The Finnish Government is preparing a reduction in early childhood education and care fees for 2021. According to the calculations of the Ministry of Education and Culture, lower fees in early childhood education and care (ECEC) "will increase employment", as incentives for accepting work will improve, while also increasing the participation rate of children in these services.
According to a press release, the first steps in the preparations for the Government proposal to reduce the fees are to raise the income thresholds by 31%. At the same time, the maximum fee for a family’s second child in ECEC will be reduced from 50% to 40%.
"In practice, these changes will changes will make everyday life easier for families, by bringing new families within the scope of lower fee categories and zero rates," the Ministry says. A legislative proposal on the matter is scheduled to be submitted by the end of October.
In its budget session in September, the Government decided that, as part of the employment measures, 70 million euros will be allocated to early childhood education and care payments to local authorities, which corresponds to the decline in ECEC revenue in local government due to higher income thresholds and the change the discount for siblings.
“Lower fees in early childhood education and care makes everyday life easier for families, brings new children to early childhood education and care to learn and strengthens employment. So we are talking about an extensive measure that supports overall wellbeing. I’m sure many families will feel relieved once early childhood education fees take up a smaller part of their disposable income,” says Minister of Education Li Andersson.
2,900 people to employment
The Ministry expects that lower fees will raise the participation rate in early childhood education and care, as incentives for accepting work will improve. Higher employment can strengthen public finances by means of mechanisms such as tax revenue and savings in social security expenditure. It is estimated that the reduction in ECEC fees would bring approximately 2,900 people into employment.
Provisions on early childhood education fees are laid down in the Act on Client Fees in Early Childhood Education and Care. The fees are determined by the number of people in the family and their gross income. The size of client fees are determined on the basis of the taxable earned income, capital income and tax-exempt income of the child, the child's parent or other guardian, and the married spouse or domestic partner of the parent or guardian living in the same household with the child’s parent or guardian.
The maximum ECEC fee for the first child (288 euros per month) remains unchanged.
