Finland wants to pay its citizens basic income of €800 a month

The tax-free basic-income model will replace all benefits when implemented.
Reuters

The tax-free basic-income model will replace all benefits when implemented.

Finland's government is drawing up plans to pay every adult citizen a basic income of €800 (NZ$1300) each month, scrapping benefits altogether.

Under proposals drafted by the Finnish Social Insurance Institution (Kela), the tax-free payments would replace all other benefit payments, and would be paid to all adults regardless of whether or not they receive any other income.

According to Olli Kangas, the Research Department Manager of the Finnish Social Insurance Institution (Kela), the proposal would be finalised by November 2016. 

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While it may sound counterintuitive, the basic income is intended to encourage more people back to work in Finland, where unemployment is at record levels. At present, many unemployed people would be worse off if they took on low-paid temporary jobs due to loss of welfare payments.

More than 10 per cent of Finland's workforce is unemployed, rising to 22.7 per cent among younger workers.

A survey commissioned by Kela found that close to 70 per cent of the population favours the idea of a national basic income.

Detractors caution that a basic income would remove people's incentive to work and lead to higher unemployment. Those in favour point to previous experiments where a basic income has been successfully trialled. The Canadian town of Dauphin experimented with a basic income guarantee in the Seventies and the results – both social and economic – were largely positive.

Juha Sipila, the Finnish prime minister, supports the idea, saying: "For me, a basic income means simplifying the social security system."

The measure will cost Finland €46.7 billion per year. Kela's proposals will be submitted in November 2016.

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 - Stuff

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