Information package: Social assistance
Kela is responsible for the administration and payment of last-resort financial assistance, i.e. basic social assistance. This is a brief overview of the current state of basic social assistance and of recent developments. In the end, you will find links to e.g. related statistics and research.
The number of recipients of basic social assistance remained unchanged in 2023
In 2023, there was little change in the number of recipients of basic social assistance compared to 2022. In 2020, due to the COVID-19 crisis, the number of recipients of basic social assistance was the highest it had ever been in the 21st century, but the number of recipients decreased in 2021 and continued to fall in 2022 despite the increase in living costs. In 2023, there were about the same number of recipients as in 2022.
In 2023, a total of 250,493 households received basic social assistance from Kela, with a total of 355,464 residents in these households, or 6.3% of the entire population.
The number of basic social assistance recipients is usually highest in the summer, when many students and recent graduates need support due to a break in their studies or graduation.
Until 2018, the number of recipients decreased in December due to tax refunds. Since 2019, tax refunds have been paid to most tax payers between August and September, correspondingly reducing the number of recipients in those months. Tax refunds are largely counted as household income.
The need for basic social assistance is greatest among young people and people who live alone
More than three out of four households in receipt of basic social assistance are single-person households. These households mainly consist of a person living alone.
Other single-person households include those living with siblings or roommates, as well as those 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. The need for support is often prolonged among people who are unemployed in particular, but also among those who live alone, families with children and people who are on parental or childcare leave.
Pensioners are less likely to receive social assistance than 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.
Basic social assistance is therefore 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 may not receive unemployment benefits, for example, 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.
Recipients of basic social assistance use public health services and health-based benefits more often than the rest of the population
Research shows that recipients of social assistance are, on average, in poorer health than the rest of the population. A study published in 2023 on recipients of social assistance in Oulu and Helsinki found that recipients of basic social assistance receive health-based benefits more often than the general population. Basic social assistance recipients were only less likely to receive a disability pension and disability benefits paid by Kela than the rest of the population of the same age.
The connections between basic social assistance and health-based benefits mostly strengthened when the responsibility for the administration of the benefit was transferred to Kela As a result, receiving basic social assistance was more strongly linked to receiving health-based benefits after the transfer of responsibility in 2018 than prior to it in 2016.
Recipients of basic social assistance also use various public health services more commonly than the rest of the population, but use private health care services and occupational health care services less often. When services in the various sectors were examined overall, the differences were considerably smaller than those seen by sector.
The use of almost all public health care services was more common by those who live alone and receive supplementary and preventive social assistance in addition to basic social assistance than by those who only received basic social assistance. The need for supplementary or preventive social assistance is an indication of an even more fragile position than the average recipient of social assistance, which is often also associated with a person’s health problems.
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 wellbeing services counties. The administration of supplementary and preventive social assistance was transferred from municipalities to wellbeing services counties in early 2023.
Social assistance is intended as 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 euros 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. When granted, basic social assistance 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.
Wellbeing services counties can 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. Preventive social assistance can be granted in order to prevent difficulties caused by a sudden financial setback, for example.
In 2022, 274,000 households were in receipt of the various types of social assistance, with a total of approximately 400,500 household residents, comprising 7.2% of the population (THL Statistical report 26/2023).
Administrative responsibility for basic social assistance transferred from municipalities to Kela in 2017
Kela has been responsible for the administration of the basic social assistance scheme since the beginning of 2017. Municipalities continue to be responsible for the administration of supplementary and preventive social assistance.
The reform harmonised 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.
