Organization of the Nordic social policies

In the Nordic countries the implementation of social policy areas is often in the hands of regional or local authorities, such as counties or municipalities. This accounts for both social benefits and services. In the case of the latter, it is very often placed in the hands of local authorities to implement. Reimbursement of local expenditure on social benefits is very common.

The social policy areas are on broad terms financed by taxation, by government or local authorities. However, several differences occur between the countries, when it comes to financing social benefits such as unemployment or pension schemes, where funding based on income or savings is the main source of financing.

Denmark has a three-tiered administration system (national, regional, and local administrations). The parliament and national administration are responsible for the legislation and structure of social policies.

The regional administrations are responsible for the daily operation of health services, including running hospitals and administering services and benefits from the national health insurance scheme.

The municipal administrations are responsible for providing the main social services, such as day-care, and nursing for the elderly or disabled. They are also responsible for paying out some of the different types of social benefits, such as cash benefits, early retirement pension etc. Finally, the municipal administrations are responsible for the administration and provision of active labour market programmes.

The private sector is also responsible for the organization of social policies through labour market agreements on areas such as maternal/paternal leave, labour market pensions etc. The private sector likewise provides social services such as insurance policies, elder care, pension schemes, and so forth.

The Faroe Islands have a two-tiered taxation and administration system (home rule government and local authorities). The government has overall responsibility for legislation on, and administration and payment of most social benefits and the provision of social services. The same applies to healthcare, where operations and administration have been transferred to other authorities.

The local authorities are responsible for day care facilities for children and care for the elderly people, amongst other welfare services. They also pay a small part of the expenditure on local authority doctors, school doctors, visiting nurses, home-care nurses, etc.

Employers and employees in the labour market equally finance the unemployment insurance scheme, which is administered by a board composed of labour market representatives. Employers and employees equally finance parental-leave insurance and the solidary labour market pension funds as well. The schemes are managed independently, and the tax authorities manage the payment of both benefits.

In Finland, the government has overall responsibility for the legislation. The taxation system is two-tiered (national and local authorities), but the administrative system is three-tiered (state, regions and local authorities).

The pension system consists of two parts: an earnings-related pension and a national pension. The earnings-related pension is work-related and insurance-based, while the national pension is awarded to all citizens in the country who receive only a small earnings-related pension or none. Private insurance companies manage the private sector's earnings-related pension schemes. Housing benefits consists of three separate benefits.

The responsibility for organising healthcare, social welfare and rescue services was transferred from municipalities and joint municipal authorities to wellbeing services counties on 1 January 2023. Public healthcare services are supplemented by private healthcare services, the costs of which are partly reimbursed via the public Sickness Insurance Scheme.

Cash benefits in the event of unemployment consists of an earnings-related allowance and a basic allowance. Most employees are covered by the unemployment insurance fund and are entitled to the accrual-based benefit.

Iceland has a two-tiered taxation and administration system (national and local authorities). The government has the main responsibility for legislation, including decision-making and responsibility for social policy. It is also responsible for many social services, hospitals, health centres (primary health care) and home nursing.

Local authorities are responsible for home help, institutions and the care of children, young people and the disabled. Local councils, in cooperation with the national government, are also responsible for services to elderly people.

The government shares responsibility with the labour market parties for income transfers (social cash benefits and pensions). Pensions are administered by the National Social Security Institution (basic pensions) and by an independent pension fund (labour market pensions) administered by the contributors (employees and employers).

The national government administers the Unemployment Insurance Scheme, while many of the sickness benefits come from salaries/wages payable during sickness absence.

Local authorities are responsible for providing social assistance.

Norway has a three-tiered administrative and political system (national, county and local authorities). The same applies to the welfare sector.

The national government, via the National Insurance Scheme, administers most of the social income transfers i.e., unemployment benefits, sickness benefits, rehabilitation benefits (work clarification benefits) and pensions.

The National Insurance Scheme is financed by contributions from employers, employees and the state. The employers' contribution depends on in which of the five counties the enterprise is located.

Local authorities administer and are responsible for social assistance, primary health care, home help and home nursing, and institutions for children, young people and elderly and disabled people.

The national government has assumed responsibility for the hospital sector, leaving the counties with only minor responsibilities in this area.

Sweden has a three-tiered administrative system (national, regional and local authorities). The national government is responsible for most income transfers e.g., sickness benefits, parental benefits, unemployment benefits and the industrial injury insurance scheme, which is administered by the Swedish Social Security Fund. Many pensions come from pensions funds and are administered by the contributors.

The regions are responsible for the hospitals and most of the primary health sector (health centres). The local authorities are responsible for social services such as childcare, child and youth welfare, healthcare and nursing and care for elderly and disabled people.