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Finland’s unemployed await word of possible benefit cuts in new activation model

Unemployed job seekers will soon find out if their benefits have been cut over failure to meet the requirements of the government's new activation model.

Mies aukaisee Kelan ovea.
Image: Ismo Pekkarinen / AOP

Next week more than 100,000 unemployed jobseekers in Finland will receive mail from the social benefits agency Kela informing them whether or not they get to keep their benefits intact for the foreseeable future.

The end of March marks the first three-month evaluation period since the introduction of the Sipilä government’s new unemployed activation model designed to wean jobseekers off unemployment benefits and get them into paid work or entrepreneurship.

If over a three-month period unemployed persons cannot prove that they have performed 18 hours of work, earned at least 240 euros from their own businesses or attended five days of employment-promotion activities, their benefits will be cut.

The benefits cut will amount to 32 euros monthly. The current labour market subsidy stands at 696 euros per month.

Critics of the model have argued that it punishes the unemployed for failing to produce results rather than penalising lack of effort. A citizens' initiative calling on government to roll back the measure quickly reached the 50,000-signatory threshold required to take it before lawmakers and has been handed in to the Parliament.

Govt prepared for rise in income support requests

Any shortfall in benefits could see the unemployed applying for income support. According to Social Affairs and Health Ministry benefits director Liisa Siika-aho, the ministry is prepared for this possibility.

“Of course that could also happen. The government budget has already factored in income and housing allowances. There will be some addition to that,” she noted.

According to Siika-aho, the so-called activation model was not designed to save money but to advance employment.

The requirements for income support are different from the criteria for the labour market subsidy. It is discretionary, based on an assessment of need. If the spouse of an unemployed person has a full-time job, income support will not necessarily be granted.

Running from one agency to another

One of the stated goals of Prime Minister Juha Sipilä’s government was to unravel unnecessary bureaucratic structures. However Johannes Kananen, a Helsinki University docent specialising in social policy, said the goal would not be met if unemployed persons are forced to run from one agency to another.

“This is extremely tiresome from the perspective of an unemployed person. This is what you would call a classic bureaucratic trap,” Kananen declared.

He noted that one of the biggest threats of the new approach is the risk that it could weaken the labour market. He said that efforts to direct the unemployed will also inevitably affect business.

If an unemployed person is obligated to accept 18 hours of work in a three-month period, it provides an opening for employers to undermine job contracts.

“The unemployed are being offered poorer temporary and gig work. Companies know that there are 200,000 unemployed [people] receiving labour market subsidies. They have no choice,” he added.

The university docent noted that the unemployed have always been activated and have always been obligated to find work or be available for new job opportunities. He said that it is the terms of such activation that matter.

“The system should be developed to ensure that employment services are good enough for people to want them. At the moment it is by no means clear that employment services are helping [people] get jobs,” Kananen remarked.

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