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How income affects the housing allowance

The amount of housing allowance depends on the income of all household members. A household typically comprises the persons sharing living quarters.

General housing allowance reduced in 2024, will no longer be available for owner-occupied homes starting in 2025

Parliament has approved cuts to the general housing allowance, which will reduce the rates of the allowance in 2024. Most of the changes to the general housing allowance will take effect on 1 April 2024. The changes will be applied to general housing allowances currently in payment the nexttime they are reviewed. General housing allowance will also no longer be available for owner-occupied housing as from 1 January 2025. 

Learn more about the changes to general housing allowances

Salaries, income from capital and many social security benefits are relevant to the housing allowance

The amount of the housing allowance is affected by

  • earnings
  • income from capital (including rent income and dividends and also recurring surrender gains)
  • many social security benefits.

The gross amount of income, i.e. before taxes are deducted from it, is used to determine the housing allowance.

When you apply for housing allowance, declare the income of all household members in the application. You do not have to send evidence of wage and salary payments. That information is available to Kela in the national incomes register.

Certain social security benefits and incidental income are not relevant to the housing allowance

The amount of housing allowance is not affected by

  • certain social security benefits (including social assistance, child benefit and informal care allowance)
  • student loans
  • the income of a minor child who is a member of the household
  • incidental income (such as inheritances, gifts or a one-time profit from a sale).

See a more detailed list of the types of income which are relevant or not relevant to the housing allowance.

Deduction from earnings

You can earn up to EUR 300 per month without it affecting the housing allowance payable to you.

This is called the earned income deduction. Kela makes the deduction separately for each household member.

The deduction is made from

  • salary income
  • income from self-employment
  • farm income.

Kela does not make the deduction from social security benefits such as earnings-related unemployment allowance.

Income limits for the housing allowance

There are maximum income limits which affect eligibility for housing allowance. If a household’s income before taxes is higher than this limit, no housing allowance is available.

See the limit applicable in your municipality.

You can also use an online calculator (in Finnish) to estimate the effect of income on the amount of your housing allowance available to you. Please note that the calculator can only provide an estimate.

How does Kela calculate your income?

When Kela calculates your income as it relates to the housing allowance, the calculation is made either as income received continuously or as an amount averaged over a certain period of time.

If your income stays the same over time

If your income stays the same for at least three months starting from the time the housing allowance is granted or reviewed, the allowance is calculated according to that income. This is called continuous income.

If your income varies over time

If your income varies (does not stay the same for at least three months starting from the time the housing allowance was awarded or reviewed), Kela will estimate an average income for you. It is a monthly average based on the assumption that your income will vary for example because of short temporary jobs, education or periods of unemployment.

Learn more about how varying income affects the housing allowance.

Learn more about how the housing allowance calculated.

Tell Kela if there is a change in your income

Remember to tell Kela if your income increases or decreases.

Your housing allowance must be reviewed if your total household income increases by at least EUR 400 per month or decreases by at least EUR 200 per month compared to the previous housing allowance decision.

Read more

Last modified 14/12/2023

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