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2nd Ld: Finland sees doubled zero-income households in decade

0 Comment(s)Print E-mail Xinhua, August 16, 2013
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The number of zero-income families has doubled in the past decade in Finland, a Nordic country long featured by its attractive welfare.

There are currently 20,757 Finnish households without taxable income, accounting for 1.25 percent of the total number of households, Finnish broadcasting company Yle said on Thursday.

However, there were only some 8,000 such households in 2003, Yle quoted a report published recently by Kela, the social insurance institution of Finland, as saying.

The zero-income households, some only consisting of single people while others being families with children, entirely depend on the public welfare, including housing, food and other living expenses.

According to Pertti Honkanen, a senior researcher at Kela, the main reason for the sharp rise was the legislation that took effect in 2006.

The legislation was intended to promote employment through vocational training, but Honkanen believed "these sanctions often have undesirable results that add to marginalization."

In Finland, an unemployed person can apply for either labor market support allowance or unemployment benefits, and the two payments are almost equivalent.

The legislation rules that allowances can be cut off from those individuals who disregard the orders of employment authorities, for instance, those refusing to take part in training programs.

Unlike the unemployment benefit, the labor market support allowance is conditional, i.e. an applicant of this support allowance has to register in the employment office as a job seeker, and comply with the office's directives on job training.

Therefore, those who are neither ready to seek for a job nor willing to receive any training could choose to apply for unconditional unemployment benefits, and become a long-term zero-income person.

"Someone who does not get labor market support allowance is usually excluded from all employment and training services," observed Honkanen.

In addition, the increasing number of the income-less is also partly attributed to the abolishment of labor market support allowance, since some of the young people are not well enough trained for any job.

What makes the problem more serious is the welfare system for poor couples.

As Finnish media discussed recently, if the spouses are both unemployed, the family can receive a total of over 2,000 euros (2,670 U.S. dollars) monthly social benefits, including unemployment benefit, housing allowance, child allowance and others, the amount of which is equivalent to the income of some low level work.

Particularly, since the Finnish labor market was fully open to the Euripean Union in 2006, the country has welcomed large number of immigrants and refugees from the countries beaten by economic downturn, who did not receive enough training for employment and contributed to the number of zero-income households. Endi

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