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Sticks or carrots – where are the students in the comprehensive reform of social security?

18.05.2018

Various parties have presented their policies on the comprehensive reform of social security, but students have been left outside in almost all cases. Students must be included in the comprehensive reform, and students’ benefits must be clearly a part of social security. Will the next Government offer students sticks, carrots or something completely different? Make sure your voice is heard! HYY is now asking you to tell us what social security means to you and how you would reform it. You can answer the survey by clicking here .

There has been a lot of public discussion on the so-called comprehensive reform of social security or basic social security this spring. Sipilä’s Government launched the reform last autumn by setting up the TOIMI project to plan a comprehensive reform of basic social security and activity. It is likely that the reform will be realised during the next Government term.

There is a large consensus on the need for the reform: the current social security system is considered complex and bureaucratic. The reform of social security aims at simplicity, incentivisation and a situation in which as few as possible are left to rely on last-resort social assistance. 

Practical discussion on values over the reform of social security has not really taken place. Different ideologies are, however, somewhat visible in the various reform proposals: should the benefits be gratuitous or conditional, should they be personal or family-based, and do they act as a security net or require activity? Originally, social security in welfare states was developed from the perspective of risk management: citizens were insured for sickness, unemployment and other situations that lead to loss of income. From the 1990s onwards, the idea that social security should encourage people to work has gained strength in decision-making. In other words, if you do not activate yourself and fulfil the set requirements, you will be getting the stick.

Various kinds of proposals for the reform have been made, but leaving students outside the reform is a common feature in nearly all of them. Student aid has undergone many changes, and including students would be expensive, as the level of study grant has been allowed to remain very low – not to mention the cuts. However, students have been the biggest losers of the austerity policies of recent years as well as the only group expected to finance their basic needs with borrowed money, no matter how insecure the prospects. While there is no desire to leave public debt for future generations, this also means that students get into personal debt at record rate.

According to various reports, students’ subsistence is at a low level. Housing costs take up a significant portion of income, and according to a recent report, students remain under two different poverty lines. Despite the constant ‘reforms’, student aid still has problematic areas that can, in worst cases, deepen students’ financial difficulties and force them onto social assistance. A report on students with a family was also published this spring, and according to it, everyday life was a constant struggle for many students with a family.

Moving students under general housing allowance was a positive change, but for many, it also meant a decrease in the amount of benefit or losing it altogether. The historical relic of general housing allowance, its household-based nature, encourages people to live alone and more expensively. Kela’s mistaken interpretations on cohabitation and the difficulty to prove these interpretations wrong have needlessly complicated the financial status of many students.

Students should be able to study full-time. This would be made possible by a predictable, sufficient subsistence. Work experience during studies is also important, but what if it drains strength needed for studying? Not everyone has the opportunity to augment their subsistence with work due to an illness, disability or some other reason. Failures and challenges should not lead into dead ends or endanger people’s subsistence in any case. Students who feel well and have their study ability are an advantage to the entire society and clearly an investment in its future. Students must be included when social security is reformed, and it is time to offer some carrots instead of just sticks.

In the long term, Finland should adopt a general, equal and personal basic income system for the whole country. Removing the household-based aspect of general housing allowance, increasing the level of study grant and tying it to the index as well as decreasing the emphasis on student loans in student aid are examples of immediate improvements to students’ situation. The minimum requirement of 20 credits should be removed and the two-tiered nature of student aid made more sensible. These measures would take us closer to personal, sufficient basic subsistence.

Now tell us what you think of social security and what it means to you – let us remind the decision-makers that students must be included in the reform! https://www.lyyti.fi/reg/Opiskelijoille_keppia_vai_porkkanaa_0129/en 

Policies proposed on the reform of social security so far:

  • The working group on inequality led by Juho Saari submitted its report in March. Unfortunately, students were not really discussed in it.
  • Universal credit suggested for Finland by the OECD: the National Coalition and the Christian Democrats support this model – students are unlikely to be involved.
  • The Social Democrats’ proposal is general security, which would significantly improve students’ subsistence.
  • Blue Reform published their own social security programme this spring.
  • Several parties are coming up with their own reform proposals. Previously, at least the Greens and the Left Alliance have supported basic income. The Centre Party states that it has supported basic income for decades and hopes that the reform of social security could progress based on the information obtained through the basic income experiment.
  • EAPN-FIN, the Finnish anti-poverty and -alienation network, launched a citizens’ initiative on minimum income, which did not include students.

Hannele Kirveskoski
Specialist (subsistence, international affairs)