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Sweden: Refugees immigration doubles the state’s costs for Pensioners

In the 2017 government letter, the Pension Authority was commissioned by the government to report the effect of migration on pension levels and the basic protection for the elderly; guarantee pension, housing allowance and elderly support. The authority also has the task of following, analyzing and communicating the development and effects of the Pensioners pension system for individuals and society.

Via: di.se 

In the 2017 government letter, the Pension Authority was commissioned by the government to report the effect of migration on pension levels and the basic protection for the elderly; guarantee pension, housing allowance and elderly support. The authority also has the task of following, analyzing and communicating the development and effects of the Pensioners pension system for individuals and society.

– As immigrants’ living income is expected to be significantly lower than others, their income-based pensions will need to be filled out with basic insurance benefits. However, when the majority of those who come here as asylum immigrants are relatively young, it will take a long time before the increase in expenditure will go through completely, “says Ole Settergren, chief analyst, the Pension Authority.

The majority of immigrants who came to Sweden for the past 30 years have done so for asylum or fornication reasons. In recent years, the majority have come from countries outside Europe with low or medium so-called Human Development Index (HDI). HDI is a measure used by the UN to reflect the welfare of the country in question, based on the country’s gross national income, the population’s expected life expectancy and the level of education.

– Among today’s foreigners from overseas countries with low or medium-sized HDIs, 65 years of age or older, today, around 80 percent have either a guarantee pension or housing allowance and elderly support. If the historical life-income pattern persists, it is estimated that the proportion is largely on similar levels, says Ole Settergren.

Future immigration to Sweden, according to Statistics Sweden’s March 2017 forecast, will reach around 180,000 people in 2017 and in a few years more than 110,000 individuals annually. By 2060, today’s foreign born from countries outside Europe with low or medium HDI, who have reached the age of 65 will be as high as possible. Expenditure on basic protection will therefore gradually increase until 2060 to subsequently decrease.

“If their life-income patterns correspond to today’s foreigners, then the state’s basic protection costs will depend largely on the number of individuals,” says Ole Settergren, adding:

– Naturally, there are great uncertainties in these calculations. An integration that succeeds better or worse, and as such increases or decreases the lives of affected individuals, can of course have a major impact on the state’s basic protection costs, “concludes Ole Settergren.

Background

In the report, the population in Sweden is divided into seven different groups according to which part of the world the person is born. In addition, countries beyond Europe have a further breakdown based on the country’s Human Development Index (HDI), which reflects the country’s gross national income, the population’s expected life expectancy and education level.

1- Swedish-born
2- Norden
3- EU except the north
4- Other Europe except EU
5- High-HDI
non-Europe countries 6 Countries outside Europe with funds HDI
7- Countries outside Europe with low HDI

Expenses for basic protection incl. The tax expense for today’s foreign born from the 6th and 7th country groups is estimated at 2060 in the amount of approximately 22 billion, expressed in today’s wage level. This corresponds to approximately 0.4 percent of gross domestic product (GDP).

Per individual, it is an average of SEK 7,600 per month. The protection of foreigners from the groups 2-5 is estimated at almost SEK 10 billion, which corresponds to approximately SEK 2,000 per person per month.

Corresponding protection for all elderly regardless of whether they have immigrated or not today amounts to approximately SEK 43 billion or about SEK 1,800 per person per month. The latter expense is estimated to increase to about SEK 1,900 per person per month in 2060 if retirement age is not raised because the continued life expectancy is otherwise expected to reduce income-related pensions, which leads to an increased need for basic protection.

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