Social Security Committee outlines partial social security reforms

The Social Security Committee met on Monday 6 September to continue processing its position statements. The Committee also outlined several social security reforms for more rapid implementation. The Committee also discussed social security expenditure and financing, demographic trends, continuous learning, and income support reform.

The work of the Social Security Committee in autumn 2021 will focus on position statements outlining guidelines for social security reform.
The praesidium of the Committee presented a draft of the position statements at the 6 September meeting, including a praesidium proposal concerning the principles for resolving each problem. The draft complies with the principles of current legislation.
The Committee will continue processing the draft on 4 October, when discussion will focus on aspects of the value base.
After the Committee has approved the guidelines, its subcommittees will be able to begin preparing associated proposals for solutions to the specified social security problems.

More rapid partial reforms

The Social Security Committee also has a mandate to propose more rapid social security reforms. The following business was forwarded for further preparation:

• Simplification of benefit claims
• Harmonisation of benefit disbursement times
• Investigation of data protection legislation
• Harmonisation of income concepts, with review to include the self-employed.
• Investigation of family concepts
• Eligibility for multiple benefits at the same time

Reform of the Social Assistance Act and requests submitted to the Social Security Committee

The Committee was briefed on the work of a working group on reform of the Social Assistance Act. A report of the working group currently circulated for comments proposes changes in income support on the basis of the current situation.
The working group has submitted a request to the Social Security Committee. The working group finds it problematic that income support has become a form of support that regularly supplements basic security. Attention should be paid to factors that cause income support to become a supplement to primary benefits. The working group accordingly suggests that the work and other preparations of the Social Security Committee should seek reforms that reduce the need for recourse to income support.

Description of social security system expenditure and financing

A description of current social security financing and expenditure has been prepared for the Social Security Committee. This description also sets out theories describing the level of social security.
Total social security expenditure in 2019 was approximately EUR 72 billion. The largest items are old-age pensions and health and social services. Approximately EUR 17.1 billion, or a quarter of all social security expenditure in 2019, was spent on benefits and allowances for people of working age and families with children, which are areas of reform for the Social Security Committee.

Social expenditure as a proportion of GDP is higher in Finland than in most other EU countries. The proportion is nevertheless by no means exceptionally high compared to other Nordic countries or to several Western European countries. The proportion of GDP has grown more rapidly in Finland than in other EU countries compared to the period before the 2007-2009 financial crisis. This is partly due to demographic structure, the employment rate, and slow GDP growth.
Research findings on the impact of various forms of social security financing will be provided to the Committee in autumn 2021.

Finland’s demographic structure and social security

A digest of information on Finland’s demographic structure and social security was presented to the Social Security Committee. The digest indicates that aside from the Uusimaa and Åland regions, Finland is in a cycle of demographic decline. The cycle will increase and deepen the sustainability gap, hampering maintenance of key societal functions and delivery of previous social policy promises. The declining dependency ratio will also bring problems of labour availability. Factors examined in the digest include the impacts on demographic structure of population movements, family policy, birth rates and immigration due to climatic and environmental changes. The digest pays particular attention to increasing the employment rate, identifying increased education as the most important means.
The digest is the outcome of an information partnership of programmes and projects financed by the Social Security Committee and the Strategic Research Council.

Continuous learning and skills development

A phenomenon-based problem report on continuous learning and skills development was presented to the Social Security Committee for the first time. The report examines skills development, especially from the perspective of how social security benefits can support in-service skills development.
The problem report accommodates the policies of the parliamentary reform of continuous learning completed in December 2020.The benefit policies of the parliamentary reform of continuous learning are:
1. Developing study opportunities for the unemployed.
2. Assessing the prospects for developing study support to support continuous learning more effectively.
3. Reviewing the benefit system from the perspective of under-represented groups.

Upcoming meetings and meeting topics of the Social Security Committee:

Working meeting on 4 October

• Objectives of the social security reform from the Toimi project; Value base of social security; Key problems and their solution goals given concrete form based on principles

Meeting on 11 October

• Assessing the adequacy of basic security; Other themes to be adapted; Processing of position statements

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

Spring 2022

• Processing of interim report (roadmap)

Committee meetings will be held in January (Adoption of position statements), March and May.
Working meetings of the Committee will be held in February and April.

Meeting materials:

• Meeting invitation (in Finnish)
• Annex 1: Minutes of the previous meeting, Social Security Committee 10 May 2021 (in Finnish)
• Appendix 2: Rahoitus ja etuusmenot [Financing and benefit outlays], Draft memorandum (in Finnish)
• Annex 3: Jatkuva oppiminen ja osaamisen kehittäminen [Continuous learning and skills development], Draft memorandum (correction on 22 October 2021 of wrongly calculated adult education support after earned income, p. 10 - in Finnish)
• Annex 4: Draft position statements of the praesidium, 30 August 2021 (in Finnish)
• Annex 5: Slides, Social Security Committee, 6 September 2021 (correction on 22 October 2021 of wrongly calculated adult education support after earned income,  slides 67-68 - in Finnish)  PDF 5.1MB

Inquiries:

Research Professor Pasi Moisio, Chair of the Social Security Committee, [email protected], tel. +358 29 524 7228,
Tuulia Nieminen, Communications Specialist [email protected], tel. +358 29 516 3635,
Heli Backman, Director-General [email protected], tel. +358 29 516 3668,
Liisa Siika-aho, Director [email protected], tel. +358 29 516 3085,
Reform of the Social Assistance Act and final report of the working group: Eveliina Pöyhönen, Director, [email protected]
Description of expenditure and financing of the social security system: Minna Liuttu, Financial Adviser, [email protected], tel. +358 29 516 3582,
Demographic structure and social security in Finland – digest: Päivi Tikka, [email protected], Anne-Christine Ritschkoff, [email protected] and Olli Kangas, [email protected] (in Finnish)
Jatkuva oppiminen ja osaamisen kehittäminen [Continuous learning and skills development]: Marjaana Maisonlahti, Senior Ministerial Adviser, [email protected] and Kirsi Heinivirta, Planning Director, [email protected] (in Finnish)