Friday, October 10, 2014

More expensive to hire older – Swedish Radio

More expensive to hire older – Swedish Radio

For the third time in modern history leaves the civil government for the big hole in the public finances, we have a surplus of over two percent, we borrow ten million per hour now, says Magdalena Andersson and continues:

– In order to then be able to implement the necessary reforms, to deal with youth unemployment, with the school, the tears in welfare, so we will also have to raise some taxes.

The Government wants to strengthen Treasury by 18 billion next year. More than two billion will come from the increase in the fee paid by the employer to employ people over 65 years, the so-called special payroll tax.

It thus becomes more expensive for firms to hire older.

Alliance lowered the special payroll tax in 2007, and it, along with those over 65 years had a higher earned income tax credits, resulted in more people reaching retirement age continued to work. So says a study from the Institute for Labour Market Policy Evaluation, IFAU.

– These reforms led to an increase in employment by 1.5 percentage points during the year after the 65th anniversary, says researcher Lisa Laun at IFAU.

The study can not to deduce what affected the employment increased the most, the lower the payroll tax or the higher tax deduction. But both reforms together gave more then 65-plusare the job.

The problem is that the jobs have been costly for the state, the money that comes in through the tax from the beneficiaries is not sufficient to finance the reform.

– The effect does not seem to be large enough to offset the costs of the tax cuts, says Lisa Laun.

But even if the payroll tax for those over 65 now becomes higher than before, so it will still be cheaper to hire them because the total employer contributions are lower for the group.

– It is still a very favorable tax treatment of persons over 65 who are working, says finance minister Magdalena Andersson.

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