which may indicate that they mainly join the fund to gain access to health and long-term care insurance (even minimum contributions guarantee full health- and long-term care coverage, while pensions depend on earnings).
Hence, many insured artists enjoy full access to health insurance while paying only minimum contributions, which leads to a concentration of bad risks in the fund. Low declared earnings may be a result of weak demand and low prices for art-work, but it might also be the result of under-declaration of earnings. Incentives to declare income above the minimum contribution thresholds are weak if individuals either have other, private pension insurance, or their true earnings are still so low that they cannot expect a pension above the poverty line. Many fund members might therefore have to rely on general revenue-financed social assistance in retirement age (Chapter 5).
1.6.2. Intermittents du spectacle
In France, artists and technicians on fixed-term contracts in the entertainment industry benefit from shorter contribution periods for eligibility to the unemployment insurance system under intermittents du spectacle scheme. This special scheme was set up to accommodate the fact that performers and stage and film technicians are hired for productions on a short-term basis and would otherwise struggle to qualify for benefits The short contribution periods make this scheme very attractive: to qualify for benefits, only 507 hours of work over the past 12 months are required, and spells of employment increase the benefit receipt duration. Thus, claimants can receive the benefit indefinitely, if they work at least two to three months per year.
The number of qualifying workers rose from 50 000 to over a quarter of a million from 1980 to 2015, and about 40% of them claim unemployment benefits. Many claimants become unemployed once they reach the minimum contribution period to qualify for the benefit, and many cycle back and forth between unemployment benefit receipt and working for the same employer, suggesting that some companies adapt their workforce management to the regulations of the scheme (Cour des Comptes, 2012[33]). In 2012,
expenditures on benefits exceeded contributions by a factor of more than five. The net cost of the scheme – defined as expenditure on benefits minus contributions to the scheme – was roughly EUR 1 billion in 2012, for a scheme covering about 250 000 workers (Chapter 4). In comparison, that same year the deficit of the general
unemployment system in France, covering around 24 million dependent employees, was EUR 2.7 billion (OECD, 2018[34]).