For Better and for Worse? On the Transformation of the Finnish Social Assistance Scheme

Helena Blomberg, University of Helsinki

Christian Kroll, University of Helsinki

1 Introduction: Against the Tide

From a European perspective, the recent reform of Finnish social assistance may be described as, in many ways, going against the tide toward a welfare service state (WSS). Having followed an almost reversed strategy – as explained in more detail below – we believe that this Finnish case and the lessons that can so far be drawn regarding its implementation and outcomes may provide some interesting perspectives, both in relation to the discussion on the ideas and goals behind the WSS, and on the interplay of various social policy rationalities for policy outcomes in general. Therefore, this case also brings to the forefront some less-discussed perspectives on impacts of policy transformations on the social citizenship of people in economically vulnerable life situations.

When discussing a(n atypical) reform to a Scandinavian- or universal-type welfare system here, it might be relevant to underline that the concept of the welfare service state, as used in this volume, should not be confused with one of the traditional characteristics of the universal welfare model, that is, the emphasis of tax-financed (universal) services in kind, of a quality high enough to ‘crowd out’ alternative (privately financed) kinds of service provisions, as part of the primary social safety net (cf. e.g. Sipilä 1997).

The outline of our paper is as follows: we start by describing the main features of the Finnish reform which we argue are somewhat ambiguous in regards to the social policy principles it promotes. We then present a framework for analyzing different aspects of the reform, and against this background, we highlight the reforms’ outcomes from the perspectives of the system, client, and front-line workers. We conclude the paper by viewing these outcomes from a broader perspective.

As pointed out elsewhere (e.g. Bonvin, Otto, Wohlfarth & Ziegler), there has been an increasing tendency among governments to view the alleviation of social risks from perspectives such as social investments and capacity building rather than from a traditional social rights perspective which various generally defined risks have been alleviated through cash transfers. This shift has often come to mean an emphasis on a provision of personalized, “people changing” social services, often provided by a decentralized service system, and characterized by policies that vary between local administrative units and/or are implemented by a public-private mix of providers, often with extensive discretion in regards to the measures taken and/or with the options to use sanctions in cases of non-compliance with policy goals (Blomberg, Kroll & Kallio, 2018). These tendencies have been both praised and criticized. On the one hand, discretion is considered essential within social work in order to strengthen de facto social justice and clients’ lived citizenship (c.f. Wallander and Molander, 2014). On the other hand, several studies have indicated real or potential problems resulting from (locally) varied implementation and (major) professional discretion (e.g. De Wilde, 2017).

Against this international setting, it is interesting to consider the case of Finland, where there have (also) been policy tendencies moving in the opposite direction, in the sense that they are moving away from solutions reminiscent of a WSS and toward a more clear-cut transfer framework. While there has been, and still is, political discussion of even more far-reaching policy reforms in the direction of general social transfers – a universal basic income-type solution has even undergone a government trial (Kangas et al., 2019; For a discussion on the background of such policy ideas in Finland, see Andersson and Kangas 2002; 2005), and the current government is planning to experiment with a negative income tax (Programme of Prime Minister Antti Rinne’s Government 2019)   the change to the handling of social assistance, as implemented since the beginning of 2017, has arguably been the most important full-scale reform in decades emphasizing cash transfers.

As will be explained in more detail below, social assistance is the strictly means-tested statutory economic aid intended as a “last safety net” for anyone residing in the country who cannot get by on any other means, be that income, primary social security benefits, or personal assets (to be precise, the reform concerned the significantly more often paid out so-called basic amount of social assistance, and not supplementary and preventive social assistance; see Blomberg, Kroll & Kallio, 2018).

The reform involved a transfer of the implementation of social assistance from frontline workers within municipal social services to frontline workers working for the national Social Insurance Institution of Finland, (known by the Finnish acronym Kela). One of the key arguments behind the transfer of social assistance from the municipalities to Kela was that municipal social assistance was generally perceived as stigmatizing, while claiming assistance from Kela, which  up until then had administered more universal benefits, would transform social assistance into “a benefit among others” (“Kuka tahansa meistä”, 2015, p. 11) – thus emphasizing the character of the assistance as a cash transfer at the expense of its (original idea of a close) relationship with social work measures within social services.

2 Background and anticipated consequences of the reform

Arguably, the reform was unusual, not only for moving against the tide in regards to the ideas of the benefits of a WSS, but also because its transformation was based mainly on a change of administrator, rather than changes in eligibility criteria. Thus, it was felt that this change of administration would result in less stigma and arbitrariness, among other things (see, e.g. HE 358, 2014), and a strengthening of the social transfer character of the assistance.

Although the legal framework on social assistance scheme itself was not altered to any substantial degree, the reform meant substantial changes for the working of the scheme. Some changes were clear from the outset, while others could only be anticipated at the reform decision stage.

From the point of view of a WSS, the transfer of responsibility from municipal (professionally trained) social workers to Kela officials (not required to have such qualifications) meant that the “people changing” capacity imbedded in the original solution, where social assistance was linked to social work, diminished. Since the reform, the main remaining steering mechanism is perhaps the application of schematic sanctions for non-compliance with activation measures, as defined in the legislation and by Kela implementation directives. The assessments available (Palola, 2014) have shown that such sanctions have seldom been used in practice by municipal social workers.

Prior to the reform, social assistance could be regarded as having functioned as an important entry point for social work professionals in identifying a need for more comprehensive social services. Municipal social workers now learn about the possible needs of social assistance claimants only as a result of assessments carried out (under certain conditions) by Kela benefit officials.

The kind of reform enacted can only be understood against the backdrop of the policy drift that had occurred in the social assistance scheme, especially during the past decade, and when taking into account that the Finnish social assistance system was also already considered one of the most universal variants of assistance in a Nordic/European context prior to the reform due to fairly detailed national eligibility criteria (cf. e.g. Kuivalainen, 2007).

The policy drift regarding social assistance was a result of an increased number of people with a (long-term) need for social assistance due to factors such as high levels of long-term unemployment and insufficient levels of basic social security benefits (unemployment, sickness, etc.) resulting in staff shortages in social services. Thus, many urban municipalities, particularly larger ones, started recruiting “benefit officials” to process the most unambiguous assistance applications in order to cope with the situation (Kuivalainen, 2013). Although professionally trained social workers still played a central role in more challenging cases and had the authority to make alterations and review cases handled by benefit officials, it seems this development blurred the connection between social assistance and personal social services (e.g. in the form of adult social work). The 2017 reform would weaken this connection more still.

There were, of course, varying opinions on what such a reform would result in. In fact, the transference of social assistance administration to Kela had been discussed, with varying intensity for a long time prior to the reform. The Finnish scholars Olli Kangas, Mikko Niemelä, and Sampo Varjonen (2014) have identified four ideational frames through which a reform of the kind now enacted with the social assistance scheme had been proposed or opposed during the last decades in various policy documents.

According to their findings, there were two main lines of argument in favor of reform, which they summarized as:

· A “rightfulness frame that includes arguments departing from an assumption that a national implementation will secure the fulfilment of applicants’ statutory rights to assistance; an,

· “Equality frame including arguments according to which applicants will be treated equally throughout the country as a result of the reform.

There were also two lines of argument against a transference of the social assistance to the state, namely:

· “The social work frame which was based on arguments that the connection between financial help and (other) social work measures will be lost, leaving clients ”on their own,” and

· “The income transfer machine frame which was based on assumptions of national implementation resulting too easily in people applying for assistance, and social assistance being granted to recipients not really in need of it, thus increasing costs.

These frames may also serve as a point of reference when considering results of the reform available so far, as we will do below.

3  A Systemic Perspective on Reform Outcomes

When considering studies concerning the Finnish social assistance reform, taken together in the light of the argument frames just described, one way of summarizing the results could be to say, “Everyone was right and so many things went wrong.”

From the perspective of the social work frame, one can conclude that there has been a transformation of adult social work: on the one hand, social workers in adult social work have fewer clients than before (which of course was an aim of the reform). However, the results available show that the remaining clients have graver problems when coming to social services (Blomgren & Saikkonen, 2018a). In addition to this, social workers seem to have to devote a lot of their time to acting as “clients’ advocates” seen in numerous cases where they have perceived their present and former clients’ social assistance decisions from Kela as incorrect (Linnanvirta, Blomberg & Kroll, forthcoming). These and other consequences of the reform from a client and front-line worker perspective will be discussed in more detail below.

From the income transfer machine perspective, the reform has resulted in a larger number of social assistance applications and more assistance granted, and thus higher total program costs (c.f. Kivipelto, Tanhua & Jokela, 2019). According to the latest statistics (Toimeentulotukitilasto, 2018), however, it seems that the increase in applications, as well as in assistance granted, took place only during the first year after the reform.

From the rightfulness frame perspective, the increase in assistance granted might be interpreted as a sign of increased social rights, through a diminished non-take-up. However, since one of the novelties introduced as part of the reform was a nationwide option to apply digitally, and since there are no comparable data regarding the number of applications rejected prior to the reform, the answer might be more complex. Available studies (Blomgren & Saikkonen, 2018a; Kivipelto, Tanhua & Jokela, 2019; Linnanvirta, Blomberg & Kroll, forthcoming) indicate that the new social assistance system has furthered both old and new applicants with better resources and capacity to navigate the new, in practice, rather heavily digitalized and standardized, application system. Groups that have been receiving social assistance for a longer time, and who have more complex life situations have in turn had difficulties in managing in the new system and thus the social assistance reform has weakened their social rights. Viewed together, it seems that the nationalizing of social assistance has increased the social rights of more (in relative terms) “resourceful” groups, while de facto weakening social rights for less resourceful groups.

Finally, when considering the equality frame argument, the reform has brought with it a more standardized procedure for handling applications, based on extensive written guidelines. However, at least during the initial stages of the new regime, problems have been detected in the correct handling of applications, along with difficulties in applying (the remaining) discretion, which have led to variations and inadequacies in decisions and various negative consequences for clients, especially, it would seem, for those in particularly vulnerable positions (Linnanvirta, Blomberg & Kroll, forthcoming). The reform aiming at more standardized forms of welfare state provision and services, has, thus, not altered the fact that the (new) frontline bureaucrats responsible for the handling of the applications still play a key role in how clients are met with and treated, and in deciding on/processing applications (including decisions lowering assistance as a sanction).

The more standardized and digitalized application process in itself has also created new patterns of inequality, at least for some groups of citizens. As already mentioned above, the new system has disbenefitted applicants in complex life situations (Blomgren & Saikkonen, 2018a; Kivipelto, Tanhua & Jokela, 2019; Linnanvirta, Blomberg & Kroll, forthcoming).

4  Client Perceptions and Experiences

The views of social assistance recipients on the reform have been studied both before and after the reform.  Many clients of social assistance seem to have felt rather indifferent toward the reform before it actually took place, although some of them were anticipating that it could lead to a weakening of social services (Blomgren et al., 2016) because Kela was seen as a more formalistic institution than local municipal social services, for example.

Other results available on reform consequences, based on data of groups comprising some of the perhaps most economically vulnerable social assistance clients (e.g. social assistance recipients living on the bread line, who often had economic difficulties for a long time and with complex life situations) show that a reform of this kind seemed to be difficult to grasp for this group prior to its implementation: this might be related to the fact that knowledge regarding the reform was rather limited among the research subjects. Whether it was based on this fact, or on the fairly strong trust in the Finnish system in general that was also detected, a majority did not anticipate any radical changes for themselves at all (Linnanvirta, Blomberg & Kroll, forthcoming). These client perceptions did, however, change after the reform had been implemented, when a majority of those interviewed regarded the transfer of social assistance from municipalities to the state (Kela) as problematic. Many clients described the behavior of the new frontline workers as being distanced in a negative way, adding that they felt belittled and powerless.

· ”And then, every time, it’s another person deciding and, there’s no-one you could go to, to tell’em what you think about it.”

· ”No-one contacts you from there. Before, sometimes there was a call, or a letter saying can you come by, we’ll talk about this situation, what’s really going on, I mean, not only based on your bank account… .”

· ”There’s just this robot behind the desk tellin’ you ‘Fill in this form’ and then you can only cross your fingers. I mean, there’s no person anywhere anymore.”
Source; Linnanvirta, Blomberg & Kroll (forthcoming)

The new way of implementing social assistance is thus reminiscent of Weber’s concept of formal impersonality and a tick-box type social work, where frontline work is dependent on instructions and procedures, not analysis, judgments, and/or negotiations. The latter aspect in particular, the lack of opportunity to talk to the person who made the decision to grant or dismiss the social assistance application, was perceived as extremely disempowering (Linnanvirta, Blomberg & Kroll, forthcoming). One thing probably adding to such perceptions is the labor division inside the new system in which advisory and decision-making are separate functions. Thus, from a client perspective, this means a loss of the opportunity to participate in decisions concerning themselves, aspects that are important for social citizenship.

On the other hand, it seems that client experiences of the reform vary on the whole. While studies focusing on those clients most in need of social assistance indicate that they have perceived the consequences of the reform mostly as negative, survey studies looking at ‘general’ social assistance recipients indicate that equal proportions of recipients perceive the reform as positive and negative (Airio & Laatu, 2017).

5  The Frontline Workers and the Delivery of Social Services

The consequences of the reform seem rather multifaceted not only from a systemic and individual client perspective but also from a frontline worker’s perspective.

The reform enjoyed relatively widespread support among managers and frontline social workers within municipal social services before its actual implementation (Eronen et al., 2016; Blomgren & Saikkonen, 2018b; Näätänen & Londén, 2018). Survey studies conducted after the reform show that in principle it still enjoys a relatively high level of support among both municipal social workers and managers as well as among Kela officials and managers, and all groups seem to perceive it as easier to apply for social assistance than before. However, municipal social workers, in particular, perceive the reform as having several negative implications in practice. A majority of the social workers think that the reform has weakened the position of the most vulnerable clients, and that clients in need of social work do not obtain it as easily as before (Näätänen & Londén, 2018).

The perception and attitudes of frontline workers concerning social assistance recipients and different social policy interventions (e.g. economic sanctions in cases of non-compliance with the conditions set for the recipient’s assistance) also contribute to the shaping of the service provisions (Blomberg et al., 2015; Nothdurfter, 2016). In this case, several studies showed that views among social security officials at Kela on social assistance recipients and their deservingness varied significantly in various (although not all) respects, compared to those of municipal social workers. For instance, they displayed more individualistic views on poverty and more often blamed clients for their predicaments (Blomberg et al., 2015; Blomberg, Kallio & Kroll, 2016; Blomberg, Kroll & Kallio, 2018). These findings were made years prior to the reform, among officials working at Kela (then handling tasks other than social assistance), but they indicate that treatment of social assistance clients might differ in the two institutions.

When it comes to social work practices after the implementation of the reform, social work in the municipalities seems to be characterized by both continuities and discontinuities. Social workers devote a lot of their time to their present or former clients’ social assistance decisions, and in this way municipal adult social work still has a fairly strong focus on social assistance/economic issues. However, now the social workers’ role is to act as clients’ advocates in relation to Kela when they perceived their clients’ social assistance decisions made as not being correct. This advocacy has occurred in numerous cases (Linnanvirta, Blomberg & Kroll, forthcoming; also Kivipelto, Tanhua & Jokela, 2019).

On the other hand, especially when it comes to new clients, the connection between financial help and (other) social work measures has been clearly weakened, in some cases leaving clients “on their own” (cf. the social work frame above). Kela has an obligation to make an assessment of whether social assistance recipients are in need of social work, and if so, to refer clients to municipal social services. So far this procedure has not been functioning optimally: Kela frontline workers have had difficulties in making assessments, and the information flow between Kela and municipalities concerning clients has been inadequate. Furthermore, in cases where Kela has made a notification “of clients in need of social work” to the municipalities, municipal frontline workers have not been able to contact the clients, or the clients (especially young clients) have not showed up (Kivipelto, Tanhua & Jokela, 2019).  Overall, the ‘new adult social work,’ where financial help plays a very toned-down role, has not, for various reasons, at least as of yet, become a reality in Finnish municipalities.

6  Conclusions

Despite presenting some perhaps problematic findings from the point of view of the Finnish social assistance reform, the aim here has not been to speak in favor of the municipally administered social assistance system as it was designed prior to the reform. It is well known through numerous previous studies, that it too had its own flaws and problems (e.g. Kuivalainen, 2007; Kuivalainen, 2013). The aim has been to reflect on various consequences of this “purely administrative” reform.

Future studies will still complement and, perhaps, alter the picture of the consequences that have been painted in this paper. However, we will finish by trying to summarize some of the lessons that might be learned from the reform so far, lessons that may also be of interest for other systems and other countries seeking to improve service and benefit delivery for vulnerable groups.

The fact that both kinds of concerns and expectations put forward prior to the reform were more or less realized indicates the complexity of the implications that can be expected when making reforms. Outcomes may be very difficult to foresee, even though this particular reform did not alter the requirements for receiving of social assistance, but was “merely” a change of the implementing institution.

The type of reform chosen seemed an unusual way of achieving a change in the perceptions and outcomes of a social policy scheme. And it might be unusual for good reason: in the light of existing research, trying to resolve the main problems of a system “by way of administration” seems at best an uncertain tactic, given the key problems with social assistance. These problems have arguably been, and probably still are: firstly, the fact that too many people have to rely on social assistance because of the insufficient level and eligibility conditions of primary, universal social security benefits (THL, 2019); secondly, social assistance is still characterized mainly by its strict means-testing and other characteristics that underline its differing character in relation to universal basic social security benefits; and thirdly, the fact that social assistance amounts are also very low in comparison to living costs still makes life very challenging and stressful for many recipients, regardless of administrative changes.

However, a reform of this administrative kind has had various important effects. From a system perspective, this “purely” administrative reform seems to have had different effects for different groups of recipients, indicating how challenging it is to reform last-resort benefits that also have a connection to social services. Since recipients of social assistance include both groups whose problems are only temporary and financial in nature, as well as groups with more prolonged economic difficulties and living in challenging and complex life situations, the reform does seem to have had positive (or at least not negative) effects on the former, but negative effects on the latter. From an individual client perspective, the reform seems to have affected, among other things, the latter type of recipients’ feelings of agency and of having an influence over their own affairs negatively, indicating a weakened social citizenship. Thus, at least when it comes to the most vulnerable assistance recipients, who also have been relying on services provided by municipal social workers in order to manage their personal finances, the change has not necessarily been for the better. Also, more generally, it seems as if varying local practices have been replaced by a deepening inequality between those assistance recipients with more and those with less resources of their own to manage their life situations. The new anonymous standardized “equality,” or perhaps better put new “uniformity,” seems to mean more freedom for some, but a burden for others, especially those recipients most dependent on social assistance (Linnanvirta, Blomberg & Kroll, forthcoming; c.f. also Kivipelto, Tanhua & Jokela, 2019).

Perhaps one could even talk about a kind of Matthew effect in social assistance (those who have – in relative terms – will get more) instead of the Pareto improvement hoped for (a reform that would make some groups better off without making other groups worse off). One might even speculate as to whether a new or at least more visible division between social assistance recipients is emerging, a kind of ‘upstairs and downstairs’ even among those with the most limited financial resources. Whether the present type of institutional arrangements will be able to handle such a development remains to be seen.

Of course, the future is always uncertain. At present, there are also plans for a total revision of the Finnish social security system, which will be more than likely also affect social assistance. From this perspective, one could also speculate as to whether the transformation of social assistance might have some influence over future developments too. Might the administrative changes made, which aimed at “normalizing” a means-tested scheme, serve as a Trojan horse for weakening the universalistic elements in social security overall in the future? Even at this stage, it seems as if the reform has blurred the discussion on the basic principle of universalism in social security, among other things.

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Authors’ Adress:
Helena Blomberg & Christian Kroll
Swedish School of Social Science, University of Helsinki
PO Box 16, FIN-00014 University of Helsinki
helena.blomberg@helsinki.fi