Organization of the Nordic social policies

In the Nordic countries, the social policy area is in general a public matter, divided by national, regional or local authorities.
Responsibility for the legislation on social policy areas rest with parliaments and the overall structure and responsibility for implementation rests with national governments.

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 authorities). The tax system is two-tiered; only the state and local councils are authorised to levy taxes.

The overall responsibilities for the legislation and structure of social policy rests with the parliament and national government. The local and regional authorities administer and pay for most social benefits and services.

The local authorities are responsible for the main social benefits, rehabilitation, housing benefits, benefits to refugees and social assistance; and meet the costs of those benefits in the first instance. The costs are subsequently reimbursed, fully or partly, by the state. Payment Denmark also administer and pays out some benefits.

The local authorities are responsible for employment measures aimed at the insured and non-insured unemployed, and at the remaining target groups (rehabilitation, sickness benefits, etc.). The local authorities are also responsible for cooperating with enterprises on employment measures. However, the voluntary unemployment's insurance funds also administer and pay out unemployment benefits.

Local authorities are responsible for administering the main social services e.g., day-care, residential institutions, preventive measures aimed at children and adolescents, housing for disabled people and socially vulnerable groups, as well as care and nursing for elderly and disabled people (home nursing, home help, nursing homes, etc.). The costs are financed by local taxation and block grants from the government.

The regional authorities have day-to-day responsibility for the health services, including running hospitals and administering services and benefits from the national Health Insurance Service e.g., payments to general practitioners and dentists, as well as subsidies for medication. The regional authorities' expenditure in the healthcare sector is financed by block grants from the government and contributions from local councils.

Faroe Islands

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.

Local councils are responsible for the health and social services provided to all residents in the areas they cover. 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, county 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 county authorities are responsible for the hospitals and most of the primary health sector (health centres). The local authorities are responsible for home help and home nursing, social assistance and institutions, and care for children, young people, and elderly and disabled people.