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The effect of salary and capital income on the general housing allowance

The amount of the housing allowance is affected by earnings, including salary and business income. It is also affected by capital income, such as income from investments.

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

Income that affects the housing allowance

The earned and capital income of all members of the household affects the housing allowance. However, the income of minor children only counts if the child is the applicant or the spouse of an applicant.

Income that affects the housing allowance:

  • earnings, including salaries, fringe benefits (housing, car or meals), overtime pay, shift work compensation and holiday bonuses
  • capital income, including
    • Income from investments: For example dividends (from stock funds or individual shares) and interests on deposits. Kela counts as income the dividend and interest income of each member of the household if it exceeds EUR 12.02 per month.
      • dividends paid to an equity savings account count as income even if they are not withdrawn from the equity savings account.
    • capital gains: Recurring capital gains count as income. Recurring capital gains paid to an equity savings account count as income even if they are not withdrawn from the equity savings account.
    • rental income: Deducted from rental income are the maintenance charges and costs of upkeep covered by the landlord. The amount that remains after this deduction affects the housing allowance. Note that for example the interest on loans or repair costs cannot be deducted from rental income.
    • income from forestry: The housing allowance is affected by the average annual yield of forest stands, multiplied by area. The income from the sale of forest holdings does not count as income.
  • self-employment income: Kela estimates the amount of self-employment income based on each self-employed person’s earned income under the self-employed persons’ (YEL) or farmers’ (MYEL) pension insurance scheme. If a self-employed person is not insured under the YEL or MYEL Act, an estimate of the income is made on the basis of the start-up grant, minimum income, salary or the self-employed person’s own estimate. Minimum income means an income equivalent to the labour market subsidy without child increases (about EUR 800 per month from 1 January 2023). Self-employed persons do not have to provide financial statements to Kela when applying for housing allowance.

Income that does not affect the housing allowance

The following types of income do not affect the housing allowance:

  • incidental income: inheritances, gifts, one-time profit from a sale or comparable incidental income
  • compensations for expenses which are part of the salary: as kilometre and per diem allowances.

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Last modified 10/7/2023

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