Tax refunds affect social assistance
Social assistance is a last-resort form of financial aid, which is affected by all the income and assets available to the applicants and their families, including tax refunds. Most customers will receive their tax refund in August or September.
Social assistance (toimeentulotuki) is intended for situations where a customer’s total income, assets and other benefits are not enough to cover their essential daily expenses, such as rent and food.
Kela takes into account all income that a customer can use to cover their expenses when granting social assistance. This means that tax refunds affect social assistance because they are also income that is available to a customer to use. A tax refund may reduce the amount of or remove the need for social assistance in the month when it is available to the customer.
The Finnish Tax Administration will confirm the August tax refunds during June. The tax refund may have been taken into account on the basis of preliminary tax information if a decision on social assistance has been made before June. If the tax refund received by a customer is higher than in the preliminary tax information, Kela will review the decision on social assistance. In such a case, the amount of social assistance will be reduced.
If the tax refund is lower than in the preliminary tax information, i.e. the tax refund used in calculations for the decision on social assistance is too high, the customer must apply for a review of the benefit decision from Kela. The customer must also apply for a review of the decision if the payment date of the tax refund changes. The decision on social assistance sent to the customer includes instructions and information on how to apply for a review.
Social assistance is affected only by the part of the tax refund remaining after debt collection by enforcement
If the customer’s tax refund or part of it is collected as payment towards a debt being recovered by the Enforcement Authority, only the remaining part of the tax refund will affect social assistance. If the customer’s entire tax refund is collected by the Enforcement Authority, the tax refund does not affect social assistance.
It is the customer’s responsibility to notify Kela if they have received a decision on social assistance in which the tax refund has already been taken into account as income, but the tax refund is subsequently collected by the Enforcement Authority in full or in part. In such a case, Kela will review the decision on social assistance.