NAV to break a record. Benefits have never been this high

The draft state budget for 2027 envisages a significant increase in expenditure related to NAV. An additional NOK 49 billion has been allocated for benefits paid through the social insurance system compared with the previous year, representing an increase of 6.6 per cent. This is the highest amount in history. A further NOK 16.7 billion is to be allocated to NAV administration.

In total, expenditure is expected to amount to approximately NOK 1.54 million per minute. The year before, it was equivalent to around NOK 87 million per hour. The scale of NAV's budget is larger than the gross domestic product of more than 100 countries worldwide, including Slovenia, Uruguay and the Democratic Republic of the Congo.

Pensions remain the largest item. Spending on this purpose is estimated at NOK 378 billion, more than NOK 26 billion higher than before. This represents an increase of 7.4 per cent. One reason is the changing population structure, as population growth in Norway up to 2060 is expected to largely concern people over the age of 75.

Spending on benefits for people unable to work is also rising. It is expected to increase by more than NOK 9 billion to approximately NOK 150 billion, or 6.6 per cent more. The work assessment allowance AAP is expected to cost NOK 59 billion, representing an increase of 5.8 per cent. Around NOK 72 billion has been allocated for sickness benefits, 7.6 per cent more, while spending on unemployment benefits is expected to rise by approximately NOK 738 million to nearly NOK 18 billion.

Part of the rise in expenditure results from overall wage growth and the annual adjustment of the basic amount used to determine benefits. However, demographic changes and the growing number of people receiving individual benefits also matter. The government therefore points to the need to increase employment. A programme aimed at young people is set to be a particular area of focus.

Labour Minister Kjersti Stenseng says the initiative is intended to bring together young people, businesses, labour-market partners, social organisations and public administration. Its aim is to make it easier to gain experience and enter the labour market. The government also announces stronger measures related to sick leave, which it considers one of the main challenges for the benefits system. NAV is to receive additional means to reduce backlogs in case processing and carry out measures related to sickness benefits.

Stenseng emphasises that the government wants to reduce the level of sick leave and increase the number of people in employment. At the same time, it declares that it will maintain benefits for people who are unable to work for health reasons. In the draft budget, measures concerning employment and benefit administration are therefore to be carried out in parallel with rising expenditure resulting from demographic changes.