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Finland looks at giving citizens €800 a month free of tax

eurozoneCitizens of Finland may soon be receiving €800 tax-free every month from the government.

This national basic income would replace all other benefits and would be paid to adults whether or not they have any other income.

The proposal aims to encourage people to find jobs. Currently many unemployed people would be worse off financially if they accepted low-paid temporary work because they would lose welfare payments.

At more than 10%, unemployment in the country is running at a record high. Younger workers face a worrying 23% jobless rate.

The basic income scheme would cost Finland about €46.7 billion per year if fully implemented.

While some fear that a basic income would remove the incentive to work and result in higher unemployment, proponents point to small scale trials which have had positive results both socially and economically.

The Dutch city of Utrecht is to introduce a similar scheme, but just for those on welfare. From January about 250 unemployed residents will be given a monthly sum to live on. Researchers will monitor the outcome to determine what effects it has.

In Switzerland a national referendum on such a scheme is slated for 2016. Recent polls indicate that half the population is in favour.

For Finland, it is unlikely any action will take place until the proposals, being drawn up by the Finnish Social Insurance Institution, are submitted in November 2016.

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