Minister of Social Security Sanni Grahn-Laasonen (NCP) arrived for the government’s budget session at the Ministry of Agriculture and Forestry in Helsinki on 19 September 2023. Grahn-Laasonen on Wednesday conceded that the cuts in parental allowance and family leave compensation would have harmed the labour-market position of women. (Heikki Saukkomaa – Lehtikuva)


THE GOVERNMENT of Prime Minister Petteri Orpo (NCP) has backtracked on two spending cuts forwarded in its action plan, reports Helsingin Sanomat.

The government decided in its newly concluded budget session that it will call off the cuts in the parental allowance and family leave compensation disbursed to employers, reveal minutes of the session seen by the daily newspaper.

The 2,500-euro compensation for family leave is intended to cover the costs incurred by employers from the parental leaves of female employees and, thereby, promote gender equality in the labour markets. The compensation was to be slashed to 1,500 euros in order to generate annual cost savings of 10 million euros.

Available to employers since 2017, the compensation has been regarded as important especially in female-dominated sectors. Last year, it was disbursed for around 20,000 employees.

The government had also agreed to do away with the raised parental allowance for the first 16 days of parental leaves, which equals up to 90 per cent of earned income, in order to generate cost savings of 13 million euros in 2025 and 25 million euros as of 2026.

The Ministry of Social Affairs and Health has been tasked with finding other cost-saving measures to compensate for the decision. The government is to make its decision on the alternative measures in its framework session next spring.

Minister of Social Security Sanni Grahn-Laasonen (NCP) told Helsingin Sanomat on Wednesday that the cuts were abandoned because they would not have generated the intended cost savings for technical reasons. The problem arose from the fact that the benefits are part of the earned income insurance, which is paid out of the partly labour market organisation-funded National Health Insurance Fund.

She also conceded that the cuts would have had a negative impact on the labour-market position of women, despite defending them as recently as in August. She argued at the time that the cuts are part of the government’s austerity programme and that more effective measures can be found to strengthen the labour-market position of women.

“I’m sure we’ll find cost savings without negative effects on equality in working life,” she stated on Wednesday.

Aleksi Teivainen – HT