Changes to unemployment benefits and activity support: what does it mean in practice?

Since October 1, 2025, there have been changes to the unemployment insurance fund and activity support. For many jobseekers, the changes mean lower benefits and increased financial uncertainty. She aim is to more people to find work more quickly. But what happens in practice and who risks being caught out?

The government’s intention is clear: to strengthen incentives to work and reduce the time spent in unemployment. The changes include adjusted benefit levels, stricter conditions and an increased focus on faster transition to work.

For those participating in labor market policy programs via the Public Employment Service , activity support, which for many is already at a low level, will also be affected. All in all, this means that a large group of jobseekers will have less financial leeway during a period that is often already characterized by concern and uncertainty.

The changes have led to extensive discussion and criticism. Many jobseekers report increased stress, difficulties in managing day-to-day finances and a sense of loss of security.

Financial pressure affects more than your wallet. It affects mental health, self-esteem and the ability to make long-term decisions. For those who are already far from the labor market, the pressure risks being an additional an additional barrier to self-sufficiency – rather than a driving force.

At AKG we meet people every day who participate in our operations via the Swedish Public Employment Service. These are people with very different backgrounds and conditions: people with disabilities, language challenges, ill health, long and short absence from the labor market or previous negative experiences of working life and authorities.

For many of these these security is a precondition for change. As the economy becomes more uncertain vulnerability and the focus shifts from development to survival. Instead of being able to take support, training or education, many are forced to put energy into making ends meet. For example, we meet people who turn down internships or training, not because they lack the will, but because they can no longer afford travel, lunches or childcare when the allowance is reduced..

The changes are based on the idea that that lower benefits will act as an incentive to work. But our experience shows that the relationship is not so simple.

For those who are close to the labor market, incentives can play a role. But for people with complex needs, the path to work is rarely linear. It is about building long-term skills, confidence and work experience – often step by step.

By reducing benefits without adapting support, the reform risks having the opposite effect: making people more insecure, less responsive and, in some cases, even further from work.

In today’s systems, success is often measured by how quickly someone leaves an intervention. But real progress looks different for different people.

For some, progress is about improved Swedish. For others, it’s about keeping up routines, building social security or daring to make first contact with an employer. These steps are crucial but are rarely captured in statistics or compensation models.

When the focus is one-sidedly on a quick exit into work or training, there is a risk that quality, individual adaptation and a long-term approach will be overlooked.

Getting more people into work also requires employers to be prepared to open their doors. Internships, induction and tailored jobs are often crucial for people who are further from the labor market. On the positive side, there is often a genuine interest from employers to give the chance to recruit widely

This requires support, time and cooperation. If the thresholds to employment remain high, lowering benefits for jobseekers will not help. Without real opportunities, the reform risks becoming a financial constraint rather than a route to work.

The changes in unemployment insurance and activity support highlight a larger systemic problem. Labor market interventions work best when authorities, providers like us at AKG and employers work towards the same goal with the individual’s development in focus.

Today, many providers feel that they carry out assignments according to detailed regulations, but with limited influence over how the efforts are designed. At the same time, we face the consequences when the system is not flexible enough for the individual’s needs, which thus affects the outcome and result of the service.

Getting more people into work is a goal we share. But if the way to get there is based on increased financial pressure rather than improved conditions, there is a clear risk that the reform will miss its purpose.

Security and development are not opposed to each other. On the contrary, security is often the basis for people to dare to take steps, try new things and approach the labor market in a sustainable way.

For the changes to have a real impact, more is needed than adjusted benefit levels. It requires:

• individualized interventions that are followed up in more depth by agency officials

• measuring actual development, not just outflow

• stronger engagement with employers

• time and resources for suppliers to build long-term solutions

If we want more people to get closer to the labor market, we need reforms that are based on reality. Otherwise, we risk continuing to criticize a result that the system itself has produced.

Aralia Eriksson, CEO AKG Sweden