EXPLAINED: How does Sweden's income protection system work?

If you become unemployed in Sweden, you can be eligible for income-related insurance benefits comprising up to 80 percent of your previous salary. But that will only be the case if you understand how the system works and sign up to make voluntary contributions.

Published: Fri 2 Jun 2023 09:22 CEST
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Joining a Swedish unemployment fund can give workers greater financial security. Photo: Getty Images

Here, we explore the differences between the basic state benefit and the much more generous provision through optional unemployment funds.

How does unemployment insurance work in Sweden?

Unemployment insurance in Sweden is provided by a set of voluntary funds, which you may not know about if you’ve moved to Sweden from abroad. Membership of an a-kassa (short for arbetslöshetskassa, which means unemployment fundcan ensure you still receive the majority of your previous salary if you lose your job.

Anyone who works or has worked in Sweden may join an a-kassa and there are a range of different funds you can join with different membership fees. You don’t need to be a member of a union to join an unemployment fund.

Unemployment insurance is covered by the labour market contribution that employers and self-employed workers pay into the state, as well as membership fees for a-kassor (that’s the plural of a-kassa). 

There’s also a limited state provision known as grundbeloppet (the basic amount) to cover you if you’re not a member of an a-kassa or have been a member for less than 12 months.

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How much benefit can you be entitled to?

The higher sum you receive from an a-kassa of which you're a member is to cover you in between jobs. It's calculated so it's not so low that you may end up taking a job below what you'd expect with your skillset, but also not so high that you don't have an incentive to find a new long-term position.

If you meet all the criteria for an a-kassa, you can get up to 80 percent of your previous income, capped at 1,200 kronor a day before tax (26,400 kronor a month). You can get this amount for the first 100 days of unemployment. For days 100 to 200, you can still receive 80 percent of your previous income but the cap is reduced to 1,000 kronor a day before tax.

From day 201 to 300, the compensation level is 70 percent of your previous income, with the daily cap remaining at 1,000 kronor a day before tax.

For the basic state insurance, the maximum amount that you can receive per day is 510 kronor before tax, if you worked full-time for the last 12 months.

If you worked less than that, you'll get a corresponding amount depending on time worked. For example, if you worked full-time for the last six months, you'd be entitled to half the basic amount, which is 255 kronor per day

Unemployment benefits, whether paid from the basic state insurance or an a-kassa, are paid for a maximum of five days per week and a maximum of 300 days. This is extended by 150 days, however, if you're the parent of a child under the age of 18 on the 300th day and you're still without work.

Office workers in Sweden are usually members of an a-kassa. Photo: Getty Images

Who can receive unemployment benefits through an a-kassa?

There are a number of requirements to fulfil to qualify for benefits. Members of an a-kassa must:

  • Register at Sweden's Public Employment Agency, Arbetsförmedlingen, look for work and be available to work
  • Have worked a minimum of 60 hours a month for six months in the past year
  • Have been a member of an a-kassa for at least 12 months before receiving any income-related benefits 

To receive benefit payments, you have to prove your previous employment, usually by asking your employer to give you a certificate of employment and sending off all relevant documentation. The unemployment fund will then give you their decision about how much insurance you're entitled to, and you'll receive the benefit directly from the fund. 

Protecting your income by joining Akademikernas a-kassa costs just 130 kronor per month – find out more

Who can't receive unemployment benefits through a-kassa?

If you've never had a job or haven't worked the hours required, you're not eligible for the full benefits. 

In order to get the basic state unemployment insurance, there are a number of requirements to fulfil where the unemployed person must:

  • Register at Sweden's Public Employment Agency, Arbetsförmedlingen and be available to work
  • Be over 20 years old
  • Be available to work for a minimum of three hours daily and 17 hours weekly and prepared to accept any suitable job offer received
  • Have worked a minimum of 60 hours per month for six months during a period of 12 months to collect the full amount
  • Or have worked at least 420 hours in six consecutive months, with at least 40 hours in each month, to collect a portion of the amount

How many people benefit from an a-kassa in Sweden?

According to the Unemployment Report (Arbetslöshetsrapporten), recently published by Akademikernas a-kassa, 3.9 million people were members of an a-kassa in 2022. This equates to almost 73 percent of the workforce (16-64 year olds) or three out of four working people.

In 2022, almost 197 000 people were unemployed, part-time unemployed or had temporary hourly employment, making them potential recipients of unemployment insurance. Forty percent of these people met all the work conditions and received payments from an a-kassa.

The unemployed who were not a-kassa members were often unable to qualify for the basic unemployment insurance as well, due to not having worked the required hours before unemployment.

A Stockholm street scene. Could you feel more secure in daily life with stronger income protection? Photo: Getty Images

Why join an a-kassa?

The Covid-19 pandemic and the war in Ukraine have put a strain on the cost of living and inflation is at its highest for 30 years.

According to the unemployment report by Akademikernas a-kassa, an average of 325,000 people aged 20–64 were unemployed in Sweden in 2022, which corresponds to 6.3 percent of the workforce. Some analysts predict unemployment in Sweden will rise this year. 

One of the big challenges is long-term unemployment. In 2022, there were 162,000 people who had been unemployed for longer than a year, which is 47 percent of all registered unemployed people.

"In most of the EU and the UK unemployment insurance is compulsory but in Sweden it’s partially voluntary," says Alexandra Oljans Ahlin of Akademikernas a-kassa. "It’s important to become a member in an a-kassa to be entitled to the full income insurance benefits available and not only the limited state provision."

Some unemployment funds are linked to professions or you can join a broader fund, such as Akademikernas a-kassa, which is Sweden's largest a-kassa. It's open to university graduates who are employed or self-employed, as well as students and those who have graduated with the equivalent of a Swedish bachelor's degree from abroad. 

"We know our members' labour market and we want to provide our members with the best service," Oljans Ahlin adds. "In the most recent survey of all a-kassa, we received the highest rating – our members were the most satisfied. It costs just 130 Swedish kronor per month and members can receive up to 80 percent of their previous salary when between jobs."

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