How basic income affect the other social security benefits

The experiment is designed in a way that ensures that no participant will suffer negative financial consequences.

Once the experiment begins, any other benefit payments which participants may receive from Kela are adjusted automatically to the basic income. Persons receiving a basic income can claim any benefits to which they are entitled as they normally would. In the case of the benefits listed below, the basic income is deducted from the after-tax amount of the benefit. The remaining amount is paid to the person receiving a basic income.

The basic income is deducted from the after-tax amount of the following benefits:

  • labour market subsidy and basic unemployment allowance
  • earnings-related unemployment allowance
  • sickness allowance and partial sickness allowance
  • maternity, paternity and parental allowances
  • special care allowance
  • Kela's rehabilitation allowance
  • daily allowance and compensation for loss of income paid under section 27 of the Act on Communicable Diseases.

Basic income and other social benefits


Benefits for unemployed jobseekers

Anyone receiving a basic income should remain registered with the Employment and Economic Development Office as an unemployed jobseeker and apply to Kela or their unemployment fund for unemployment benefits. Unemployment benefits are governed by the same rules during the basic income experiment as at other times. If the net amount of unemployment benefits exceeds the amount paid as a basic income, the exceeding part is paid to the person applying for benefits. This can be the case at least when unemployment benefits are supplemented by an increase for children, or when a person receiving a basic income participates in a service agreed with the Employment and Economic Development Office. The basic income is not deducted from expenses allowances paid during participation in the service.

Social assistance

The amount of basic social assistance is affected by available income and assets. The basic income counts as income for social assistance purposes. If a person participating in the experiment turns down an offer for a job or rehabilitative work activity, the basic amount of social assistance can be reduced by up to 20 or 40 percent.

Housing benefits

The basic income, while tax free, is equated with taxable unemployment benefits when it comes to its effect on housing benefits. When deciding an application for general housing allowance or housing allowance for pensioners, the basic income is considered to be at least equal to the basic unemployment allowance. Also other types of income that count towards housing benefits, such as wages and salaries, are taken into account as income when calculating housing benefits.

Example

Maija has been unemployed for a few months, and has registered with the Employment and Economic Development Office. She is paid the full basic unemployment allowance of €32.40 per day, and gets an additional €7.68 per day for her two children. Her monthly unemployment payment is €861.27 before taxes, or €689.38 after taxes.

Maija is selected to participate in the basic income experiment. She will now get a tax-free basic income of €560 a month. Maija can still claim the basic unemployment allowance due to her. In addition to the basic income, she gets the difference between the basic unemployment allowance and the basic income.

Last modified 15/02/2017
Updated 07/12/2016