The social security system must ensure sufficient income for all citizens in different life situations, such as during unemployment, sickness, studies, family leave and old age.
Working and encouraging people to work must continue to be the cornerstones of social security.
The transformation of work is challenging the Finnish social security system, as jobs will disappear, new jobs are created and the forms of work will become fragmented. The current system is bureaucratic, the services are fragmented, and an individual’s opportunities for influence are limited. The social security system must be developed in a direction that increases encouragement and ensures that individual needs and challenges are taken into account.
The reform should be implemented in a controlled manner, one element at a time. STTK considers the promotion of work and employment and the prevention of exclusion to be the key and primary aspects in reforming social security.
STTK has published its own incentive model for the social security reform. The primary goals of the incentive model include effective employment and increased inclusion, which call for a comprehensive reform of the service system. The goals can only be achieved through sufficiently broad, accurately targeted and effective services. The services to be provided must be modernised to focus on the individual and offer encouragement.
Benefits must be closely linked to the personal service process, and the benefit system needs further clarification. The moderate combination and renewal of benefits are necessary.
The three levels of the incentive model
Our incentive model has three levels: the minimum level, the participation level and the incentive level. Social assistance and housing allowance are combined on the minimum level, which is need-based and intended as last-resort financial assistance. A personal assessment of the need for services is made and the best service path for the individual is selected on the participation level, which corresponds to the current labour market subsidy and basic unemployment allowance.
On the incentive level, which provides a larger amount of support than the participation level, participation in society is supported through broad-based activation measures that are suitable for the individual and encourage them. The purpose of the incentive level is to increase positive opportunities to participate in society, prevent exclusion and improve the individual’s opportunities for employment.
STTK seeks to reduce the incentive problem by better coordinating benefits and income from work. According to the model, when income from work increases, benefits decrease steadily so that each euro earned reduces the benefits by EUR 0.6.