Recipient of financial social assistance
Means tested benefit
Social assistance is a strictly means tested benefit. Usually, all other means of income must be exhausted before becoming eligible for social assistance, including the resources of other family members in the household. The recipients could be required to realise certain financial assets or move to a more affordable dwelling.
Social assistance in general is based on the principle that everyone should be guaranteed a reasonable standard of living, which includes an adequate minimum income.
Common Nordic benefit properties
There are differences in the form of social assistance between the Nordic countries, but common properties include support for ordinary living and housing expenses which are often covered in full.
Some countries concentrate more on cash benefits where others offer a wider variety of free services, and the amount of discretion regarding extraordinary expenses varies a lot. Eligibility to social assistance tends to include some nationality and residency requirements and conditions relating to work availability.
Comparison between countries
The social security systems of Nordic countries are close to each other’s in many respects. The benefit with the least common ground among the countries is arguably social assistance, where the target group, means testing and the form of organisation of the benefit often differ between countries. For instance, in some countries the social assistance and unemployment benefits are very closely combined whereas in other countries they function more as independent benefits.
Social benefits, services and taxation of a country form an entirety, which is not apparent when focusing only on individual forms of support. The form and need for the organisation of the social assistance will inevitably be affected by the extent to which a country's priority benefit system operates. Thus, only comparing the level of social assistance between Nordic countries does not tell the whole story, because the level of the measure of last resort is heavily dependent on how much and what kind of other help was available before this stage.
There are large varieties in the chosen implementation strategies for social assistance, which are reflected in the countries’ compensation rates. The compensation rates in Denmark are high and Norway are rather low, while the other countries lie somewhere between these two.
There are also differences in the size of the intended target group for social assistance. In Norway almost all unemployed people are entitled to unemployment benefits, thus reducing the need for further social assistance. In some other countries, like Sweden and Denmark, parts of the unemployment benefit are dependent on the membership in an unemployment insurance fund. Not belonging to such a fund increases the likelihood of receiving social assistance.
Please refer to the section on Social assistance, for more specific information on rules in each of the Nordic countries.
The two graphs show the calculated compensation rates for single persons with or without children comparing the income level after receiving social assistance with the income level from work. The income level compared is at 75% of the average wage. The calculation is equivalized with respect of size of family to secure comparability.
The compensation rates in all countries are lower for single persons without children than they are for single with a child. Faroe Islands have the highest compensation rates in both cases. For a single person with a child, Sweden has the lowest compensation rates and for a single person without children, Norway has the lowest compensation rates. This is the case in all income levels.
The calculated compensation rates shown in the two graphs for couples compare the income level after receiving social assistance with the income level from work. The income levels compared is at 75% of average wage for parent on benefit and 100% of the average wage for the other parent. The calculation is equivalized with respect of size of family to secure comparability.
The compensation rates in all countries are lower for couples than they are for single people. The compensation rates for couples are lower for couples without children than for couples with children. Faroe Islands have the highest compensation rates for couples with two children and Denmark has the highest compensation rates for families without children. Norway, closely followed by Sweden, have the lowest compensation rates in both cases.