Legislative proposal on basic income experiment submitted to Parliament
The Government proposes the implementation of a basic income experiment. The experiment would be carried out in 2017 and 2018, and its aim is to show whether basic income can be used to reform social security so that incentive traps relating to work are eliminated.
The Government submitted a proposal on the experiment to Parliament on Thursday, 20 October 2016. The government proposal is included in the budget proposal for 2017. The new act is scheduled to enter into force on 1 January 2017.
The experiment, which would be the first phase of a larger basic income pilot study, is scheduled to start early next year. The research consortium preparing the basic income pilot study will complete its work in November, after which the Government can decide whether it continues, and possibly extends, the now proposed experiment. This second phase would start in early 2018.
The primary goal of the basic income experiment is related to promoting employment. The experiment including a follow-up research aims to find out whether basic income promotes employment. The Social Insurance Institution of Finland (Kela) would be responsible for carrying out the experiment.
Persons receiving Kela’s unemployment-related benefits, under certain limitations, would be included in the experiment. From the target group, a test group of 2,000 persons would be selected by means of random sampling. It would be mandatory to participate in the experiment, which would ensure that the results will not be biased. According to the proposal, the level of basic income would be EUR 560 per month. Since the experiment would be mandatory, the level of the lowest basic income to be tested should correspond to the level of labour market subsidy and basic daily allowance. Basic income would be tax free for the receivers. Basic income would be paid by Kela.
When assessing the effects of basic income, the test group would be compared with a control group comprised of such persons from the target group who do not receive basic income.
The target group of the experiment would not include persons receiving old-age pension or students, for example, because improving their employment situation is not the objective of the basic income experiment. Students’ primary goal is to complete their degree.
The basic income experiment is part of the Government key project called “Services to be based on customer needs”. It also forms a part of the Government goal to introduce a culture of experimentation.