Major welfare cuts by the Finnish government are set to come in effect in 2025, impacting a wide range of social benefits.
Measures include stricter eligibility criteria for the general housing allowance and unemployment benefits, as well as increased healthcare costs.
Starting 1 January, the general housing allowance will consider applicants' assets. The Social Insurance Institute of Finland (Kela) estimated this change will reduce benefits for approximately 3,700 households, with over 2,000 losing support entirely.
Assets exceeding 10,000 euros for single-person households and 20,000 euros for multi-adult households will now reduce the allowance, with no support granted if assets exceed 50,000 euros. Summer cottages will be excluded from these calculations.
Additionally, Kela will stop paying the housing allowance for owner-occupied properties, affecting nearly 16,000 households that previously received an average of 230 euros per month. The government projects a cumulative savings of 30 million euros over the parliamentary term for this rollback.
"These changes do not affect pensioners' housing benefits, but they will tighten conditions for those already under asset-based scrutiny," Kela's research manager, Signe Jauhiainen, told Yle.
Unemployment cuts
Unemployment benefit cuts will continue into the new year. Partial unemployment benefits will be reduced, and recipients participating in job training programmes will no longer receive increased support during their activities.
Young people are also affected by these changes. Those who drop out of compulsory education at 17 will no longer qualify for unemployment benefits, while eligibility for the rehabilitation allowance will increase from age 16 to 18.
At the same time, the conditions for rehabilitation support will be tightened. Rehabilitation allowance is available if a person's illness or disability prevents them from working. In most cases, the reason for receiving support is mental health problems or behavioural disorders.
There has been a sharp increase in the number of people receiving youth rehabilitation allowance. In 2010, there were fewer than 5,000 beneficiaries, but by 2023 the number had more than tripled.
Cost of living pressures
Index freezes on numerous benefits, including unemployment support and parental allowances, remain in place, but will not rise with inflation.
Healthcare costs are also increasing. The annual deductible for prescription reimbursements will rise from 50 to 70 euros, and out-of-pocket limits for social and healthcare services reset with the new year.
Meanwhile, patient fees for primary care are set to increase by more than a fifth and specialist care costs by 45 percent. These measures aim to save 150 million euros annually in public spending.
The cuts could increase reliance on basic social assistance, with Kela projecting expenditure on this support to rise from 760 euros million in 2023 to nearly 900 million euros in 2024.
"When other benefits are reduced, the need for social assistance grows. However, this increase may not immediately reflect in the number of recipients but in the amount required per household," explained Jauhiainen.
Government employment targets
The government aims to save billions through these welfare reforms and create 100,000 new jobs. While initial measures from the Ministry of Economic Affairs say that Finland has achieved 80 percent of this goal on paper, the unemployment rate remains high at nine percent, the worst in nearly a decade.
The government also intends to raise the overall employment rate to 80 percent, but achieving this figure remains a distant target as that figure was 75.7 percent in Statistics Finland's latest labour force survey.