Effect of income on the amount of housing allowance

Housing allowance payments are available to low-income households. The gross income of the household members affects the amount of the housing allowance. Gross income means income before deduction for taxes.

The income is taken into account either on a continuous basis or is averaged over a certain period. See this table for examples on how income affects the amount of the housing allowance.

An earnings deduction of EUR 300 is made from every household member's salary, income from self-employment or income from agriculture. This means that the income that is taken into account is smaller than the person's actual income.

The income of child household members under 18 years of age does not affect the amount of the housing allowance, except if such a child is applying in their own right or together with a spouse or partner.

Regular income

Regular income means income which the person continues to earn for at least three months starting from the date on which the housing allowance is granted or reviewed. If a person's 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.

Average income

If a person’s income will not be the same for at least three months, it will be taken into account as the average amount of all income received over the next 12 months.

Calculating an average income for a student

Ansa applies for housing allowance starting from 1 August 2021. She has a summer job for June, July and August, during which she will earn 2,300 euros per month. She starts her studies on 1 September 2021. Ansa’s rental agreement for an apartment in Helsinki starts on 1 August 2021 and she moves in at the beginning of August. Her monthly rent is 400 euros.

Ansa is granted a housing allowance for the period beginning 1 August 2021.

Because Ansa’s income will not remain the same for a period of at least three months from when she was granted the housing allowance, an average income is calculated for her in the following way:

Salary 1 August 2021 – 31 August 2021: EUR 2,300 per month
After a so-called earnings deduction of EUR 300, Ansa’s salary is recognised as EUR 2,000 per month.

Study grant 1 September 2021–31 May 2022: 9 months x EUR 253.69 per month = EUR 2,283.21

Because information about Ansa’s earnings in the summer of 2022 is not available, they are estimated on the basis of her earnings in summer 2021.
Salary 1 June 2022 – 31 July 2022: 2 months x EUR 2,300 per month = EUR 4,600
After a so-called earnings deduction of 2 months x EUR 300 per month = EUR 600, Ansa’s salary is recognised as EUR 4,000.

Total income 1 August 2021 – 31 July 2022 = EUR 8,283.21

Ansa’s average income starting 1 August 2021 is: EUR 8,283.21: 12 months = EUR 690.26 per month.

Calculating an average income for an unemployed person

Susan is applying for housing allowance for the period beginning 1 April 2022. She has a fixed-term employment contract from 1 April to 31 May 2022 for which she earns a salary of EUR 1,550 per month. After her employment ends, Susan will receive unemployment benefits from 1 June 2022 to 31 March 2023, which are estimated to total EUR 741.75 per month. She has no other sources of income.

Susan's average income, which affects her housing allowance, is estimated as follows:

Salary 1 April 2022 – 31 May 2022: 2 months x EUR 1,550.00 per month = EUR 3,100.00
An earnings deduction is made on the salary 2 months x EUR 300.00 per month = EUR 600.00.

EUR 2,500.00  (EUR 3,100.00 – EUR 600.00) is taken into account as Susan's salary.
 
Unemployment benefit 1 June 2022 – 31 March 2023: 10 months x EUR 741.75 per month = EUR 7,417.50
Total income: 1 April 2022 – 31 March 2023 = EUR 2,500.00 + EUR 7,417.50 =
EUR 9,917.50 per year.

Susan’s average income starting 1 April 2022 is:
EUR 9,917.50 / 12 months = EUR 826.45 per month

Conversion of the daily allowance into monthly income

When calculating the amount of the housing allowance, various social security daily allowances are converted into monthly income as follows:

  • Unemployment allowances are converted by multiplying them by 21.5, because unemployment allowance is paid for an average of 21.5 days per month.
  • Other daily allowances (such as the sickness, maternity, paternity and parental allowance) are multiplied by 25.

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