Fraud in the welfare state

Who has the right to welfare benefits? That has always been a sensitive question. It does not become any easier to answer when more and more people live transnational lives – living, working or studying abroad for parts of the year. 

In reality, EU and EEA member states – including Norway and Iceland – decide who should receive unemployment benefits, parental pay, child benefits and so on. But the European cooperation also gives rights to citizens. It is not only goods and capital that should float freely. People can also move freely and work in other countries. It should therefore be possible to carry the rights you have earned in one country to another. 

This is where Norway’s welfare agency NAV has made a fundamental mistake, which first came to light on 28 October this year. The Minister for Employment and Social Inclusion Anniken Hauglie, the head of NAV Sigrun Vågeng and the Director of Public Prosecutions Tor-Aksel Busch appeared at a joint press conference to announce that Norway had been misinterpreting EEA rules since June 2012. 36 people might have been wrongly sentenced to prison terms, accused of benefit fraud, and 2 400 people might have been asked to wrongly pay back large amounts of money.

Since then, the scandal has broadened. There is now the question whether the misinterpretation began as early as in 1994, when the EEA agreement was signed. Despite the scope of the scandal, the total sum of money wrongly claimed back might not go beyond 100 million Danish kroner, the sum embezzled by Britta Nielsen from the Danish National Board of Social Services. 

One single person – with a mandate to choose the account numbers for pay-outs to charities and individuals – wrote her own account number instead, and spent the money to buy gold and diamonds as well as a house and cars in South Africa. 

Is the employer partly to blame when control is so lax? And what about when employees at the IT giant Evry tells the Aftonbladet newspaper about inhuman pressure to perform interviews on behalf of Statistics Sweden in as short a time as possible? Does the company carry any responsibility if employees cheat? This too is now the topic of an investigation.

What consequences will these three scandals have for people’s trust in the authorities in charge of distributing welfare payments? In this newsletter we have interviewed school cleaners, but we also have a portrait of the richest thousandth of Finns – those whose wealth surpasses one million euro. Two Finnish researchers have asked 90 of them about their views on taxes, the business climate and work.

Many of the millionaires are directors and describe themselves as active, hard-working and full of initiative. People who get help from the social safety net are characterised as lazy, lacking in initiative and of poor working morals.

The NAV scandal shows these are views shared by more than the richest one per mille. It has permeated the whole of society. Because neither politicians, authorities, the courts or the media took the weakest’s side when they lived their lives as Europeans. So it is some comfort to know that authorities sometimes do show generosity, like when Sweden misinterpreted EU rules.