Draft budget for the Ministry of Social Affairs and Health and its administrative branch for 2025
The Ministry of Social Affairs and Health proposes appropriations of EUR 15.1 billion for the Ministry and its administrative branch for 2025. This is approximately EUR 1.2 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 in social security to 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 and approximately EUR 300 million due to the reforms that will enter into force in 2025. The benefits generated from the reduced costs of social security funds will be allocated to strengthening central government finances. This channelling solution will reduce the Ministry’s need for appropriations by a total of EUR 536 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 195 million less than in the 2024 Budget. The amount of the appropriation is reduced particularly because of the changes to the housing allowance. The level of the appropriation takes into account the estimated increase in social assistance expenditure.
- A sum of EUR 1.77 billion is proposed for unemployment security, which is EUR 460 million less than in 2024. The amount of this 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 (EUR 370 million), the abolishment of the increment components of unemployment security (EUR 23.5 million) and the strengthening of means testing for labour market support (EUR 2.6 million).
- An appropriation of EUR 1.87 billion is proposed for health insurance, which is EUR 439 less than in 2024. The amount of the appropriation is reduced, for example, because of the channelling solution (EUR 536 million), the reforms concerning reimbursements for medicine costs (EUR 58.2 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).
- An appropriation of EUR 5.5 million is proposed for pensions, which is EUR 14.5 million less than in 2024. The reduction in the appropriation is due to changes in benefits payable abroad (EUR 38 million) and in the housing allowance for pensioners (EUR 12 million) and due to the raising of the age limit for the national pension and rehabilitation allowance from 16 to 18 years (EUR 6.5 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 operating expenses and grants of the administrative branch
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 28.5 million of these savings be directed at government agencies and public bodies in its administrative branch and EUR 0.8 million at other items. The greatest savings concern the largest 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 saving will be less than four per cent of the appropriations allocated to the government agencies and public bodies in the administrative branch for 2024.
For grants to associations and foundations to help them promote health and social wellbeing, the Ministry proposes an appropriation of EUR 304.1 million. 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 and shelters
The Ministry of Social Affairs and Health proposes that the appropriation level for central government transfers for Kela reimbursements for appointments with doctors be raised by EUR 24.6 million to EUR 89.9 million.
The Ministry proposes that EUR 10.0 million be allocated for continuing education for people in working life. This means a system for replacing the adult education allowance to respond to the educational needs of special education teachers and nurses in particular.
For student healthcare provided by the Finnish Student Health Service, the Ministry proposes central government funding of EUR 72.7 million. The increase in the appropriation is due, among other things, to 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 1.6 million).
The Ministry proposes increasing the funding for university-level research in healthcare and social welfare by EUR 5.0 million to EUR 40 million.
For food aid activities, the Ministry proposes an appropriation of 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 a sum of 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 an appropriation of EUR 2.5 million. The Ministry also 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 and EUR 0.5 million for mental health chat services.
The Ministry also proposes 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.
Consideration of the draft budget to continue in September
The Government will discuss the draft budget in its budget session on 3-4 September 2024. The Ministry of Finance will then finalise the Government’s budget proposal, which will be submitted to Parliament on 23 September. Parliament will approve the Budget in December.
This press release concerns the Ministry of Social Affairs and Health’s draft budget. No final decision on the budget has been made yet.
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
E-mail addresses are in the format [email protected]
The press release has been edited at 14.16 on 12.8. The section “The central government will cover 67 per cent of the costs of these reimbursements and 33 per cent of the costs will be covered by collecting medical expenses insurance contributions.” has been removed from the text, because the so-called channelling solution will also change the funding shares for Kela reimbursements, and in the future the central government transfer will be 52 per cent and the share of insured persons 42 per cent.