Labour market policy initiatives in the Budget Bill for 2016

In the Budget Bill for 2016, the Government is investing in better job matching and skills development through measures to promote an active labour market policy for people who are long-term unemployed or have impairments that entail reduced working capacity. The Government is also investing in a significant raise in the compensation paid to municipalities for their reception of refugees, and more effective measures to introduce newly arrived immigrants to the labour market. Under the Government’s proposal, the investments in the labour market area presented by the Government in the spring amending budget for 2015 will continue. The Budget Bill is based on an agreement between the government parties and the Left Party.

Investments to overcome long-term unemployment

The objective of the Government’s employment policy is to reduce unemployment so that it is the lowest in the EU by 2020. To succeed in this, it is particularly important to tackle the high long-term unemployment. The Government is now beginning to eliminate Phase 3 by stopping new referrals to the present employment placements. Instead, people will be offered active measures based on their needs, such as subsidised positions, education and training, and work experience. Those now in employment placements will gradually be offered other measures, such as extra jobs in the welfare system.

The Government proposes additional funds to make it possible to provide labour market policy measures to those who have been unemployed the longest, i.e. those who have spent more than 450 days in the job and development guarantee scheme. This will open the way to meaningful and effective measures that will bring participants closer to the labour market. The Government will commit SEK 60 million to this end in 2016, SEK 102 million in 2017, SEK 111 million in 2018 and SEK 121 million in 2019.

In the Budget Bill, the Government proposes that participants in the job and development guarantee scheme in 2016–2019 should be allowed to retain activity support for at most 24 months while attending vocationally oriented courses at folk high school. The vocational programmes must be in occupations where there is a shortage of labour. The proposal will make it possible to raise the level of education among participants, since education is often vital to compete for jobs in the labour market.

The Government also intends to allow the initiative for folk high school courses aimed at encouraging further studies to continue for participants in the job and development guarantee scheme who have reached the age of 25 and lack a complete compulsory or upper secondary education.

The Government intends to introduce an option of six months of part-time study in the school system and folk high school alongside participation in the job and development guarantee scheme. The purpose is to make it possible to complete previously unfinished education or to supplement previous education with relevant short courses that can increase participants’ chances of getting a job. The Government also proposes that studies in Swedish for Immigrants (SFI) should be possible for twelve months instead of the present six months as part of the job and development guarantee.

Investments for people with impairments that entail reduced working capacity

Many unemployed people have some form of impairment that entail reduced working capacity. Their skills and abilities must be used. The Government therefore proposes that additional resources be allocated to allow more people with impairments that entail reduced working capacity to obtain jobs at Samhall AB. Under the proposal, the resources for this purpose will increase by SEK 300 million in 2016 and by an estimated SEK 400 million in subsequent years. As a result of this investment, up to 2 000 more people with impairments that entail reduced working capacity will be able to obtain a job at Samhall AB each year.

The Government also proposes an investment in wage subsidies and special introductory and follow-up support, which is estimated to create scope for jobs for up to 1 000 people with impairments that entail reduced working capacity. Increased resources of approximately SEK 400 million per year are proposed.

Work is in progress at the Government Offices to review the wage subsidies for people with impairments, with a view to improving job opportunities. The regulatory framework needs to be clarified and measures reinforced, putting a clear focus on opportunities for all individuals to develop their capacity to work. The Government is continuing its work on changes in the current system of wage subsidies. The resources for this purpose are estimated at SEK 174 million in 2017, SEK 243 million in 2018 and SEK 282 million in 2019.

In addition, participation in longer courses (up to five months) aimed at encouraging further studies at folk high schools will be incorporated in the job and development guarantee scheme as an option for people with impairments that entail reduced working capacity.

Investments for quicker introduction of new arrivals

The Government’s objective is for more newly arrived immigrants to start work or education and training during their time in the introduction system, i.e. normally within two years. To achieve this objective, better use must be made of new arrivals’ knowledge and skills.

Fast track and stronger labour market-oriented measures

Many new arrivals have education and training, and experience, in occupations in which there is a shortage of trained and experienced labour in the Swedish labour market. These individuals’ knowledge and skills have to be put to use more quickly and efficiently. The Government has therefore held talks with the social partners, the Swedish Public Employment Service and other relevant government agencies on measures for creating more rapid ways, or ‘fast tracks’, into the labour market, within the framework of the introduction system, for new arrivals with education and training or experience for which there is demand in Sweden.

The Government proposes an allocation of SEK 376 million in 2016 to enable measures for fast track participants and to reinforce labour market-oriented measures aimed at facilitating and speeding up the introduction of new arrivals to working life. The estimated investment in subsequent years is SEK 532 million in 2017, SEK 422 million in 2018 and SEK 339 million in 2019. To pave the way for fast track provision, the social partners will also be given the opportunity to apply for funds for promotion and development measures.

Swedish Public Employment Service will be given better conditions for the introduction system

The Swedish Public Employment Service has a key role in achieving the Government’s objective of a quicker introduction of new arrivals to the labour market. The increasing number of participants in the introduction system presents a challenge to the Employment Service’s activities. The Government proposes an additional allocation of SEK 193 million to the Employment Service’s administrative appropriation for the introduction system in 2016, with a view to reinforcing efforts to facilitate and speed up the introduction of new arrivals. An increase of SEK 93 million per year is estimated in 2017–2019. The Government also intends to look over the system of rules for the introduction system. The purpose of this is to reduce unnecessary administration and create conditions for increased flexibility and efficiency in the system.

Early measures for people with residence permits in accommodation centres

More new arrivals are staying on in Migration Agency accommodation centres for extended periods after receiving residence permits because there is insufficient municipal reception capacity to cope with the need. The Government considers it important that new arrivals are able to use the waiting time in a meaningful way, so as to speed up labour market entry. The Government therefore proposes an additional allocation of SEK 32 million in 2016 for early measures for new arrivals with residence permits staying in Migration Agency accommodation centres. One example might be early skills identification measures. The estimated investment in subsequent years will be SEK 32 million in 2017, SEK 20 million in 2018 and SEK 10 million in 2019. In addition, the Government proposes that further funds be allocated to the municipalities for education in Swedish for Immigrants (SFI) for people with residence permits staying in accommodation centres.

More efficient validation process for jobs and education

Validation of skills and assessment of foreign qualifications, together with various types of supplementary courses if necessary, can be very important for introduction to the labour market and to enable new arrivals’ skills to be put to better use. The Government therefore proposes that funds be allocated to reinforce validation activities within the introduction system. The Swedish Public Employment Service will be given the possibility of offering brief supplementary courses within the introduction system to allow new arrivals with foreign qualifications equivalent to Swedish higher education to be matched more quickly with jobs in the Swedish labour market. An investment of SEK 7 million is proposed in 2016, and an estimated SEK 10 million per year in 2017–2019.

The Government also intends to establish a validation delegation with instructions to monitor, support and coordinate intensified development work in the area of validation. The delegation will operate until 2019.

Investments for better reception throughout Sweden

As a result of the refugee situation in the world, more people are seeking protection in Sweden. While this is a challenge in the short term, the fact that people with strength and skills are moving to our country and contributing to Sweden’s development is above all an opportunity. To make the most of this opportunity, changes are needed to improve the introduction process in Sweden. The objective is decent and orderly reception and good conditions for introduction in all municipalities.

Higher compensation to municipalities for reception of new arrivals

To increase the ability of municipalities to receive new arrivals, the Government proposes to raise the level of compensation provided to municipalities. The Government proposes that the standard compensation paid by central government should be raised from SEK 83 100 to SEK 125 000 per new arrival up to the age of 65 received in a municipality, from 1 January 2016. For new arrivals over the age of 65, the proposed raise in compensation is from SEK 52 000 to SEK 78 000. The raise is estimated to cost SEK 1.1 billion in 2016 and SEK 2.6 billion in 2017. In connection with the raise, the performance-based compensation provided to the municipalities will be eliminated.

More resources to county administrative boards for work on reception of new arrivals

The county administrative boards have an important role to play in the reception of new arrivals and their settlement, in that they enter into agreements with the municipalities on the reception of newly arrived refugees and other people in need of protection, and their family members. There is a great need to increase the number of available places in the municipalities, which means that the county administrative boards need to step up their negotiating activities. The Government therefore proposes a permanent increase of SEK 20 million per year in the county administrative boards’ funding for administration, beginning in 2016. At the same time, the Government proposes that the funding available to the county administrative boards for use in measures in municipalities aimed at creating preparedness and sufficient reception capacity (‘Section 37 funding’) be increased by SEK 20 million in 2016. This investment is estimated to cost SEK 20 million per year in 2017–2019 as well.

Sustainable reception nationwide

For effective and solidarity-based refugee reception, all municipalities must join in and take responsibility, based on their own situation and possibilities regarding the labour market, population and other reception services provided. The Government therefore intends to propose a new act to the effect that all municipalities can be required to receive new arrivals for settlement in the municipality. The proposal has been referred for consultation, with responses due by 28 September. The memorandum referred for consultation proposes that the new act on reception come into force on 1 July 2016.

Compensation for vacancy rents

Currently, municipalities can receive compensation for rental costs that arise while waiting for a newly arrived person to move into an apartment. The Government intends to remove the current ceiling on the amount of rent and the restriction that compensation is only paid in so far as funds are available. The purpose of this is to increase the number of housing units for people in the new arrivals category by having the municipality make more housing available to new arrivals assigned to the municipality. The intention is that the change will enter into force when the new act on reception is introduced.

Change in compensation system and new form of placement for unaccompanied minors and young adults

To facilitate municipalities’ reception of unaccompanied minors and young adults, the Government wants to simplify the regulations, reduce the administrative burden and improve planning conditions and predictability for municipalities. The Government intends to change the central government compensation system by introducing differentiated standard rates for different forms of placement in the reception of unaccompanied minors and young adults from 1 July 2016 and 1 January 2017 respectively. The standard rates should make it possible to guarantee the quality, security and safety of the accommodation and the health and social care provided to unaccompanied minors and young adults, as required by current legislation.

The Government also intends to submit a bill to the Riksdag in autumn 2015 on the introduction of a new form of placement, to be known as ‘supported accommodation’. Supported accommodation will supplement the existing forms of placement, homes for care or residence and foster homes. The new form of placement will make it easier for municipalities to find an appropriate placement for the individual concerned, and will increase the flexibility of reception by municipalities. The placement of unaccompanied minors and young adults must still be based on an individual assessment of what is best for the child or young adult. The Government expects this legislative amendment to be able to enter into force in 2016.

Increased funds for civil society for refugee guides

Civil society has a key role to play in the introduction process. Many people throughout the country feel involved and want to help improve the introduction of new arrivals. People at local level and in civil society have many good ideas and a strong desire to get involved and make a positive contribution to the introduction of newly arrived immigrants.

The Government proposes that an additional SEK 30 million be allocated to create more long-term economic conditions enabling civil society to contribute to the introduction of new arrivals. In 2017–2019, an estimated equivalent of SEK 40 million per year will be allocated to refugee guide and family contact activities. These activities give new arrivals a chance to speak Swedish and learn more about Swedish society. On top of this, they can be a way of creating new contacts that contribute to broader networks both for new arrivals and for those who have lived in Sweden a considerable time or who were born in this country.

Investments to get young people into jobs

Reducing youth unemployment is one of the challenges for labour market policy to which the Government attaches highest priority. The Government has taken the first steps in an ambitious programme of reforms and has announced the gradual introduction of a 90-day guarantee for young people. Several different investments are being made to make the 90-day guarantee possible: education contracts have been introduced, the possibility for young people aged 20–24 who are returning to studies to obtain the higher grant level in the system of financial support for studies has been expanded and the possibility of taking courses at folk high school that encourage further studies has been extended. 

Trainee jobs will increase opportunities for young people to establish themselves in the labour market, while making it easier for employers to recruit people with the right skills. Given the impending shortage of labour in the welfare sector, the Government considers it important that those who have begun a trainee job are able to complete their education and training under this scheme. To ensure that this happens, the Government intends to introduce a possibility of extending trainee jobs in the welfare sector to a maximum of two years. Work is in progress at the Government Offices to examine how this possibility should be formulated.

The Government has also appointed a delegation on putting young people to work, which has the task of promoting constructive and flexible collaboration between the Swedish Public Employment Service and municipalities to reduce youth unemployment. The delegation can also approve central government grants to municipalities that have entered into local cooperation agreements.

Investments for modern working life

The fundamental starting point in the Government’s approach is that no one should have to risk death or injury in their work. Continued efforts to prevent work-related ill health, particularly psychosocial ill health, are important for achieving a sustainable working life. Under the Government’s proposals, the further development of the Swedish Work Environment Authority’s efforts on special preventive measures in women’s work environments, which was launched in 2015, will continue at the same level in 2016.

Investments in the work environment area were made in the spring amending budget for 2015. These will continue, according to the following proposals:

  • The Swedish Work Environment Authority’s appropriations will increase by a further SEK 35 million from 2016 onwards.
  • The annual central government grant to regional safety representative activities will increase by a further SEK 1 million from 2016.
  • Special funds will be allocated to financing research on working life, with a particular focus on the work environment in sectors dominated by women and women’s work-related ill health. An investment of SEK 10 million is proposed in 2016, and an estimated SEK 20 million per year in 2017 and 2018.
  • SEK 10 million will be allocated in 2016 to promote skills provision in occupational health services. This investment is estimated at SEK 10 million per year from 2017. The Government will present more detailed proposals on the form to be given to this support.

The Government aims to present a new work environment strategy at the beginning of 2016. The strategy will be formulated in close consultation with the social partners and on the basis of relevant research. It will proceed from the challenges and opportunities of modern working life. One component will be a vision zero for fatal accidents at work. The Government has already identified issues for closer analysis, such as how work on knowledge and evaluation of the work environment is to be collected and disseminated. The Government intends to conduct a survey of the work environment and working conditions in the household services sector, in response to reports of shortcomings in the work environment in this sector. The Government also intends to instruct the Swedish Work Environment Authority to inspect the work environment in elderly care in terms of stress and opportunities for influence and participation within the framework of systematic work environment measures.

Requirements complying with or equivalent to collective agreements to apply to new start jobs in 2017

The status of collective agreements must be safeguarded. The Government intends to make it a requirement in 2017 that for new start jobs to qualify for support, wages and other terms of employment must comply with, or be equivalent to, collective agreements. The purpose is to ensure equally good terms of employment for all those employed with wage subsidies. Introducing this requirement in 2017 will give employers who currently do not meet this requirement time to take the necessary measures to fulfil the conditions that the regulatory change entails before it enters into force.

Unemployment insurance ceiling raised

On 7 September, the ceiling for income-related benefit in the unemployment insurance system was raised so that a person earning up to SEK 25 000 a month will receive 80 per cent of their wage for the first 100 days of benefits. This means the maximum daily allowance will be SEK 910 on days 1 to 100, and SEK 760 on subsequent days. The minimum level of compensation was also raised, from SEK 320 to SEK 365 per day. Raising the maximum daily allowance is essential if it is to function as insurance against loss of income, giving the individual security in the event of unemployment.

Certain issues relating to unemployment insurance have been studied by the parliamentary inquiry on social security. The inquiry presented its final report, More security and better insurance (Swedish Government Official Reports 2015:21), to the Government in March 2015. The report has been referred for comment and the Government intends to respond to the proposals at a later date. Work will also begin on a review of the unemployment insurance system with a view to making it easier for more people to qualify for and join the system.

Contact

Natali Sial
Press Secretary to Minister for Employment Ylva Johansson
Mobile +46 72 520 54 49
email to Natali Sial

Budget Bill for 2016

On 21 September the Government submitted its proposal for the central government budget to the Riksdag.