SWEDEN - Sweden plans to scrap the special employer's contribution for all workers to encourage the employment of older people.

The special tax raised on wages of older employees since 1990 was to function as substitute for social insurance contributions made by the employees. But employers were weary to pay the 24.26% extra for an already expensive employee.

Since January the special employer's contribution has been discontinued for employees born after 1938. However, in its spring budget the Swedish government now suggested to scrap the tax altogether, that means also for people born before 1938.

The measure should see more older worker being retained or employed by companies - the government hopes. In the autumn budget it stated that the measure is to help "make better use of older people's potential in the prevent exclusion and facilitate employment".

Similarly, the Icelandic prime minister said he will put in place measures to ensure older people get the chance to work if they want to and sufficient pension provision in their retirement.

"The nation needs the experience and knowledge of the elderly," Geir Haarde, prime minister and leader of the Independence Party, was quoted by the Icelandreview daily.

He wants people over the age of 70 to be able to work without their pension being cut. Furthermore, he wants to provide every person with a minimum pension of around ISK25,000 (€281) from the state pension fund even those that did not acquire rights. This would be a payment additional to the regular pension from the social security system.

"I believe it is natural for the state to secure a minimum pension from the pension fund for everyone," Haarde said.

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