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HomeFinlandSweeping Changes Planned for Finland’s Social Security in 2024

Sweeping Changes Planned for Finland’s Social Security in 2024

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The Finnish government is gearing up to implement a series of substantial changes to the country’s social security system in 2024, with far-reaching implications for benefit rates and eligibility criteria. These planned changes, detailed in the government program, will be introduced gradually throughout the year, rather than all at once at the beginning of 2024.

The Ministry of Social Affairs and Health will be tasked with finalizing and submitting the government’s legislative proposals to Parliament for approval.

While comprehensive details are yet to be confirmed, the available information indicates several key alterations, including reductions in unemployment benefits and general housing allowances, alongside increases in child benefits and Kela reimbursements for private doctor consultations.

The specifics of these changes will be disclosed once the government’s legislative proposals are solidified. Kela, the Social Insurance Institution of Finland, is committed to keeping the public informed about forthcoming adjustments throughout the autumn.

Pensions, Disability Benefits, and Housing Allowance for Pensioners

Pensions provided by Kela, including the national pension and guarantee pension, as well as disability allowances and front-veterans’ supplements, will undergo their annual adjustments based on the National Pensions Index. The exact percentage of the increase will be announced on October 13, 2023, affecting payments starting from January 1, 2024.

The eligibility criteria for the housing allowance for pensioners are expected to remain unchanged in 2024, mirroring the criteria in place this year.

Unemployment Benefits

The amounts of unemployment benefits paid by Kela, such as the labor market subsidy and basic unemployment allowance, are set to remain constant in 2024, at €37.21 per day, pending Parliament’s approval of the government’s proposed indexation freeze.

However, significant changes are in store for unemployment benefits, with some slated for implementation at the start of the year and others at later dates. Beginning in early 2024, the waiting period for unemployment benefits will be extended from five to seven days. Additionally, accrued but unused annual leave will impact the initiation of unemployment benefits.

Notably, starting from April 1, 2024, unemployment benefits will no longer include child increases, resulting in a 10–20 percent reduction in labor market subsidies and basic unemployment allowances. The rules governing adjustments to unemployment benefits based on earnings will also be revised, potentially removing the current €300 monthly exempt amount.

To qualify for unemployment benefits, employees will be required to meet an extended work requirement, increasing from six to 12 months. This modification is anticipated to take effect in September 2024, with eligibility based on income rather than the number of hours worked per week.

Child Benefits and Child Care Allowances

Child benefits are slated to receive an initial increase at the beginning of 2024, with further raises scheduled later in the year. These increases will primarily affect child benefits and single-parent supplements for children under three, introducing a higher rate for the fourth child and beyond.

Child care allowances will not undergo their usual index adjustment at the turn of the year, provided Parliament approves the government’s proposal for an indexation freeze. Rates will remain unchanged from those in 2023.

General Housing Allowance

The general housing allowance is poised for changes in eligibility criteria, resulting in lower rates of assistance. The new system will place a heavier emphasis on recipients’ other income, reduce coverage of housing costs, eliminate earned income deductions, and cease payments for owner-occupied homes. Modifications to the basic deductible calculation will partially offset the impact on families with children. These changes are expected to take effect in April 2024, with existing housing allowances adjusted during their next reviews.

The proposed indexation freeze, if approved, will also influence the general housing allowance, affecting criteria such as maximum housing costs.

Social Assistance

Basic social assistance rates will undergo a normal index adjustment on January 1, 2024, following a 10 percent increase in children’s basic amounts for 2023, which concludes on December 31, 2023. Further legislative proposals will clarify and tighten the rules concerning the recognition of housing costs, expected to come into effect in 2024.

Rehabilitation Allowance

Effective from January 1, 2024, the minimum rate of the rehabilitation allowance for young individuals and vocational rehabilitation will be reduced from €36.91 to €31.99 per working day, representing a roughly 13 percent reduction.

Kela Reimbursements for Private Doctor Consultations and Medicine Expenses

Reimbursements for private doctor visits will see a significant increase from the current average of €8, starting January 1, 2024.

The annual maximum limit on out-of-pocket medicine expenses will also rise in 2024. However, it will not undergo double increases to compensate for the lack of index adjustment in the preceding year. Instead, only the 2024 index adjustment will be applied if the government’s proposal is approved.

As these changes progress, Kela will keep the public informed through its website and press releases in Finnish, Swedish, and English. Detailed information will be provided once the government’s proposals have been submitted to Parliament and the parliamentary review process is completed. Brochures in plain language will also be released in early 2024 for customers and partners to navigate the evolving social security landscape.

Source: Helsinki Times

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