Finland mends welfare system

Lennart Simonsson –
On its first regular working week of 2017, Finland launched a two-year nationwide experiment offering a basic income to a limited pool of part-time employees and the unemployed.
Some 2,000 randomly selected participants are to receive a monthly payment of 560 euros, which is not taxed. Recipients can even keep the benefit if they also earn money from employment.
According to Marjukka Turunen, head of the legal affairs unit at KELA, Finland’s social welfare agency, the plan is to see if a long-debated basic income policy can boost employment and adapt the country’s social welfare system to the labour market trend towards more temporary contracts and freelance work.
The programme could also help reduce the “bureaucratic burden” both for welfare agency employees and recipients of benefits, since beneficiaries would not have to spend time filling out detailed forms.
The income is also regular, like a monthly salary, offering better means of planning and more security. The first payment of the welfare experiment, launched on Monday, is due on January 9.
Of those receiving the income, some “have been unemployed for years,” Turunen said, while some only lost work in October and received their first unemployment benefit in November.
Participants — aged between 25 and 58 — were drawn from all over the country of 5.5 million people. Turunen said 48 per cent of the group were women and 52 per cent were men, and were picked from a pool of 175,000 people who received a labour market subsidy or a basic unemployment allowance in November.
During the two-year experiment, participants would be “left in peace” to avoid affecting the study “or they way they behave,” she said.
One participant — Juha Jarvinen from the small town of Kurikka in western Finland — told Finnish public broadcaster YLE he was happy to be part of the experiment, and planned to relaunch his small business that went under five years ago.
Heikki Hiilamo, professor of social policy at Helsinki University, said the programme targets people who have not had an opportunity to get “a traditional permanent position in the labour market.”
Finland’s social welfare office will check tax records and other registries as well as employment benefit services to ensure participants comply with the programme.
The 560-euro benefit would not be affected if the participant works a few days or more, as opposed to current systems that reduce unemployment benefit payments and discourage benefit recipients from taking on employment, Turunen said.
“The aim is to increase the incentive to take on a job,” she said. “It is incentive-based, as you get to keep the 560 euros.” — dpa