Over 550,000 social welfare recipients will receive less support from 1 April, according to revised estimates from Finland's Social Insurance Institution Kela.
The changes are part of the Petteri Orpo-led government's package of cost-cutting reforms to social welfare, and will notably affect people receiving general housing, basic daily allowance and labor market support payments.
Over 400,000 households will receive less in general housing support benefits, with those cuts kicking in whenever their next reassessment is scheduled, but no later than March 2025.
From the start of April this year, cuts in basic daily allowance and labour market support will affect approximately 100,000 child supplement recipients and 74,000 work income recipients over the course of the year.
Cuts could be triple whammy for some households
However, head of Kela's Centre of Expertise Pasi Pajula noted that it is difficult to calculate in euros how much of an impact the partially overlapping cuts will have.
"The change may be more than a hundred euros, or even more in some situations," Pajula said.
Many Kela recipients receive two or more allowances, such as those for housing, income support or unemployment. These means that when the changes come into effect simultaneously, cuts to different benefits may impact the same people at the same time.
Furthermore, while an individual benefit might be trimmed by a relatively small amount, if the same household is affected by a reduction in several allowances – and across several members of the household – the overall effect could be significant.
Housing benefit in the crosshairs
Over 100,000 people who rely on labour market subsidies or unemployment benefits will take an additional hit after legislative changes to the child increase payment kick in from the start of next month.
As of 1 April, the government will abolish the so-called "child increases" that Kela pays as a supplement to labour market subsidies, basic unemployment allowances and commuting and relocation allowances.
These payments increase the level of these benefits for recipients with dependent children.
The euro amount of the housing benefit will decrease and, in the future, those receiving housing allowance will need to pay at least 30 percent of their housing expenses with other income.
As of February, there were a total of more than 406,000 households with one or more people receiving general housing allowance.
Kela reassesses the general housing allowance at least once a year, and this is when recipients will feel the brunt of the legislative change.
As part of the package of reforms, unemployment benefit recipients will no longer be able to earn 300-euros a month without their benefit being reduced.
In future claimants will see benefits reduced by fifty cents for every euro they earn through work, whereas at present they are able to earn 300 euros without any reduction in benefit payments.
This exemption will be scrapped from the start of next month for anyone claiming unemployment benefit on or after 1 April 2024.
The removal of this so-called "protective" exemption affects unemployed people who work part-time or gig work and receive adjusted unemployment benefits. Last year, that amounted to more than 74,000 people.
Income support to offset some cuts
According to Kela's report, income support will to some extent compensate for the reductions in other benefits. However, young people, especially those on low incomes, as well as students, will suffer most from the cuts.
While Petteri Orpo's government programme says it aims at halving the number of people receiving income support, Kela spokesperson Pasi Pajula is less optimistic.
"At Kela, we are preparing for an increase in the number of applications for income support and also for the fact that the number of recipients will increase," Pajula noted.
He further emphasised that Kela is not behind the decisions, but its task is to implement the laws passed by the Finnish parliament.
More information, including a calculator that can estimate changes to individual benefits, can be found on Kela's website.
Users with an Yle ID can leave comments on our news stories. You can create your Yle ID via this link. Our guidelines on commenting and moderation are explained here.
