Draft legislation would exempt counselling, training and validation support from income tax from 1 January 2027, while cash-based study assistance remains taxable.
Sweden’s Ministry of Finance has submitted a government referral (Lagrådsremiss) proposing to exempt competence support benefits (förmån av kompetensstöd) from income tax, in a move aimed at removing legal uncertainty that has discouraged employees from taking up training during their careers.
The referral, signed on 27 August 2026, proposes inserting a new section – Chapter 11, Section 17 a – into the Swedish Income Tax Act.
Scope of the exemption
Under the proposal, non-cash support delivered by registered transition organisations (omställningsorganisationer), or equivalent basic support administered by the Legal, Financial and Administrative Services Agency (Kammarkollegiet), would no longer be treated as taxable income. The exemption covers counselling (rådgivning), professional guidance (vägledning), purchased education (köpt utbildning) and purchased validation of skills (köpt validering).
Support paid in cash would remain outside the scope of the exemption and continue to be taxed, including short-term study support and supplementary study support.
Background to the proposal
The proposal follows labour law reforms Sweden introduced in 2022, which established public basic transition and competence support alongside a transition study support scheme. Under the general tax rules currently in force, benefits arising from employment are fully taxable, and because competence support is granted to individuals while they remain in employment, it has continued to be treated as a taxable benefit even though employers do not pay it directly.
According to the Ministry of Finance, this treatment created widespread legal uncertainty, prompting some transition organisations to suspend their training offerings, while a number of employees turned down training opportunities because they could not afford the resulting benefit tax. The Ministry said the exemption is intended to remove this uncertainty, strengthen incentives for employees to pursue training mid-career and improve the overall supply of skills in the Swedish labour market.
Fiscal impact
The reform is projected to reduce annual tax revenues by SEK 0.30 billion, comprising a 0.16 billion SEK fall in personal income tax – of which SEK 0.15 billion reflects lost municipal tax revenue – and a SEK 0.14 billion reduction in employer social security contributions. The Government intends to compensate municipalities for the lost revenue through the 2027 budget bill.
Between October 2022 and September 2025, an average of 7,000 individuals per year received basic competence support, with the total annual value of benefits affected by the exemption estimated at approximately SEK 450 million.
Effect on individuals and pensions
For individuals, the change means no benefit tax will be due on counselling, guidance, training or validation received. The Ministry illustrated that an individual receiving basic guidance valued at SEK 6,000 would save around SEK 2,200 in tax, based on an average marginal tax rate of 35.93%.
Because the benefits will become tax-free, they will also cease to be pension-qualifying, which the Ministry said would have a very minor negative effect on the future public pensions of individuals earning below 8.07 income base amounts – roughly SEK 56,000 a month, or SEK 672,600a year. This effect was described as secondary to the broader benefit of helping individuals secure long-term employment.
Gender equality and organisational impact
The Ministry noted that women have historically made greater use of competence support than men, but said the overall economic impact remains too limited to produce any significant effect on economic gender equality or income distribution.
The eight registered transition organisations, along with Kammarkollegiet, would also be relieved of the administrative burden of calculating and declaring benefit values and paying employer social security contributions on them.
The new provision is proposed to enter into force on 1 January 2027.
