Report on the pay subsidy scheme


Report no. 12/2004

The overall objective of the report is to describe the rules and conditions for pay subsidy employment of insured unemployed people and in continuation of this to evaluate Employment Service (AF) administration of the pay subsidy scheme. In addition, the objective is to examine the Ministry of Employment’s supervision of AF’s administration of the scheme.

The examination covers the period after 1 July 2003 when the Act on an Active Labour Market Policy took effect. The Act singles out the pay subsidy scheme as a central tool in AF’s work in helping insured unemployed people return to full or part-time ordinary employment. Pay subsidies can be granted to private as well as public employers employing an unemployed person with a view to improving his or her competencies.

The examination is based primarily on audit visits to three selected AF regions, where the NAOD examined a total of 179 cases regarding pay subsidy employment of insured unemployed people. The purpose of examining the pay subsidy cases was to evaluate whether AF administers the wage subsidy scheme in accordance with the rules, including whether the cases contained the required information and fulfilled the conditions for initiating pay subsidy employment.