Unemployment Benefits - Sweden

Sweden

Sweden uses the Ghent system, under which a significant proportion of unemployment benefits are distributed by unions. Unemployment benefits are divided into a voluntary scheme with income related compensation up to a certain level and a comprehensive scheme that provides a lower level of basic support. The voluntary scheme requires a minimum of 12 months membership and a certain degree of employment during that time before any claims can be made. Employers pay a fee on top of the pre-tax income of their employees, which together with membership fees, fund the scheme (see Unemployment funds in Sweden).

The maximum unemployment benefit is (as of July 2007) SEK 680 per day. During the first 200 days the unemployed will receive 80 percent of his or her normal income during the last 12 months. From day 201-300 this goes down to 70 percent and from day 301-450 the insurance covers 65 percent of the normal income (only available for parents to children under the age of 18). In Sweden tax is paid on unemployment benefits, so the unemployed will get a maximum of about SEK 10,000 per month during the first 100 days (depending on the municipality tax rate). In other currencies this means a maximum of approximately £730, $1,650, or €1,100, each month after tax. Private insurance is also available, mainly through professional organizations, to provide income related compensation that otherwise exceeds the ceiling of the scheme. The comprehensive scheme is funded by tax.