SAK would replace activation model by its employment incentive scheme
PAM’s Social Policy Specialist Egezona Kllokoqi-Bublaku supports the SAK model.
SAK proposes its own employment incentive scheme. It would simplify unemployment protection and add services to the unemployed. The activation model would be abolished. PAM’s Social Policy Specialist Egezona Kllokoqi-Bublaku gives the green light to the proposals.
SAK employment incentive scheme
Away with the activation model, more needs-based services to the unemployed.
Shorter and clearer waiting periods.
More security to gig workers: work requirement and adjusted unemployment benefit would be determined on the basis of earnings only, not on the basis of working hours and earnings as present.
An employee can include both employee pay and entrepreneurial income in his/her combined unemployment insurance.
Work requirement is six months, determined by earnings and not by working hours.
Away with the specified waiting period in the beginning of the unemployment.
Two types of social benefits are enough: earnings protection and basic protection.
On Thursday, SAK proposed a complete reform of the services to the unemployed. SAK’s Project Manager Saana Siekkinen says that unemployment protection has become too complicated to jobseekers. The proposed model aims at easing the position of those in short-term employment. Essential elements include putting an end to the activation model as well as softening and simplifying the sanctions, i.e. the waiting period. According to SAK, the model increases trust towards the unemployed and, at the same time, encourages them to jobseeking.
The activation model has now been in use for a little more than a year and, according to Siekkinen, it has turned out to be bureucratic and complicated. In the activation model, the jobseeker loses nearly 5% of his unemployment benefits unless he shows enough activity during a three-month period. According to SAK survey, only 30% of the unemployed could meet the activity criteria and their unemployment benefits were not cut.
Siekkinen adds that the activation model has pointed out that there are far too little services to the unemployed.
Waiting periods should be shorter and clearer
In the SAK model, waiting periods are short and clear and only become more stringent with repeated negligence. First time leads to warning only. The jobseeker can also avoid sanction by correcting the mistake.
”The present 60-day waiting period for not following the employment plan is quite a tough sanction”, Siekkinen notes.
How does the SAK model encourage to jobseeking? Siekkinen says that services to the unemployed must be increased as Sweden and Denmark have done: the jobseeker is met face-to-face already in the beginning of the unemployment instead of a mere phone call. The meetings are then repeated every three months which, in itself, keeps up jobseeking.
Also, digitalization should speed up the processing of benefit applications. Instead of requiring the jobseeker or somebody in occasional employment to send a number of different certificates to the unemployment fund and the TE office, this information will become available in the Incomes Register.
”For this reason, we want the Incomes Register to be fully functional as soon as possible”, Siekkinen says.
To improve the income of gig workers SAK proposes that the adjusted unemployment benefit system be reformed by, for example, abolishing the requirement to assess working hours. The amount of the adjusted unemployment benefit should depend on earnings only, not on working hours and earnings anymore.
Good for those with zero-hours contracts
PAM’s Social Policy Specialist Egezona Kllokoqi-Bublaku supports the proposals. In her opinion, a thorough reform of the services to the unemployed is necessary. Jobseekers must be recognised as individuals with different needs.
The employment situation has improved. Still, last November 322,800 people received unemployment benefits.
In 2017, approximately 168,000 people received adjusted unemployment benefit in Finland. (Kela)
Finland invests 0.15% of its GDP to employment services (2016, OECD). This is clearly less than what Denmark and Sweden do.
Scaling and softening the waiting periods would, according to Kllokoqi-Bublaku, make the system more human, for example to those on zero-hours contracts.
”At the moment, many zero-hours contract workers suffer from unreasonable waiting periods when they decline offered work for family reasons, for example.”
The change in work requirement would also improve the position of those who work less than 18 hours a week as they would now have access to adjusted unemployment benefit. She also supports the idea of stopping looking at working hours in adjusted unemployment benefit and switching to earnings-based assessment instead.
Platform workers would benefit from the clarification of the middle ground between being an employee and being an entrepreneur, Kllokoqi-Bublaku adds.
The former activation model 2, i.e. the model of independent jobseeking, is being prepared in tripartite consultations.