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The Government of Prime Minister Juha Sipilä (Centre) is intent on shaving 0.85 per cent off many social security benefits, pushing thousands of people below the poverty line, according to the Central Association of Finnish Pensioners (EKL).
The Government of Prime Minister Juha Sipilä (Centre) is intent on shaving 0.85 per cent off many social security benefits, pushing thousands of people below the poverty line, according to the Central Association of Finnish Pensioners (EKL).

Less than 1,190 euros.

That is how little people living below the poverty line have to scrape by every month in Finland. And the number of such people is about to grow by the thousands due to upcoming cuts in various social security benefits, warns the Central Association of Finnish Pensioners (EKL).

The Government should, as a result, re-consider its decisions to reduce income transfers and raise public service charges in its upcoming budget session, argues EKL.

The Government decided earlier this year to slash dozens of social security benefits – such as minimum daily allowances, national pensions, housing allowances, child benefits and labour market subsidies – to account for one-half of the savings target of 400 million euros adopted in its framework session.

The benefit cuts will put almost 10,000 Finns below the poverty line, according to the Finnish Federation for Social Affairs and Health (SOSTE).

EKL reminds that a number of benefits granted under the social security scheme were cut by 0.4 per cent at the beginning of the year. The Government, it adds, is currently intent on slashing the same benefits by an additional 0.85 per cent.

“The Government's decisions, if implemented, will widen the income gap in our country. The additional benefit cuts will result in an increase in the number of people living below the poverty line because almost 10,000 people are already about fall below the line,” Timo Kokko, the chief executive of EKL, says in a press release.

“This will inevitably result in the lengthening of the national embarrassment that are breadlines,” he adds.

Kokko assures in an interview with Uusi Suomi that he recognises the necessity of cost cuts amid the difficult economic conditions.

“But you should also take into consideration the people without have a voice in our country – the poorest and most disadvantaged people – when making the decisions. It's easy to shave 0.85 per cent off everything. You should think more about how to target the cost cuts at people who are not in the most difficult position,” he says.

EKL has set the poverty line at 60 per cent of median household income, leaving roughly 700,000 people to live below it in Finland.

Kokko points out that the largest group of people living below the poverty line, at 180,000, are pensioners, who are not only affected by the benefit cuts but also by the cost-cutting measures introduced in the health care sector – such as the raises in health care charges and adjustments in medication expense reimbursements.

“The Government's goal to create savings of 134 million euros in medication expense reimbursements is a whole other chapter. The sum equals ten per cent of the medication reimbursement costs of Kela, and the adjustment mainly targets pensioners and people with a high disease risk,” notes EKL.

EKL also estimates that the effects of the good decision, such as the one to raise guarantee pensions in 2017–2018, will melt away because index-based benefits are about to drop by six per cent due to inflation in 2019.

This article was re-published after being deleted in a server update on 5 August, 2016.

Aleksi Teivainen – HT
Photo: Vesa Moilanen – Lehtikuva
Source: Uusi Suomi

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