Low-income households are eligible to receive a general housing allowance from the Social Insurance Institution Kela for use towards the costs of living in a home which is used year-round.
The number of people who need public support to keep a roof over their heads has shot up dramatically over the past few years. Between the year 2009 and the end of 2012, the total of people who were drawing housing allowances rose by 55,000.
"This is primarily due to the rise in unemployment. With the crisis in the economy, the number of unemployed has grown by 80,000 over the 2008 level. Most households receiving a housing allowance have at least one unemployed adult," explains Pertti Honkanen, a researcher at Kela.
In addition to unemployment, other factors include a growth in the number of single-parent families and of people living alone.
The most common recipient of a public housing allowance is unemployed and lives alone. One out of five people in Finland who live alone get the allowance.
Need for update
The eligibility for and the amount of the allowance depends on a number of factors: the number of persons in the household, the size of the home, the location, building year and heating system of the home, the household's monthly income before taxes, and the household's assets.
There is an acute need for the system of public housing allowances, but also a need for the system to be updated, according to Pertti Honkanen.
"People receiving these allowances are in a tight spot as they represent the lowest income segment of the population. The permitted income level and the amount of the allowances have not kept up with the general development of the level of rents," Honkanen points out.
People in need of help with living expenses have the toughest time in the Helsinki region, where Kela' standard for allowable rent is around 400 euros a month, whereas in reality rents are much higher. Many find that they have to turn to the social assistance office to get enough money to keep a roof over their heads.
"The requirements for receiving housing allowances should be eased in areas where rents are high. The ceiling on income needs to be re-examined, too, so that lower income families with children and people without steady jobs can more easily get help. The present system is rigid," says Honkanen.
Too complex
The programme of the present government calls for a reform in the system of housing allowances before the next elections.
"The system of allowances has two defects. First of all, it is very complex. It is hard for regular people, even for experts to understand how allowances are determined. Then, because of the tight rules, some of the population in need of help don't get it," Pertti Honkanen notes.
The 2013 budget for housing allowances is set at 613 million euros. According to Honkanen, considerably more is need if an upcoming reform is to be more than merely cosmetic.