A person holding a brochure about social assistance in a service point of the Social Insurance Institution of Finland (Kela) in Helsinki in June 2020. Minister of Social Security Sanni Grahn-Laasonen (NCP) told YLE last week that the government intends to carry out the first of its extensive social security cuts in the autumn. (Vesa Moilanen – Lehtikuva)


THE GOVERNMENT of Prime Minister Petteri Orpo (NCP) will carry out the first of what will be 1.5 billion euros worth of cuts in social security benefits this autumn.

Minister of Social Security Sanni Grahn-Laasonen (NCP) told YLE on Wednesday that the government is seeking to attach the first proposals to its budget draft for next year, with a view to presenting them to the parliament by year-end.

The government programme outlines that spending on social security should be reduced by 1.5 billion euros, including by slashing the housing allowance by 360 million euros or about 16 per cent from 2022. Grahn-Laasonen stated to the Finnish public broadcasting company that the cuts will align Finland with the rest of the Nordics.

“For example, you wouldn’t be eligible for the housing benefit for owner-occupied housing any more,” she said.

The allowance being available to home owners, she explained, leads to higher rents through property investors.

VATT Institute for Economic Research, though, estimated in a study published last year that increasing the housing allowance does not appear to lead to increases in the rents paid by the allowance recipients, although a minor impact on rents cannot be ruled out entirely. Grahn-Laasonen on Thursday stated to Helsingin Sanomat that the study is of high quality and its results are well known at the ministry.

“In a broader sense, there’s no clear scientific evidence of the effects of the housing allowance on the general rent level,” she argued.

The Finnish government will seek to incorporate all working-age people into working life by adjusting unemployment benefits and simplify social security benefits by transitioning toward a single general benefit.

Grahn-Laasonen on Wednesday expressed her hope that employers provide more job opportunities to people with a limited ability to work, for example.

“We’ll always encourage working as the primary option, as other Nordic countries are already doing. We can’t have incentive traps for working, for example. We’re faced with extremely challenging population ageing,” she said to YLE.

One of its goals is to halve the number of income assistance recipients, the last-resort form of social security in Finland.

“The main idea is that being able to provide employment is best way to get people off of income assistance,” she answered when asked which recipients the government is looking to disqualify for income assistance.

The reforms, she added, will “naturally” be implemented in accordance with the boundaries of the constitution.

Grahn-Laasonen also revealed that she was surprised by how few Finns Party supporters consider racism to be a problem in Finland, pointing to a newly published survey by YLE.

“You could think that racism is maybe a theme that we have to talk about in Finland. It can be difficult to detect racism if you haven’t experienced it yourself,” she analysed, stressing that racism is a real problem in the country.

She voiced her confidence that the populist right-wing party has genuinely committed to the government’s stance against racism.

“I don’t believe in the road of isolation – of saying that over 620,000 Finns were wrong for voting for the Finns Party,” she said to YLE. “Power has to come with responsibility, meaning they have to start implementing the government programme and demonstrating that they’re a ruling party that’s capable of implementing the programme together with other coalition partners.”

Aleksi Teivainen – HT