Budget proposal for the Ministry of Social Affairs and Health and its administrative branch for 2025

Budget proposal for the Ministry of Social Affairs and Health and its administrative branch for 2025

The Finnish Government proposes about EUR 15.2 billion in appropriations for the Ministry of Social Affairs and Health and its administrative branch for 2025. This is about EUR 1.1 billion less than in 2024.

Of the appropriations for the Ministry of Social Affairs and Health and its administrative branch, approximately 36 per cent will be allocated to pensions, approximately 31 per cent to offsetting family and housing costs and to basic social assistance, approximately 12 per cent to unemployment security, approximately 12 per cent to health insurance, approximately 2 per cent to supporting healthcare and social welfare and approximately 2 per cent to grants for the promotion of health and social wellbeing. Of the appropriations under the main title of expenditure, 0.4-1.0 per cent will be allocated to each of the other classes of the main title.

Changes to social security reduce appropriations

The reduction in the appropriations of the Ministry of Social Affairs and Health is particularly due to the reforms and savings concerning social security that were agreed in the Government Programme and the government session on spending limits. The social security reform aims to simplify the social security system and introduce more incentives for work, along with strengthening general government finances.

The net effect of these reforms on the Ministry's main title is around EUR 470 million. Of this, about EUR 170 million is due to the reforms that entered into force in 2024 (the savings impact of which will grow in 2025) and approximately EUR 300 million due to the reforms that will enter into force in 2025. The benefits from the reduced costs of social security funds will be allocated to strengthening central government finances. This channelling solution reduces the Ministry's need for appropriations by a total of EUR 575 million in net terms.

• An appropriation of around EUR 4.6 billion is proposed for offsetting family and housing costs and for basic social assistance and certain other services. This is EUR 244 million less than in the 2024 Budget. The amount of the appropriation is reduced particularly by the changes to the housing allowance. The level of the appropriation takes into account the estimated increase in social assistance expenditure.
• An appropriation of EUR 1.9 billion is proposed for unemployment security, which is EUR 340 million less than in 2024. The amount of the appropriation is reduced, for example, by the transfer of the responsibility for organising employment and economic development services (TE services) from central government to municipalities (around EUR 370 million), the abolishment of the increment components of unemployment security (EUR 23.5 million) and the strengthening of the means testing for labour market support (EUR 3.4 million).
• An appropriation of EUR 1.87 billion is proposed for health insurance, which is EUR 437 million less than in 2024. The amount of the appropriation is reduced, for example, by the reforms concerning reimbursements for medicine costs (EUR 60 million), the change in the formula for calculating the sickness allowance (EUR 4.0 million) and the reform of the vocational rehabilitation of young people (EUR 21.6 million). The savings in insurance contributions concerning the above-mentioned changes are taken into account as part of the channelling solution that reduces the need for the appropriation by a total of EUR 601 million under the item 'Health insurance'.
• An appropriation of EUR 5.5 billion is proposed for pensions, which is EUR 30 million less than in 2024. The reduction in the appropriation is due to changes in benefits payable abroad (EUR 35 million) and in the housing allowance for pensioners (EUR 9.5 million) and due to the raising of the age limit for the national pension and rehabilitation allowance from 16 to 18 years (EUR 6.6 million).
• An appropriation of EUR 123.0 million is proposed for supporting veterans, which is around EUR 11.5 million less than in 2024. The decrease in the appropriation level is due to the diminishing number of veterans.

Savings in the administrative branch's operating expenses and grants

Under the central government productivity programme, savings of EUR 29.3 million will be made in the Ministry of Social Affairs and Health's branch of government. The Ministry proposes that EUR 28.7 million of these savings be directed at government agencies and public bodies in its administrative branch and EUR 0.6 million at other items. The largest savings concern the biggest institutions, i.e. the Social Insurance Institution of Finland (Kela), the Finnish Institute for Health and Welfare and the Finnish Institute of Occupational Health. On average, the savings will be less than 4 per cent of the appropriations allocated to the government agencies and public bodies in the Ministry's administrative branch for 2024.

A sum of EUR 304.1 million is proposed for grants to associations and foundations to help them promote health and social wellbeing. This is EUR 79.5 million less than in 2024. A total of EUR 25.8 million will be dissolved annually from non-distributed proceeds in the balance sheet during the period 2024-2026.

Additional funding to continuing education, mental health services, EU projects and shelters

The Ministry of Social Affairs and Health proposes that the central government funding contribution for reforming the Kela reimbursement model be raised by EUR 4.7 million to about EUR 70 million.

The amount of EUR 10.0 million proposed for continuing education for people in working life has been transferred to the main title of expenditure of the Ministry of Education and Culture. This is meant for a system for replacing the adult education allowance in order to respond to the educational needs of special education teachers and nurses in particular.

The Ministry of Social Affairs and Health proposes EUR 72.7 million in central government funding for student healthcare provided by the Finnish Student Health Service. The increase in the appropriation is explained, among other things, by the growing number of students (EUR 3.7 million) and the entry into force of the maximum waiting time for access to therapy as from 1 May 2025 (EUR 1.2 million).

The Ministry proposes that funding for university-level research in healthcare and social welfare be increased by EUR 5.0 million to EUR 40 million.

For food aid activities, the Ministry proposes EUR 3.0 million. In line with the Government Programme, the Government will ensure permanent funding for food aid to help the most deprived persons and to secure sustained development of such aid.

The Ministry proposes EUR 3.5 million for the prevention of drug-related deaths among young people. For the development of services for young people suffering from substance abuse or using violence and for young offenders, the Ministry proposes a sum of EUR 2.5 million. In addition, the Ministry proposes EUR 0.5 million for launching a hybrid model for child welfare.

A total of EUR 2.0 million is proposed for improving the availability of low-threshold mental health services. An appropriation of EUR 0.5 million is proposed for mental health chat services. This sum is included in the grants awarded to associations and foundations to help them promote health and social wellbeing.

It is proposed that funding for shelter activities be increased by EUR 1.0 million to EUR 27.6 million. By increasing the appropriation, the aim is to improve access to shelter services.

An appropriation of EUR 250,000 is proposed for support provided to veterans of crisis management operations.

Inquiries

Veli-Mikko Niemi, Permanent Secretary, tel. +358 295 163 425
Mikko Staff, Director of Finance, tel. +358 295 163 214
Nuutti Hyttinen, Special Adviser to the Minister of Social Affairs and Health, tel. +358 295 163 073
Hannu Peurasaari, Special Adviser to the Minister of Social Affairs and Health, tel. +358 295 163 662
Sakari Rokkanen, Special Adviser to the Minister of Social Security, tel. +358 295 163 109
Niilo Heinonen, Special Adviser to the Minister of Social Security, tel. +358 295 163 603
Veera Svahn, Special Adviser to the Minister of Employment, tel. +358 295 047 321

Email addresses are in the format [email protected]

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