Out-of-date income details in SGI decisions lead to benefits being set too low

Sickness benefit qualifying income (SGI) forms the basis for the amount of, and sometimes even the entitlement to, several social insurance benefits – such as sickness benefit or parental benefit. The Swedish Social Insurance Agency makes approximately nine million SGI decisions each year.

The Swedish National Audit Office’s audit shows that the management has become more efficient and that the decisions normally correspond to the individual’s actual income. Despite this, there are discrepancies in both directions – in certain types of cases, the SGI is too low, and in others, it is too high.

The main reason for the largest discrepancy is that a large number of SGI decisions are based on out-of-date information; this is because many people applying for benefits such as parental allowance confirm previous information – even when it is incorrect – and the Swedish Social Insurance Agency only carries out limited checks. The Swedish National Audit Office’s estimates show that this leads to underpayment in around 40,000 cases per year.

Another area of concern is the ‘SGI security’, which allows a person to retain a previously higher SGI. The Swedish Social Insurance Agency’s investigations are resource-intensive, while there are shortcomings in case processing and the risk of errors is high.

Information on annual working hours also risks leading to incorrect benefit levels. Many people applying for benefits do not know what the term means, or what their own annual working hours are, which leads to both resource-intensive processing and a risk of errors. The fact that the Swedish Social Insurance Agency also investigates and determines annual working hours for technical reasons when this is not actually necessary leads to further inefficiency.

“The Swedish Social Insurance Agency could significantly improve its processing by only determining annual working hours in cases where this information is relevant to the benefit in question,” says Elisabeth Rydberg, project leader for the audit.

The Swedish National Audit Office also notes that it is unclear which department within the Swedish Social Insurance Agency has overall responsibility for SGI governance and monitoring. Monitoring of productivity and quality is also incomplete. These shortcomings mean that the Swedish Social Insurance Agency lacks an overall picture of how the SGI is managed, making it difficult to identify the improvements that are needed.

The audit also shows that the management of the SGI is particularly vulnerable during periods of high volumes of cases and resource constraints. During the COVID-19 pandemic, the Swedish Social Insurance Agency therefore made extensive deviations from its own process, and continued to do so in the years that followed due to a strained budgetary situation. This has increased the risk of decisions being based on incorrect information and led to an increase in the number of reassessments.

“The Swedish Social Insurance Agency’s SGI decisions form the basis for the payment of several major social insurance benefits. If these decisions are based on outdated or incorrect information, this can have major consequences for the individual. Furthermore, it can undermine confidence in the social insurance system,” says Auditor General Christina Gellerbrant Hagberg.