(CN) — Finland's right-wing government introduced cuts this month to housing support and unemployment allowance for low-income groups, despite warnings from international human rights organizations, in an attempt to improve the country’s public finances and lower deficits.
The conservative National Coalition Party spearheaded the cuts to basic social security benefits. Already upon taking office, Prime Minister Petteri Orpo cited the need to balance government budgets better and emphasized that ”the system must be reorganized to encourage Finns to work.”
Finnish citizens will see their overall housing compensation decrease under the new rules, as allowance goes down and the basic deductible goes up. They also face the cancellation of a deduction for earned income, meaning all earnings now stand to lower their monthly housing allowance.
According to the Social Insurance Institution of Finland, a government body known as Kela, these changes alone would mean that a single resident working part-time would see a decrease of more than 100 euros, or $108.55, each month.
At the same time, the government removes the current 300-euro-per-month exemption amount associated with unemployment benefits and abolishes supplements for families with multiple children.
Several human rights organizations have sounded the alarm upon implementation of the new cuts.
The non-governmental advocacy group Finnish League for Human Rights warned that they represent a serious step in the wrong direction because they mainly target the three lowest-income deciles of society, and inevitably will cause a rise in relative poverty among young adults, single parents and elderly, working-aged people who live alone.
“People who struggle with health issues or are only able to work part-time will be very affected by the new criteria. Achieving higher benefits have definitely become more difficult,” said Anna Salmivaara, adviser on economic and social rights at the organization.
Salmivaara, pointing out a 2023 report from the Ministry of Social Affairs, underlined how the new cuts could reduce the disposable income by 300 euros per month for some families. She also referred to the Finnish Institute for Health and Welfare, noting that income inequality will likely increase — while 68,000 people are at risk of moving to the low-income category already this year.
Taija Siren is one of the citizens who will likely feel the effects of the new cuts. She works three jobs part-time and is about to see her normal unemployment benefits being cut by close to 500 euros.
“My monthly sum is reduced a lot. It is a really hard and cruel situation, also because I have a lot of illness and medication,” she said, adding that it used to be more advantageous to work while receiving unemployment benefits.
Siren worries not only for herself but also for Finnish society as a whole. At one of her jobs, at a mediation office with the police and district attorney, she frequently encounters families with social issues. People tend to lash out and become more tense when they are under financial pressure, Siren has observed.
The new rules also come with more administration, such as getting statements and recalculating benefits. Siren called the prospect of “more work for less money” very demotivating.
Even before the new rules were implemented, Finland received warning via a 2023 notice from the social rights committee of The Council of Europe, an international human rights organization with 46 member states.
The committee, which analyzes individual countries’ ability to secure a minimum level of social and economic safety for their citizens, said Finland's level of social insurance was too low compared to the overall median income when looking at factors like social existence, unemployment benefits and parental allowance. It highlighted an obligation to support the lowest income groups in society, referring to Council of Europe's European Social Charter.
While the council's social rights committee recognized Finland had made index increases and improved pensions levels, the picture might change with the new cuts, which also include freezing social benefits so they won’t match inflation in years to come.
Salmivaara from The Finnish League for Human Rights said the percentage of families living in relative poverty, with an income of 40% below the national median, is likely to increase now — which is worrying because the U.N. Committee on the Rights of the Child has advised Finland to avoid any benefit cuts that could affect children at risk of poverty.
Yet there is a widespread recognition, including among European monitors, that citizens have access to a wide range of security packages in Finland, where public health and social services cover most of the population.
At Helsinki University, professor in social policy Minna van Gerven also underlined that Finland remains a strong welfare state despite its recent political changes.
“Almost a third of Finland’s public finances are invested in social security, so we are in the top four within the European Union," she said. "Even after these cuts, the country keeps its Nordic welfare model, where an individual is — in principle — supported from birth to grave.”
However, after the election in April last year, the government has been able to form a right-wing conservative dream team pushing one major goal.
”There is a strong focus on raising employment to curb state debt," Gerven explained. "The new government wants to cut four billion euros in public expenses, with more than half of it coming from the health and social care sectors.”
She added that the National Coalition Party — supported by the Finns party, the Swedish People’s Party and the Christian Democrats — is clearly opting for a “stick, rather than carrot approach” to get more Finns into the labor market.
In her view, it is not unlikely that Finland will see further cuts in the near future.
Subscribe to Closing Arguments
Sign up for new weekly newsletter Closing Arguments to get the latest about ongoing trials, major litigation and hot cases and rulings in courthouses around the U.S. and the world.
Additional Reads
-
California certifies March 5 primary election results April 12, 2024 -
