The administrative branch of the Ministry of Social Affairs and Health’s draft budget for 2018

Ministry of Social Affairs and Health 19.9.2017 11.30
Press release 122/2017

The proposal of the Ministry of Social Affairs and Health to the Parliament is an appropriation of approximately EUR 15 billion to the ministry’s administrative branch for 2018.

This is approximately EUR 0.36 billion more than in 2017.

The draft budget includes, for example, increasing employment and shortening the duration of unemployment by using an activation model for the unemployed, eliminating incentive traps by raising young people’s rehabilitation allowance and curbing the growth of rent and housing allowance expenditure, as the housing allowance will increase with the cost of living index, maximum housing expenditure will be frozen for 2018 and a standard for shared apartments will be adopted.

Research and innovation activities will be developed by establishing a neuroscience centre in Finland, as well as a permit authority to administer the use of health care and social welfare data.

Furthermore, the draft budget involves increasing the number of places at shelter homes, raising the minimum of sickness, parental and rehabilitation allowances and raising guaranteed pensions.

Of the appropriations for the administrative branch of the Ministry of Social Affairs and Health, 31% is allocated to pensions, 29% to offsetting family and housing costs and 18% to unemployment security. The proportion of health insurance is 14% of the appropriation.

Unemployment expenditure expected to fall

The unemployment rate is expected to fall in 2018. This will be due to the predicted improvement of the employment situation and the aim of shortening the duration of periods of unemployment. The employment rate will also be improved by promoting partial employment and entrepreneurship. Prolonged unemployment and exclusion from the labour market is being reduced by supporting beneficiaries’ active participation as an alternative to full unemployment.

An activation model for raising the employment rate and reducing the duration of unemployment will be deployed. The activation model encourages unemployed people to work and to participate in services that promote employment also for short periods. This helps activate people and reduce their exclusion.

In addition, becoming an entrepreneur during unemployment will be made easier and studies supporting vocational skills and becoming an entrepreneur will be promoted by making it possible for an unemployed person to study for a short spell without losing the right to unemployment benefits. These changes will increase the required appropriations by EUR 13.5 million in 2018. In addition, EUR 4 million has been allocated to the development of vocational rehabilitation and reforming the criteria for rehabilitation.

EUR 2.7 billion is allocated to unemployment security. This is EUR 168 million less than in 2017.

The reduction is mainly due to the drop in the unemployment rate.

Incentive traps removed, housing allowance indexed to cost of living

To remove incentive traps and promote the employment of people with partial work capacity, the minimum amount of young people’s rehabilitation allowance and the rehabilitation allowance for vocational rehabilitation will be increased so that it remains at the same level as the guaranteed pension. The proposal will increase central government expenditure by EUR 1.5 million.

To make work pay, the general housing allowance will in future be raised in accordance with the cost of living index. In future, the expenditure cap for the general housing allowance will be raised based on the cost of living index instead of the rental index. However, the 2017 general housing expenditure cap will still be applied in 2018. Additionally, a separate general housing expenditure cap will be applied to the housing expenditure of those renting part of a shared apartment. This standard for shared apartments would be 80% of the current housing expenditure cap. According to estimates, these changes will decelerate the growth of housing costs by a total of EUR 28 million in 2018 and by EUR 37 million as of 2019.

An appropriation of EUR 9.5 million will be allocated for raising the amount of the single-parent supplement of the child benefit, which means an increase of approximately EUR 5 per month. An annual increase of EUR million 1.65 will be allocated to updating the maternity grant. These funds will make it possible to renew the contents of the maternity package.

The sum of EUR 4.3 billion will be reserved for the equalisation of family and housing costs, basic income support and certain other services. This is EUR 200 million more than in 2017. This increase is mainly due to the fact that students placed within the scope of the general housing allowance as of 1 August 2017.

Higher sickness, parental and rehabilitation allowances

The minimum amount of the sickness, parental and rehabilitation allowances will be increased to ensure that the net daily allowance is sufficient so that the beneficiary does not need to resort to basic income support. This will clarify the social assistance application process. The increase in the minimum daily allowances means that central government expenditure will grow by EUR 8 million in 2018. Entrepreneurs’ qualifying period for sickness allowance will be shortened to one day, which will be financed by raising the daily allowance payment charged to them.

Due to taxi traffic pricing being released from previous regulations, the operations involving travel and reimbursements for travel expenses will be updated.

EUR 2.1 billion will be allocated to funding health insurance. This is EUR 169 million more than in 2017. The increase is mainly a result of the Competitiveness Pact. Lowering employers’ social security contributions and alleviating the contribution burden of the lowest-income wage earner means an increase EUR 123 million in the need for funding relative to 2017.

Pensions to be increased

EUR 4.6 billion will be allocated to pensions. This is EUR 75 million more than in 2017.

EUR 18 million will be allocated to raising the guaranteed pension and associated benefits. The amount of guarantee pension will increase by approximately EUR 15 per month. Also, the basic part of care allowance for pensioners will be increased to EUR 70.52 per month, resulting in a cost effect of EUR 10 million. The objective of this allowance is to help disabled or chronically ill people to manage in their everyday life.

A neuroscience centre to be founded in Finland

As part of the research and innovation activities within the health care sector, a national neuroscience centre will be established.

In addition, EUR 1.8 million will be allocated to establishing a permit authority to administer the use of health care and social welfare data. This new permit authority will ensure that permits to use the health and social services information resources can be obtained from one place and that the information will be utilised better than ever within the health and social services reform.

The objective of these measures is to make Finland a trailblazer country and an internationally sought-after partner in top health care research, which utilises neuroresearch and health and social services information resources. Another target is to create new businesses and jobs in Finland that tap into the health care and social welfare sector.

Other research, development and education

An appropriation of EUR 1 million will be allocated to the development of end-of-life care, with the aim of standardising the foundations for palliative and end-of-life care, regardless of the patient’s place of residence.

Central government funding to health care units for their university-level research totals EUR 15 million and central government compensation to health care units for doctor and dentist training amounts to EUR 94.7 million.

Increasing places at shelter homes

In order to increase the number of places at shelter homes, an appropriation of EUR 17.6 million will be allocated to the funding of shelter home operations. The sum is EUR 4 million more than in 2017. An appropriation of EUR 3 million will be allocated to the treatment of mothers suffering from substance abuse. Central government funding for medical and medical helicopter operations will be the same as for 2017, i.e. approximately EUR 29 million. An appropriation of EUR 5.3 million will be reserved as compensation to local government for the costs of urgent social welfare for illegal residents.

The sum of EUR 287.5 million will be used for health and social services organised by local governments. This is EUR 105 million more than in 2017. The increase is mainly due to the EUR 100 million appropriation proposed for the freedom-of-choice pilot projects in health and social services. The central government transfers to local government for the organisation of basic public services are included in the Ministry of Finance’s appropriations and in 2018 total approximately EUR 8.46 billion.

Health and social services for young people to be updated

Health and social services for young people will be updated in line with the youth guarantee. The sum of EUR 1.5 million will be allocated for this purpose. In addition, EUR 51 million will be allocated to the health and wellbeing key projects in 2018. This is EUR 0.8 million more than in 2017. The key projects include, for example, service voucher and basic income experiments, assessment of the allocation of residence-based social security, a programme to restructure child and family services, a project for revamping home care of the elderly and reinforcing the informal care of people of all ages, a project for promoting health and wellbeing and reducing inequality, and a project for promoting the part-time employment of people with impaired work capacity.

Health and social services reform and service digitalisation

The funding allocated for preparing and facilitating the health and social services reform belongs to the appropriations of the Ministry of Finance, which the ministries use collectively. An appropriation of EUR 180.5 million in total will be allocated for 2018 for the ICT investments required for the national support of the health, for the social services and regional government reform, for the digitalisation of public administration and services, and for national and regional services.

Promoting health and functional ability

EUR 35 million will be allocated to promote health and functional ability. In addition, an increase of EUR 1 million will be made to the funding of centres of expertise in the social welfare sector. This will safeguard the development of social welfare within the health and social services reform.

Supporting veterans in many different ways

The sum of EUR 181.2 million will be allocated to support veterans, of which EUR 88 million will be allocated to military injuries indemnities, EUR 40 million to the operating costs of institutions for disabled veterans, EUR 12.6 million to field allowances and EUR 32.7 million to the rehabilitation of front-line veterans.

An appropriation of EUR 6.7 million will be allocated to the rehabilitation of disabled veterans’ spouses, widows and war widows, to the rehabilitation of those who served in certain war-time tasks and to some foreign volunteer front-line soldiers as a front-line allowance. An appropriation of EUR 1.3 million will be allocated as central government compensation for the care of those who suffered in the wars.

In addition, the front-line allowance of Estonian volunteer front-line soldiers will be increased from EUR 590 to EUR 2,000.

Farm relief activities and temporary help

The cost of farmers’ and fur producers’ relief activities will decrease by EUR 15.3 million from the previous year and will total EUR 163 million. The reduction is due to a change in the needs assessment. An appropriation of EUR 16.1 million will be allocated to the administration costs of relief services. This includes the EUR 1 million allocated to helping farmers cope at work. The increase is linked to the agricultural crisis package. Moreover, EUR 1 million will be allocated to a partial extension of the reduced contributions for temporary help in farm relief services.

Combining committees

The Appeal Committees for Unemployment Security and Social Security will be combined to form the Appeal Committee for Social Security Issues. An additional appropriation of EUR 1.4 million will be allocated to the committee due to the increase in the number of appeals.

Grants to associations and foundations

An appropriation of EUR 358 million will be allocated towards grants to associations and foundations to help them promote health and social wellbeing.

Additional information  

Kirsi Varhila, Director General, tel. +358 295 163 338 (health and social services reform)  
Outi Antila, Director General, tel. +358 295 163 164 (social insurance)
Liisa-Maria Voipio-Pulkki, Director General, tel. +358 2951 63382 (health and social services, health and wellbeing )
Minna Saario, Director, tel. +358 295 163 146 (health and social services reform and digitalisation of services)
Mikko Staff, Finance Director, tel. +358 295 163 214 (budget)
Tomas Forsström, Head of Financial Planning, tel. +358 295 163 563 (government agencies and public bodies)
Mikko Nygård, Ministerial Adviser, tel. +358 295 163 291 (health and social services matters, central government transfers to local government)
Marianne Koivunen, Senior Financial Officer, tel. +358 295 163 573 (social insurance)
Anne Kumpula, Ministerial Counsellor, tel. +358 2951 63705 (freedom-of-choice pilot projects)
Satu Seikkula, Senior Adviser, tel. +358 2951 63234 (key projects)
Minna Liuttu, tel. Ministerial Adviser, +358 295 163 582 (social insurance)
Susanna Grimm-Vikman, Ministerial Adviser, tel. +358 295 163 172 (social insurance)
Kari Synberg, Special Adviser to the Minister of Social Affairs and Health, tel. +358 295 163 106
Niina Perälä, Special Adviser to the Minister of Social Affairs and Health, tel. +358 295 163 107
Hanna-Maija Kause, Special Adviser to the Minister of Family Affairs and Social Services, tel. +358 295 163 109
Riikka Pirkkalainen, Special Adviser to the Minister of Family Affairs and Social Services, tel. +358 295 163 110

Elsewhere online

Hallituksen esitys vuoden 2018 talousarvioksi (VM) (in Finnish)