Social Security

Finland experiments with universal basic income scheme

Finland now trying out universal basic income
Finland now trying out universal basic income

Finland's experimental scheme to provide its citizens with a basic income, regardless of employment, launched earlier this week.

The two-year pilot scheme will provide 2,000 unemployed Finnish citizens, aged between 25 and 58, with a monthly basic income of 560 euros ($581.48) that will replace their other social benefits.

These citizens will continue to receive the basic income even if they find work.

Kela, the organization which runs Finland's social security systems and is running the pilot scheme, hopes the basic income experiment will boost employment, because the current system can potentially discourage the unemployed to find work as their earnings reduce the benefits they may receive.

"For someone receiving a basic income, there are no repercussions if they work a few days or a couple of weeks," said Marjukka Turunen, head of Kela's Legal Affairs Unit, in a press release.

"Incidental earnings do not reduce the basic income, so working and self-employment are worthwhile no matter what."

Nadia Isakova | Getty Images

Kela intends to test various basic income models and hopes to expand the sample size in 2018.

The basic income policy has come into focus in the last few years. Switzerland considered introducing a basic income for its citizens last year, but the plan was rejected by the public in a referendum.

Other countries considering the idea include Scotland, which plans to test the scheme in Fife and Glasgow later this year.

Proponents of universal basic income argue it can be more efficient, fairer and will better protect people as the economy evolves.

"A universal basic income would provide a much more secure income base in an age of deepening economic and social insecurity and unpredictable work patterns," economists Howard Reed and Stewart Lansley said in a report on basic income published in May last year.

"It would offer much greater financial independence and freedom of choice for individuals between work and leisure, education and caring while recognizing the huge value of unpaid and voluntary work."

Others criticize the idea as expensive and unworkable. In September, the U.K. government rejected plans for a basic income scheme.

"While at first glance a universal basic income might appear desirable, any practical implementation will invariably be unaffordable. Because it doesn't take into account individual needs properly, it will markedly increase inequality," Conservative politician Damian Hinds said during the debate, The Independent reported.

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