Proposals by the Swedish government to introduce a payroll tax on the elderly are expected to badly impact staffing and payroll companies that specialise in placing older workers, reports dn.se. 

There have been a number of recruitment agencies specialising in older workers popping up in recent years, as a result of the reduction in payroll taxes for older workers, which makes specialising in the niche market more profitable.

Under the current legislation, for workers born between 1938 and 1948 there is a tax limit of 10.21%, as opposed to the 31.42% paid for other workers who have not yet retired.

The difference in taxation levels means that companies with pension age temporary agency workers are able to offer companies a lower price in areas such as childcare, cleaning, and housework.

Martin Gidlund, Founder and President of Senior Kraft/Hire a Pensioner (Seniorkraft/Pensionär att hyra) staffing agency, commented: “At the moment we are between SEK 100 (€10.88) and SEK 150 (€16.32) per hour cheaper than others in the industry.”

The government, however, has announced plans to increase the employer contribution for pensions to 18.71%, which would still remain below the level for the rest of the working population.

Mats Claesson, CEO of Veteran’s Pool (Veteranpoolen), which has more than 9,000 older workers, said that the margins are already quite tight, since a large number of persons who each work only a few hours requires relatively expensive administration.

“It is likely that we will have to raise our prices, which will impair our development,” he said, adding that he thinks the proposal is a step in the wrong direction.

“We make a positive contribution to society. Swedes need to work, more and more, and we allow them to continue to participate in working life on their own terms.”