Funding
Kela's operations are financed by statutory contributions from the insured and employers and with funding from the public sector. In 2011, the state's share of funding is about 69%, with contributions accounting for about 26% and local government payments for about 5%.
Kela's total annual expenditure for 2011 is estimated to be about €13.0 billion. Benefits account for about 97% and operating costs for about 3% of the total expenditure. Each benefit fund accrues operating expenses, which are funded almost entirely by the state.
National Pension Insurance Fund
Expenditures out of the National Pension Insurance (NPI) Fund are funded entirely by the state. Benefit expenditures of the NPI fund consist of pensions and disability benefits.
National Health Insurance Fund
The National Health Insurance system comprises an earned income insurance component and a medical care insurance component. Earned income insurance includes sickness, parenthood and rehabilitation allowances as well as occupational health care (except for compensations to the Finnish Student Health Service, which are paid out of the medical care insurance scheme). Medical care insurance includes reimbursements for medicine expenses, doctors' fees, examination and treatment charges, travel expenses, and rehabilitation services. The funding of National Health Insurance in 2011 can be divided as follows:
- about 35% comes from health insurance contributions from employers
- about 14% comes from contributions from employees and self-employed people towards daily allowances
- about 23% comes from contributions from employees and self-employed people towards medical care
- about 24% comes from state contributions towards the medical care insurance
- 3% comes from state contributions towards minimum daily allowances and occupational health services for the self-employed
- about 1% comes from EU reimbursements and income from investments.
General Fund for Social Security
About 86% of the benefits paid out of the General Fund for Social Security are funded by the state and about 13% by local governments. The local government share consists of child day care subsidies and a proportion of the labour market subsidy payments for the long-term unemployed. The rest, 1%, is covered by unemployment insurance contributions from employees, which are credited towards the provision of unemployment security.
Updated 10/22/12