Service voucher

A service voucher is a financial instrument which allows a public authority to target social services at those it deems in need, and at the same time to promote employment and labour market integration. It effectively boosts demand for certain services which meet social policy objectives.

A voucher scheme will typically start by defining services which are needed in society, but which are being supplied neither by the market nor by the public sector. These might include for example home care, household repairs, ironing, or bicycle hire and repair. The activities within the scheme will typically be agreed with trade unions and employers' organisations, to avoid concern about the disturbance of unfair competition.

Potential providers of these services are identified, often from among the long-term unemployed.

Vouchers are sold to people who want to use the service. The price is subsidised, so that on the one hand the service is affordable - and for instance can compete with informal (illegal) work - and on the other provides decent condition working for the employees (including social insurance cover, holiday pay etc.). An example of this kind of subsidy regime can be found in Belgium, where service vouchers for house cleaning, laundry, ironing, sewing, cooking, running errands, and transport for people with reduced mobility are sold to people who require these services. Each person residing in Belgium with an ID card and SIS card is entitled to a quota of 500 service vouchers a year, with the first 400 service vouchers sold at a rate of 9 EUR each, and remaining 100 service vouchers sold at a rate of 10 EUR. In addition, each household has a quota of maximum 1000 service vouchers, with exceptions given to single parents and people with disabilities, who may be entitled to 2000 service vouchers, depending on the circumstances. Mothers who have just given birth, are also entitled to 105 extra service vouchers for a certain period of time. This initiative was made in order to combat the black market and has resulted in the creation of many jobs. This subsidy scheme allows for domestic workers to be declared and benefit from a legal salary, health insurance, paid holidays, and a pension; benefits that were not all possible when working on the black market. For each service voucher, a domestic servant receives a salary of 22.05 EUR, paid by both the customer and the state. In addition, tax breaks are also given to each service voucher, creating another incentive to purchase these services. Similar systems exists in France and in Sweden.

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