Inadequate checks on social insurance in international mobility

Today, many individuals move from one country to another, or work in a different country from where they live. In such cases, the rules on who is covered by Swedish social insurance are complex, and errors are easily made. The National Financial Management Authority estimates that half a billion Swedish kronor have been disbursed erroneously to individuals living abroad in 2021.

The Swedish National Audit Office’s audit shows that checks performed by the Swedish Social Insurance Agency and the Swedish Pensions Agency do not counteract this effectively enough. Deficiencies exist along the entire control chain, from checks in an initial examination to post-payment checks and follow-up.

All in all, the shortcomings lead to undue payments that could otherwise have been prevented or detected, and to some people not receiving support or allowances to which they are entitled.

These problems arise from government agencies relying too heavily on individuals providing accurate information and informing agencies of changed circumstances that may affect their right to compensation.

“The individual obligation to report changes is no substitute for well-functioning checks. The Swedish Social Insurance Agency and the Swedish Pensions Agency have both the mandate and the means to make this more effective,” says Auditor General Christina Gellerbrant Hagberg.

However, the regulations are complex; the number of circumstances that individuals are supposed to report to different government agencies is high, and many years can elapse between a decision to grant a benefit and the recipient having to notify of a change. This increases the risk of unintentional errors.

“A fundamental problem is that the rules are difficult for individuals to understand and for agencies to monitor. While access to information is relatively good, agencies still face challenges in reaching out with the right information at the right time,” says Niklas Österlund, project leader for the audit.

Some government agencies’ information is only available in Swedish, and only accessible to those who have a Swedish bank ID, which exacerbates the difficulties. Individuals who are going to move to or work in Sweden often lack knowledge of the Swedish language and the opportunity to acquire a Swedish bank ID.

Government agencies also take an overly passive approach to post-payment checks and perform few risk-based or targeted checks.

Information exchange between government agencies and the Swedish Migration Agency has improved considerably in recent years. However, a problem that persists is that no automatic indication is sent to the Swedish Social Insurance Agency and the Swedish Pensions Agency when a residence permit has been revoked or withdrawn. This means that payments can continue to be disbursed to individuals who are not covered by the social insurance system.