Information package: Social assistance

Kela is responsible for the administration and payment of last-resort financial assistance, i.e. basic social assistance. The following is a brief overview of the current state of basic social assistance and of recent developments. At the end, you will find links to more material on this topic, including statistics and research.

The number of recipients of basic social assistance continued to decrease in 2022

For the second year in a row, the number of recipients of basic social assistance was significantly lower than it has been ever since the responsibility for the administration of the benefit was transferred to Kela in 2017. In 2020 there were more recipients than ever before in the 2000s due to the COVID-19 pandemic, but in 2021 the number of recipients started to fall. The number kept going down in 2022 despite the rising costs of living.

In 2022, a total of 251,958 households, comprising a total of 355,426 persons or 6.4% of Finland’s total population, received basic social assistance from Kela. The number of recipients of basic social assistance decreased by approximately 23,000 persons, or 16,000 households, from the previous year.

Compared with 2021, the number of persons and households in receipt of basic social assistance was down by 6%. Of all types of households that received social assistance, the largest proportional decrease occurred among two-parent families with children, couples and adult living with others. The decrease in the number of recipients living alone was more moderate.

Usually, the number of recipients of basic social assistance reaches a peak during the summer, when many students and recent graduates need financial assistance for the summer break or because they have just finished their studies.

Until 2018, the number of recipients decreased in December, when people received their tax refunds. As of 2019, most people receive their tax refunds in August or September, so the number of recipients of basic social assistance tends to decrease during these months. As a rule, tax refunds count as household income.

Greatest need for basic social assistance among those living alone and among young people

More than three out of four households in receipt of basic social assistance are single-person households. Most single-person households consist of a person living alone.

However, the definition of a single-person household also includes persons living with a sibling or roommate, and persons aged 18 or over who live with their parents.

Approximately one fifth of all recipients of basic social assistance are families with children. Most of these are single-parent families.

The need for basic social assistance is greater in the younger age groups. Particularly young people aged 18 to 24 are overrepresented among the recipients of basic social assistance. One reason for this is that persons under the age of 25 years without vocational qualifications are subject to stricter requirements for entitlement to unemployment benefits. Another reason is that younger people are less likely than people in older age groups to have savings to fall back on.

However, younger people tend to receive basic social assistance only for a short period, whereas older working-age people often rely on basic social assistance for prolonged periods of time. A prolonged need for social assistance tends to occur particularly in the case of unemployed persons, but also persons living alone, families with children and those on parental leave or child care leave.

People of retirement age are less likely to receive social assistance than those in other age groups. The national pensions, guarantee pensions and the housing allowance for pensioners provide a better level of financial security than the other benefits providing basic social security. As a consequence, pensioners are usually not entitled to social assistance.

Basic social assistance can compensate for low or no primary benefits

Unemployment benefits from Kela are the primary source of income for approximately half of the households receiving basic social assistance. Most also receive general housing allowance. All in all, four out of five households in receipt of basic social assistance also receive general housing allowance.

Thus, basic social assistance is often used to compensate for an inadequate level of basic social security. For example, nearly 40% of recipients of labour market subsidy also receive basic social assistance. Similarly, recipients of other minimum-rate daily allowances tend to be entitled to basic social assistance. The minimum-rate daily allowances are basic unemployment allowance and minimum-rate sickness allowance, rehabilitation allowance and allowances for parents.

People often need basic social assistance to cover the high cost of living, particularly in the Greater Helsinki area. In roughly a third of households in receipt of basic social assistance, either the recipient of the benefit or their spouse has no primary benefits or earned income. Even though they do not receive unemployment benefits or other comparable benefits, they usually receive other tax-free benefits such as general housing allowance or child maintenance allowance.

The figure below shows the distribution of income and expenses of recipients of basic social assistance, with a focus on persons living alone and single-parent families with children.

Increasingly common for households receiving basic social assistance to have earned income

The number of households that receive both basic social assistance and earned income (from wages or self-employment) has increased. In 2017, every month about 6% of households receiving basic social assistance had earned income, and in 2022 the number had risen to about 9%.

Two-parent families with children are the most common type of household to have earned income and almost a fourth of them had earned income in 2022. This could be explained by the fact that while such households have two potential earners, they also have high expenses.

More than 15% of couples and more than 10% of single-parent families also had earned income. Of single-person households, approximately 6.5% had earned income.

The nature of basic social assistance and the grounds for its determination

Social assistance is a last-resort, means-tested benefit available to individuals and families whose income does not cover their necessary daily expenses. Social assistance is divided into basic social assistance, paid by Kela, and supplementary and preventive social assistance, paid by the municipalities.

Social assistance is intended as a short-term assistance for those in financial difficulty. Under Finnish law, social assistance is intended to ensure the minimum income needed for a life of human dignity and to promote autonomy and independence.

Social assistance is granted to a household. In this context, a household comprises the applicant and the applicant’s co-resident spouse and underage children. The amount of basic social assistance is based on a calculation of the household's income and expenses. The income that is taken into account is the net income of all household members, although there are a few exceptions. The assets of the household are usually also taken into account as income.

The expenses taken into account include a calculated basic amount for each household member (in 2023 the basic amount for a person living alone is €555.11 per month). The basic amount is intended to cover everyday expenses such as food, clothing and the use of a telephone.

Additionally, household expenses include housing costs to the extent that they are considered reasonable (rent, home insurance and electricity), child day care expenses and health care expenses. Basic social assistance usually also includes a voucher for the recipient’s prescription medication.

The amount of basic social assistance paid to a household equals the difference between the total income and expenses of the household.

Municipalities may grant supplementary social assistance to cover expenses that Kela either does not accept as expenses for the purposes of basic social assistance or that are related to the specific needs and circumstances of individual families. Supplementary social assistance can be granted in order to prevent difficulties caused by a sudden financial setback, for example.

Administrative responsibility for basic social assistance transferred from the municipalities to Kela in 2017

Kela has been responsible for the administration of the basic social assistance scheme since the beginning of 2017. The municipalities continue to be responsible for the administration of supplementary and preventive social assistance.

The reform harmonized the criteria for granting basic social assistance, promoted the equal treatment of customers and provided better online channels for social assistance matters. Further, the reform reduced the responsibilities of the municipalities, thus freeing up municipal social workers’ time for actual social work.

In legislative terms, basic social assistance is still an element of social welfare. Kela and the municipalities work closely together to ensure that people who need more than just financial assistance receive the help they need.

Since the reform, Kela’s information systems have produced a wide range of up-to-date information on the situation of social assistance recipients in Finland. This allows for evidence-based decision making and a more efficient development of the social assistance scheme.