Amount, payment and taxation of pension assistance

Pension assistance is equal in amount to the guarantee pension, that is EUR 784.52 per month (2018). The amount of pension assistance is reduced by other pensions and compensations that the recipient is entitled to (for example workers' compensation and survivor's pensions).

Recipients can work without it affecting the amount of the pension assistance to which they are entitled.

The rate at which the pension assistance is paid is determined according to the national pensions index.

Payment

Pension assistance is paid on the 4th day of each month. If banks are closed on the scheduled payment date, it is paid on the nearest preceding banking day.

Kela pays pension assistance up to the end of the month in which you reach the age of 65. The payment is also stopped if you, for example, qualify for earnings-related pension or partial early old-age pension before reaching the age of 65.

If you move to another EU/EEA country or to Switzerland, Kela will continue to pay you pension assistance. In any other country, pension assistance is paid only for the duration of a temporary residence there.

Taxation

Pension assistance is a taxable benefit. The withholding tax rate for pension assistance is 0. If you wish Kela to withhold tax at a higher rate, you must notify Kela.

Recipients of pension assistance are eligible for a pension income deduction for their taxes.

If you claim pension assistance in 2018, and you are paid the assistance in arrears for 2017, tax is withheld at a rate of 40 percent on the pension paid in arrears. You can ask the Tax Administration to issue a revised tax card for 2018 and to send it to Kela. Kela will then withhold tax according to the revised tax card.