The Finnish government, under the leadership of Prime Minister Petteri Orpo, is initiating a major reform of the social security system. The aim is to streamline various benefits into a universal allowance to provide clarity and better work incentives for recipients.
This historic reform, led by Minister of Social Security Sanni Grahn-Laasonen, will be implemented in phases with the initial focus on combining the labour market subsidy and basic unemployment allowance into the universal allowance by 2026.
The long-term goal is to integrate other basic benefits, income assistance, and housing allowance into the universal allowance to create a clear and encouraging social security system. The government plans to ensure a smooth transition to prevent disruptions in payments.
Although inspired by the UK’s Universal Credit system, the Finnish reform seeks to avoid the negative consequences seen in the UK, such as increased homelessness and child poverty. The complex process aims to simplify the application process and improve benefits for recipients.