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Budget

Report: Over 400,000 living on less-than-minimum budget

More than 400,000 Finnish householders or some eight percent of the population are living on incomes that are below the minimum budget of 669 euros a month – excluding housing costs. According a new report released by the National Institute for Health and Welfare THL, single dwellers, single parents, students and the unemployed are most likely to fall into this group.

Äiti lapsi sylissä katselee ikkunasta ulos.
Single dwellers, single parents, students and the unemployed are most likely to fall into the group of people living on less than minimum incomes. Image: Henrietta Hassinen / Yle

According to the results of a new survey released by the National Institute for Health and Welfare THL, roughly eight percent - or 440,000 - of Finnish residents are getting by on incomes that fall below what has been determined as a minimum budget.

The THL defines the minimum budget excluding housing costs as between 600 and 669 euros monthly, depending on the individual’s age.

The public health organisation said that persons living alone, single parents, students and unemployed persons are most likely to fall into the group of people living on shoestring budgets.

THL researchers found that housing and food take the biggest bite out of minimum budgets.

For persons renting alone or those receiving the minimum sickness benefit or living on the basic unemployment benefit allowance, disposal income after paying for housing costs is just 71 percent of the minimum budget.

Single dwellers relying on basic social benefits receive about 1,000 euros a month and spend half on housing - leaving them with just 500 euros in hand. In the case of single pensioners receiving a guarantee pension, incomes are just over 1,100 euros a month, leaving around 630 after paying for a roof over their heads.

Basic benefits improving, but still not enough

According to the THL, although the adequacy of basic benefits has grown between 2011 and 2016, they are still not sufficient to guarantee a reasonable standard of living for all households based on a minimum budget.

On the other hand, persons who receive the guarantee pension usually end up with slightly more than the minimum budget.

Moreover the THL said that 12 percent of the population or 660,000 people are currently living in what the EU defines as relative poverty - in other words, their incomes are less than 60 percent of the national average net monthly income, or less than 1,190 euros, regardless of housing costs.

Officials expect that the number of individuals living in relative poverty or getting by with incomes below the minimum budget will remain at the same level this year, as during the previous survey in 2014.