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A total of 672,000 adults received financial support for their housing costs from the Social Insurance Institution of Finland (Kela) in 2017.
A total of 672,000 adults received financial support for their housing costs from the Social Insurance Institution of Finland (Kela) in 2017.

 

The Social Insurance Institution of Finland (Kela) disbursed more than two billion euros in housing benefits last year for the first time in history.

The combined cost of the general housing allowance, pensioners’ housing allowance and housing supplement of student financial aid has therefore surged by 65 per cent since 2010 and by 100 per cent since 2006.

Kela on Wednesday revealed that housing benefits were disbursed to a total of 672,000 adult recipients in 2017. Most of the general housing allowance recipients, it added, were one-person households living on the verge of poverty and, predominantly, under the age of 35.

The increase in housing benefit costs may be substantial, but it is no cause for concern, assures Signe Jauhiainen, a senior researcher at Kela.

She points out that the increase in benefit costs slowed down last year as a consequence of the long-awaited economic upturn and improved employment situation in Finland. The costs, she explained, should decrease as the economic upturn continues and more and more people re-join the ranks of the employed.

“If the costs fail to decrease even then, that’s when I’ll become concerned. That’s when there might be something seriously wrong with the system,” she says.

Another reason for the surge in costs is the comprehensive housing benefit reform that was implemented in 2015. It not only raised the benefits but also expanded the eligibility criteria for them.

Jauhiainen adds that the objective was also to simplify the housing benefit system. She believes the current system is simpler in that the amount of housing allowance is determined based on a maximum rent that varies according to the place of residence and household size of the applicant.

However, she also agrees with other experts and policy makers that the entire social security system should be developed further.

Aleksi Teivainen – HT
Photo: Heikki Saukkomaa – Lehtikuva
Source: Uusi Suomi

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