Evaluation Report on the Adequacy of Basic Social Security 2015–2019
Abstract
According to the Act on the national pension index, changes to the adequacy of basic social security must be assessed at the end of each government term. The National Institute for Health and Welfare was commissioned by the Ministry of Social Affairs and Health to bring together in April 2018 an assessment group for carrying out the third assessment of the sufficiency of basic social security.
The basic approach used for the assessment was the same as for the previous assessment report. In the report, basic social security benefits include minimum unemployment benefit, parental daily allowance, sick leave allowance, pensions, home care allowance, student benefit, and supplementary housing benefit. The means tested last resort social assistance is not counted as basic social security. This time, however, more attention was paid to the relationship between basic social security and social assistance. All the calculations for case study households are now presented both with social assistance and without social assistance.
The definition of what is a sufficient basic social security level is ultimately a political decision. In order to provide a helpful measurement scale, we have used the reference budgets for reasonable minimum consumption produced by the Consumer Society Research Centre. Based on these, it was found that the income levels of those receiving unemployment benefit, home care allowance, minimum sick leave allowance or parental daily allowance were not sufficient to cover the reasonable minimum consumption budget. Basic pension security, on the other hand, is sufficient to meet this minimum consumption target. Student social security covers the reasonable minimum consumption budget only if supplemented by a student loan.
The changes taking place between 2015 and 2019 have, depending on the life situation of the recipient in question, either weakened their basic social security level or kept it constant. In particular, the basic social security level for the unemployed has dropped as a consequence of the index cuts and reductions in benefits resulting from the activation model. The basic social security levels for recipients of pensions, sick leave allowance and parental daily allowance, on the other hand, have each remained constant. Social security for students, meanwhile, has become increasingly loan-based.
For the unemployed in particular, income support fills in the gaps left by weakening basic social security levels. The role the means tested last resort social assistance in filling the gaps in the basic social security provided to the unemployed has increased significantly between 2015 and 2019. Once the means tested last resort social assistance is taken into account, the income level of those relying on basic social security has not decreased but instead remained constant.
Compared to other Western European countries, the income level provided in Finland by basic social security ranks either at the top or in the middle, depending on the family type and the life situation of the recipient in question. The income level of those depending on basic social security is lower than the average citizen’s assessment of the sufficient minimum security level.
Authors
Third evaluation group on the adequacy of basic social security
Additional Information
- Peer-Reviewed: yes.
- Open Access: yes.
- Cite as: Perusturvan riittävyyden III arviointiryhmä. (2019). Perusturvan riittävyyden arviointiraportti 2015–2019 (Työpaperi 6). Terveyden ja hyvinvoinnin laitos. https://urn.fi/URN:ISBN:978-952-343-296-3
