Child Home Care Allowance

Child home care allowance can be paid to families that have a child under age 3 who is not in municipal day care. If granted, the allowance is also paid for any other children under school age whose care is arranged in the same way.

Adoptive parents can get Child Home Care Allowance also for children over the age of three until two years have passed from the date on which parental benefits for adoptive parents were first paid or until the child starts school.

Child Home Care Allowance is payable also if the child attends a part-day municipal pre-school class one year before starting school, or if the child will start school one year before regular school age.

The allowance can be granted so that it immediately follows Parental Allowance. It is paid until the youngest child reaches the age of 3 or transfers to municipal day care, or until the family chooses to receive private day-care allowance instead. The child can be looked after by either of the parents or some other relative, or a private child care provider.

The allowance can also be paid for children accompanying a parent who is posted to another EU/EEA country provided that the family continues to be covered by the Finnish social security system.

The child home care allowance consists of a basic allowance, which is paid separately for each of the eligible children. There is also a supplement which is only payable for one child.

Amount

Care allowance is paid separately for each eligible child. The care allowance is paid at the following rates:

• for one child under age 3 (or adopted child over age 3) 314.28
• for each additional child under age 3 94.09
• for each additional child under school age 60.46

The care supplement is paid for one child eligible for the care allowance. Its maximum amount is €168.19 / month.

The amount of the care supplement depends on the monthly income of the family and family size (considered as the parents and up to 2 children eligible for the supplement, i.e. for whom parental allowance is no longer being paid but who have not yet reached statutory school age).

The care supplement is paid at its full rate if the family’s monthly income is below a limit linked to family size.

The supplement is paid at its full rate if the family’s monthly income is below a limit that varies with family size. Any exceeding income reduces the full amount of the supplement by a certain percentage.

If another child is born, the basic allowance and the supplement are payable also during the parenthood allowance period, provided that they are higher than the parenthood allowance that is being paid. The parenthood allowance is considered as income when calculating the amount of the supplement.

Payment of the allowance

Child Home Care Allowance is paid to the parent (or other guardian) who is primarily responsible for looking after the child. It is paid to the recipient’s bank account on the last banking day of each month. The allowance is not paid for periods of less than one month.

Child Home Care Allowance can be paid starting from the first weekday following the end of the parental allowance or any extended paternity leave. It is discontinued when the youngest child reaches the age of three or transfers to municipal day care, or until the family chooses to receive private day-care allowance instead. The parts paid for older siblings are discontinued at the end of July of the year in which they start school. For children within the extended compulsory education system, payment ends at the end of July in the year in which the child reaches the age of 7 years.

Some municipalities grant a special municipal supplement. The municipalities decide for themselves whether to grant the supplement and either pay it themselves or have Kela pay it along with the regular allowance.

The Child Home Care Allowance may have to be deducted from unemployment benefits such as earnings-related or basic unemployment allowance, labour market subsidy, or training allowance, as well as from job alternation compensation regardless of whether the benefits are paid to the same family member.

However, if one of the parents looks after the child at home and is not registered as an unemployed job-seeker, the child home care allowance is not deducted from any unemployment benefit the spouse may receive. If both parents receive an unemployment-related benefit, the child home care allowance is only deducted from the benefit of the parent who receives the allowance.

Parents receiving student financial aid can get child home care allowance. However, it is regarded as an outside source of income for purposes of determining the recipient’s eligibility for student financial aid.

Taxable income

Child Home Care Allowance payments are subject to tax. Kela withholds the tax at the recipient’s personal withholding rate. This is normally determined on the basis of the recipient’s wage tax card, unless the recipient has acquired a revised tax card for the purpose of receiving the allowance. If the allowance is taxed on the basis of a wage tax card, the withholding rate on the card is increased by 2 percentage points because some of the deductions relating to wage income do not apply to the child home care allowance. If you receive child home care allowance at the same time as some other benefit (such as a parental benefit), and you are using a wage tax card for taxation purposes, the child home care allowance is taxed at the rate applicable to secondary occupational activity. You can avoid this by acquiring a revised tax card from the tax authorities.

Kela gets the tax withholding information and any revised tax card issued to you directly from the tax authorities. The only times when you must personally provide a tax card to Kela is when you are using a tax-at-source card or a tax card with income scales.