The Social Insurance Institution of Finland (Kela) took over basic social assistance payments from municipalities in 2017. (Jussi Nukari – Lehtikuva)

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THE RELATIVE NUMBER of basic social assistance recipients is almost twice as high in Finland than in Sweden, reveals a study by the Finnish Institute for Health and Welfare (THL).

THL on Tuesday reported that the difference is attributable to factors such as the amount of the benefit, the impact earned income has on the benefit and, to a notable extent, the underutilisation of the benefit in Sweden.

While fewer than half of people who would be entitled to the benefit had received it in Sweden in 2016–2017, the corresponding share stood at two-thirds in Finland. The benefit is also more accessible and subject to less strict eligibility conditions in Finland than in Sweden, according to THL.

The authors of the study viewed that if the same conditions were introduced in Finland, basic social assistance would no longer function as a supplement of the labour market subsidy and housing allowance schemes.

“If Finland aligned with Sweden in terms of the level and guaranteed amount of basic social assistance, the number of benefit recipients would be about half of what it is currently,” estimated Jussi Tervola, a research director at THL. “Basic social assistance also would not supplement the labour market subsidy and housing allowance the way it does today. In Sweden, basic social assistance is often the primary source of income for recipients.”

The numbers of recipients in the two countries were compared by means of international register data and simulation methods.

The Finnish Social Insurance Institution (Kela) in 2017 took over the basic social assistance from municipalities as part of a reform aimed at reducing the stigma associated with applying for it and, consequently, its under-utilisation. While the study found that the under-utilisation decreased especially in 2017, the extent to which the decrease was attributable to the transfer remains unclear as a decline was registered also in Sweden.

“You cannot draw too specific conclusions about the effects of the transfer to Kela,” said Tervola.

The Finnish government has launched a social security reform designed to, for example, reduce long-term reliance on basic social assistance.

Aleksi Teivainen – HT

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