Ghent system

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Ghent system is the name given to an arrangement in some countries whereby trade/labor unions have the main responsibity for welfare payments, especially unemployment benefits, rather than a government or employers.

The system is named after the city of Ghent, Belgium, where it was first implemented. It is the predominant form of unemployment benefit in Denmark, Finland, Iceland and Sweden. In most of these cases, unemployment funds held by unions or labour federations are regulated and/or partly subsidised by the respective national government. Because workers in many cases need to belong to a union to receive benefits, union membership is relatively higher in countries with the Ghent system.