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Social welfare should be modernised, but there is no need to change everything
The purpose of the social welfare system is to ensure adequate livelihood and a dignified life. Social welfare in Finland comprises benefits that ensure livelihood and associated services.
Achieving the objective
- Earnings-related social welfare benefit systems must be prepared on a tripartite basis together with the social partners.
- While social welfare should be modernised, it would be pointless to dismantle the whole system, which is fundamentally sound.
1. Social welfare must continue to be based on need and on earnings. It must be available on specific grounds, such as illness, unemployment, parenting and studies. Social welfare benefits must be based in principle on earnings from work, over and above a basic standard of welfare.
2. Services and benefits must be more effectively integrated.
3. The process of seeking and receiving social welfare must be clear to those who need it.
Why is this objective important?
Occupational pensions are financed by pension contributions paid by employers and employees. They also finance most unemployment benefit, and family and health insurance benefits. This accordingly justifies including the social partners in reforms of social welfare. Finland has good experience of implementing major reforms through mutual agreement. This has brought stability to society and such benefits as reasonable pension security for employees.
The social welfare system has become increasingly complex over the years, both for its beneficiaries and administrators. The system nevertheless remains functional in respect of its basic principles, ensuring a livelihood in various life situations. Earnings-related benefits also help to prevent poverty and provide an incentive for working.
Services and benefits must be harmonised more effectively to meet the needs of people. For example, the unemployed must be assisted in returning to work through a high standard of employment services. Services also support human inclusion and the maintenance of working and functional capacity.
While the underlying mechanisms of the benefit system may be complex, the system must be easy for the beneficiary. Digitisation, automation and robotisation provide new ways of facilitating the processing of applications.
Access to earnings-related benefits must be facilitated with an improved level of benefits
The purpose of unemployment benefit is to secure the livelihood of workers during periods of unemployment, and to enable them to find new work that corresponds to their skills. The livelihood of the unemployed must be improved, especially in the case of those who have worked in low-paid sectors.
Achieving the objective
- The level of unemployment benefits must be increased, for example by abolishing the five-day waiting period.
- Access to earnings-related benefit should be facilitated by shortening the employment condition period to three months.
- Earnings-related unemployment benefit should be extended to everyone by enhancing the current unemployment fund system and increasing the level of unemployment benefit.
- A combined unemployment insurance system should be created, incorporating income from wages and self-employment.
Why is this objective important?
The current employment condition of eligibility for unemployment benefit is difficult to satisfy, especially for part-time and casual workers. Abolishing the waiting period is a concrete way of improving unemployment benefit.
Access to earnings-related daily allowance should be facilitated for workers with varying working time arrangements. The employment condition should be shortened, as part-time and casual workers have difficulties in satisfying this condition in its present form.
Combining gainful employment and work done on a self-employed basis must have a stronger impact on unemployment benefit. This can be achieved by introducing a combined insurance scheme that provides joint insurance for both forms of work. The level of earnings-related benefit will increase when both wages and income from self-employment affect the earnings on which the benefit is based.