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Significant differences in the penalties of the Swedish Unemployment Insurance Funds in the event of negligence or misconduct

There are significant differences in how often the various unemployment insurance funds administer penalties when unemployed persons fail to actively seek jobs or break the rules in other ways. The Swedish National Audit Office recommends that Swedish Government and the Swedish Unemployment Insurance Board (“Inspektionen för arbetslöshetsförsäkringen,” or “IAF”) ensure that the unemployment insurance funds receive better guidance on how to deal with the regulations.

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Through unemployment insurance, unemployed persons may be eligible for unemployment benefits provided through any of the 27 independent unemployment insurance funds (known as “a-kassor”). In the course of 2017, the a-kassor disbursed a total of approximately 12.4 BSEK to just over 220,000 job-seekers.

In order to receive unemployment benefits, the job-seeker must be actively seeking employment and must submit activity reports to the Swedish Public Employment Service. In the event of misconduct, the Swedish Public Employment Agency informs the relevant unemployment insurance fund by issuing a so-called “notification.” In 2016, the Swedish Public Employment Service issued approximately 195,000 notifications.

For some time, there have been signs of major variations in how the various unemployment insurance funds process the notifications they receive from the Swedish Public Employment Service, as well as the extent to which these result in penalties and the suspension of benefits.

The Swedish National Audit Office has therefore used statistical analysis to examine whether the unemployment insurance funds apply the rules equivalently. The findings of the audit show that there are significant differences between the unemployment insurance funds when it comes to the frequency with which notifications lead to penalties.

The fact that a member of one unemployment insurance fund is probably at considerably less risk of losing his/her compensation as a result of a breach of the terms and conditions of the policy than a member of another unemployment insurance fund is a clear indication of equivalence deficiencies – and that’s not the way things should be, says Auditor General Stefan Lundgren.

The differences could not be explained by differences in the types of cases handled by the various unemployment insurance funds, nor by the education and income levels of their members. Instead, a plausible explanation is that the differences occur because the unemployment insurance funds apply the regulations differently.

About eight out of ten notifications pertain to job-seekers who have submitted their activity reports late without a “valid reason.” It is therefore important that the unemployment insurance funds use a standard, common application of the concept of “valid reason.”

The unemployment insurance funds want clearer guidance from the IAF in the form of provisions on “valid reason.” Such provisions do not currently exist, because the IAF lacks the authority to issue them, explains Anton Ringström, the project manager for the audit.

The audit also shows that the unemployment insurance funds want further guidance in the form of general advice on how the rules should be interpreted. It is the assessment of the Swedish National Audit Office that clearer guidance may contribute to greater equivalence in the application of the regulations.

Big differences in how the unemployment insurance funds deal with job-seekers threaten to undermine public confidence in the unemployment insurance system, and thus the legitimacy of the entire system, says Stefan Lundgren.

The Swedish National Audit Office therefore recommends that the Swedish Government review the IAF's mission in order to clarify the insurance policy regulations. It is recommended that the IAF issue general advice on the application of insurance policy in areas with unclear case law and where large disparities in the application of the regulations have been noted.

Press contact: Olle Castelius, phone: +46 8-5171 40 04.

Presskontakt: , telefon: 08-5171 42 06.

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Updated: 14 January 2019

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