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Separate solution for TE services reform outlines responsibilities for financing integration services

Ministry of Economic Affairs and Employment
Publication date 14.12.2021 12.18 | Published in English on 17.12.2021 at 9.57
Press release
Immigrant woman and boy study in school.

The Ministerial Group on Employment outlined a separate solution for the TE services reform 2024, specifying responsibilities for financing integration services. The solution takes into account the special features of integration, but at the same time encourages municipalities to develop services and promote the integration and employment of immigrants at a very early stage of integration. 

In the reform of employment and economic development services (TE services), the intention is to increase municipalities’ responsibility for financing unemployment security while removing the link between unemployment security and activation services. 

After the changes, municipalities will also have to finance unemployment benefits for the days when the jobseeker is participating in employment services. These days will also increase the unemployment day counter that forms the basis of responsibility for financing services. 

However, with regard to responsibility for financing labour market support payable during the integration plan and integration training, the Ministerial Group on Employment proposes a separate solution in order to maintain the best possible incentives for municipalities to promote the integration and employment of immigrants. 

For refugees, the day counter will be frozen for three years

According to the separate solution, the day counter forming the basis of responsibility for financing unemployment benefits will be frozen if the municipality pays unemployment benefit based on integration. For refugees, the freezing of the day counter will last for three years, for other immigrants one year. 

It is considered that the impact of the separate solution on the employment target will be minor and that it is justified because the employment of jobseekers with a foreign background, particularly refugees, is often slower than for other jobseekers. 

Although the objective of the upcoming reform of the Integration Act is to accelerate integration, integration training often lasts longer than other employment services. The activation rate of immigrants is also often high, so municipalities in the current situation will not finance the employment benefits of those in integration services to any significant extent. 

Integration training to be compensated via system of central government transfers to local government

Public funding of employment services amounts to approximately EUR 700 million per year, of which approximately EUR 50 million is allocated to integration training. 

The ministerial group also decided that municipalities will be compensated for this integration training organised as labour market training, mainly as part of the system of central government transfers to local government and on the basis of the foreign language criterion. However, part of the funding to be spent on integration training for refugees, an estimated EUR 20 million, will be allocated to municipalities as part of the imputed compensation payable for the reception of refugees and the promotion of integration. 

Financing solutions will be cost neutral

The financing solutions now decided will better take into account the general financing solutions of the TE services reform with regard to the differing situations of municipalities in terms of numbers of integration customers. The separate solution also supports municipalities’ opportunities to organise services that promote integration and employment at the very early stage of integration. The financing solutions will be implemented in a cost-neutral manner.

Iiris Niinikoski, Special Adviser to the Minister of Employment, tel. +358 295 047 372 
Paula Karjalainen, Ministerial Adviser, tel. +358 29 504 7117

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