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Getting unemployed with problematic debt problems to work

11 January 2017


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More and more long term unemployed and lately also other unemployed looking for work, see themselves confronted with not directly work related problems as a barrier to work. Many are not self-reliant and need help in the form of social help, childcare, transport facilities, addiction care and help with relief of problematic debts. Over-indebtedness turns out to be a major barrier. Potentially debt relief can be effective in a more effective job search. Little knowledge is as yet available of debts and type of debt-relief in the context of employment servicing for the unemployed. This working paper offers a quick-scan of debt help strategies in the context of employment services. The quick-scan was held in 2016 amongst the European public employment services. The survey results show significant differences in approaches between the countries. The quick-scan clarifies that we are just in the initial stage of encompassing debt relief as an employment instrument.


Applied methodology

In order to get an understanding of the role of debts in re-employment services a quick-scan was performed amongst European Public Employment Services (PES). In this quick-scan we investigated the information on debts and debt relief PES place on their website, held a literature search and set out a questionnaire amongst the EU members of the World Association of Public Employment Services (WAPES). This report presents the state of the art of debt relief from inside the domain of work and income. It looks at the position of public employment service organizations regarding debt and debt relief in the context of employment servicing. As there was no material available yet on the integration of debt and debt relief in employment services we produced an overview ourselves. We looked at whether the websites of the various PES bodies provide information on debt and debt relief to the unemployed and to companies, conducted a literature search and distributed a questionnaire among 25 EU member states, all members of the World Association of Public Employment Services (WAPES). With the aid of an online questionnaire, the PES bodies in the EU countries were asked in February-April 2016 to answer our questions. In distributing the questionnaire, the University of Amsterdam received the full and enthusiastic cooperation of the secretariat of the World Association of Public Employment Services. In order to get the maximum response rate possible the questionnaire was presented in the English, French and Spanish language. The information on the websites and literature search was processed in the questionnaire report below. Table 1.1 provides an overview of the type of response according to the type of welfare state.


Characteristics of European debt relief systems: a wide diversity

In the last twenty years we have seen an enormous growth of the debt problem in Europe. In response, many countries have implemented legal arrangements in order to provide the indebted with the possibility to turn to a judge and start all over anew, in other words to get debts cancelled. Each system has its specific characteristics.

In most countries, just like in the field of employment services, legal debt rules and regulations are complex and there is an enormous variety of public and private players active in the field.

There are also significant differences in pressure from the field of debt-relief systems on over-indebted unemployed. There are countries where there is no extra pressure on the unemployed to look for work (Belgium, France, Great Britain, Czech Republic), but there are also countries that do exert extra pressure to look for work (Germany, the Netherlands) and there are countries where it is more difficult for the over-indebted unemployed than for the regular unemployed to refuse an offer for less suited work. (Spain, Portugal). Denmark has built in thresholds for over-indebted unemployed to enter a debt restructuring trajectory. Unemployed have to find paid work before they can be admitted to such a trajectory.


This study provides the analysis of the following topics: PES strategies, prevention actions, results in terms of insertion, etc.…

The overall conclusion given by the author of the study is that the PES debt policies are still in its infancy because it’s a new instrument and because of the lack of studies.