History

Founded on 16 December 1937, Kela was initially a pension institution, its sole responsibility to provide basic state pensions ("national pensions"). Since then, Kela's operations have been expanded, diversified and modernized. From a pension insurance institution, Kela has evolved into an institution offering social protection for all. Kela is now a provider of cradle-to-grave social protection.

Milestones

1937
Following the adoption of the first National Pensions Act by Parliament, Kela begins operations on 16 December.

1939
The National Pensions Act becomes effective. The National Pensions Scheme was originally a retirement savings scheme. The premiums paid by the insured were deposited in an interest-bearing individual account with Kela.

1942
The first disability pensions are granted.

1949
Kela begins to award old-age pensions.

1956
National pensions reform: Individual accounts are closed, the national pension is turned into a pension composed of both means-tested and flat-rate parts and tax-like pension insurance contributions are introduced.

1963
Citizens are issued with a personal social security code and a health insurance card. A certificate from the civil registry (as proof of identity) is no longer required to accompany applications for pension.

1964
Besides the National Pension Insurance, Kela becomes responsible for administering the National Health Insurance scheme. Before, Kela's clientele had comprised pensioners and persons with disabilities. Now, all residents of Finland become potential clients of Kela. At the same time, new approaches are introduced to rehabilitation and disease prevention and a basis is created for early rehabilitation. Finland is divided into 204 health insurance districts, with each district encompassing one or several municipalities.

1967
The second stage of the National Health Insurance is introduced, extending coverage to doctors' fees and cutting the waiting period for the sickness allowance from 14 days to 7 days.

1969–1970
The first survivors' pensions, child disability allowances and pensioners' housing allowances are granted. Direct reimbursement for medicine purchases was introduced in the pharmacies in 1970.

1975
An organizational reform merges the hitherto separate field organizations for pension insurance and health insurance into a unified regional and local administration. The reform is aimed at improving customer service, speeding up decision-making and strengthening civic participation. The possibility to delegate decision-making in pension matters from the central administration to the local offices is introduced.

The 1980s
The 1980 national pensions reform turns the national pension into a non-means tested minimum pension available to all residents of Finland.

  • The daily allowance and maternity allowance schemes (National Health Insurance) are reformed in 1982
  • Care and rehabilitation assistance introduced in 1983
  • In a 1985 reform of unemployment protection, the provision of basic unemployment benefits is entrusted to Kela.
  • Disability allowances introduced in 1989.

The 1990s
Kela's operations expand to cover also students and families with children. Responsibility for certain local government and central government functions is reassigned to Kela. The focus of Kela's operations shifts increasingly to the local offices.

Income protection of families with children: Following the handover of child benefits and child home care allowances in 1993, the administration of the maternity grants scheme is turned over to Kela in 1994

  • Social protection of students: administration of the student financial aid and student housing supplements schemes is reassigned to Kela in 1994
  • Administration of the conscript allowances scheme is handed over to Kela in 1994
  • Administration of the general housing allowances scheme is reassigned to Kela in 1994
  • The labour market subsidy scheme is brought under the administration of Kela in 1994
  • 1 January 1996 the national pension scheme was changed so that the national pension became a minimum pension dependent on the person's other pension income as the basic amounts of the national pension were gradually abolished.The national pension contributions for the insured were abolished.The burial grant was discontinued.
  • School transport subsidy scheme introduced in 1997.

The 2000s
Kela has implemented several administrative reforms and continues to actively develop new customer service channels.

  • A new Act on the Social Insurance Institution is passed in 2001, leading to the establishment of a separate Board governing Kela's operations.
  • The adoption of electronic document management transforms internal operations in 2000-2004. Decisions on claims for benefit are from now on made electronically throughout Finland, making it possible to shift workloads between areas with heavier and lighter workloads.
  • European Health Insurance Card (EHIC) was introduced in Finland 1.6.2004.
  • In 2006, Kela begins consolidating telephone customer service into a new Customer Contact Centre. The goal is to adopt telephonic customer service nationwide by 2009.
  • Mnay Kela benefits can be applied for online. The aim is that the customers can handle the most common matters that require contact with Kela online, if the customer so chooses.
  • In 2003 the possibility of changing a medicine to a cheaper one at the pharmacy was introduced as regards reimbursements for medicine costs.
  • In 2006 the financing of health insurance was changed so that it was divided into earned income insurance and medical care insurance.The system for reimbursements for medicine costs was reformed the same year.
  • In 2007 the partial sickness allowance was introduced. The paternity leave was extended the same year.Parental benefits were also increased for parents who were working.The system of direct reimbursement without authorization was extended to service producers in health care.
  • In 2008 the National Pensions Act was reformed and the survivors' pensions paid by Kela were also included in the same Act.At the same time the separate Act on Disability Benefits and the Act on Housing Allowance for Pensioners took effect.
  • 1 April 2009 reference pricing for medicines was introduced.The administration of the child maintenance allowance scheme was transferred from the municipalities to Kela.

The 2010s

  • In 2010 preparations started for the introduction of process management and a reform of the benefit data systems and online services (so-called ARKKI project). Online services were developed, and the number of authenticated customer service transactions increased to 6.5 million, compared to 4.8 million the previous year.
  • 1 January 2010 the employers' national pension contribution was abolished altogether.
  • The project for direct reimbursement for taxi travels started in May 2010.
  • 1 September 2010 the administration of interpreter services for the disabled was transferred from the municipalities to Kela.
  • Through decisions of the Kela Board insurance districts have been consolidated into larger units and local offices have, after proper consideration, been replaced by citizen service centres.Customer services are to an increasing extent concentrated to the Internet and call centres.At the beginning of 2011 there were 25 insurance districts, 218 local offices and 123 shared-service agreements.
  • 1 March 2011 the new guarantee pension was introduced, which increases the minimum pension level of persons who are resident in Finland.At the same time, the special assistance for immigrants, which had been paid from 1 October 2003, was abolished.

Updated 01/11/13