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Controls of subsidised employment need to be more effective

The central government spends SEK 18 billion every year on employment subsidy programmes for around 150,000 people. The Swedish National Audit Office’s audit shows that the design of these programmes can facilitate misuse and that some control elements are ineffective.

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Photo: Maskot

The Swedish National Audit Office (Swedish NAO) has audited the control of employment subsidy programmes.

The audit shows that there are risks related to the design of these initiatives, such as sham employment contracts, poor working conditions and subsidies being paid to people who are not entitled to them. ‘New start jobs’ are especially high risk, since the compensation is high and there are fewer controls than for other forms of support.

The Swedish NAO notes that, while the Swedish Public Employment Service has created an effective chain of controls to counteract these risks, efficiency in the various parts of the chain needs to improve.

For example, the Swedish Public Employment Service’s controls system is not designed to deal with employers who repeatedly abuse the system. New decisions can be approved while there are ongoing control cases related to the same employer.

“Subsidised employment is among the central government subsidies that are considered to have the highest risk of undue payments. The Government and the Swedish Public Employment Service need to take measures here,” says Deputy Auditor General Claudia Gardberg Morner.

Part of the problem is that the Swedish Public Employment Service’s processing requires a lot of administration. IT systems are underdeveloped, with the effect that employment officers have to work in many different systems and enter the same information multiple times. This makes the controls costly and increases the risk of processing errors.

Long lead times before suspected errors are investigated is another problem. There is a risk that money will be paid out unduly over a long period and it is difficult to investigate old cases. The Swedish Public Employment Service seldom reports matters to the police and convictions for abuse of the system are rare.

“The Swedish Public Employment Service needs to improve processing of suspected errors. For example, they need shorter lead times for investigations, new procedures for when subsidies should be suspended and more collaboration with the Police Authority on police reports,” says Yvonne Thorsén, project leader for the audit.

In recent years, the Government has placed great emphasis on reducing undue payments, and prospects of preventing unscrupulous employers have improved. However, the Swedish Public Employment Service’s new duties have suppressed ordinary controls, which has led to longer lead times.

Also, the Government has not provided the Swedish Public Employment Service with adequate conditions for recovering unduly disbursed compensation. Employers who have misused the system can refrain from paying and wait to be sued by the Swedish Public Employment Service, which can take several years or may not happen at all.


The Swedish NAO’s recommendations to the Government include the following:

  • ensure that the risks regarding new start jobs correspond to adapted requirements for controls
  • conduct a review of the system for recovery of undue payments to provide the Swedish Public Employment Service with the means to efficiently recover undue payments.

See the report for the full recommendations.

Subsidised employment

State-subsidised employment has formed part of Swedish labour market policy since the 1980s. Today, around 150,000 people have a subsidised job.

A subsidised job is essentially a normal employment relationship between an employee and an employer. The Swedish Public Employment Service decides on the wage subsidy, which is paid into the company’s tax account.

Those covered by the initiatives are mainly newly arrived immigrants, people in long-term unemployment and persons with disabilities that impair their capacity to work. The Swedish National Audit Office’s audit concerns new start jobs, wage subsidies and introduction jobs.

Press contact: Olle Castelius, phone: +46 8-5171 40 04.

Presskontakt: , telefon: 08-5171 42 06.

Updated: 12 December 2023

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