Financing


Kela’s operations are financed by statutory health insurance contributions from the insured and employers and with funding from the public sector. In 2017, the State's share of funding was 75%, while income from contributions accounted for about 19% and local government payments for about 6%.

Total expenditure by Kela amounted to EUR 15.3 billion in 2017. Benefits accounted for 97% and operating costs for about 3% of the total expenditure. Benefit expenditures are paid out of the following three funds: the National Pension Insurance Fund, the National Health Insurance Fund and the General Fund for Social Security.

National Pension Insurance Fund

Expenditures out of the National Pension Insurance (NPI) Fund are funded entirely by the State. Benefit expenditures of the NPI Fund consist of pensions and disability benefits.

National Health Insurance Fund

The National Health Insurance system comprises an earned income insurance component and a medical care insurance component.

Earned income insurance includes sickness, parenthood and rehabilitation allowances as well as occupational health care (except for compensations to the Finnish Student Health Service, which are paid out of the medical care insurance scheme). The earned income insurance scheme is financed through contributions from employees and self-employed persons towards daily allowances, health insurance contributions from employers and a contribution from the State.

Medical care insurance includes reimbursements for medicine expenses, doctors' fees, examination and treatment charges, travel expenses, and rehabilitation services. The health insurance scheme is financed through contributions from employees, self-employed persons and benefit recipients, EU compensations and a contribution from the State.

The funding of National Health Insurance in 2017 can be divided as follows:

  • health insurance contributions from employers (21%)
  • contributions from employees and self-employed persons towards daily allowances (27%)
  • contributions from employees, self-employed persons and benefit recipients towards medical care expenses (9%)
  • state contribution towards medical care insurance (38%)
  • state contribution towards earned income insurance (4%)
  • EU compensations (1%)

General Fund for Social Security

Among the benefits financed out of the General Fund for Social Security are the basic unemployment benefits, child benefits and financial aid for students and social assistance. 85 percent of the fund expenditure was in 2017 financed by the State and about 12 percent by the local governments. The local government share consists of child day care subsidies and a proportion of the labour market subsidy payments for the long-term unemployed. The rest, 3%, was covered by unemployment insurance contributions from employees, which are credited towards the provision of unemployment security.

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