Promotion of subsidized savings in the Federal Republic of Germany.

The National Commission on Unemployment Compensation noted that there has been considerable disagreement among the States as to whether retirement income should reduce the UI benefit, and it further noted that the current offset provision is a more sweeping and severe disqualifying income penalty than any State had enacted throughout the history of the UI program. Consequently, the Commission recommended that this provision be repealed. The other Commission recommendation bearing directly on older workers is that an Unemployment Benefit Lifetime Reserve Program should be established for persons aged 60 and over. The Commission argued that this program would strengthen the laborforce attachment of workers as they approach age 65. The Commission suggested that special UI protection for older workers could help workers who are experiencing labor-force dislocations as they grow older; could reduce the amount of Social Security payments for early retirement (although the Commission did not recommend prohibiting simultaneous receipt of Social Security and the special unemployment benefit); and could foster reemployment of older workers and hence give the Nation continued use of their skills. The program includes several features. First, a worker must have at least 40 quarters of coverage under Social Security, of which 20 quarters are within the 40 immediately preceding age 60. Second, an unemployed claimant aged 60-64 would be eligible for these lifetime reserve benefits after having established eligibility for UI in his or her current unemployment and having exhausted all regular and extended benefits. Third, the Unemployment Benefit Lifetime Reserve payments would be payable for up to 52 weeks total (beyond regular program benefits) during the period the claimant is aged 60-64. And fourth, these benefits would be financed through contributions to a special pooled fund in the UI system. The Commission estimated that implementation of this recommendation would cost $35 million in fiscai year 1989. In connection with this proposal the Commission’s Report cited the experience of other industrial nations. A number of other western countries provide special programs to encourage gainful employment of older workers. These programs have certain features in common: Both duration of employment required for qualification and the duration of benefits provided increase with age; governments contribute substantially (from general revenues) to the cost of these programs; special training, relocation and placement programs are provided to help older workers become re-employed; and subsidies are given to employers who hire older workers. At the same time, workers in these countries generally receive unemployment.or retirement benefits, but not both simultaneously. Social Security Abroad