Labour market initiatives in the Budget Bill for 2021

Published

In the Budget Bill for 2021, the Government proposes labour market initiatives worth more than SEK 9 billion. The Government’s proposals are based on an agreement between the government parties, the Centre Party and the Liberal Party.

Reinforcement of unemployment insurance to be temporarily extended

In the Budget Bill for 2021, the Government proposes that several changes made to unemployment insurance in the first half of 2020 be extended for a further two years, i.e. until the end of 2022.

The COVID-19 outbreak has hit businesses hard; both employees and sole traders have lost their jobs or assignments and are now in need of unemployment benefits. In an additional amending budget in April 2020, the Government decided on a range of temporary measures to increase the number of people entitled to unemployment benefits and on a temporary increase in benefit levels in 2020.

Based on the Government’s proposals, a temporary relaxation of the work requirement was introduced.  The Government also decided to raise the ceiling for the income-related benefit for the first 100 days and from the 101st day. In addition, the Government decided on an increased minimum unemployment benefit and a temporary minimum level for unemployment benefit. In the Budget Bill for 2021, the Government proposes additional funding to enable these changes to unemployment insurance to apply throughout both 2021 and 2022. The proposed allocation is for almost SEK 6  billion in 2021. 

Arbetsförmedlingen’s administrative appropriation reinforced by SEK 1  billion

Unemployment is expected to continue to rise in 2021. Arbetsförmedlingen (the Swedish public employment service) therefore needs increased administrative resources to be able to manage a higher number of registered jobseekers and ensure effective local presence and equitable services throughout the country.

In the Budget Bill for 2021, the Government therefore proposes that Arbetsförmedlingen be allocated SEK 250 million as of 2021 to ensure effective local presence and equitable services throughout the country and SEK 740 million to manage a higher number of unemployed people. The Government also estimates that SEK 300  million will be allocated in 2022 and SEK 50 million in 2023 to manage a higher number of unemployed people.

In addition, further reinforcements and reductions in Arbetsförmedlingen’s administrative appropriation are proposed due to other reforms included in the Budget Bill for 2021. The administration appropriation will be reinforced by a total of SEK 1 011  million in 2021.

SEK 772 million for employment training

Unemployment is expected to rise and demand in the economy to be subdued over the next few years. Many of the jobs that are now disappearing are at risk of disappearing forever. It is important to offer quality skills enhancement initiatives so that jobseekers who need them can strengthen their position in the labour market ahead of an economic upturn.

In the Budget Bill for 2021, the Government therefore proposes that funds be allocated to increase access to employment training programmes to meet the demand for workers in shortage occupations and boost jobseekers’ knowledge through short vocational programmes.

The Government proposes an allocation of SEK 772 million in 2021. In addition, it proposes allocations of SEK 500 million in 2022 and SEK 200 million in 2023. These allocations correspond to, on average, an additional 4 000 participants per month in 2021, 2 500 participants in 2022 and 1 000 in 2023.

SEK 1 billion to enable more jobseekers to access job-matching services

The Government proposes that funds are allocated to gradually increase the number of participants in procured job-matching services. Increasing the extent of procured matching services can contribute to shorter periods of unemployment and a lighter burden on Arbetsförmedlingen. It can also contribute to gradually increasing the suppliers’ capacity to offer matching services for jobseekers ahead of a future reformed system. The reform of Arbetsförmedlingen aims to enhance the effectiveness and efficiency of its labour market activities, and the main regulatory framework will enter into force at the end of 2022. 

In the Budget Bill for 2021, the Government proposes that SEK 1 billion be allocated to gradually increase the number of participants in procured matching services as part of Arbetsförmedlingen’s reform process. This will be followed by an estimated SEK 1.5 billion in 2022 and SEK 2 billion in 2023. It is estimated that in 2023, SEK 500 million will be added to appropriation 1:2 ‘Grant to unemployment benefit and activity support’

SEK 100 million for introduction of ‘intensive year’

In the Budget Bill for 2020, the Government announced the introduction of an ‘intensive year’ for newly arrived immigrants. This is part of their ‘new start’ in Sweden, and will help them to enter the labour market more quickly. The aim is that, after the ‘intensive year’, the participants’ skills should match labour market needs and they should be able to find work within one year of beginning the ‘intensive year’.

Funds for the ‘intensive year’ were allocated in the Budget Bill for 2020, including in Arbetsförmedlingen’s administrative appropriation. An additional SEK 100 million to Arbetsförmedlingen’s administrative appropriation is now being proposed in the Budget Bill for 2021 to ensure effective implementation.

SEK 500 million to introductory jobs and extra jobs

Long-term unemployment is expected to rise in 2021 and result in a need for initiatives for people who have been unemployed for a long time or newly arrived immigrants who are unable to find work without considerable support. Extra jobs and introductory jobs can create job opportunities for this group, not least foreign-born women, and increase the chances of finding work.

In the Budget Bill for 2021, the Government therefore proposes the allocation of funds to introductory jobs and extra jobs. The aim is to create more job opportunities for newly arrived immigrants and long-term unemployed, which in turn can strengthen their position in the labour market.

In the Budget Bill for 2021, the Government proposes additional funding of SEK 500 million for extra jobs and introductory jobs. The proposal estimates that this will generate, on average, 2 400 more employment support initiatives per month in 2021. In 2022 the additional funding is estimated at SEK 100 million.

Delegation for the Employment of Young People and Newly Arrived Migrants

In its Budget Bill, the Government proposes additional funding of SEK 25 million in 2021 for promotion funds to the Delegation for the Employment of Young People and Newly Arrived Migrants (Dua). This is to enable collaboration between municipalities and Arbetsförmedlingen to be maintained and developed. Dua’s efforts to promote collaboration between municipalities and Arbetsförmedlingen are important for young people and newly arrived immigrants, who are able to benefit from the joint initiatives of municipalities and Arbetsförmedlingen, including initiatives in collaboration with employers in ‘local job tracks’.

On 17 September 2020, the Government decided to extend Dua’s assignment until 31 December 2021.

SEK 30 million to fight labour market crime

In the Budget Bill for 2021, the Government proposes a permanent increase of SEK 30 million in the Swedish Work Environment Authority’s administrative appropriation. This will better enable the Swedish Work Environment Authority and other agencies to work in a focused and collaborative manner to continue to fight fraud, non-compliance with rules and regulations, and crime in the Swedish labour market. In 2018–2020 the Government has invested SEK 18 million per year to strengthen efforts to combat unfair competition in the labour market. The Government has previously tasked eight agencies – Arbetsförmedlingen (the Swedish public employment service), the Swedish Work Environment Authority, the Swedish Economic Crime Authority, Försäkringskassan (the Swedish Social Insurance Agency), the Swedish Gender Equality Agency, the Swedish Migration Agency, the Swedish Police Authority and the Swedish Tax Agency – with jointly developing efficient and effective working methods in 2018–2020 for multi-agency controls to combat fraud, non-compliance with rules and regulations, and work-related crime. This assignment was coordinated by the Swedish Work Environment Authority.

In February 2020, the Minister for Employment decided to task an inquiry with following up and analysing the work on multi-agency controls to fight fraud, non-compliance with rules and regulations, and crime in the Swedish labour market. The inquiry will also propose measures in this area and actions required to ensure that efforts are effective and efficient. The final report is due by 30 December 2020.

SEK 47 million to combat incorrect disbursements and labour market fraud

The conditions to effectively combat incorrect disbursements and benefit offences need to be strengthened. In the Budget Bill for 2021, the Government therefore proposes that SEK 47 million be allocated for this in the labour market policy area.

The Government proposes that resources be allocated to Arbetsförmedlingen and the unemployment insurance funds in 2021–2023 to enable them – in cooperation with the Swedish Unemployment Insurance Board and a newly established function at the National Financial Management Authority – to strengthen checks and combat incorrect disbursements and fraud in the area of unemployment insurance. Moreover, Arbetsförmedlingen is tasked with strengthening its checks in relation to jobseekers’ job-search activities and reporting to the unemployment insurance funds.  The Government proposes an allocation of SEK 25 million for this in 2021–2023; SEK 15 million is proposed for Arbetsförmedlingen and SEK 10 million for the unemployment insurance funds. In addition, the Government proposes an allocation of SEK 5 million per year to the Swedish Unemployment Insurance Board for work to combat incorrect disbursements and fraud against the welfare systems.

In the Budget Bill for 2021, the Government also proposes several investments to intensify efforts to combat incorrect disbursements, abuse and fraud in the welfare systems. These investments include SEK 17 million to Arbetsförmedlingen and, as mentioned above, SEK 5 million per year to the Swedish Unemployment Insurance Board to combat incorrect disbursements and fraud in the welfare systems. The allocations will be used to intensify efforts to fight and follow up on errors and fraud in the benefit systems.

SEK 400 million till Samhall

Samhall plays an important role in improving job prospects for people who have disabilities impairing their capacity to work and who cannot find work or support through other measures.

Samhall’s additional costs are expected to rise due to wage increases. To enable Samhall to uphold its labour market policy mandate and maintain its sound capital structure, the Government proposes that Samhall receive additional funding of SEK 400 million per year as of 2021.