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Jobless people are being paid a guaranteed basic income of nearly £6,000 a year in a radical experiment in Finland.
The Scandinavian country became the first in Europe to trial such a scheme, with 2,000 unemployed receiving 560 Euros (£475) a month for two years from January 1.
The recipients are free to spend the money on anything they choose, do not need to prove they are looking for work and will still receive the basic income even if they do get a full- or part-time job.
Finnish government agency Kela, which is responsible for the country’s social benefits, hopes the scheme will encourage the recipients to seek employment, remove disincentives to work and reduce bureaucracy. But critics fear getting a guaranteed basic income could have the opposite effect by making some unemployed people ‘lazier’ and less inclined to look for a job.
The scheme is part of the measures by the centre-right government of Prime Minister Juha Sipila to tackle Finland’s joblessness problem.
The unemployment rate of Finland, a nation of 5.5 million, stood at 8.1 percent in November 2106 with some 213,000 people without a job, unchanged from the previous year.
Marjukka Turunen, head of Kela’s legal affairs unit, said: ‘At present, unemployed persons may not gain any additional income even if they find work because earnings reduce social benefits. For someone receiving a basic income, there are no repercussions if they work a few days or a couple of weeks. Incidental earnings do not reduce the basic income, so working and self-employment are worthwhile no matter what. This is the key idea behind the basic income.’
According to her, the basic income, which is paid in advance at the beginning of each month, also helps its recipients plan their finances and provides a sense of security. More and more people are working part-time or temporarily or are self-employed and coordinating social security systems with non-standard work is often challenging.
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