Response to interpellation 2023/24:605 on the effect of inflation on sickness and activity compensation
Translated from Swedish by AI; the translation may contain errors. The Swedish text is the original.
Summary AI, written in advance
M argues that the sickness and activity allowance is appropriately linked to the price base amount to compensate for increased costs 1 2 3. The Government emphasizes that a restrained fiscal policy is necessary to push back inflation and protect households' purchasing power 1 2 4. M claims that another indexing would have led to significantly lower increases and that the government's policy is crucial so that the most vulnerable are not hit harder 2 3 4. S considers that the current indexing does not compensate for the cost of living and demands rapid measures to raise the allowances 5. S emphasizes that low allowances lead to poverty and stress for persons with disabilities 6.
Written by AI in advance and may contain errors. The numbers lead to the speech a statement builds on; check against the text below.
Statsrådet Anna Tenje (M)
Madam Speaker! Jessica Rodén has asked me if I will take the initiative to change the indexing of the sickness and activity allowance to ensure that the allowances maintain their value over time. Jessica Rodén has also asked me what other measures I intend to take within my area of responsibility so that people who receive sickness and activity allowance do not experience a lowered standard of living.
Sjukersättning and aktivitetsersättning are adjusted annually with the price base amount, which follows the price level according to the consumer price index. It is an appropriate arrangement that the sjukersättning and aktivitetsersättning are adjusted in accordance with current law. This means that they are indexed with the price base amount to compensate for increased costs.
Jessica Rodén points out how the real value of a new price base amount can change during the time that passes before the increased compensation begins to apply. For the government, the starting point is the following: Precisely because the purchasing power that a certain amount provides decreases faster during periods of high inflation, price stability is central. This applies in particular to persons with sickness or activity compensation. The government takes responsibility by conducting a restrained fiscal policy in this somewhat tough situation. An overly expansive fiscal policy risks creating a worse economic situation for Sweden, with higher inflation for a longer period and further deterioration of households' purchasing power.
At the same time, the government is taking measures to support households that are particularly hard hit by the price increases. One such measure is the extension of the temporary supplementary grant to families with children within the housing allowance until June 2024. A proposal in the year-end budget for a further extension of the supplementary grant until the turn of the year has recently been subject to a referral process.
Jessica Rodén (S)
Madam Speaker! In light of the passive answer I have received from the Minister for Social Insurance, I wish to pose a direct question: Does the answer mean that the Minister finds it acceptable that individuals with chronic illnesses or disabilities are expected to support themselves on a net income of approximately 11,000 kronor per month? A simple yes or no!
Statsrådet Anna Tenje (M)
Madam Speaker! As I began by saying, the sickness and activity allowance is increased annually with the price base amount. In that way, the person who receives sickness and activity allowance is compensated precisely for the price increase. I also mentioned that the government is taking measures to support the households that are particularly hard hit by the price increases.
The temporary supplementary grant within the housing allowance is proposed to be extended further until the turn of the year, after having been extended until June. It is a proposal that has recently been subject to a referral process.
Inflation hits hard against the whole society and especially against those households that have it the toughest. By having pursued a restrained fiscal policy, the government, together with the parties, has taken a great responsibility to push back the inflation.
We are now seeing positive effects of the policy we have pursued. Inflation has now gone down and has not had all too large negative effects on the economy. That is good, and it is likely the single most important thing for households that have a particularly tough economy and a tough situation.
If the member's friends here in the Riksdag, Miljöpartiet and Vänsterpartiet, and the Socialdemokrater had instead formed a government, an expansive budget and expansive borrowing would rather have driven up inflation. It would likely have led to inflation that had remained at a significantly higher level and for a significantly longer period. It would have successively eroded household finances, especially for those who have it the toughest and not least those who receive sickness and activity benefits.
Thank goodness we see that thanks to a responsible government with Elisabeth Svantesson at the helm, which has pursued a restrained fiscal policy but invested resources where they are most needed, we are now pushing back inflation. It will have the greatest effect for those households that are particularly vulnerable.
Jessica Rodén (S)
Madam Speaker! In economically difficult times, people with low incomes are hit extra hard. It is a core issue for justice and solidarity in our society that the most vulnerable are not left behind when the economy shakes.
When prices rise and the value of benefits erodes, the government faces a clear choice: Either one acts for solidarity and justice or simply accepts a silent, increasing economic inequality.
It is clear, Madam Speaker, that the current arrangement, where the compensations are adjusted based on the price base amount, does not compensate for the increased living costs that our citizens face. For every percent that the compensation loses in value, the gap between life and survival widens. Therefore, the situation demands so much more than a restrained fiscal policy. It requires decisive and rapid measures to raise and adjust the compensations so that they reflect the actual living costs.
I think it is strange, Madam Speaker, that when it comes to providing support to those of us with high incomes, there is decisive action. One even introduces a punitive taxation for the sick and disabled. But when it comes to changing the indexation of the sickness and activity compensation, there are many excuses, such as that it would drive up inflation.
I therefore want to reuse a question that I asked the Minister in December. I want to ask the Minister to explain why investments in sickness and activity compensation would be inflation-driving while tax cuts for high-income earners are not.
Statsrådet Anna Tenje (M)
Madam Speaker! As the member says, we have had this debate and discussion before, and actually, not so much has changed since then.
I note that the high inflation clearly demonstrates the importance of the sickness and activity allowance being linked to the price base amount and why it should also continue to be so, given that it follows the price level according to the consumer price index.
If the last few years had been as Member of Parliament Jessica Rodén and the Social Democrats seem to advocate for, and the compensation had followed a different index instead, then those who receive sickness and activity compensation would not have received the increase we have seen in recent years, given the high inflation.
For 2023, the sickness and activity allowance was increased by 8.7 percent and for 2024 by 9.14 percent. We can state that if we had had it in the way that Jessica Rodén seems to advocate, one would have received an increase of around 3 percent each year, and then inflation would have truly affected and eroded these households' finances significantly. It is clear that it is very good that the allowance follows the correct index, precisely because high inflation hits hardest those households that have it toughest. For that very reason, it has been the government's primary priority to fight inflation so that households can avoid seeing their wallets eroded.
For that reason, it becomes very difficult to reconcile the member's concern about high food prices under the influence of inflation with the fact that she wants to see an indexing that would have resulted in those who today receive sickness and activity compensation de facto receiving much less money.
Now they get three times more than those who have received a salary increase. Looking at the income pension, it is a matter of an adjustment of 3 percent one year and 1 percent the other year. This, therefore, is of great importance, and if one really wants to protect these groups, one would, with hindsight, rather advocate for the price base index during these years.
Jessica Rodén (S)
Madam Speaker! I think we must not forget that we are talking about a compensation that, after tax, amounts to approximately 11,000 kronor per month. One in four people with a disability has a low economic standard, and according to FUB, it is precisely the levels in the sickness and activity compensation that is the primary cause of poverty among people with intellectual disabilities. In this year's report *Fångad i fattigdom* (Trapped in Poverty), FUB writes that a person with sickness and activity compensation can go into deficit by approximately 1,300 kronor per month.
In my profession, I have met many individuals with different disabilities but also with fantastic relatives. They are people with dreams and joy of life but also with great stress and anxiety, Madam Speaker. Relatives ask who will take care of or support their children when they themselves have died. It is a terrible development we see when people feel this enormous stress and fear regarding the future that their children will face when they themselves are no longer there and can no longer provide financial support. I believe we agree that it is terrible.
Madam Speaker! I believe the Minister's reasoning here in the chamber indicates a passive attitude toward one of the most burning issues in our welfare system when she refers to "an appropriate order" and ignores all the real consequences of an indexing that does not keep pace with the actual cost development. I hope that moving forward we can agree on and also work to strengthen the economic security for those people who have just sickness and activity compensation.
Statsrådet Anna Tenje (M)
Madam Speaker! I also want to thank the interpellor for a good and important interpellation and a good debate. How we best combat inflation and secure the compensation for those who are ill are important questions that deserve to be discussed and debated. We have done it before, and we will certainly do it more times.
I can only state that I am very happy, both for Sweden's sake and for those who receive sickness and activity compensation, that we have a moderate-led government that has steered Sweden through difficult years with record-high inflation. It is difficult to even imagine the alternative – an irresponsible government that would have spent more, borrowed money, and dragged it out further. Then we would have had a significantly higher inflation which would also have lasted even longer, and if anything, it would have been devastating for particularly vulnerable households with low incomes.
It would also have been devastating if we had changed this compensation since earlier and changed the indexation. People who have sickness and activity compensation do not have any high compensation - I can definitely sign off on that - and they would then have received an increase of 3 percent at the same time as inflation increased and food prices were raised by significantly more.
During these particularly tough and difficult years, one has now received an increase of 8.7 and 9.14 percent respectively. Now we see that inflation is receding, and we are moving towards significantly brighter times. That is good, and it is thanks to the hard work of combating inflation that this government has prioritized.
Source: The Swedish Parliament. The speeches come from the open data of the Riksdag, translated into English by AI, which may contain errors.