Amount, payment and taxation of pension assistance
Pension assistance is equal in amount to the guarantee pension, that is EUR 834.52 per month (2020). The amount of pension assistance is reduced by other pensions and compensations that the recipient is entitled to (for example workers' compensation and survivor's pensions).
Recipients can work without it affecting the amount of the pension assistance to which they are entitled.
The rate at which the pension assistance is paid is determined according to the national pensions index.
Pension assistance is paid on the 4th day of each month. If banks are closed on the scheduled payment date, it is paid on the nearest preceding banking day. Kela sends the data on pension assistances paid out to the national incomes register within five days of the date of payment.
Kela pays pension assistance up to the end of the month in which you reach the age of 65. The payment is also stopped if you, for example, qualify for earnings-related pension or partial early old-age pension before reaching the age of 65.
If you move to another EU/EEA country or to Switzerland, Kela will continue to pay you pension assistance. In any other country, pension assistance is paid only for the duration of a temporary residence there.
Pension assistance is a taxable benefit. The tax is primarily withheld according to your tax card for pension assistance issued by the Tax Administration. If you do not have a tax card the withholding tax rate for pension assistance is 0. A tax card for salary income is not enough.
Recipients of pension assistance are eligible for a pension income deduction for their taxes.
If you claim pension assistance in 2020, and you are paid the assistance in arrears for 2019, tax is withheld at a rate of 40 percent on the pension paid in arrears. You can ask the Tax Administration to issue a revised tax card and to send it to Kela. Kela will then withhold tax according to the revised tax card.