Committee launches study on alternative social security models

Ministry of Social Affairs and Health

13.10.2021 12.24 | Published in English on 22.12.2021 at 17.23

Press release

The agenda of the Social Security Committee for its meeting on 11 October was 1) the adequacy of basic security and 2) consideration of alternative social security models.

Assessment of the adequacy of basic security

“The term basic security is sometimes used inconsistently. Specialists generally distinguish between minimum security (income support), basic security and earnings-related security. The Finnish Constitution guarantees a basic livelihood in the event of unemployment, illness, incapacity for work, old age, the birth of a child or the loss of a provider. Basic security often refers to the minimum benefits payable in these life situations. Of the basic security benefits for people of working age, labour market support is the largest in terms of the number of beneficiaries,” explains Jussi Tervola, Research Manager at the Finnish Institute for Health and Welfare (THL).

Finland conducts an assessment of the adequacy of basic security once in each electoral period. These assessments are carried out by a research team led by THL. A reference budget for reasonable minimum consumption, the popular perception of adequate income based on citizen surveys conducted by the Social Insurance Institution (Kela), international comparisons, and the number of people entitled to basic income support have been used to measure adequacy.

“A review of basic security indicates that basic security does not suffice to cover the reference budget for reasonable minimum consumption in Finland in many life situations, especially for single person households. The benefit package of last resort also comprises an exceptional number of benefits by international standards,” Tervola observes.

Discussions on the Social Security Committee highlighted the costs of living on basic security, such as maintenance of family members and the varying situations of families with children, indebtedness and distraint, and the costs of housing, including rents for non-subsidised rental housing. The overall picture of expenditure on basic security was also discussed. The Committee will continue discussions on this subject in November, focusing on whether the interim report should include a long-term target and a plan for the level, coverage and financing of social security.

Processing of draft position statements and consideration of alternative social security models

The draft positions of the Social Security Committee concerning social security problems to be taken up for further preparation and the principles of their alternative solutions were processed in the early autumn on the basis of the comments received from the Committee. Particular attention was paid at this meeting to discussing alternative models to the current social security system. These models include universal basic income, negative income tax, and a basic account. Examining alternative models is part of preparatory work for the interim report of the Social Security Committee, which is also the target of the draft position statements.

The discussion noted that the position statements did not yet set out the principles for a comprehensive reform of social security. The draft position statements focus on correcting problems identified in the current system within the framework of the current system. Exploring alternative models alongside these was broadly regarded as a worthy idea. The discussion also noted that even radical reforms are possible within the current system.

Additional proposals were also made for the draft position statements, including from the perspective of the self-employed and people with disabilities.

Upcoming meetings of the Social Security Committee

The next meeting of the Social Security Committee will be arranged as a hybrid meeting on 8 November. Future meetings will be arranged as hybrid meetings, with working meetings taking place on a face-to-face basis.

Working meeting on 8 November

Processing of position statements; Structuring of the interim report

Meeting on 29 November

Transformation of the world of work; Housing and work-based social security, and international mobility; Other themes to be adapted; Processing of position statements; Approval of final versions of problem reports

Meeting on 31 January

Implementation and digitalisation, Data management and data protection, Adoption of principles for the draft position paper

Working meeting on 14 February
Meeting on 21 March
Working meeting on 25 April
Meeting on 23 May

Inquiries:

Research Professor Pasi Moisio, Chair of the Social Security Committee, tel. +358 29 524 7228pasi.moisio@thl.fi
Jussi Tervola, Research Manager, Finnish Institute for Health and Welfare (THL), firstname.lastname@thl.fi
Heli Backman, Director-General, 2nd Vice-Chair of the Social Security Committee, tel. +358 29 516 3668
Liisa Siika-aho, Director, 3rd Vice-Chair of the Social Security Committee, tel. +358 29 516 3085
Tuulia Nieminen, Communications Specialist, tel. +358 29 516 3635
With the exceptions of Pasi Moisio and Jussi Tervola, e-mail addresses are in the format firstname.lastname@gov.fi

Social security reform

Meeting materials:

Sosiaaliturvauudistus