Response to interpellations 2024/25:39 and 66 on tax for persons with 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
The debate concerns the tax for persons with sickness and activity compensation. M proposes a tax reduction for workers and pensioners to strengthen households' purchasing power and create incentives for work 1. M argues that it is reasonable for there to be a difference in taxation since employees have expenses that persons with compensation do not have, and that the compensations have been indexed for inflation 2. M argues that they are lowering the tax broadly to make Sweden richer and that employees need increased purchasing power 3 4. S argues that there is an unfair "funkisskatt" (disability tax) that punishes those who cannot work 5 6. S believes that a tax reduction of 1,900 kronor per year would increase consumption and productivity 6 7.
Written by AI in advance and may contain errors. The numbers lead to the speech a statement builds on; check against the text below.
Finansministern Elisabeth Svantesson (M)
Madam Speaker! She has asked me in what way the difference in taxation between persons with earned income and persons with sickness and activity compensation increases the incentives to work. She has also asked me if I consider this difference to be fair and, if not, why the difference is not removed. Karin Sundin has asked me in what way productivity will increase in Sweden by persons who live on sickness and activity compensation having higher taxes than other groups in society.
Many households have had it tough as a result of the high inflation. Even though inflation has now been fought, prices have stabilized at a high level, which means that many households still have difficulty making ends meet. Wage earners have lost ten years of real wage increases as a result of inflation. At the same time, many benefits, including the sickness and activity allowance, have been adjusted upwards with inflation.
Now that inflation has been fought, the government in the budget bill for 2025 focuses on investing in a wealthier and safer Sweden. An important part of that is to strengthen the purchasing power of households. Since the purchasing power of wage earners has been particularly affected, the government lowers the tax broadly for wage earners through an enhanced job tax deduction. It is also a structurally correct measure. In order for more people to leave benefit dependency and instead support themselves, better incentives are required. It must always pay to work. Therefore, in the budget bill, we propose a tax reduction for those who work and for pensioners.
But we also support economically vulnerable households. We propose lowered fuel taxes, an extension of the supplementary grant in the housing allowance, and an increase in the compensation for persons with sickness or rehabilitation allowance in special cases. We also propose a number of measures so that fewer people get stuck in long sick leaves. The most important thing is that we present a growth budget that allows Sweden as a country to become wealthier in the long run.
Eva Lindh (S)
Madam Speaker! Ever since 2007, when the then Moderate-led government introduced its first job tax credit, we have seen an increasing tax gap. The gap between those who have a job and those who have a disability has become ever deeper, and the difference is therefore called the disability tax. On January 1, 2025, this tax gap will become even deeper. Pensioners are compensated with reduced tax when the new job tax credit is introduced, which of course is good. But persons with sickness or activity compensation are not compensated. The deeply unjust tax for pensioners now becomes an unjust tax for the sick, which hits those who actually cannot work.
Over 260,000 people in Sweden live today on sickness or activity compensation. Many receive barely 10,000 kronor a month before tax. Persons with sickness or activity compensation, the unemployed, and those on parental leave are not covered by the job tax deduction that wage earners receive.
I met a woman last week. She said that for several years, the highlight of her life had been having a cup of coffee with her female friends once a week. Now she can only afford to do it once a month. It cuts to the heart that she can no longer do what she likes best once a week.
I have therefore asked in what way becoming poorer increases the motivation to work. I seriously cannot understand why carrots, i.e., more money, should be needed for those who already have, and a whip for those who do not have and are already poor.
I also think it is provoking that people often talk about things brightening up now, because it is not brightening up for people in this group. Inflation has been tough even for them - or above all for them. It is terribly much more expensive to go and shop today. Percentagewise, it naturally becomes more expensive for those who do not have money and have to calculate everything. Inflation affects everyone.
Furthermore, quite a few people who are a bit short of money live in rental apartments. It will not become cheaper in the future. It is not the case that the lowered interest rates will benefit them. There will still be rent increases in the future.
My question is why carrots are required for some and a whip for others. And is it not the case that inflation has also hit those who do not have much money?
Karin Sundin (S)
Madam Speaker! It should always pay to work, the Minister for Finance answers. She says that an enhanced job tax credit is a structurally correct measure so that more people will leave benefit dependency and instead support themselves, and that better incentives are required.
It is clear that it should pay to work. It is through people's work that we build the country. It is through people's work that Sweden has become a wealthy country. It is through people's work that we can finance childcare, elderly care, school and healthcare. It is through people's work that we can defend Sweden and everything we hold dear.
Madam Speaker! The problem is that the questions the Minister for Finance has received in this interpellation debate and which she is here to answer concern people who cannot work. The questions concern people who live on sickness benefit or activity benefit, and these are people whom the state, in the form of Försäkringskassan, has assessed as unable to work or unable to work fully.
Försäkringskassan makes the assessment based on laws and regulations derived from decisions we have made in this chamber. To receive sickness compensation, one must have a disease or disability that prevents one from working at all or working a maximum of 75 percent. The disease or disability must be permanent.
Madam Speaker! The Minister for Finance knows this. Nevertheless, she has managed to answer two different interpellations concerning persons with disabilities without even mentioning the word disability. Her answers are about the wage earners and about creating growth so that Sweden will become richer in the long run. But those who become richer in Elisabeth Svantesson's Sweden are those who are already rich, earn a lot, and have the means to save a lot in ISK. They benefit most from the Tidö government's policy.
Those who live on the lowest incomes and have the greatest difficulty making the money stretch – those who live on sickness benefit or activity benefit – do not become richer with this government's policy. They do not get a tax cut. On the contrary, they get higher taxes than almost everyone else and are practically penalized for not being able to work. They get the disability tax. That is the question it is about and which I want answers to.
I repeat, therefore, my question to the Minister: In what way will productivity in Sweden increase by persons who live on sickness benefit or activity benefit having higher taxes than others in society?
Finansministern Elisabeth Svantesson (M)
Madam Speaker! I would like to thank the interpellants for an important question. Just as in the previous debate, the interpellants are asking about the consequences of inflation. They are still present and mean that very many are struggling with high prices when they go to shop for food. It is tough, and the margins are small. Therefore, it has been important, as I have said before, to first and foremost combat inflation. It is the great enemy. I am glad that it is down, but that does not mean that prices are falling. All four of us parties that have submitted the budget are therefore careful to strengthen households' purchasing power again, of course for the sake of the households, but also to get the economy moving and increase growth. It will also affect the households, and more people will come into work.
There is something very interesting here. I completely share the view that those who receive sickness benefit and activity benefit are having a tough time. I do not live in another reality, I do not meet other people, and I do not have other people in my vicinity than the interpellents - as far as I know.
My point is that Sweden is fantastic. I am surprised that no one is highlighting that we have a fantastically good social security system. That is what we agree on, even if there may be differences on the margins.
During this period of high inflation, many compensations have been stepped up. One simply compensates for the inflation, for example for this group. This means that the person who, for example, has 15,000 in sickness benefit or activity benefit has received a much larger increase. It is still at a low level, but one has still received more in the wallet during these years than a wage earner who works by the hour, who might be able to put together 15,000 and also has it tough. I want that said, because it does not sound that way in the debate.
I can understand that for other reasons one might think that there should not be different taxation. But do not forget that during the toughest years, those who have had a job but perhaps have not been able to work full-time, for various reasons, have in no way been compensated. Therefore, we are lowering the tax broadly for two consecutive years to ensure that those who work get more in their wallets.
With that said, I want to raise the question of whether it is reasonable to have any difference in taxation at all. One can absolutely answer both yes and no and have different opinions about it. I still believe it is important to know that if one has 15,000, there is a difference of 169 kronor a month between the one who works and the one who receives compensation.
The person who works has quite a lot of expenses that a person who does not work does not have. If one has 15,000, perhaps one does not work every day but for example part-time or by the hour and takes the jobs one gets. One does everything to be able to support oneself. It is perhaps not unreasonable that that person has 169 kronor more per month. One can have different opinions about that.
In this case, when inflation has been high and the benefits have been adjusted upwards for those who have them, the wage earners have not received any compensation whatsoever. Therefore, I think it is reasonable to strengthen those who have it toughest, as we do with our indexations. It is very good. That is what we agree on here in the chamber.
We will also ensure that we strengthen the purchasing power for more people. Even if one has sickness benefit or activity benefit, one can be dependent on one's car. We have therefore lowered the tax. With the Social Democrats' policy, it would become more expensive to fuel the car. It absolutely would, because one, for example, voted against the reduction of the reduction obligation that we introduced on 1 January.
Step by step, we are doing a lot to strengthen households' purchasing power. Now it has been two years. We intend to work for several years, hopefully many years, to make Sweden richer and ensure that those who live here become richer.
Our welfare systems are financed primarily by everyone who goes to work every day. We want strong systems and protection. We shall have that. But that also requires that we strengthen the incentives to work, study, and simply do everything one can - as many people do - to contribute to oneself and the common good. It must pay to work.
Eva Lindh (S)
Madam Speaker! I will not argue the words, even though I think that might sound a bit exaggerated. We are fully aware that it has been calculated. That is not what the debate is about. It is about the injustice in that some should pay more in tax than others.
We were in agreement regarding the unjust gap between pensioners and those who work. I understood it, at least, as the government removing that gap because it was not fair.
Or was there some other reason why it was decided to remove the gap? If one gap is unfair, I do not understand why another would not be. This is what I am seriously interested in knowing.
Then I want to hear: Does the Minister for Finance believe that there is a difference between people and people, that we function differently, and that carrots were needed for some and a whip for others?
I have worked in social work for quite many years, about 20, and I have almost never met anyone who does not want to work. There are some, but almost none. Some say that they do not want to, in order to save their own self-esteem. But one wants a job and to be involved and contribute.
We are talking about people who actually cannot work. Just as my colleague Karin Sundin has pointed out, it is people where we know that it has been assessed that they cannot work. That is why they have sickness or activity compensation. I assume the Finance Minister does not doubt that the assessment is correct.
Does the Finance Minister think that the gap we call the "funkisskatt" is fair? It is our opinion that it is not. The "funkisskatt" is unfair and not reasonable. So I continue, because I am curious and really want to know.
I know that we have different values, and we should. That is why we engage in political parties and try to push forward and make a difference. For me, one of the important differences when I worked as a social secretary and wanted to engage politically was that in that work you can help a person, but when it comes to really changing the conditions for people so that they have a job to go to, a good education that leads to jobs and all the other things that really make a difference in their lives, it is we as politicians who can do that.
I therefore become very upset when I see injustices, and the funkisskatt is a profound injustice. We Social Democrats have included in the budget that this gap shall be closed.
Karin Sundin (S)
Madam Speaker! The Minister highlights the importance of strengthening purchasing power, so let us speak about purchasing power. A couple of years ago, the Swedish Social Insurance Agency presented a report that clearly shows how the value of Swedish social insurances in relation to wage incomes has been eroded over long periods.
Even though we have now had a period of high inflation, that difference has not disappeared, but rather we are talking about a group that lives on sickness and activity compensation and which over time has had increasingly poorer purchasing power.
What is happening now with the Tidö government's policy, with yet another job tax deduction for those who are wage earners and a corresponding deduction for pensioners, is that the differences in standard of living are increasing even faster for everyone. It becomes most clear for the group that has the lowest incomes. They have low income, they will not be able to return to work, and they do not have the conditions to take any extra jobs to get extra income. This is exactly what Försäkringskassan has assessed by saying that that group needs sickness and activity compensation. That is why the funkis tax is so deeply unfair. It punishes those who actually cannot work - people for whom even a small tax reduction would make a big difference.
So let us talk about purchasing power, and let us talk about what money it is about. I want to make a comparison. The state's compensation to cabinet ministers today is 156,000 kronor per month. The state's compensation to those who live on sickness benefit is today between 11,842 and 23,171 kronor per month as a maximum amount. A cabinet minister gets a tax cut of approximately 30,000 kronor per year with the government's budget. The one who lives on sickness benefit gets 0 kronor.
We have had the Riksdag's investigation service calculate how much a person living on sickness benefit would receive in reduced tax if the person received the corresponding earned income tax credit next year. We should remember that we have had the earned income tax credit for quite a few years now, but let us talk about next year. On average, it is about 1,900 kronor a year or 158 kronor a month. It is not that much compared to 30,000 kronor a year, but it is much more than 0 kronor. It is money that would make a big difference.
In the last few days, I have asked people who live on sickness benefits what they would do with 158 kronor more per month. Someone said: I could go to the store and sometimes buy what I actually crave and not just the cheapest thing. Someone pointed out that 158 kronor is exactly enough for the cheapest cinema ticket. It is not enough for the popcorn, but it is enough to go to the cinema sometimes.
Now that November is here, we can all do a quick Google search on what Gore-Tex boots or winter jackets cost and conclude that it will be difficult to pay for both with 1,900 kronor a year.
What I primarily encountered when I asked about the disability tax was sorrow, anger, and despair. I received stories about people who today cannot afford to satisfy their most basic needs. I encountered words like discrimination, ableism, perverse, and undignified. I can do nothing but agree. This is undignified.
Finansministern Elisabeth Svantesson (M)
Madam Speaker! I shall try to be relatively brief. Every day I go to work, I have Sweden and all of us who live here in focus. How shall Sweden become better based on my values and my direction? How shall Sweden become safer? How shall Sweden become wealthier? How shall our children and grandchildren get an even better country to live in? What can we do together?
As I said earlier, there is much that works well and other things that need to work better. I also said earlier that we have systems that ensure those who have it toughest are compensated when inflation hits, which it has done in a brutal way.
The consequences of inflation still remain, and therefore many of the compensations are also significantly higher today than they were a few years ago. It is even the case that the difference between having worked and working has become smaller.
I am somewhat surprised that I never, or at least very rarely, hear the Social Democrats speak about this. The years of high inflation have hit many who are struggling, who go to work, and who are trying to make the puzzle of life fit together. Single mothers and fathers have seen their wages eroded significantly.
I am quite clear, I hope, about what we are doing. We are lowering taxes broadly, and we are changing quite a lot, as I said in previous posts. We are making it cheaper to refuel. We ensure that everyone who saves in an ISK gets a return on their money, which they do not get in a savings account. And it is really not 4 million rich people who are saving, but it is many ordinary people—wage earners—who are saving. They can also save up a small buffer for something they need, small or large.
Then I think, Madam Speaker, that it becomes a kind of hypocrisy, and it is perhaps what disturbs me most right now. You are welcome to take my fee - I have no problem with that - but I never heard the Social Democrats stand here in the chamber and speak about the social democratic ministers' fees when the war tax was removed.
Värnskatten was also a tax on the higher incomes, and when it disappeared, it could be justified. I have all the respect for the fact that it was removed - I think it was good - but for me, this is hypocrisy.
It also becomes hypocrisy when it comes to the difference of 169 kronor for the person who has 15,000. One can have different opinions about that difference, but now we have it. But the person who works and has 15,000 has higher expenses. If you live here in Stockholm, you definitely have that—I don't live here; I live in Örebro, which I believe Karin Sundin also does—and we must remember that the tax has been raised here. This year, the municipal tax was raised, and the municipal tax is being raised next year. Who is hit most by the raised municipal tax? It is the person who earns the least.
For me, this entire debate becomes strange. I understand that we may have different views on the exact tax level. For me, it is about that we together shall do everything we can so that Sweden becomes wealthier, to achieve increased prosperity, and to ensure that more people have their own livelihood. Those who need support to enter work shall receive it. It has not worked as it should at all. We must also ensure that the protection works for those who cannot work. And if that protection is to exist in our social insurance systems, even more people must work.
Madam Speaker! I believe that we fundamentally have the same problem picture. It is tough for many. We see slightly different paths forward for how we want to facilitate things for wage earners and for pensioners who have worked; I think that it should pay off to have worked.
It is about how we are to ensure that our systems are sustainable. I have mentioned several times now that I know it is very tough for the person who has this compensation. One can truly think that it is a low level of compensation. One can think that the difference of 169 kronor is unreasonable or reasonable. Others may judge that. I do, however, find it difficult that very long arguments are being drawn on this and it almost touches upon my view of humanity in this issue. I go to work every day so that all of Sweden can become better.
Eva Lindh (S)
Madam Speaker! I do not doubt that the Minister for Finance is passionate about his vision and for what the future should look like for Sweden. I simply believe that we have different visions of what Sweden looks like and how we are to reach a better society. For me and for us Social Democrats, it is incredibly important to have a fair Sweden that gives all residents good conditions to live a good life.
I am still surprised and think it is strange that the Finance Minister says that we have never talked about the so-called ordinary people. We have, in fact, done so throughout this entire period. We have felt a sense of powerlessness over the fact that ten years of real wage increases have disappeared.
We have also been obsessed with fighting inflation. We know, in fact, how crucial it is.
But this debate is, for once, about the funkisskatt, the unfair funkisskatt. That is why we are talking about it here and now, today. It is deeply unfair. People who cannot work do not just have it tough, but are also supposed to pay more in tax than others. It is, at least for me, completely unreasonable. We do not understand why some people should get carrots and others should be whipped.
Regarding the defense tax, it is absolutely no secret that it was not something we Social Democrats promoted. I understand that the SD-led government would like to bring up that issue. But it was not we Social Democrats who thought it was a priority issue.
Karin Sundin (S)
Madam Speaker! My question to Finance Minister Elisabeth Svantesson was in what way the productivity in Sweden will increase by people who live on sickness and activity allowance having higher taxes than others in society. I cannot claim that I have received any answer. The Finance Minister talks about everything except the situation for precisely the persons who live on sickness and activity allowance.
I perhaps should not be surprised. I, like many others, have read the interview in Svenska Dagbladet where the reporter asked Elisabeth Svantesson what she herself would do with the tax refund of approximately 30,000 kronor that she will give herself and other high-income earners next year. She answered: I have no thoughts at all on what I will do with the money.
I think that a government that argues that the path to increased productivity and increased growth goes through lower taxes should lower taxes most for people who live on sickness benefit or activity compensation. People who live on small margins know exactly what they would do with the money. For them, a tax cut of 1,900 kronor a year would make a big difference, a much bigger difference than 30,000 kronor makes for the one who already has everything they need and a little more. An abolished funkisskatt would be converted into increased consumption, increased productivity, and increased growth.
I believe that if Sweden stops penalizing the chronically ill and persons with disabilities and instead gives them better conditions to live a dignified life, we will all together, as a society, become much safer and wealthier.
Finansministern Elisabeth Svantesson (M)
Madam Speaker! I would like to thank the interveners for this debate.
The word justice has been used quite many times. This also applies to the word productivity. But I am not talking about productivity when it comes to this group. It is not about productivity for a certain group or productivity at all.
It is about the fact that Sweden is a country that has been built wealthy and shall be built even wealthier. We want companies to stay here, that even more people should have a job to go to and that our children and grandchildren shall get an even better Sweden. Then the economy needs to grow. The economy also needs to grow so that we can have the systems and the social insurances we have. I believe that we share that picture.
This matter of justice is interesting, nonetheless. Are the increases in compensations due to inflation, the indexations, exactly fair in relation to those who work? One might have a job that one does not enjoy and perhaps have a long way to work with expensive costs. Those people have not been compensated at all.
I think it is reasonable that our compensations are indexed. But I also see a need for the employee, regardless of whether one has earned 15,000 or 35,000, to also receive increased purchasing power.
One might think that a difference of 169 kronor is unreasonable or reasonable. I have full respect for that. But that is not where the difference lies between what view of humanity one has or how one views Sweden. Those who have this compensation - they are not high compensations - have nevertheless been compensated for two years now, more than in very many years, due to the high inflation. I think that is good.
I also think it is good that we are now ensuring that we lower the tax for those who work and for those who have worked.
And you know what? I have been asked what I am going to do with the money. I am not thinking about that, and I understand that one wants to draw some long conclusion from it. But I work day and night in the job I have now so that Sweden will become better. I do not spend so much time on what I myself am going to consume or do, but I try to do a good job at the Ministry of Finance.
Source: The Swedish Parliament. The speeches come from the open data of the Riksdag, translated into English by AI, which may contain errors.