Tax Subsidies and Private Agencies in Sweden's RUT System
Discover how tax subsidies support Sweden's RUT system for domestic services, the role of private agencies, and the influence of trade unions like Kommunal in organizing workers. Explore the benefits, regulations, and impact of this government-subsidized initiative within the Swedish labor market.
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Presentation Transcript
IDWF IDWF Domestic Domestic Workers Conference* Workers Conference* Workers Right and Workers Right and Organizing Organizing in Europe Brussels Brussels ( (Belgium Belgium), 23 ), 23- -24 May 2022 SWEDEN in Europe 24 May 2022 Domestic Workers in the "RUT" system organized by Kommunal (Swedish public services trade union) *supported by EFFAT
Regulation of Regulation of domestic The The RUT / ROT RUT / ROT System domestic work System work in in Sweden Sweden "RUT" is a government subsidized system (tax deduction) for services done in private housholds, introduced 2007 1. "RUT" cleaning and washing, moving services, child services, care servies, garden work andminor installations and repairs to computers and IT equipment ROT repairs, conversion, extension 2. "RUT" is mainly used for cleaning services ( over 90%) and gardening Services can only be accessed through agencies or self employed person (paying corporate tax) Direct employment: regulation through Domestic Workers Act (1970) very rarely used
How How does Tax Tax subsidies subsidies does the the RUT RUT - -system system work work? ? The private household is entitled to a 50% tax reduction on the labour costs (wage and social contribution) up to a maximum threshold of SEK 50.000 ( 4.760) per year per individual(basis: invoice of agency) For the home the person/family lives in For the holiday home For the home of the parents RUT 2019 subsidies: SEK 5.6 billion = 539 million; 1.023.000 users of "RUT" (Sweden population: ca. 10 million Sweden households: ca. 4,8 million) Earn-back effects are larger than the initial costs of the measures Long-term care is not included in RUT , but mainly paid by the municipal governments
How How does Private Private Agencies Agencies does the the "RUT" "RUT"- -system system work work? ? 17.000 private companies ("RUT" system only) Among them: 450 companies which have a collective agreement with Kommunal The collective agreement for Home Care Services is concluded by Kommunal and Almega (Employers organization for service companies) There is no national minimum wage in Sweden the minimum wage in the collective agreement (2019): SEK 21.370 ( 2.034) Companies not covered by the CA can freely negotiate The hourly rate for workers working informally range from 8- 10 ( 1.390 1.740)
Kommunal Kommunal trade trade union union Kommunal is the largest trade union in LO and the second largest in Sweden. Kommunal is represented throughout Swedem Kommunal has 515.000 member (2019) Among them: RUT -System - 3.000 members
Domestic Domestic Workers ( Workers ( RUT RUT ) in ) in Kommunal Kommunal (1) (1) In the cities, mainly migrant women - in the country side more Swedish nationals Migrant domestic workers are mainly from Eastern European countries (difficult to convince to join a trade union)
Domestic Domestic Workers ( Workers ( RUT RUT ) ) in in Kommunal Kommunal (2) (2) Majority is working part-time in several households Commuting time is paid (according to the CA) often violations against this clause Services to the domestic workers: All issues related to the CA Assisting in accessing professinal training Legal Support Search for jobs if needed Working part-time leads to low income Domestic workers complain about bad equipment, exposure to chemical cleaning products (negative impact on health)
Domestic Domestic Workers ( Kommunal Kommunal (3) Workers ( RUT (3) RUT ) ) in in SPECIFIC PROBLEMS DURING THE PANDEMIC: Risk of infection Job losses or fewer assignments but less than expected Compensation paid by governments covers domestic workers but low as it is related to previous income
