Wednesday 10/28/20

Kela will pay 723 euros a month to parents absent from work due to Covid-19

The benefit will also be available to persons arriving in Finland from abroad who have been placed in quarantine-like conditions to combat the pandemic and are therefore away from work without pay.
Minister of Finance Katri Kulmuni and Primer Minister Sanna Marin. Photo: Lauri Heikkinen/Vnk.

The Finnish government has reacted to the great economic crisis that is coming. Prime Minister Sanna Marin and Finance Minister Katri Kulmuni announced on Wednesday a second supplementary budget package of 3.6 billion euros to support Finland's economy during the coronavirus pandemic.

According to Government information, the package includes aid to families -especially for parents who have lost their job or have to stay home to care for their young children- to companies, associations and unemployment funds. In addition, there is an additional allocation of 600 million euros for the acquisition of relevant protective equipment, devices and medicines through the National Emergency Supply Agency.

"To respond to the growth in unemployment and lay-offs, an increase of 1.2 billion euros will be targeted to unemployment security, housing allowance and social assistance," the Ministry of Social Affairs and Health said in a press release.

Support for parents from work

The Government proposes that those absent from work with no pay due to the coronavirus epidemic could apply for temporary support from Kela. The idea is to compensate for the wages lost and secure their living while having complied with the Government’s recommendations to combat the coronavirus.

The amount of the support would be the same as the minimum parental allowance, this is 28.94 euros per weekday (or 723.50 euros per month).

The support will be paid for the duration of the restrictions, as from 16 March. And parents can apply for it retroactively. Further details on its implementation will be communicated in the coming days the Social Insurance Institution (Kela).

The support will be paid to parents caring at home for children who are not attending early childhood education and care or basic education due to the restrictions. Government says it will be applicable only in situations where a child is entitled to contact teaching even in exceptional circumstances.

The benefit will also be available to persons arriving in Finland from abroad who have been placed in quarantine-like conditions to combat the pandemic and are therefore away from work without pay.

The total amount of funds reserved for this support would be 94 million euros.

Other social security benefits

The Government proposes an increase of approximately 1.1 billion to the earnings-related component of unemployment benefits and job alternation compensation and to the basic security component of unemployment benefits.

Of this amount, 794 million is due to the growth in unemployment and lay-offs and 20 million euros is intended to subsidize the functioning of unemployment funds.

Relating to the supplementary budget proposal, the Government has submitted to Parliament proposals for an act on the temporary right of self-employed people to receive unemployment security, and for acts on the temporary amendment of the Unemployment Security Act, the Act on Financing Unemployment Benefits and the Act on Unemployment Funds.

With these proposals, the Finnish government intends to expand unemployment security and improve the livelihood of people facing unemployment or lay-offs. Of the proposed increase, 272 million euros is due to the legislative amendments.

Due to the deteriorating employment outlook, the Government proposes an increase of 169 million euros for the financing of basic social assistance and an increase of 177 million euros for housing allowance expenditure.

An additional appropriation of 30 million euros is proposed for the expenditure arising from the Self-Employed Persons Pensions Act. The need for funding is due to the reduction in the earned income of the self-employed and in the revenue from pension insurance contributions.

Kela and unemployment funds

The Government also proposes an additional appropriation of 41 million euros to Kela. Those funds are needed due the increase in the costs arising from the benefits and customer services, additional IT costs, and additional administrative costs arising from the extension of unemployment security to self-employed persons and support to be paid to those absent from work with no pay due to the coronavirus epidemic.

The Government proposes 20 million euros in financing for unemployment funds.

For the operations of the Finnish Medicines Agency Fimea, the Government proposes an increase of 1.9 million euros. The funds are intended to ensuring the pharmaceutical services required by the coronavirus situation and securing the ICT service capacity.

For the Finnish Institute of Occupational Health (TTL), the Government proposes 0.4 million euros in additional funding.

Healthcare and psychological support

6 million euros will be allocated for expanding and implementing distance appointments in healthcare and extending the digital service for healthcare and social welfare Omaolo to new hospital districts.

The Government proposes an increase of 5 million euros to the grants to associations and foundations for promoting health and social welfare.

By means of this additional funding, a separate application for grants will be opened for associations in the health and social services sectors to respond to the crisis caused by the coronavirus. Grants will be targeted to psychosocial support via digital channels and to supporting individuals and families facing difficult life situations.

The proportion of the main title of the Ministry of Social Affairs and Health in the Government’s second supplementary budget proposal amounts to just over 2.2. billion euros.

For companies

There will be also additional funding for state export and small and middle-sized companies through Business Finland. 200 million euros will go to local economic development centres and a maximum of 150 million euros for sole entrepreneurs.

This is the second additional budget package agreed in Finland since the pandemic outbreak. The first one, consisting in 1.1 billion euros, was approved by the Finnish Parliament (Eduskunta) in late March.