Response to interpellation 2023/24:845 on the supplementary grant in the housing allowance
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 supplementary grant in the housing allowance. M considers the supplementary grant to be of an extraordinary nature and can be scaled down as the economic situation eases 1. M emphasizes that work and self-sufficiency are most important against poverty 1 and that the government's tax cuts increase the incentives for work 1 2 3. M wants to increase accuracy through monthly data at the individual level 1 2 and wants households to manage their finances by having more people enter the workforce 3 4. V argues that the housing allowance has been eroded as it is not indexed 5. V considers that the reduction implies an income reduction for those with the smallest margins 5 and hits single mothers hard 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! I have been asked if I intend to take any initiative to permanently strengthen the housing allowance and when I will introduce monthly adjustments in the housing allowance in accordance with the BUMS investigation's proposal.
The supplementary grant provided to families with children within the housing allowance is a support of an extraordinary nature that is provided for a limited period of time. However, the extraordinary situation has persisted for a longer period than it was possible to foresee. When the pandemic, which was the time when the temporary housing allowance was introduced, was over, inflation rose. It was impossible to foresee how long this period would be.
We see now that the difficult economic situation has eased, and the future prospects for households look significantly brighter. A cyclical recovery is judged to begin towards the end of 2024, and the purchasing power of households is expected to strengthen. This also means that the need for an extraordinary support, such as the supplementary grant, is decreasing.
The housing allowance is a benefit that is income-tested, and it thus has marginal effects. For groups that have a weak anchoring in the labor market, income-tested benefits can, in a longer perspective, reduce the incentives for self-sufficiency. It is important that more people enter employment and manage their livelihood through their own work. People who have a job also have a significantly lower risk of a low economic standard. The Government wants to lower the tax on work to increase the incentives for work and strengthen households' purchasing power.
Against this background, an extension of the supplementary grant to continue supporting economically vulnerable households, while it is now being scaled down from 40 to 25 percent of the preliminary housing allowance, is considered to be a well-considered measure.
It is important to increase the accuracy of the housing allowance as well as to reduce the risk of incorrect payments, clawbacks, and indebtedness. The investigation on housing allowance and maintenance support - reduced indebtedness and increased accuracy (BUMS) has, in its report Accurate - Introduction of monthly data in the housing allowance and maintenance support (SOU 2021:101), submitted proposals for a new income basis in, among other things, the housing allowance based on income data at the individual level in the employer declarations, which are submitted every month to Skatteverket. In the budget bill for 2024 (prop. 2023/24:1 utg.omr. 12 section 3.8), the Government has indicated that the intention is to return with such a proposal. Försäkringskassan has been allocated funds to begin the preparations for an introduction of individual data from the employer declaration as an income basis, and the Government is now conducting a dialogue with the agency regarding the preparations.
Isabell Mixter (V)
Madam Speaker! The housing allowance has been eroded over decades, as the levels are not indexed. Neither the income limits nor the allowance amounts have kept pace with price and wage developments. This means that for every year that passes, fewer and fewer people are able to receive the housing allowance, and an ever smaller portion of the rent is covered.
The supplementary grant introduced in the housing allowance during the pandemic and which has since been extended during the economic crisis has therefore been welcome and necessary for households with the smallest margins. Retaining the temporary increase of the housing allowance was also essentially the only measure the government took to support weaker households through the economic crisis. Vänsterpartiet has long demanded more and broader measures in the economic crisis. We have also submitted proposals to the Riksdag to permanently increase the housing allowance and give more people the right to housing allowance.
The government has now announced that the supplementary grant will be scaled down to 25 percent, compared to today's 40 percent. This will mean a reduction in income for those people who today receive housing allowance with an average of around 450 kronor. The Minister writes in his response to the interpellation that the background to the government's reduction of the supplementary grant is that the difficult economic situation has eased and that the future prospects for households look brighter. However, it is not possible to eat oneself full on brighter future prospects, to pay the rent with brighter future prospects, or to buy football boots for the children with brighter future prospects.
The Swedish Enforcement Authority reports that evictions of families with children increased by 17 percent during 2023. The fact that inflation is decreasing does not mean that the grocery bill or the rent will become cheaper, but only that prices are not increasing as quickly as before.
The Minister's vision of a brighter future is probably reserved for those who have capital in an ISK or a high monthly salary. The brightening future prospects are not shared by the single mother with housing allowance. In a survey that Sveriges Makalösa Föräldrar has conducted among single parents, 40 percent answer that they have had to borrow money for basic costs. In a survey by Rädda Barnen with several, 54 percent of the single parents state that they have difficulty paying for the children's leisure activities.
Single parents forgo eating their fill to afford to feed their children. Children of single mothers have a five times higher risk of poverty than children who grow up with cohabiting parents. Many of these are in need of housing allowance, and now the government is withdrawing a portion of their livelihood from them.
It is clear to me where this government's priorities lie, even if it is quite incomprehensible. One should cut back on those who hardly have money for food and rent and send them to the enforcement authority to free up money for enormous tax cuts for those with high monthly salaries. The Prime Minister himself can look forward to a tax cut of 3,750 kronor per month. It is moderate support over housing allowance.
The invisible hand that the government blindly believes in, the neoliberal dogma that if people only become poor enough they will take a job and stop living on benefits, has long since been dead and buried. The reality is that the only thing that happens when people are punished out is that they become even poorer, that vulnerability and poverty grow. If you in the government are to get people into work, you must actually start working on getting Sweden moving.
Madam Speaker! I am concerned about the government's priorities regarding the housing allowance. I want to ask the Minister what the plan is moving forward for the housing allowance. Is the intention to completely phase out the supplementary allowance in the long run?
Statsrådet Anna Tenje (M)
Madam Speaker! As I mentioned earlier, the temporary supplementary grant has been a temporary measure during an extraordinary situation. This situation has lasted longer than what was possible to foresee, given that it continued throughout the entire pandemic and thereafter during a subsequent period of high inflation.
The temporary supplementary grant has fulfilled, and fulfills, a function through its purpose of temporarily strengthening economically vulnerable households. As the economy is now brightening and we are moving out of the recession, it is however high time to begin shifting from crisis management to investment in making Sweden richer and safer for everyone.
Madam Speaker! In two days, the government will present its budget bill in the Riksdag. It is a growth budget that secures jobs and welfare. In the budget, we strengthen Sweden's economy, school, healthcare, and the justice system here and now, but we also do what is required to strengthen competitiveness, jobs, and welfare in the future.
The reform space in the budget for 2025 is 60 billion, which is a significant increase from last year. We are using the resources precisely to get more people into work and for measures for higher growth and higher productivity. We shall invest in infrastructure, research and education, and we shall reward effort.
With that said, it is also justified to work with supporting and helping in times of concern, for example by increasing the temporary housing allowance. But over time, and ahead of the next crisis, it is neither temporary nor permanent allowances that make Sweden richer, safer, and freer. It is work and self-sufficiency.
Among the households that have housing allowance, it is 53 percent that have wage income as their primary means of support. Lowered taxes, which we are now moving forward with, mean that more of those who today have the temporary housing allowance will be able to keep more of their wages for the hard work they perform every day. Every person and household that, through lowered taxes, receives increased incentives to, for example, move from part-time to full-time or from allowance to self-sufficiency, represents an enormous gain, primarily for the individual but also for society as a whole.
To return to the second question, regarding income data on a monthly basis in the housing allowance, it is important – I share the interpellant's view on this – to increase accuracy and reduce the risk of incorrect payments. This also applies to clawbacks and indebtedness, issues that have been relevant previously.
Work is ongoing, as said. Försäkringskassan was allocated 6 million kronor in the budget for 2024, and we are now conducting a dialogue with Försäkringskassan regarding the necessary preparations to be able to get this reform in place.
Isabell Mixter (V)
Madam Speaker! I thank the Minister for the answer.
I would like to remind the Minister that there is a common objective for the economic family policy that the Riksdag has established: to contribute to a good economic standard of living for all families with children, reduced differences in the economic conditions between households with and without children, and an equal parenthood. To assume that the single mother will start working more just because she receives enough whip is not a method that, as far as I am aware, has sufficiently good results to achieve that.
Anna Tenje pointed out that even those who work and simultaneously receive housing allowance will benefit from the government's tax cuts. The problem is that for a low-income earner, the tax cut will mean perhaps 100 kronor more in the wallet, while the housing allowance is reduced by an average of 450 kronor. It is an equation that means the single mother who is struggling now will have it even worse.
The Swedish National Audit Office released the report "The Housing Allowance's Goal Fulfillment - Overcrowding and Absolute Poverty" last week. The report shows that the goal fulfillment for the housing allowance's housing policy goals has deteriorated. Among other things, the report points out that overcrowding among housing allowance recipients has increased, as the allowance has not kept pace with the development of rents and thus forces people into cheaper apartments.
In that light, it is quite strange to me that from the government's side, one does not see a need to take a larger grip on the housing allowance. What is the long-term plan? Are we going to ensure that people can live in reasonably sized apartments and can afford their housing even if they have a very low income? It is a question that I would very much like to have an answer to. How does the government view the housing allowance in the long term?
If I interpret Anna Tenje correctly, she means that the temporary grant is to be phased out completely in the long run. If we do not take a bigger step and reform the housing allowance fundamentally so that it follows price and wage developments, the housing allowance will completely lose its purpose of lifting people out of poverty and ensuring that they have a decent standard of living.
The government's reduction of the supplementary amount has been out for consultation, and several of the consulting bodies are critical.
Hyresgästföreningen writes in its referral response: "The better economy has not, as the government claims, led to improvements in the finances of the most vulnerable households. Hyresgästföreningen considers that the temporary contribution is still needed until permanent improvements of the housing allowance have been implemented." It is an opinion that I and Vänsterpartiet share.
LO also opposes a reduction of the temporary allowance and wants to see an overall reform of the housing allowance.
SKR considers that the government should conduct a review of the housing allowance with the aim of implementing a general increase and broadening it so that the allowance benefits more people. The many temporary increases show that the housing allowance does not correspond to current cost levels.
The Social Insurance Inspectorate also assesses that the temporary allowance has now existed for so long that it has likely become an income that many economically vulnerable families with children have adapted their finances to. This means that even a gradual phase-out could have major economic consequences for this group.
There are many who share the view that the housing allowance needs to be increased permanently, but the government chooses instead a reduction.
Madam Speaker! I understand that the Minister believes very strongly that if people do not receive benefits, they will work more. With that logic, we should however have lower unemployment now than, for example, in 2005 when 270,000 households received housing allowance, compared to today's 170,000.
Madam Speaker! I want to ask the Minister again how she views the housing allowance in the long term. Will any reform be implemented?
Statsrådet Anna Tenje (M)
Madam Speaker! I would first like to dwell a little on the government's proposal regarding tax cuts. I still believe that the interpellator underestimates their effects. Despite everything, it is work and self-sufficiency that takes people out of exclusion and poverty. It is the single most important measure for improving one's finances. Here we have a clear dividing line between the government's work line on one hand and the opposition's contribution line on the other.
With the government's tax cuts, households across the entire income scale get more money in their pockets. On average, the tax is reduced by 2,600 kronor per person per year, and in total, it amounts to 11 billion every year that people who work and do the right thing get to keep for their own work. It is both good and fair. It is that which builds Sweden safely and securely.
This is particularly important when it comes to low- and middle-income earners. The job tax credit is, in fact, designed in precisely such a way that the largest tax reliefs and tax reductions are targeted at them. It is also among the low-income earners that most of the households receiving housing allowance are found.
It also leads to more people all over Sweden getting more colleagues in the workplace and there being more people in the breakroom, as the tax cut is expected to increase the number of employed people by 4,000 and the number of hours worked by 9,000 full-time equivalent jobs. Whether it is about more hands in healthcare, more adults in school, or more employees on the factory floor, this therefore contributes to making Sweden richer and safer.
Mr. Speaker, just as I touched upon earlier, there is a clear ideological dividing line between the government and, in this case, the Left Party. While the Left wants to make permanent and pay out eternal subsidies of 125, 140, or why not 200 percent of today's housing allowance, the government instead wants to invest in the work principle, in increased incentives to enter employment, and in ensuring that as many as possible of the households that today receive the temporary supplementary housing allowance in the next crisis are well-equipped to manage their housing situation and finances. That is how you lift people, and that is how social mobility occurs. That is how you create self-determination and freedom, and that is also how you build Sweden wealthier and safer.
Isabell Mixter (V)
Madam Speaker! It is interesting what journey this government is taking. During the economic crisis that we are now partially beginning to emerge from, the housing allowance has truly been highlighted as an enormously accurate and important measure for the weakest households. Now it sounds very different. Now they say that they are not going to make the allowances permanent for people and that we must give them more whip to get them out and work.
I completely agree that people should be able to have their own livelihood and security and, above all, a higher standard of living than many have today. It is a terribly difficult situation to have such a low income that one qualifies for housing allowance; that income is enormously low.
But with that said, this means de facto that the housing allowance is being scaled back - that people will receive less money in their pockets. People such as, for example, single parents, who already today have to pinch every penny to afford food for their children, will now see that their housing allowance is being reduced. I want to ask how Anna Tenje envisions how people are to afford food and rent when they now all of a sudden receive less money in their pockets.
I would also very much like to know why the government cannot make a decision on when monthly reconciliations in the housing allowance should be introduced. It seems to be very easy for the government to implement various types of reforms, but right here it seems to be a bit stuck. I wonder why the government cannot make a decision that this should be implemented. It would make things easier for many people who today are being burdened with debt and end up with the Enforcement Authority because of a system that is not designed for people.
Statsrådet Anna Tenje (M)
Madam Speaker! To begin where the interpellor ended, we are now entering into a dialogue with Försäkringskassan. For the current year, 6 million have already been set aside to prepare for changes in the form of monthly reconciliations so that accuracy increases and incorrect payments decrease, and above all so that we can prevent the demands for repayment from increasing and families with children being burdened with debt – entirely unnecessarily, I would like to assert.
I appreciate this type of debate. It is very clear for the audience which dividing lines exist within Swedish politics. It is an important piece of consumer information to the Swedish people that we have different views on different issues, not least when it comes to the work line versus the benefit line. I want to do my utmost so that everyone who during this crisis was dependent on an extra supplement to the housing allowance to manage the economic situation, when we face the next crisis in Sweden—for it will come—shall stand on their own feet, have their own livelihood and manage their finances significantly better, by more people entering work and more also moving from part-time to full-time.
I therefore look forward to more of these types of enlightening interpellations debates, and I am quite certain that they will come.
Source: The Swedish Parliament. The speeches come from the open data of the Riksdag, translated into English by AI, which may contain errors.