Changes to Kela benefits in 2021

A new year has started, and it brings some changes in the services provided by the Finnish Social Security (Kela).

The following is a summary of the key changes in 2021 which affect the social benefits provided by Kela.

Earnings threshold to qualify for social security coverage will be increased for persons employed in Finland

Workers arriving in Finland from another country may be eligible for social benefits from Kela. They are eligible if they earn at least 726.27 euros per month (up from 723.69 euros per month in 2020).

This corresponds to the amount of the basic unemployment allowance per month. Benefits are available for months in which the threshold is exceeded.

Students to pay a healthcare fee

In 2021, Kela will have administrative responsibility for providing health services to higher education students, including the collection of a healthcare fee. The Finnish Student Health Service (FSHS) will provide services not only to students of traditional universities but also to students of universities of applied sciences.

The student healthcare fee must be paid by all students who are completing a degree at a Finnish institution of higher education and have registered as attending for the term in question.

Higher education students must pay the fee to Kela starting with the spring term of 2021. In 2021, the fee will be 35.80 euros per term. Students are not billed for the fee but are expected to pay it unprompted via Kela’s e-service.

Changes to student aid due to the coronavirus

The target time to qualify for a student loan compensation or student loan tax deduction can be extended by 0.5 academic years for students who completed a degree in higher education during the autumn term of 2020 (1 August 2020 - 31 December 2020) and whose graduation was delayed because of the coronavirus epidemic.

Students who did not graduate within the target time will in March-April 2021 receive a decision proposal from Kela informing them that they have not been granted a student loan compensation or tax deduction. They should then submit a request to Kela to have their case reviewed and provide information about the studies required for the degree that they did not complete in the spring term of 2020 (1 January - 31 July 2020) and explain how the coronavirus epidemic affected these studies.

Students who postpone the beginning of their studies in a higher education institution because of the epidemic may also qualify for an extension of the target graduation time. The above applies to students whose first admission to a degree programme is for a programme scheduled to begin in autumn term 2020 or in spring term 2021, but the coronavirus epidemic has caused them to postpone the start of their studies.

The qualifying requirements for the school transport subsidy will change temporarily because distance learning has become more common during the coronavirus epidemic. Students may qualify for school transport subsidy if they make at least eight return trips to and from school in one calendar month. This requires also that the students now make fewer trips to and from school because their school has made special arrangements to provide instruction during the coronavirus epidemic. The described changes will remain in effect for the spring term, from January 2021 to 31 July 2021.

The meal subsidy for higher education students will increase to 2.30 euros per meal starting 1 January 2021. In practice this means that Kela’s share of the cost of the meal will increase, while the student’s out-of-pocket share will decrease.

Increases in family benefits

The minimum amount of the maternity, paternity and parental allowances and of the special care allowance will go up. The new amount will be 29.05 euros per day (28.94 euros per day in 2020).

The euro amounts of child care allowances tied to the national pensions index will go up 0.4%.

Rates of child maintenance allowance increased

The full amount of the child maintenance allowance will be increased to 167.35 euros per month (from 167.01 euros per month in 2020).

The income limits to qualify for an exemption on child support debt will be revised. Persons with maintenance liabilities qualify for the exemption if their monthly income does not exceed 1,130.86 euros. The income limit goes up by 282.71 euros per month for each additional child. However, the income limit is not increased for children who have been granted child maintenance allowance. The 2020 amounts were 1,128.57 euros per month and 282.14 euros per month.

Kela does not provide child maintenance allowance if a child is able to support him- or herself. In 2021, the limits for children’s earnings and income from capital will be increased to 791.60 euros per month for children living at home, and to 1,130.86 euros per month for children who are living independently. The corresponding limits in 2020 were 790 euros per month and 1,128.57 euros per month.

Unemployment benefits increased

The basic unemployment allowance and the labour market subsidy will increase to 33.78 per day euros (from EUR 33.66 in 2020).

The supplementary amount and the child increases will be raised as well. The supplementary amount will be 4.80 euros per day.

The child increases will be as follows:

• 5.30 euros per day for one child.
• 7.78 euros per day for two children in total.
• 10.03 euros per day for three or more children in total

Some temporary exceptions to unemployment benefit rules extended to 31 March 2021

During the coronavirus epidemic, there have been several temporary legislative changes affecting unemployment benefits. Some of these exceptions have been extended to 31 March 2021. For example, the exempt amount applicable to unemployment benefits has been raised to 500 euros (from 300 euros).

The exempt amount is the amount of money that an unemployed jobseeker may earn without a reduction in unemployment benefit.

Also, the eligibility requirements for the commuting and relocation allowance have been relaxed so that until 31 March 2021, the allowance is available if the two-way trip to and from one's place of full-time employment takes more than two hours (rather than three hours) per day.

Finally, self-employed persons can get labour market subsidy payments until 31 March 2021 if their business has suffered due to the epidemic. The eligibility is not conditional on a specific form of incorporation and does not require the termination of all self-employment activity.

General housing allowance: Maximum housing costs increased slightly

The maximum housing costs allowed under the general housing allowance scheme will be adjusted in line with the cost-of-living index. This means that the maximum housing costs will be increased slightly at the beginning of 2021. The new maximum limits will apply to all reviews and awards of housing allowance made on or after 1 January 2021.

The amount of water charges recognised as housing costs will also rise slightly. In 2021, up to 19 euros per month per person in separately paid water charges can be recognised as housing costs.

Due to an adjustment of the national pensions index, the basic deductible applicable to housing allowance recipients is reduced somewhat. This means that the income limit to qualify for a full housing allowance will go up slightly. In 2021, the full rate of allowance is available on an income of 606 euros plus 100 euros for each adult and 224 euros for each child in the household.

Increase in the basic amount of social assistance

The basic amount of social assistance will increase slightly in 2021. It will be 504.06 euros per month for persons living alone, up from 502.21 euros per month in 2020.

The amount of water charges recognised under the social assistance scheme will increase slightly. Up to 22.80 euros per person will be recognised in 2021 (up from 21.60 euros per person in 2020).

Maximum limit on out-of-pocket medicine costs increased slightly

The maximum limit on yearly out-of-pocket medicine costs will go up slightly. The new limit will be 579.78 euros per calendar year (up from 577.66 euros in 2020). Once the limit is reached, customers only pay a 2.50 euros copayment for each reimbursable medicine for the rest of the year.

The basic rate of reimbursement (40% of the sale or reference price), the lower special rate of reimbursement (65% of the sale or reference price) and the higher special rate of reimbursement (100% of the sale or reference price) will remain the same.  Also the initial deductible (50 euros) which customers must pay out of pocket to qualify for reimbursements will remain unchanged.

Higher reimbursement for persons tested for coronavirus by a private-sector healthcare provider

Starting 1 January 2021, persons visiting a private-sector healthcare provider in order to undergo a PCR test will get a reimbursement of 100 euros (up from the current rate of 56 euros in effect since 1 April 2020).

The PCR test is a nucleic acid detection technique based on the analysis of nasopharyngeal swabs, which is considered the most accurate existing method for detecting COVID-19.

Minimum amounts of sickness and rehabilitation allowances to increase slightly

The minimum amounts of sickness and rehabilitation allowances will increase. They will be 29.05 euros per day (28.94 euros in 2020).

The rehabilitation allowance for young persons and the allowance payable during vocational rehabilitation will go up to 33.51 euros per day (from 33.39 euros in 2020).

Increases in pensions

The full amount of the national pension for recipients living alone will be 665.29 euros per month (up from 662.86 euros in 2020). The corresponding amount for those living together with another person will be 593.97 euros per month (up from 591.79 euros in 2020).

The full amount of the guarantee pension and of pension assistance will be 837.59 euros per month (834.52 euros per month in 2020).

The starting pension for surviving spouses will be 328.74 euros per month, and the basic amount of the continuing pension 102.97 euros per month. The basic amount of the orphans' pension will be 60.49 euros per month.

The increase available to pensioners with a dependent child under 16 years of age will be 22.23 euros per month.

The front-veterans’ supplement will be 125.46 euros per month, while the additional front-veterans' supplement will be 258.13 euros per month for recipients living alone and 226.04 euros per month for those living together with another person.

The earnings limit for putting a disability or guarantee pension on hold will go up as well. Recipients of a disability pension can in 2021 earn a maximum of 837.59 euros per month without any effect on the further payment of the disability pension or guarantee pension.

Changes in the housing allowance for pensioners

The maximum housing costs taken into account in the housing allowance for pensioners will be increased by 0.9% in all three municipality categories.

The maximum amount of housing costs will be

• 8,433 euros per year in category 1 municipalities.
• 7,755 euros per year in category 2 municipalities.
• 6,804 euros per year in category 3 municipalities.

The amount of water charges that can be recognised as housing costs will be raised to 29.81 euros per person per month (up from 29.42 euros in 2020). Recognised heating costs will remain unchanged. The recognised monthly costs of maintenance for a single-family home will increase to 43.44 euros from 43.28 euros in 2020. These increases will be applied in forthcoming reviews of the housing allowance for pensioners.

Increases in disability benefits

Disability benefits will be increased slightly starting 1 January 2021 in line with index adjustments:

Disability allowance for persons under age 16:

• Basic disability allowance 93.39 euros / month.
• Increased disability allowance 217.93 euros / month.
• Highest disability allowance 422.58 euros / month.

Disability allowance for persons aged 16 years or over:

• Basic disability allowance 93.39 euros / month.
• Increased disability allowance 217.93 euros / month.
• Highest disability allowance 422.58 euros / month.

Care allowance for pensioners:

• Basic care allowance 71.48 euros / month.
• Increased care allowance 155.72 euros / month.
• Highest care allowance 329.27 euros / month.
• Disability supplement for veterans 107.88 euros / month.