Finland's system of social benefits, administered by state-owned administrator Kela, is complex and generous – some say to a fault. Finland's top financial newspaper Taloussanomat was curious about how many people in Finland receive Kela money to cover all of their housing costs. Kela answered that the number is nearly 65,000.
Kela provides residents of Finland who need help with their housing costs with state-sponsored housing benefits. More than half a million Finnish households receive some amount of money from Kela as a housing benefit. If the housing benefit proves insufficient, people down on their luck can apply for income support, or basic social assistance - a last-resort benefit for meeting basic daily expenses.
Taloussanomat says Kela informed them that 135,000 households in Finland find themselves in this position, as they regularly receive basic social assistance to help them with housing. So far this year, Kela has handed out 286 million euros in basic social assistance.
"About 65,000 households in this number have no deductible, so their housing benefit or social assistance covers their entire rent or housing payment, up to a ceiling determined by Kela," Heidi Kemppinen, a chief planner at Kela, told the paper.
Comprehensive housing aid data
This marks the first time that this sort of nationwide data on housing assistance has been released, as the payment of social aid was transferred from Finland's municipalities to Kela at the beginning of the year.
Kela keeps a table that outlines maximum housing costs for determining reasonable housing benefit support in different areas of Finland.
In Helsinki, for example, where housing can be very expensive, the ceiling is 508 euros per month for a household of one, and 1,095 euros for a family of four. In municipalities outside the capital city area and its surroundings, the maximum drops to 344 euros for one person and 764 euros per month for four-occupant households.
This ceiling jumps to 675 euros per month for applications for basic social assistance. Applicants for this last-resort form of assistance can be directed by Kela to seek out a less-expensive flat, for example, if the rent exceeds the ceiling limit. But situations have arisen that a less-expensive, viable option clearly wasn't available, and in such cases the state does compensate for those higher rents.
Does state aid keep rents too high?
Taloussanomat says economists are divided about whether state benefits actually keep rents and housing costs high. If true, it means that money meant to help the needy is indirectly transferred to the pockets of Finland's real estate owners.
The Finance Ministry's Permanent Secretary Martti Hetemäki was recently quoted saying that "basic social assistance flows into rents."
Hetemäki founded his comment on the observation that the Kela ceiling of 675 euros for a one-person dwelling in Helsinki corresponds with the standard rental price for a one-person residence in the capital city: 650 to 700 euros. Hetemäki said he suspects landlords of setting prices which they know Kela will pay.
Chief economist at SAK, Finland's largest umbrella organisation for blue-collar unions, Ilkka Kaukoranta says he feels Hetemäki is "pretty brave" to make such a causal inference, as the law requires that rents are determined by the prevailing market.
