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Changes to Kela benefits in 2018
The year 2018 will see major changes affecting, among others, unemployment benefits and student financial aid. Benefit amounts tied to the national pensions index have not be increased in line with the index, but an across-the-board increase will be made in some benefits.
The following is a summary of the key changes in the social security schemes administered by Kela.
Parliament has decided that in 2018 the national pensions index will remain at the 2017 level. The euro amounts of the benefits paid by Kela that are tied to the national pensions index will thus not change.
Parliament has, however, made some across-the-board increases or other legislative changes that will have an impact on the euro amounts of some of the benefits tied to the national pensions index.
Easier for 18- to 19-year-olds to get study grant
Starting 1 August 2018, parental income will no longer affect the amount of study grant available to students at the upper secondary level aged 18 to 19, who live independently. These students are eligible for study grant at the basic rate, EUR 250.28 per month. Students not yet in receipt of study grant must apply.
There are also a number of other changes in the student financial aid programme effective from the beginning of 2018. The limits on allowable annual income has been increased by 1% and the day of payment of student financial aid has changed. As of the beginning of the year, study grant, housing supplement for students and school transport subsidy are paid on the first day of the month or on the immediately following business day. It will become easier for students in higher education to be granted an extension of the maximum period for which financial aid is available as any uncompleted studies will no longer affect the granting of an extension.
University financial aid committees have ceased operations, and applications for financial aid will no longer be reviewed at any Finnish university. Decisions on financial aid for higher education students will in future be centralised to Kela. This change does not require students to take any action.
Parliament has adopted a law amendment under which a guardian of a child under 18 years of age will receive a provider supplement of EUR 75 per month. The number of children you have and who they live with does not affect your eligibility for the provider supplement. The provider supplement is granted automatically by Kela.
Unemployed persons are encouraged to take on jobs and engage in self-employment
The full rate of the basic unemployment allowance and labour market subsidy is EUR 32.40 per day.
The waiting period for unemployment benefits will be shortened from 7 days to 5.
The entitlement criteria for the commuting and relocation allowance have been eased. Commuting and relocation allowance can also be paid to persons working part-time, provided that they work less than 18 hours a week. The allowance is only paid for days of actual work.
If taking on a job involves education or training, commuting and relocation allowance can also be paid for the time of education or training, provided that the other eligibility criteria are met. It is possible to backdate applications for commuting and relocation allowance by 3 months. The allowance can be increased if the recipient has dependent under-age children or if the commute is unusually long (more than 200 km).
Self-employment undertaken when being unemployed does not prevent a person from receiving unemployment benefits during the first 4 months. The unemployment benefit will be adjusted in line with any income they may receive from self-employment.
Receiving full unemployment benefit will require that you, in a period of 65 days of payment, have worked for at least 18 hours or participated in employment-promoting services for at least 5 days. If you do not meet these requirements, your unemployment benefit will be reduced by 4.65% for the next 65 days of payment. In practice, this cut corresponds to the compensation you would normally receive for 1 day of unemployment (EUR 32.40).
The criteria for the activation model are met through salaried employment, self-employment or participation in employment-promoting services. These include labour market training, self-motivated study and work experience placements. The normal amount of unemployment benefit will again be paid when the criteria have been met during a reference period of 65 payment days.
Unemployed persons who receive a benefit on the basis of incapacity for work or disability are not included in the activation model, neither are informal caregivers and family caregivers. Furthermore, activity is not a prerequisite and the unemployment benefit will not be reduced while an application for disability pension is pending or during a short period of lay-off.
General housing allowance: The maximum housing costs remain unchanged
The maximum housing costs allowed will be adjusted in line with the cost of living index instead of with the rental index. The maximum housing costs will, however, remain the same as in 2017. Maximum housing costs refer to the maximal amount of acceptable housing costs where general housing allowance is concerned.
Increase in the basic amount of social assistance
The basic amount of social assistance (income support) has been increased in 2018. As of the beginning of the year, the basic amount, i.e. the amount for basic living expenses used when calculating social assistance, is EUR 491.21 (single person).
Basic social assistance is a benefit of last resort. The increase will secure the level of basic social assistance although most benefits that are tied to the national pensions index will remain at the same level as in 2017.
Buying larger amounts of particularly expensive drugs is made easier
In the case of particularly expensive medications the costs which exceed EUR 1,000, reimbursement was paid only for one month’s supply at one time. But as of the beginning of 2018, it is possible to buy, at one time, a supply of expensive medication that exceeds the annual maximum limit on out-of-pocket medicine costs.
The annual maximum limit will remain unchanged at EUR 605.13 per calendar year. If it is exceeded, customers will only pay a EUR 2.50 copayment for each reimbursable medicine for the rest of the year. In the case of expensive medicines, the copayment is EUR 0.21 per each beginning week of treatment.
Across-the-board increase in sickness and rehabilitation allowances
The minimum amount of sickness allowance, rehabilitation allowance and special care allowance have been increased by EUR 0.91 per day. The new minimum amount is EUR 24.64 per working day.
In 2018, the minimum amount of rehabilitation allowance for young people and the minimum amount of rehabilitation allowance paid during vocational rehabilitation is EUR 31.02 per working day (EUR 30.41 per working day in 2017).
All allowances already in payment will be adjusted automatically.
The waiting period required for sickness allowance for self-employed persons is shortened
The waiting period for self-employed persons insured under YEL (the Self-employed Persons’ Pensions Insurance scheme) has been shortened to one day. In 2018, only the day when you fall ill is included in the waiting period. In 2017, the waiting period consisted of the day you fell ill and the 3 following working days. In the case of disability periods starting in 2018, the YEL insurance must be effective on the day a self-employed person falls ill in order for the person to be able to receive allowance under the YEL scheme during the waiting period required to qualify for sickness allowance.
Both parents can get special care allowance during a period of terminal care at home
The special care allowance is a compensation for loss of income available in situations where persons providing for a sick or disabled child under the age of 16 years is unable to do their regular work because of participating in the treatment or rehabilitation of their child.
From the beginning of 2018, special care allowance can be paid to both parents during a period of terminal care at home.
Employers' contribution to National Health Insurance is reduced
In 2018, the contribution rate for employers will be 0.86% of the payroll (1.08% in 2017).
In 2018, insured wage and salary earners will pay 1.53% of their pay towards daily allowances (1.58% in 2017). Self-employed persons insured under MYEL (the Farmers' Pension Insurance scheme) also pay 1.58% of their earned income. Self-employed persons insured under YEL pay an additional contribution of 0.17%, bringing their total contribution to 1.70% (1.64 % in 2017). If the total annual amount of wage, salary and self-employment income is less than EUR 14,020, no contributions towards daily allowances are made.
No contributions to medical care insurance is collected from wage and salary earners and self-employed persons in 2018. This was also the case in 2017. A contribution to medical care insurance of 1.53% will be withheld from pensions and other benefit income (1.45% in 2017). It is included in each pension and benefit recipient's tax withholding rate.
Reimbursements for occupational healthcare costs are increased
Kela compensates self-employed persons for the costs of their personal occupational healthcare based on annually confirmed maximum amounts. In 2018, the confirmed allowable maximum cost per self-employed person will be increased by about 0.3%. The maximum amount of reimbursement per employee payable to employers for the accounting period 2017 will also increase by about 0.3%.
Reimbursement for costs of occupational healthcare becomes available to an increasing number of self-employed persons
As of the beginning of 2018, self-employed persons will be able to receive direct reimbursement for the costs of their personal occupational healthcare also from private service providers. So far, direct reimbursement has been possible only when purchasing occupational healthcare services from health care centres. In order to be able to claim reimbursement on behalf of a self-employed person, private service providers must enter into an agreement with Kela.
Self-employed persons receiving rehabilitation subsidy are eligible for occupational health care reimbursements
Self-employed persons, whose YEL or MYEL insurance is no longer in effect due to incapacity for work, will be able to receive reimbursement for occupational healthcare while receiving rehabilitation subsidy or temporary pension under statutory insurance against employment accidents.
Change in reimbursement to farmers for costs of farm visits
As of the beginning of 2018, Kela will pay farmers 50% of their costs for a visit to their farms by an occupational healthcare provider for evaluation of their working environment, or 60% of the reimbursement under the Health Insurance Act, and a reimbursement of 40%, maximum, out of other state funds.
Farmers will thus be reimbursed for
- 100% of the costs for farm visits, provided that the farmer has signed an agreement with the occupational healthcare provider on, and implemented, common practices and measures relating to the management, follow-up and early support for work capacity
- 90% of the costs for farm visits, if the farmer has not signed an agreement with the occupational healthcare provider on common practices and measures relating to the management, follow-up and early support for work capacity.
Reimbursement for costs of occupational healthcare is, however, only paid up to an annual maximum amount per farmer.
Increase in the basic rate of pensioners’ care allowance
The rate of basic care allowance for pensioners will be increased by EUR 8.81. The increase will be paid automatically and customers will not need to contact Kela. The other rates of care allowance will remain unchanged, as will also the rates of other disability allowances.
The new rate of the basic care allowance for pensioners is EUR 70.52 per month. The increased rate is EUR 153.63 per month and the highest rate is EUR 324.85 per month.
Disability allowances for persons under the age of 16 and those aged 16 or over remain unchanged. The rates of the disability allowances are: basic rate EUR 92.14 per month, increased rate EUR 215 per month and highest rate EUR 416.91 per month.
The disability supplement for war veterans will remain unchanged.
Increases in family benefits
There will be an increase in the amount of the maternity grant. Maternity grant will be EUR 170 if the expected due date is 1.6.2018 or after. At the moment the grant is EUR 140.The family can choose whether to take the maternity grant in the form of a maternity package or as a tax-free cash benefit.
The single-parent supplement has been increased. As of the beginning of 2018, the supplement amounts to EUR 53.30 per month for every child for which child allowance is paid (EUR 48.55 per month in 2017).
The full amount of the child maintenance allowance has been increased to EUR 156.39 per month (EUR 155.50 per month in 2017).
The limit for insolvency in the case of child maintenance allowance has been increased. The new limit for insolvency applicable to persons liable for maintenance is EUR 1,103.43 per month. The income limit per child is EUR 275.86 per month. In 2017 the amounts were EUR 1,097.14 per month and EUR 274.29 per month.
Kela does not provide child maintenance allowance if a child is able to support him- or herself. In 2018, the limits for children’s earnings and income from capital have been increased to EUR 772.40 per month for children living at home, and to EUR 1,103.43 per month for children that are living independently. In 2017, these limits were EUR 768.00 per month and EUR 1,097.14 per month.
The minimum rate of paternal allowance and special care allowance have been increased in 2018. They are both EUR 24.64 per day (EUR 23.73 in 2017).
Increase in the guarantee pension, other pensions remain unchanged
The guarantee pension is increased by EUR 15.01. The national pension, which is tied to the national pensions index, will remain unchanged.
In 2018, the full amount of the guarantee pension increases from EUR 760.26 per month to EUR 775.27 per month. The national pension will remain the same as in 2017, that is EUR 628.85 per month for persons living alone and EUR 557.79 for those living with a partner.
The starting pension for surviving spouses is EUR 324.33 per month, and the basic amount of the continuing pension is EUR 101.59 per month. The basic amount of the orphans' pension is EUR 59.68 per month.
The increase available to pensioners with a dependent child under 16 years of age amounts to EUR 21.93 per month.
Pension assistance increase
The pension assistance is equal in amount to the guarantee pension. It amounts to EUR 775.27 per month.
Changes in the housing allowance for pensioners
The maximum housing costs taken into account in the housing allowance for pensioners will be increased by 1.8% in all three municipality categories. The maximum allowable housing costs in municipality category 1 are EUR 8,097 per year, in category 2 EUR 7,447 per year and in category 3 EUR 6,533 per year. The compensation for monthly maintenance costs of a detached house or cottage is increased to EUR 42.32 (EUR 41.57 per month in 2017).
These increases will be applied in forthcoming reviews of the housing allowance for pensioners. The water and heating costs taken into account remain the same.
Working while receiving a pension
It is possible to work while receiving a pension. Persons to whom Kela pays rehabilitation subsidy or disability pension can in 2018 earn up to a maximum of EUR 737.45 per month. This income limit is the same as in 2017. It applies even if the persons in question also receive an earnings-related pension with a higher earnings limit. In the case of self-employed persons, income under the pension laws applicable to self-employed persons or, in the absence of insurance for self-employed persons, the actual income from self-employment is taken into account.
Kela must be notified if the income limit is exceeded. In situations like this, payment of the rehabilitation subsidy or disability pension will generally be interrupted.
Changes in workers’ social security
As of the beginning of 2018, seasonal workers from non-EU countries and intra-corporate transferees (so called ICT workers) are entitled to coverage under the Finnish social security system, provided that their employment will last for at least 4 months. Seasonal work refers to work in agriculture and tourism carried out during certain seasons of the year.
Seasonal workers and intra-corporate transferees who are covered for national health insurance benefits or insured under the earnings-related pensions and worker’s compensation schemes in Finland are considered comparable to the residents of a municipality even though they may not have a municipality of residence in Finland. These workers will be charged the same client fee for treatment as that paid by the local residents. You must apply separately to Kela for medical treatment.
Additional information for customers:
- Kela benefits in euros 2018 (pdf)