In a controversial trial, Finland has guaranteed its unemployed a basic monthly income for doing nothing. Contrary to the Australian welfare system, under the Universal Basic Income scheme, people will continue to receive the same payments even after they have found a job.
Under the two-year trial that kicked off on 1 January 2017, 2000 unemployed Finns aged between 25 and 58 will receive a monthly guaranteed sum of 560 Euros (AUD 805). The scheme is likely to cover other low-income groups as well.
The single income payment replaces all other welfare payments.
The unemployment rate in Finland is above 8 per cent which has remained unchanged since last year.
Kela, the company that runs Finland’s social security system said the move will cut employment as the current system discouraged people from working in low-paid, temporary jobs.
“For someone receiving a basic income, there are no repercussions if they work a few days or a couple of weeks.”
“Working and self-employment are worthwhile no matter what,”
said Marjukka Turunen, of Kela’s legal affairs unit.
Both sides of the politics in the country of 5.5 million reportedly find the idea attractive because of its potential of lowering poverty and reducing the burden on welfare.
But experts are divided over having a similar system in place in Australia.
Bob Douglas, director of Australia21, told News Limited last year that Australia’s broken welfare system needed a more efficient replacement.
“The conventional welfare system isn’t doing the job it’s supposed to,” he said.
He said in the current system that required policing of the recipients, which he says can be offensive.
Gigi Foster, an Associate Professor at UNSW’s school of Economics said the way UBI was designed, it could penalise people for working more.
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