Björn Bjarnason urges digital oversight of welfare payments

In a column published by mbl.is, Björn Bjarnason argues that Iceland’s current government finance problems are largely the result of decisions made by the authorities themselves. The state’s benefits and welfare system costs nearly 500 billion Icelandic krónur and is growing rapidly, he writes.

The government has chosen to increase spending instead of making changes to ensure the system’s sustainability. It has responded with tax increases, presenting them as “restraint on the revenue side” of public finances, Bjarnason says.

Higher taxes transfer the problem from those managing the state treasury to taxpayers without adequately assessing whether public spending is justified and necessary. They do not solve the underlying problem, he argues.

Recent reporting on unemployment benefits, disability payments and subsistence support has highlighted the authorities’ fragmented overview. Figures on payments by citizenship or origin do not prove abuse, nor does the number of cases under review prove how many violations have occurred. However, the figures published in recent days have raised questions that the authorities should be able to answer.

These include why certain groups are disproportionately represented in some systems, how many unlawful payments are identified, how much money is recovered and where responsibility lies when a person moves between subsistence support, unemployment benefits, rehabilitation pensions and disability benefits.

Authorities cannot provide adequate answers because each institution oversees only the part of the process assigned to it by law. The Social Insurance Administration monitors its own payments, while the Directorate of Labour oversees unemployment benefits. Iceland Health Insurance monitors payments to individuals and healthcare providers, and municipalities administer financial assistance in their respective areas.

Skatturinn, Iceland’s tax authority, holds information on income, while Þjóðskrá, the national registry, holds information on legal domicile and registered residence. The Directorate of Immigration also has information on residence and protection status when those details have an independent legal bearing on entitlements.

Citizenship or origin should not be treated as a risk indicator, Bjarnason writes. Oversight should instead focus on the conditions for receiving payments and inconsistencies in the data.

“The overall picture is missing. That is the weakness,” he writes.

A joint case registry was established in the Icelandic government administration in the past. It did not merge ministries or remove their responsibility, but laid the foundation for shared organisation, traceability and an overview of data and cases spread across the government system.

The small size of Iceland’s government administration became an advantage, Bjarnason writes, because it was possible to connect the different strands and create a model that could be adapted to larger administrations.

The technical foundation for shared monitoring of state expenditure already exists within Digital Iceland, a project office operated by the Ministry of Finance and Economic Affairs. It works across state institutions and municipalities to build shared digital infrastructure, including Ísland.is and joint application systems.

The aim is for people to access public services in one place while responsibility for those services remains with each institution.

One of Digital Iceland’s foundations is called Straumurinn. It enables public bodies’ information systems to exchange defined sets of data securely and in a traceable manner.

Straumurinn is not a central database. Data remains stored by the institution responsible for it, while other authorities can obtain specific information when permitted by law and required for the task.