How to apply for the Finnish housing subsidy

Houses in Finland are expensive and salaries are not always enough to cover the basic needs of households. That is why there exist the housing subsidies, also known as housing allowances.

Housing subsidies are paid by the Finnish Social Security (Kela). They have been created to help low-income households and families with fewer resources to afford regular housing costs.

According to the information provided by Kela, “low-income households are eligible for a general housing allowance to help with their housing costs”. A household typically comprises the persons sharing living quarters. This can be one or several persons and the housing allowance is granted to the entire household as a whole.

Who can apply?

Spouses and cohabiting partners always belong to the same household. The household allowance can be claimed by one person on behalf of the entire household. The claimant is usually the person in whose name the rental agreement is or who owns the home.

Foreigners may also be considered to be part of a household if they are covered by the Finnish social security system. It is important to list all occupants of the household when applying for a housing allowance. Based on the information received, Kela will decide who is considered to be a member of the household.

They are accepted as part of the same household

In general, Kela accepts to consider as a part of the same household:

• The persons permanently sharing a home.
• A married or cohabiting couple living in the same dwelling.
• A married couple living separately. For example a spouse who lives in another town due to employment, study or conscript service reasons is considered a member of the household.
• Close family members sharing a home. This includes grandparents, parents and children. All are part of the same household regardless of any rental or maintenance agreements which may exist.
• The persons having rented a home under a joint rental agreement. They are considered to make up a so-called communal household even if they do not share a household.
• Persons having rented a home under separate rental agreements if the agreement or an appendix to it specifies that they are jointly responsible for paying rent.
• Students living with their parents.
• Persons temporarily absent from the household. For instance, due to studies, work, military, hospitalisation or incarceration… An absence is usually considered to be temporary if it lasts no more than a year.

If you rent a home with another person on a joint rental agreement, you are part of the same household. This means that friends sharing a home are one household.

Not accepted as part of the same household

As a general rule, Kela will not consider as a part of the same household:

• Persons who have a separate lease for a part of the dwelling.
• Adult children who move to another town.
• Main tenant or owner of the dwelling and a subtenant of either of them. If a tenant signs a separate rental agreement with the main tenant or owner of a dwelling for part of the dwelling (one room for instance), the agreement is considered to be a sublease agreement. The subtenant is considered to belong to a different household than the main tenant or owner, unless they are a couple or close relatives.
• Siblings sharing a home. If the siblings each have their own rental agreement with the landlord or if one of them is the other's subtenant.
• Spouses who are legally separated

if you rent a home on separate rental agreements, you each form your own household unless you are a married or cohabiting couple or close relatives, or the rental agreement or any appendix to it defines you as jointly responsible for paying the rent.

The acceptable housing costs

This type of subsidies are not only designed for people who live in rental houses. Of course the tenants of rented homes can apply for this benefit, but housing allowances are also available for owner-occupied homes, right-of-occupancy homes and part-ownership homes, as Kela remarks on its website.

The Finnish Social Security system pays housing benefits for acceptable housing costs such as the rent. However, the acceptable housing costs may vary depending on the type of housing.

For instance in rental homes and part-ownership homes, the rent and the water and heating costs paid separately from the rent are accepted.

In the case of right-of-occupancy homes and single-family-owned homes, Kela accepts also maintenance charges and seventy-three percent of the monthly interest paid on personal loans taken out to acquire the right of occupancy.

You can find more information on the accepted housing costs depending on the different types of homes HERE

The amount of the allowance

The amount of the housing allowance may vary depending on the number of adults and children in the household, the municipality in which their home is located and the income before taxes.

Though it is difficult to determine the final amount because it depends on each case, in this article we will try to clarify the general rule applied when it comes to calculate it. Please, use the links provided in order to better understand each concept and its influence on the result.

In general the housing allowance is the 80% of the difference between the acceptable housing costs and the basic deductible.

Persons with very low incomes need pay no basic deductible. If the amount of acceptable housing costs exceeds the maximum housing costs, the amount of the allowance will be calculated based on the maximum costs. The rates of maximum housing costs are linked to the household size and the municipality in which the home is located. They are pegged to the cost-of-living index.

Source: Kela

Maximum housing costs in Åland Islands municipalities:

• One-person household, 417 euros per month.
• Two-person household, 609 euros per month.
• Three-person household, 772 euros per month.
• Four-person household, 915 euros per month.
• If there are more than four persons in the household, the maximum housing costs are increased by 125 euros for each additional person.

You can use Kela's simulator to calculate an estimated amount of the housing allowance. You can find the simulator by clicking HERE

How to apply for the housing allowance

According to Kela, new payments of housing allowance begin on the first of the month. This means that for example, if you have a rental agreement that goes into effect on 15 March, you will get housing allowance starting from 1 April.

It is possible to get housing allowance retroactively for up to one month from the month of application.

The first step when applying for this benefit is to submit an application for general housing allowance online at Kela’s webpage HERE (in Finnish) or HERE (in Swedish).

Again, foreigners have to face a common difficulty when it comes to apply for social benefits: the services are available in Finnish or Swedish languages only. So if you are not familiar with the country’s official languages, the best option is to ask for help.

Log in to Kela’s online customer service using your online banking ID or a mobile ID. If you don’t have online banking credentials, read below how to submit an application on paper.

The following step is to scan or take a photo of any supporting documents and enclose them with your application. At least you will need to include:

• A copy of a written rental agreement.
• Proof of the amount of rent or maintenance charge if not shown in detail by other enclosed documentation such as the rental agreement or rent increase notice.
• If information about your rental agreement is provided to Kela electronically by your landlord, you need not enclose the rental agreement or any proof of the amount of rent you pay.

Depending on your household's situation, also enclose:

• Pay slip or other document showing your salary.
• Details of any other pensions or benefits you may receive from other sources besides Kela or your authorised pension provider.
• Details of housing loans (remaining balance and interest rate).
• Form Yhteisöruokakunnan valtuutus (Authorisation from a communal household) (AT 5). If your need this document, you can download it HERE
• Decision showing the award of a start-up grant if you are a new entrepreneur without YEL insurance cover.
• Pay slip if you are returning to work within three months of the date when the housing allowance was granted or reviewed.

For applications on paper

If you do not have online banking credentials then you can fill in and print out an application for housing allowance (AT 1e) and mail it to Kela along with any supporting documents.

You can download the AT 1e form in English by clicking HERE

You can find a list of Kela’s postal addresses and the general conditions to send applications by mail HERE

A housing allowance is usually granted for one year in advance. However, if the level of income or other concrete circumstances change during that year, the housing allowance is reviewed. The Finnish Social Security System stresses that if anything changes, the beneficiaries of these aids must “notify Kela immediately”.