Unemployed people in Finland are to be handed €560 every month as the government embarks on a two-year social experiment.
The trial incorporates 2,000 jobless people selected randomly to receive the monthly basic income from the beginning of January 2017.
The unemployment rate in Finland is running at 8% currently affecting more than 200,000 individuals. In Portugal the rate was 10.5% towards the close of 2016.
The move has catapulted the austerity-driven country into becoming the only nation in Europe running such a trial. A referendum earlier this year in Switzerland saw a similar proposal quashed.
Finland is testing the idea of providing a universal basic income instead of paying welfare based on certain conditions such as poverty or lack of paid work. The idea behind it is that a universal income offers workers greater security, especially as some traditional jobs are lost to technological advances. It will also let unemployed people experiment with low-paid or short-term contract work or pick up odd jobs without losing their benefits.
The trial hopes to reduce poverty and promote employment as well as to reduce government bureaucracy in a country where the benefits system is complex and costly to run.
Recipients are not restricted in how the payments are spent and need not report on spending or prove that they are seeking work. The sum will be deducted from any other benefits they receive but will not be taxed.
Official data indicates that the average private sector income in Finland is €3,500 per month, so the basic income on offer in the experiment falls well below the average.
The government will study outcomes to see if the policy better helps recipients find work. It is already aware that many unemployed people are reluctant to accept certain positions because they will lose benefits and become worse off financially.
“It’s highly interesting to see how it makes people behave,” Olli Kangas from the social security ministry said.
“Will this lead them to boldly experiment with different kinds of jobs? Or, as some critics claim, make them lazier with the knowledge of getting a basic income without doing anything?”
He also noted that the basic income experiment may be expanded later to other low-income groups such as freelancers, small-scale entrepreneurs and part-time workers.
