How the basic income experiment works in
practice
Marjukka Turunen
Head of Legal Unit
Benefit services
12.1.2017
How the basic income experiment works in practice
2
Basic income experiment is one of those actions which aim to
• Renewing social security to answer better to changes of wor...
Why is the Finland´s experiment so unique?
• Experiment is compulsory, you cannot choose whether you want to be in it or
n...
Why is the Finland´s experiment so unique?
• Experiment is implemented by the main social insurance implementor in Finland...
1. More incentives to take on work
• Earnings don´t reduce basic incomes amount, you get to keep it no matter
how much pay...
2. Financial security garantee (”Peace of mind”)
• Basic income is payed in advance every months second bank day
unconditi...
3. Less burocracy
• To calculate the amount of the unemployment benefit, customer needs to bring all
the necessary informa...
Target group 2000 persons
9
NORTHERN
INSURANCE 12 %
DISTRICT
EASTERN
INSURANCE 17 %
DISTRICT
SOUTHERN
INSURANCE 40 %
DISTR...
Experiment in practice
• Decisions sent by post to the target group 28.12.2016  All of the benefit paying
days for the wh...
How to customers act in practise?
• Customers don´t have to inform Kela about their earnings or whether
they have taken on...
Examples
• Person A is in basic income experiment
• Before experiment he received basin unemloyment allowance 522 euroa pe...
Unemloyd person who has a part-time job
• Unemploymen benefit receiver
• Gets basic income 560 euros every month
• On top ...
Customers comments and feedback
• It has been a positive surprise for many people that working and
earnings from working d...
Nächste SlideShare
Wird geladen in …5
×

Marjukka Turunen basic income experiment in practice 12012017

493 Aufrufe

Veröffentlicht am

Presentation at the event ”Socially Innovative Finland - Spotlight on the basic income experiment and the Finnish maternity package”, Kela, Helsinki, 12.1.2017.

  • Als Erste(r) kommentieren

  • Gehören Sie zu den Ersten, denen das gefällt!

Marjukka Turunen basic income experiment in practice 12012017

  1. 1. How the basic income experiment works in practice Marjukka Turunen Head of Legal Unit Benefit services 12.1.2017
  2. 2. How the basic income experiment works in practice 2
  3. 3. Basic income experiment is one of those actions which aim to • Renewing social security to answer better to changes of working life • Develop social security to more participating and incentive for work • Reduce byrocracy • Simplify the complexity of the social security system 3 Basic income experiment in a nut shell – Why?
  4. 4. Why is the Finland´s experiment so unique? • Experiment is compulsory, you cannot choose whether you want to be in it or not  came as a surprise to the participants  results will be more genuine and trustworthy • Target group (2000 customers) chosen were randomly picked from the whole group of of basic unemployment benefit receivers (175 000 persons)  no exclusion of certain groups from the experiment • Target group (2000) – control group (173 000)  can be comparised together because the profile is the same • Experiment is nationwide, participants are situated all over Finland 4
  5. 5. Why is the Finland´s experiment so unique? • Experiment is implemented by the main social insurance implementor in Finland (Kela) • Experiment has been planned and implemented by interdisciplinary group (reseachers, legislation experts, benefit experts, ICT experts) inside one organisation • Experiment is based on legislation and the law on the experiment has been proven by constitutional board in parliament 5
  6. 6. 1. More incentives to take on work • Earnings don´t reduce basic incomes amount, you get to keep it no matter how much pay you get • Basic unemployment benefit is coordinated with earnings so if you take on for example a part time job, you´ll get less than the full amount of the unemployment benefit (1 euro earnings reduces 50 cents of the benefit) • In some situations it is not worthwhile to take on a part time job because the amount of euros left in your hand is less than the full unemployment benefit (taxes, child increases etc to be considered) 6 Basic income experiment– Why?
  7. 7. 2. Financial security garantee (”Peace of mind”) • Basic income is payed in advance every months second bank day unconditionally without any application • You can plan ahead and have certainty of the basic income • Unemployment benefit is payed beforehand and it´s amount is reduced by possible earnings – uncertainty how much does the benefit is especially when doing part-time job and amount of earnings vary from month to month  insecurity 7 Basic income experiment– Why?
  8. 8. 3. Less burocracy • To calculate the amount of the unemployment benefit, customer needs to bring all the necessary information to Kela every 4 weeks. Pay checks, application form, other clarifications what is needed to calculate the amount of the benefit  takes time to get the information from the employer and also Kela has to process the application with the information  administrational work and burocracy burden for both customer and Kela  More energy to look for work and plan ahead • Status changes: If person in experiment gets sick or has a baby, he or she will stay on basic income and don´t have to apply for sickness benefit or parental benefit − Finnish basic social security system consist of 40 benefits or parts of benefits and it is sometimes impossible to customers to know what they are entitled to. Furthermore, benefits are calculated in different ways and so customer needs to bring different application and other information for Kela to process applications8 Basic income experiment– Why?
  9. 9. Target group 2000 persons 9 NORTHERN INSURANCE 12 % DISTRICT EASTERN INSURANCE 17 % DISTRICT SOUTHERN INSURANCE 40 % DISTRICT WESTERN INSURANCE 17 % DISTRICT CENTRAL INSURANCE 15 % DISTRICT Basic income receivers: • 48 % female, 52 % male • 30 % aged 25-34, 29 % aged 35-44, 41 % aged 45-58 • 87 % received labour market subsidy and 13 % basic unemployment allowance
  10. 10. Experiment in practice • Decisions sent by post to the target group 28.12.2016  All of the benefit paying days for the whole 2 years have been informed to the target group • Kela is not allowed to give away information about the persons in this experiment unless non-identifiable • Individual privacy and not allowed by legislation • The results of the experiment suffer  by disturbing the customers we can alter their behavior and spoil the idea of a compulsory field trial • The analysis of the experiment will be take place in the end of the trial via for example interviewing target group or part of it and comparison with the comparison group will be made. • Analysis and information during the experiment will be made according to Kela´s registers and other information from for example tax authority and employment offices  we will not disturbe customers during the experiment 10
  11. 11. How to customers act in practise? • Customers don´t have to inform Kela about their earnings or whether they have taken on a job or not • Customers don´t have to inform their basic income to tax offices • Other benefits act like they have before, so earnings might reduce housing allowance, social assistance or other benefits • Unemployment benefits is good to apply so customer don´t miss anything during the experiment or after it 11
  12. 12. Examples • Person A is in basic income experiment • Before experiment he received basin unemloyment allowance 522 euroa per month and housing allowance 330 euros per month (calculated according to expences in Eastern Finland/city of Joensuu) • From the beginning of the experiment he receives basic income 560 euroa per montha and housing allowance 330 euroa per month  incomes increase by 38 euros per month. • Can stay on the experiment, no apply for a job for the whole two years 12
  13. 13. Unemloyd person who has a part-time job • Unemploymen benefit receiver • Gets basic income 560 euros every month • On top of that every earned euro increases persons total incom • Person has a right to unemployment benefit but in practic basic income reduces the unemployment benefit on to 0 euros unless person has child increasement or other increasements. In total income influences also housing allowance which is being tested when income rise 400 euros per month. If a person has before had right to social assistance, every euro reduces that. 13 Earning Earnings, netto Basic Income Euros in handm tax 20 % 0 0 560 560 50 40 560 600 100 80 560 640 150 120 560 680 200 160 560 720 250 200 560 760 300 240 560 800 350 280 560 840 400 320 560 880 450 360 560 920 500 400 560 960 550 440 560 1000 600 480 560 1040 650 520 560 1080 700 560 560 1120 750 600 560 1160 800 640 560 1200 850 680 560 1240 900 720 560 1280 950 760 560 1320 1000 800 560 1360 1200 960 560 1520 1400 1120 560 1680 1600 1280 560 1840
  14. 14. Customers comments and feedback • It has been a positive surprise for many people that working and earnings from working do not affect ore reduce basic income • Many who have called to Kela are thinking of starting their own businesses • Those who have started studies, have selected basic income instead of student benefits • Single persons have also thinking about staying on basic income and not apply for jobs but some of them have had a reason for this (for example taking care of an elderly person) 14

×