Comprehensive reform of social assistance proceeds to Parliament

Comprehensive reform of social assistance proceeds to Parliament

The Government proposes a comprehensive reform of social assistance. The changes to be made would, for example, strengthen the obligations of recipients to apply for full-time work and primary benefits. The aim is to clarify the role of social assistance as a last-resort and temporary form of assistance, prevent social exclusion among young people and strengthen general government finances.

In line with the Programme of Prime Minister Petteri Orpo's Government, the Government will implement a comprehensive reform of social assistance that will improve people's ability to live independently, reduce long-term dependency on social assistance and clarify the role of social assistance as a last-resort discretionary cash benefit included in basic social security.

The Government proposes amendments to the Social Assistance Act, the Act on the Processing of Client Data in Healthcare and Social Welfare and the Act on Rehabilitative Work. The Government submitted a proposal on the comprehensive reform of social assistance to Parliament on 22 September 2025. Most of the proposed acts are scheduled to enter into force on 1 February 2026.

Strengthening the obligation to apply for primary benefits and full-time work

According to the proposal, the reformed Social Assistance Act would impose a stronger obligation on applicants for social assistance to apply for primary benefits instead of social assistance. The primary benefits include unemployment security benefits and student financial aid. If an adult applicant for social assistance had not applied for a primary benefit payable, for example, on the basis of studies, unemployment, illness or incapacity for work before applying for social assistance, the Social Insurance Institution of Finland (Kela) should assess whether they are eligible for such a benefit. If, before applying for social assistance, the person failed to apply for primary benefits within one month of being requested to do so by Kela, the basic amount of social assistance could be reduced by 50 per cent.

According to the proposal, the obligation to register as an unemployed jobseeker could, in future, mean seeking full-time work. Thus, it would also be obligatory to seek full-time work under threat that the basic amount be reduced in cases where a person who has the capacity and ability to work does not work full-time, business activities are not profitable or a person is not entitled to receive student financial aid for their studies. If the applicant failed to do as requested within the set time limit, the basic amount of social assistance could be reduced by 50 per cent.

One of the aims of the proposed amendments is that applicants for social assistance would seek to safeguard their livelihoods, as a rule, by engaging in gainful employment, and if this was not possible, by applying for primary benefits before social assistance. Another aim is for unemployed people to always register as jobseekers seeking full-time work and, at the same time, to start accessing employment-promoting services and to have their need for services assessed.

The basic amount could be reduced in the above-mentioned situations only if this would not endanger the means of support necessary for a life of dignity and if the reduction could not be considered otherwise unreasonable.

Process of reducing the basic amount due to unemployment security sanctions to be streamlined

If the payment of the unemployment security benefit granted to the recipient of social assistance was suspended due to sanctions laid down in the Unemployment Security Act, the basic amount of social assistance would be reduced. The duration of the reduction would depend on the duration of suspended unemployment security. However, it would be no more than six months. The basic amount would be cut by 20 per cent for the first month and, after that, by 40 per cent. The reduction percentages would remain in line with the current legislation.

Reducing the basic amount of social assistance would be made easier by abolishing the requirement of the two-month time period laid down in the current Act.
The basic amount would be cut by 20 per cent for the first month and, after that, by 40 per cent. This would also apply to immigrants who are not obligated to register as unemployed jobseekers with the employment authority but who fail to comply with their integration plan. In these situations, the two-month time period laid down in the current Act would continue to apply when it comes to the duration of the reduction in the basic amount.

Applicants for social assistance could always avoid any reduction in the basic amount and any unemployment benefit sanctions by participating in employment services or in the integration plan as required by the relevant legislation.

The basic amount could be reduced in the above-mentioned situations only if this would not endanger the means of support necessary for a life of dignity and if the reduction could not be considered otherwise unreasonable.

Changes to municipalities' funding shares and consideration of income in social assistance

To prevent social exclusion among young people, the municipalities' funding share of basic social assistance would be raised from 50 per cent to hundred per cent in respect of those social assistance recipients between the ages of 18 and 24 who do not have family members of other ages living with them. The funding would be reimbursed to the municipalities in full. The purpose of raising the funding share is to encourage the municipalities to employ young people at the earliest possible stage in order to keep the support periods as short as possible. The amendment would enter into force at the beginning of 2027.

Social assistance would no longer have the earned income allowance of EUR 150 for people aged 18 or over. In future, other minor income and subsidies would also be taken fully into account as income in respect of those aged 18 or over. However, in respect of people under the age of 18, earned income and gifts that are considered small would not be taken into account as income in the calculation of social assistance.

Changes to social assistance seek to achieve savings in general government finances

The proposal is estimated to directly strengthen general government finances by EUR 70 million at the 2027 level when taking account of the changes to benefits and tax revenue. The reform is expected to increase implementation costs by a total of EUR 18 million. In addition, it is estimated to boost employment by 1,200 people, which would strengthen general government finances by about EUR 29 million. In 2024, Kela paid a total of about EUR 825 million in basic social assistance.

To achieve the savings target, the level of the basic amount of social assistance would also be cut as follows:

• 3 per cent for people aged 18 or over who live alone
• 3 per cent for people aged 18 or over who live with their parents
• about 2 per cent for other people aged 18 or over.

For example, for those aged 18 or over who live alone, the cut would reduce the basic amount of social assistance by EUR 17.80 at the 2025 level. The cuts would apply only to the basic amounts of those aged 18 or over. The basic amount of social assistance for people under the age of 18 would increase slightly (0-0.7 per cent), which would reduce the impact of the changes on families with children.

The Government is not proposing any changes to index increases to the basic amount of social assistance. Instead, benefits will be increased in accordance with the national pension index at the beginning of 2026.

• Government proposal to Parliament for acts amending the Social Assistance Act, section 64 of the Act on the Processing of Client Data in Healthcare and Social Welfare and section 10 of the Act on Rehabilitative Work (in Finnish)

Impact of the comprehensive reform of social assistance assessed together with other proposals

The memorandums assessing the combined impacts of social security changes, which were published today by the Ministry of Social Affairs and Health, also covers the comprehensive reform of social assistance. In addition, the Ministry of Social Affairs and Health and the Ministry of Economic Affairs and Employment have together prepared an assessment of the combined impacts of the government proposals concerning social assistance, general social security benefit, and employment services and unemployment security sanctions.

• Memorandums assessing combined impacts of Government's social security changes now published (Press release 22.9.2025)

Inquiries

Liisa Siika-aho, Director General, tel. +358 295 163 085, [email protected]
Annu Jaakkola, Special Adviser to the Minister of Social Security, tel. +358 29 516 3560, [email protected]