The Mandatory Evaluation of Adequacy of Basic Social Security in Finland

In 2010, an internationally exceptional piece of legislation entered into force in Finland. The Ministry of Social Affairs and Health have to commission every fourth year an evaluation of the development of the adequacy of basic social security from an independent evaluation group. Basic security is the non-contributory income protection for those outside labor markets and earnings related benefits. The evaluation coverages the entire income package of low income households and the factors that influence on the adequacy of these incomes.

The first evaluation report was published in 2011. The main results were that the disposable incomes of households living on basic security are inadequate to meet the minimum reference budget and have shrunk against average earnings in 1990-2011. The second evaluation report was released in 2015, and first time also in English. The main results were that the level of basic social security has improved both in real terms and compared to the wages in 2011–2015, but it is not adequate to cover reasonable minimum costs determined in reference budgets. Also, reforms in benefit and tax legislation have decreased the income inequalities and the poverty risk.

The third evaluation of the adequacy of basic social security will be published 2019. In here we present some of the improvements planned to be included into the third evaluation report, for example nowcasted poverty rates and counterfactual social policy alternatives.