Finland's social insurance agency Kela expects benefit expenditure to increase this year after payouts reached a record €17.5 billion in 2025.
New figures published by the agency show benefit spending rose by €188 million last year, an increase of 1.1 per cent compared with 2024. Kela now estimates total expenditure will climb to €18.1 billion during 2026, driven by higher spending on unemployment support, student benefits, social assistance and sickness-related payments.
The largest shift in spending during 2025 came from changes to housing support.
Expenditure on the general housing allowance fell by €449 million, a drop of almost 27 per cent.
The decline followed reforms affecting students. Since August last year, students have no longer been covered by the general housing allowance scheme and instead receive housing supplements through the student financial aid system.
As a result, spending on student financial aid increased by €177 million during 2025, representing growth of almost 24 per cent.
Kela also reported a sharp rise in basic social assistance payments. Expenditure in that category exceeded €1 billion for the first time, increasing by €176 million, or more than 21 per cent compared with the previous year.
Unemployment benefits accounted for another major increase. Spending rose by €157 million in 2025, an increase of eight per cent from 2024 levels.
Meanwhile, expenditure on child home care support moved in the opposite direction. Payments under that scheme fell by €13 million, representing a decrease of about five per cent.
Looking ahead, Kela expects upward pressure on several key benefit categories throughout 2026.
The agency estimates unemployment benefit spending will reach €2.4 billion this year. That would mark an increase of €322 million compared with 2025 and make it one of the largest areas of expenditure growth within the welfare system.
Student benefits are also forecast to rise significantly. According to Kela's projections, spending in that category will increase by €252 million compared with last year.
Additional growth is expected in basic social assistance, sickness insurance benefits and rehabilitation support programmes.
Housing allowance spending is forecast to continue its downward trend despite overall welfare costs increasing. Kela estimates expenditure on the general housing allowance will fall to around €1.05 billion in 2026, approximately €178 million less than in 2025.
HT
