Saturday, 25 February 2012

The benefits of living in a Welfare State aka the Scandinavian Model aka the Nordic Model

Recently an old school mate of mine wrote on Facebook that she was reluctant to have to go back out to work just three months after giving birth. In spite of sometimes feeling bored at home with only a baby for company I am really glad I don’t have to face her dilemma. As a Finnish mother, by law, I am allowed maternity leave for one hundred and five days at sixty percent of my salary. I can start the leave up to fifty days before the due date but at least thirty days before. After this I can get Parental leave and allowance at the same rate or I can switch with my husband and he can take the parental leave and allowance while I go back to work. That means that by the time parental leave ends and we start to feel the economic pinch our child is at least nine to ten months old. For sure it is still hard to leave your ten month old in daycare but it is a little better than sending him/her there already at three months old. However, if I wish, I can opt to stay home for up to three years and receive child care allowance of approximately three hundred and thirty euros a month which is not much but it is something. In addition there is the child benefit of one hundred and fifty euros a month until the child turns seventeen. If I had a permanent job I would be in an even better situation as my employer would be required by law to keep my job for me for up to five years after giving birth. And if I decided to go back out to work and put my child in a daycare centre, the cost is subsidized, so that the maximum cost per child is two hundred and fifty euros a month but could be less depending on your income.

And there are many more benefits we Finns are fortunate to have. If I become unemployed and I am a paying member of a labour union or an unemployment fund I can apply for unemployment allowance at sixty percent of my lost salary for up to five hundred days.  If after five hundred days I am still unemployed, I can then get a labour market subsidy of approximately seven hundred euros per month for an indefinite period of time. Unemployed immigrants may also apply for the labour market subsidy. There are also housing benefits for low income families. We receive free health and basic dental care. And free education all the way through to University. I did my Masters degree for free! And I also received a study grant of approximately three hundred euros a month while studying, so long as I didn’t make too much income of my own. Other students living on their own can get an additional two hundred and fifty euros a month in housing supplement. And of course there are sickness and disability grants and pensions for those too sick or old to work. In this welfare state sports and culture are also heavily subsidized.

Naturally all these benefits are paid for by high taxation. For instance, just recently I unexpectedly received my summer vacation pay. Since I had not given my employer this year’s tax card by default I was taxed the maximum rate of sixty percent (don’t worry I will get it back at the end of the tax year). So as you see the very rich are heavily taxed. But that’s the tradeoff for the benefits we receive. In Finland people don’t mind the higher taxes if it means that disadvantaged people are taken care of and we don’t have to pass beggars on the street. Finns are all about equality and taking care of those less fortunate in society. Hence, an individual giving to charity is not a common practice here.

Of course the Finnish social welfare system is not perfect. Every year authorities cut health, dental care, and social work budgets while we pay the same amount of taxes. Unless you have an acute problem the waiting line to see a doctor or dentist is months long and there are not enough places in the daycare centres. This is the result of the government not prioritizing and trying to support everything a little and therefore, not supporting anything properly. And of course there are people who abuse the system preferring to take as many benefits as possible instead of working but they are few. In fact the government recently increased benefits. The Helsingin Sanomat newspaper estimated that it is possible to get government support of up to approximately one and a half thousand euros a month without lifting a finger, while most cleaners make around the same salary. And then there are a few people who fall through the cracks and are homeless. However, those are usually alcoholics or drug users who do not qualify for housing if they do not stay sober. So no, our system is not perfect, but no system ever is. However, I think the Nordic model is the best system we have.

Here is an explanation of the Nordic model on Wikipedia:

1 comment:

  1. My dear, I just came across your blog by googling Trinis in Finland. Will be in Helsinki in a couple of days. Been living in Japan for a few years and missing home like crazy. I don't want to be presumptuous that you would want to link up with some random Trini woman, but in case you do, please shout me out on my blog :) Now I'm off to maco everything about your life in Finland.