Govt mulls to remove student without child from general housing benefit

The Government is planning to remove students from the scope of the general housing allowance scheme and reimplement the student housing supplement scheme in August next year, said the Social Insurance Institution-Kela in a recent press release.

However, students with children would remain within the scope of the general housing allowance scheme.

Currently, about 40 per cent of the households receiving general housing allowance are students.

The government is planning to transfer students from the general housing allowance scheme to the student housing supplement scheme on 1 August 2025.

The maximum rate of the housing supplement would be EUR 216 per month, EUR 248 per month or EUR 296 per month, depending on the municipality in which the student lives.

Study grant rates will not be index adjusted. Instead, the rates will stay the same as in 2023 and 2024.

Next year will see several changes to Kela benefits, affecting both benefit rates and eligibility criteria.

Some of the changes have already been approved by Parliament, but most of the legislative amendments will be submitted to parliamentary review in the autumn.

Kela will actively inform its clients of any upcoming changes throughout the autumn.

The upcoming changes to social security benefits were outlined in the programme of the four-party alliance government led by Kansallinen Kokoomus (National Coalition Party-NCP) during the Government’s budget deliberations at the beginning of September.

The government is planning that Kela will stop paying old-age and disability pensions to recipients in other EU or EEA countries or in Switzerland or the United Kingdom in 2025.

The change would not apply to survivors’ pensions, child increases or front-veterans’ supplements, nor will it affect the payment of earnings-related pensions.

The government is also planning to increase the impact that assets and income have on the rate of the housing allowance for pensioners.

In the Government’s draft proposal, it is estimated that the housing allowance for pensioners will decrease by an average of EUR 15 per month for about 200,000 recipients.

The pensions paid by Kela (national pension and guarantee pension), along with disability allowances and front-veterans’ supplements, are routinely increased each year in line with the National Pensions Index.

The percentage of increase will become known on 14 October 2024, when Kela is scheduled to confirm the National Pensions Index that will be applied starting 1 January 2025.

The government is planning to increase the initial deductible for medicine expenses from EUR 50 to EUR 70.

Parliament has already decided that, as of 1 January 2025, general housing allowance will no longer be available for housing costs for owner-occupied homes, such as maintenance charges, maintenance costs for single-family homes and interest payments on housing loans.

In addition, the government is planning to limit the eligibility for school transport subsidy. It would only be available to students who are entitled to free upper secondary level education. The change would take effect on 1 August 2025.

The Government is planning to raise the minimum age limit for the national pension, the guarantee pension, the rehabilitation allowance (including the rehabilitation allowance for young persons), the disability allowance and the sickness allowance from 16 to 18 years.

Going forward, the disability pension and the rehabilitation subsidy would be available from the age of 18.

The change would not affect young persons who already receive these benefits. Instead, it would affect persons born in or after 2009.

Vocational rehabilitation for young persons is intended to become more strictly targeted at young persons who are not in school or work or who are otherwise at risk of social exclusion.

However, rehabilitation could continue to be granted without a formal diagnosis of illness or disability.

As a rule, participation in coaching services in connection with vocational rehabilitation for young persons (Nuotti coaching) would no longer make participants eligible for rehabilitation allowance.

Earlier, Kela cut general housing allowances and unemployment benefits from April 1, 2024, which impacted about 500,000 people.

In December 2023, Professor of Social Policy at the University of Helsinki Anne Kouvonen said that the cuts planned by the right-wing government will hit everyone and society will pay the price.

Leaders of the conservative Kokoomus, radical rightist Perussuomalaiset (Finns Party), Suomenruotsalainenkansanpuolue (Swedish People’s Party of Finland-RKP) and the SuomenKristillisdemokraatit (Christian Democrats of Finland-CD) on June 16, 2023 published the program of the alliance government with the view to reshape economy.

The government’s decision created widespread controversy and people from different strata across the country including students protested it.

The cuts include €2.05 billion in social and healthcare services and €1.2 billion in social security and benefits.

Leaders of the opposition parties strongly criticized the government for bringing the basic sectors under the austerity measures.