Response to interpellation 2023/24:387 on abuse of new start jobs
Translated from Swedish by AI; the translation may contain errors. The Swedish text is the original.
Summary AI, written in advance
The debate concerns the abuse of nystartsjobb. L argues that the government prioritizes countering fraud and that payments must be correct 1. L emphasizes legislative changes for increased cooperation against fraud and crime in the labor market 1. L defends nystartsjobb as a functioning part of the support 2. L wants Arbetsförmedlingen to check that people are available to the labor market 2, lower the compensation levels and wants more extensive funding from the employer 2. L believes that the control activities should become permanent 2 and that nystartsjobb should not be means-tested 3. S argues that nystartsjobb has wide qualification conditions which create risks for abuse 4. S demands means-tested measures and stricter controls 5.
Written by AI in advance and may contain errors. The numbers lead to the speech a statement builds on; check against the text below.
Arbetsmarknads- och integrationsministern Johan Pehrson (L)
Mr. Speaker! I have been asked what measures I intend to take to counter fraud and abuse in the nystartsjobb and to ensure that individuals employed with nystartsjobb are not exploited.
In my question, Serkan Köse refers to the Swedish National Audit Office's audit report Subsidized employment - to counter errors in a system with serious risks. The Government welcomes the Swedish National Audit Office's audit. The work to counter incorrect payments and grant fraud directed against the public sector is a high priority for the Government. Of course, payments from the welfare systems must be correct.
Nystartsjobb is, after wage subsidies, the most common form of subsidized employment. A large proportion of people with nystartsjobb establish themselves on the labor market after the period of support has concluded.
No form of misuse of public funds is acceptable. How extensive the incorrect payments regarding subsidized employments are, the National Audit Office's report provides no answer to. But that there are serious risks is bad enough. I can assure you that the government takes the issue very seriously.
According to the regulatory letter for 2024, Arbetsförmedlingen shall contribute to the overall goal that payments from the welfare systems shall be correct, the proportion of incorrect payments shall decrease, and errors shall be countered. The proportion of incorrect payments from the benefits that Arbetsförmedlingen handles shall therefore decrease. Arbetsförmedlingen shall report on the goal fulfillment, the measures implemented to reduce the incorrect payments, and an assessment of the effects of the measures.
The Government decided on 1 February 2024 to request the Council on Legislation's opinion on a proposal for a new law on the obligation to provide information in order to counter incorrect payments from the welfare systems as well as fraud, rule violations, and crime in the working life. The law means that certain state authorities as well as municipalities and unemployment insurance funds shall be able to share more information with each other than is possible today. The proposal aims to give the relevant state authorities as well as municipalities and unemployment insurance funds access to the information needed to ensure correct decision-making bases in order to counter incorrect payments from the welfare systems. The proposal also aims to give the state authorities that participate in cooperation against fraud, rule violations, and crime in the working life access to the information needed to plan, carry out, and follow up on joint authority controls of workplaces.
Regarding crime in the working life, the government gave an extended mandate in December 2023 to the cooperating authorities to continue their previous mandate during 2024. The government intends to return with a renewed mandate no later than during the third quarter of 2024. The Delegation against crime in the working life shall, in accordance with its directives, report a follow-up and analysis of the authorities' cooperation no later than 23 February 2024. The renewed mandate shall take into account the proposals in the partial report and involve a more effective implementation of the government's priorities, including that the work shall hit harder against the criminal economy, organized crime in a corporate environment and human exploitation through work.
The Riksdag submitted the Swedish National Audit Office's audit report to the government on 21 November with instructions to submit a communication to the Riksdag regarding the report within four months of the submission.
The Government will return to the Riksdag with such a communication in the near future.
Serkan Köse (S)
Mr. Speaker! I thank the Minister for the answer.
In January, just over 23,000 people had nystartsjobb, a wage subsidy introduced by the bourgeois government in 2007 and which is not a common labor market policy program that requires a referral from an Arbetsförmedlingen caseworker. Instead, nystartsjobb is based on rights-based legislation, which means that the subsidy is a right. Therefore, no labor market policy assessment is required as long as the employee meets certain, relatively broad, qualification conditions.
The "nystartsjobb" (new start jobs), which were part of the bourgeois government's reform agenda, aimed to simplify and lower the costs for companies to hire staff. Their simple design compared to other forms of subsidies has likely led to more people being employed. However, this has also entailed greater challenges, meaning that some of the jobs that the subsidy helped to create would likely have arisen even without financial support from the state. This is probably due to the fact that employers have the opportunity to select unemployed individuals who already have a stronger relationship with the labor market and stand closer to it. This is confirmed by data from Arbetsförmedlingen which shows that individuals who have received employment through nystartsjobb have had a more favorable position on the labor market compared to those who have been employed through other employment supports.
The Swedish National Audit Office has now audited whether the control of subsidized employment is effective. In that audit, nystartsjobb are identified as the wage subsidy where the risk of abuse is greatest. The reason is their design with a relatively high compensation level while the requirements on the employer, as well as the control before the decision, are significantly lower than what applies for other subsidized employments.
Mr. Speaker! It is difficult for Arbetsförmedlingen to control wages and insurance when employers lack collective agreements. It is also complicated to reclaim incorrectly paid compensation due to how the regulatory framework is constructed. Employers who have deliberately abused the system can ignore the payment and wait to be sued by Arbetsförmedlingen in general court, which can take several years or not happen at all.
That there are no requirements that the terms of employment - apart from the salary - shall be at the level of collectively agreed terms means that the employer is neither obliged to ensure that the employee is insured or that premiums for occupational pensions are paid in.
Before a decision on a nystartsjobb is made, no labor market policy assessment is carried out, which also means that no workplace visit is conducted. The employers' organizations are also not given the opportunity to comment on the workplace's suitability.
The National Audit Office states in the report that Arbetsförmedlingen's case officers rarely even have contact with either employers or employees before decisions regarding nystartsjobben are made. They point out this as a likely reason why nystartsjobben is the subsidized employment most commonly found in Arbetsförmedlingen's police reports.
Once again: The lack of requirements and controls increases the risk of fraud, abuse, and work-related crime. Furthermore, workers risk being exploited and being harmed in workplaces where working conditions or the work environment are poor.
In view of this, I asked a concrete question to Minister Johan Pehrson regarding what measures he intends to take to counter fraud and abuse in the nystartsjobb and to ensure that individuals employed with nystartsjobb are not exploited.
I repeat my question: What does the Minister intend to do to handle the issue of the nystartsjobben?
Arbetsmarknads- och integrationsministern Johan Pehrson (L)
Mr. Speaker! In the response to the interpellor Serkan Köse, I listed a number of measures that are now being taken.
It is incredibly urgent to address cheating, errors, and pure criminality, and we are now working broadly on this. We are strengthening the entire justice system with major investments in the law enforcement agencies' conditions to reach the forces behind the crime. It is not the case that it is just some individual person who decides to cheat a little here, but it is often organized.
We are talking about a serious crime that is eating its way into the body of society - just take Södertälje, where they are struggling enormously with this. Therefore, it is very good that, for example, in the board of Arbetsförmedlingen, there are representatives from, lo and behold, Södertälje kommun who have knowledge, experience, and actually passion - I am talking about a social democrat - and who fight for order and tidiness, against the gangs and against the organized crime that is chewing its way into the marrow of our society.
We are carrying out the great. We are reducing secrecy and driving forward cooperation in order to be able to run registers and compare. We have also started up the Payment Authority. All of this aims to ensure that the right person gets the right support. The one who is not entitled to that support shall not receive it, and if one cheats, one shall be punished.
That is what I want to say that we do. Then I can respect that Serkan Köse does not think it is enough.
What do we do regarding Arbetsförmedlingen? They are, in fact, working on this assignment. I and the government will return with an answer to the letter that the Riksdag has sent to us with the Swedish National Audit Office's valuable analysis. That answer will contain a number of things that we have already done, but we will also point out what we believe we will need to do additionally.
Mr. Speaker! The interpellor points out something that is important, and that is that when one has the right and can, so to speak, request a new start job oneself, it is, if one behaves and everything is fulfilled and correct, less bureaucratic in the sense that no labor market assessment takes place. The evaluation itself shows that these jobs fulfill a function, but it is not the only support. We have everything from wage subsidies to special employments within Samhall. Adjustments are made, and there are also other interventions.
Now the establishment jobs are finally in place, which I am very happy about. Many Social Democrats have also fought creditably for this. As a Liberal, I am happy to be able to deliver this, so now it is a matter of us ensuring together that this type of support is used in a good way to get more people into the labor market.
A variety of measures are needed, and we will continue to deliver all the measures we can.
I also mentioned the efforts against crime against the working life which one can reasonably, Mr. Speaker, say this belongs to. Crime against the working life can be part of a more systematic crime against Swedish society and against individuals, and we will continue to ramp up when it comes to this, because it is completely central.
We are therefore doing what I mention in my answer, and we will do more. The legislative changes that we are now implementing could have been implemented eight or nine years ago.
Serkan Köse (S)
Mr. Speaker! Thanks to the Minister for the answer!
We Social Democrats have long demanded that labor market policy measures should be means-tested and individual. We have demanded stricter controls, improved opportunities for trade unions to monitor workplaces, and requirements that companies utilizing subsidies must follow collective bargaining agreements. These steps are important to defend workers' rights and guarantee that state funds are used in a responsible manner.
Mr. Speaker! Every year, 18 billion in state funds are paid out to subsidized employments - 18 billion! It affects approximately 150,000 people. More than 1 billion of these 18 billion are judged to be paid out incorrectly, according to Arbetsförmedlingen's own calculations. An overwhelming majority, 85 percent, of these incorrect payments are due to errors caused by employers, both intentionally and unintentionally.
We Social Democrats share the view that subsidized employment are important measures. There are many people, target groups, in our society with different circumstances who need support. It is also important that there are different types of state incentives and measures to help those people who need support to establish themselves on the labor market.
But an increased control of the subsidized employments is required. It is necessary so that we can counteract fraud and minimize the risk of incorrect payments of specifically 1 billion kronor. Once again, it is about ensuring that public funds are used in the most responsible and effective way, which Johan Pehrson also mentioned in his answer.
The Swedish National Audit Office's criticism is harsh in the report. Among other things, they point out that the design of the supports can facilitate abuse, for instance, some parts of the controls are ineffective. There is also criticism regarding the risks with the design of the interventions, including sham employment and poor working conditions. The interventions also go to persons who do not have the right to these employments.
The National Audit Office is tough in its review. The situation is as it is, and it is a question of a rights-based measure. As long as it is a question of a rights-based measure, I am afraid that we will continue to see the problems.
I understand that the then Alliance government and the current government have invested wholeheartedly in the "nystartsjobb" (new start jobs) and believe that they will lead to more jobs. But how does the Minister intend to act to put a stop to the abuse here and now? I look forward to the government's response to the letter, and I am waiting to see what proposals the government intends to put forward. But does Johan Pehrson already now intend to review the design of the "nystartsjobb" from the perspective that it is a rights-based measure? Will it be means-tested? Can the Minister say anything already now? Will we see any type of change for the "nystartsjobb"? I believe that both the Minister and I are keen that 1 billion can be used for much else, not least in welfare.
Arbetsmarknads- och integrationsministern Johan Pehrson (L)
Mr. Speaker! Rights! They are fine, Mr. Speaker. There are such [rights] in our constitution, and we Liberals believe in rights. I hear that the Social Democrats are hesitant about rights, that so to speak, getting a support if there is not a political review beforehand. It should be someone who intervenes; if it is not a politician, it should be a civil servant. It is still interesting to take part in the distribution.
Mr. Speaker! But I am fundamentally pleased that the interpellor is so committed against fraud and to ensuring that our safety systems, for example the unemployment insurance, are used in a correct manner. That is why we not only take measures for the new start jobs but also say that we shall be careful that Arbetsförmedlingen checks that people are truly available to the labor market. One must apply for the jobs that exist and be prepared to apply the factor that applies already today, that is to say, be prepared to move from one municipality to another, from a place where one lives to a workplace located in another place.
I assume that the commitment is just as strong from Serkan Köse, who has raised an interpellation that things should be handled correctly and properly and that people should follow the rules that exist. Otherwise, Serkan Köse, Johan Pehrson, or someone else, reasonably should, the authority, put a stop to this.
Let me return to the question of the nystartsjobben. We are therefore lowering the compensation levels because we do not think the compensation levels should be too high. They are lowered for this year. It is clear that there should be a more extensive funding from the employer so that people do not experience that they are being exploited if they do a valuable job, and then they continue with a subsidized employment. It shall be a higher compensation.
Many controls are taking place today. The activities that Arbetsförmedlingen has today for controls will now become permanent, and you think that is good. It is also part of the mandate when one fills in and clarifies in the regulatory letters that Arbetsförmedlingen's broad responsibility is to combat fraud and errors. In that case, it would be strange if one excluded the nystartsjobben.
Regarding the regulations for the "nystartsjobb" (new start jobs), I must nevertheless, for the sake of the minutes, point out that it was the Social Democratic government that abolished them. Regarding the control measures that we are now introducing, it would have been good if Serkan Köse had been involved in introducing them eight or nine years ago. I do not hear that Serkan Köse is opposed. Then it would have been a better situation with fewer examples of errors, fraud, or in the worst case, serious crime.
Serkan Köse (S)
Mr. Speaker! I understand that Johan Pehrson is really fighting to defend the nystartsjobben. They were introduced during the time of the Alliance government. Now we see the flaws in the system with the nystartsjobben. The controls are insufficient, and the requirements on the employers are weak. It has led to fraud, and it has increased work-related crime. I mentioned that 1 billion is paid out incorrectly. I understand that Johan Pehrson defends the nystartsjobben because Johan Pehrson doubled the resources for the nystartsjobben. Then Johan Pehrson understood that they perhaps were not quite so good and reduced the resources for the nystartsjobben a little bit.
I am somewhat concerned that the government, with the support of the Sweden Democrats, has rejected our proposal for stricter controls, especially during a time when unemployment is increasing and where there is a need for effective labor market measures. It is urgent, and resources are needed for these measures.
We have said that the measure shall be means-tested. It is important that it is means-tested and individual. Johan Pehrson thinks it is wrong when I say that the measure shall be means-tested. The risk with today's model is that the measure goes to everything and everyone. As long as one meets the conditions, one receives the support. The National Audit Office's report shows that the support is used in an incorrect way today. The National Audit Office has also presented more concrete recommendations to the government, namely to adapt the control requirements to reflect the risks with the nystartsjobb. It is also said that a review of the ordinance must take place to ensure good employment conditions even with employers without collective agreements, and it concludes by stating that the system for reclaiming incorrect payments must be improved. There are clear requirements from the National Audit Office, and we share that view. This is a system that currently does not work.
I look forward to Johan Pehrson's response to the writings, and I look forward to the continued debate.
Arbetsmarknads- och integrationsministern Johan Pehrson (L)
Mr. Speaker! I thank you for a good debate. I am quite sure that we agree that we shall counter fraud, errors, and organized crime.
It is still interesting that it is to be a question of means testing. I think that vulnerable people, the unemployed, should also have the opportunity to make important choices, to move forward in life.
One might want to take a course within the municipal adult education to strengthen one's opportunities for more empowerment and freedom. One might want to obtain a degree from the university college to become more employable. That would be freedom, and it should not be means-tested.
If I as an individual have had difficulty finding a job and there is an opportunity to take a start-up job, with reduced benefit levels with the introduced increased control, my position on the labor market can be strengthened. The need exists within the individual, and I believe that the individual can have their own responsibility. As a liberal, I believe in the human being.
We step up, but we also set requirements. Therefore, we have strengthened the control regarding the nystartsjobb.
All labor market policy measures are difficult to calculate - one makes them before a year has started, and then the year comes. Economic conditions and regional variations affect how many - or how few - new-start jobs there will be. It is not possible to see into the future, Mr. Speaker.
Source: The Swedish Parliament. The speeches come from the open data of the Riksdag, translated into English by AI, which may contain errors.