Finland to scrap Universal Basic Income scheme after two-year trial

Finland is to scrap a pioneering universal wage scheme that paid people a flat monthly fee rather than unemployment benefits.

The Finnish Social Insurance Institute - known as Kela - introduced a two-year trial of Universal Basic Income (UBI) in January last year , which saw the government pay citizens a monthly stipend of €560 (£490).

The trial was heralded as a possible solution to a future in which there will be increasing amounts of automation and rising inequality.

Across the country, 2,000 unemployed people between the ages of 25 and 58 were randomly selected for the experiment, which received international recognition for its potential impact on social security and was a European first.

Facebook CEO Mark Zuckerberg and his Tesla and SpaceX counterpart Elon Musk were among the high-profile supporters of UBI, but the Finnish government has announced it intends to scrap the project.

Under a full roll-out of UBI, all citizens - not just those looking for a job - would have been guaranteed the same monthly payment.

Its backers say it would help tackle poverty and inequality as people would not have to worry about making ends meet - and it would encourage the unemployed to find work.

But the government has rejected a request from Kela for additional funding to expand the trial to encompass a selection of people currently in work, and has decided to cancel the project once the trial ends in January 2019.

Miska Simanainen, a researcher at Kela, told Swedish newspaper Svenska Dagbladet that the government would now pursue changes that would "take the system further away from a basic income".

His colleague, Olli Kangas, told the Finnish broadcaster YLE that the scheme required a longer trial before any final decision was made.

"Two years is too short a period to be able to draw extensive conclusions from such a big experiment," he said.

"We should have had extra time and more money to achieve reliable results."

In December, Finnish MPs voted through legislation to make some unemployment benefits contingent on people taking part in training or some form of work for at least 18 hours over the course of three months.

Finance Minister Petteri Orpo has told Swedish newspaper Hufvudstadsbladet that he was considering a number of alternatives to UBI, including a universal credit system similar to the one introduced in the UK .

In the meantime, Kela has pledged to remain in touch with the 2,000 people involved in the UBI trial to analyse its long-term impacts.

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