Financial recession increases need for social assistance

20.5.2009 5.42
News item N5-49252
As in other countries, the effect of the global financial crisis in Finland carries the threat of increased social exclusion, in addition of more joblessness. Kari Ilmonen, who heads the MSAH unit on promoting social inclusion, says that there needs to be sufficient attention given in municipalities to how to assist people on minimum income support.

"The danger is that the financial crisis will see some people cast out of society and will result in a further polarization of society", says Ilmonen.

"Exclusion needs to be halted by bringing people back to collective activity and maintaining the dignity of everyone. The welfare society must be kept integrated despite the economic crisis."

Ilmonen is particularly concerned about the situation of children and people living on low incomes.

"During the previous recession social security and family, child and youth services were reduced. The structures and service system for early support were not restored to their former level following the recession. This inability of the service system to deal with problems facing children and families in good time is seen in such things as the growth of the numbers of children needing child protection. If services are going to be cut again, it'll be the future of children and youth that will be cut."

More people on income support

The MSAH is carefully monitoring the impact of the recession on people's lives. One of the indicators of the threat of exclusion is the demand for social assistance. The unit to promote social inclusion has requested the state provincial offices to assess the social assistance situation in the municipalities.

According to information received from the municipalities, the need for social assistance has increased in the main urban areas of South Finland. In each, the numbers of recipients has risen by up to 20 percent compared to 2008. The increase in medium sized cities and towns has been slightly less, while it has been practically negligible in small municipalities. The increase has been the smallest in the province of Lapland.

The increase in the demand for social assistance represents the first wave of the effects of the economic crisis. The demand on union unemployment funds has become congested and people who have been made unemployed or laid off have to wait for their unemployment benefits and rely on social assistance.

People on minimum support need assistance

Municipalities have been able to provide immediate assistance to people in urgent need for social assistance. Despite this, the statutory seven working day timeframe within which social assistance applications have to be dealt with poses a problem in some of the bigger cities. Many cities have hired more staff or reorganized the work involved in handling income support applications.

New applicants have been dealt with mainly together with benefit processing and have not had to meet with a social worker, as is usually the case with new income support applicants.

"Not all applicants need actual social work support, but it is good if new clients are able to go over their situation in full with a social worker and plan ahead sufficiently", Ilmonen says.

"If the recession is a long one, there'll be increasingly more people on unemployment benefit and labour market support. Once municipalities have reduced the queues of social assistance  applications, attention needs to be given to how people on minimum support can be helped through more long-term solutions."

The MSAH committee that is currently dealing with social protection reform (known as the Sata Committee), began work before the onset of the recession, but was not in a position to tackle the problems of the basic and minimum support benefit system before the start of the crisis.

"I hope that the committee will come up with some solutions quickly and provide help to people in danger of ending up on income support."

Ilmonen says that more people are being caught by the minimum support safety net. But this safety net can only help a small proportion of people regain work or get back to a sufficient income sphere.

Ilmonen notes that he purchasing power of social assistance has dropped appreciably below that of the pervious recession of the early 1990s. Some people easily become excluded from society and their numbers accumulate.

"If we want to prevent the exclusion of an increasingly large group of society, minimum social security must be available rapidly and at a sufficient level that people can live on it. This would be the best option from the standpoint of the welfare of society and the economy as a whole."

Merja Moilanen
Translated Mark Waller