Social security cuts are pushing twice as many families with children into poverty than previously estimated, according to new calculations by the Finnish Institute for Health and Welfare (THL).
On Monday, Finland's public health agency published detailed assessments of the impacts of budget cuts by the government of Prime Minister Petteri Orpo (NCP).
According to research manager Jussi Tervola, families with children who receive public assistance will be hardest hit. Last year there were more than half a million families with children in Finland, and over a million children.
"The new estimate is that 27,000 children will fall below the low-income threshold," Tervola told Yle.
This figure is twice as high as previously estimated by the THL and the Ministry of Social Affairs and Health. Those projections said that the cuts would push 11,000–13,000 more children into poverty.
THL's new estimate takes into account the combined effects of the government's tightening of unemployment benefits and housing allowances since 2024.
In Finland someone is officially defined as poor or low-income if their income falls below 60 percent of the median monthly income. In 2023, this was about 1,470 euros per month for a single person.
Basic social assistance not enough to stay above the poverty line
The new assessment indicates that the basic social assistance allowance (toimeentulotuki in Finnish) is less effective than previously thought in protecting people against falling into poverty.
"In the past, researchers have overestimated how much social assistance compensates for the cuts made by the government," Tervola said.
THL has previously said that cuts to unemployment benefits and housing allowances will increase the number of people eligible for social assistance by as much as 100,000. Now, the number of new social assistance recipients is estimated to be a third of that, or 30,000.
In this case, the reduced estimate does not mean that the cuts would have less impact on the beneficiaries' finances than estimated – on the contrary.
Not everyone who falls below the poverty line due to the cuts is eligible for this last-resort social assistance, and for some the assistance is not enough to raise them above the poverty line. In addition, some do not apply for social assistance, even if they would be eligible for it.
Next year, the poor will get poorer
Statistics from the Social Insurance Institution (Kela) show that the number of people receiving social assistance has increased.
The number of recipients of basic income support has generally been 12,000–16,000 higher each month this year than in the same month of 2024. In July this year, for example, there were 156,000 such recipients.
Meanwhile, the need for basic social assistance has also risen due to the increase in long-term unemployment.
Orpo's government is now preparing changes in social assistance for next year. According to THL’s preliminary assessment, those who are already poor will become even poorer.
"This will deepen poverty even further," warned Tervola.
