The National Pensions Index means an increase of 5.9 per cent to only some Kela benefits – the Government proposes a freeze to the other benefits
Kela has confirmed the value of the National Pensions Index as of 1 January 2024. However, the Government proposes that next year the index increase be made to only some of the benefits that are tied to the National Pensions Index. Parliament also considers other Government proposals regarding cuts in and increases to benefits.
Most benefits provided by Kela are tied to the National Pensions Index. The National Pensions Index is linked to the Cost-of-Living Index, which is compiled by Statistics Finland and tracks the prices of key commodities. As prices change, the index linkage helps to maintain the purchasing power of benefits.
Kela is required under the law to confirm the value of the National Pensions Index for the next calendar year by the end of the previous October. The value has now been confirmed and in 2024 it will be 1911. This year the value is 1805. The value thus increases by 5.9% and the amounts of the benefits that are tied to the index will be increased correspondingly.
In addition to the National Pensions Index, there will also be other changes to the amounts of the Kela benefits next year. The temporary increases to the benefits for families with children will end on 31 December 2023 and Parliament is considering several Government proposals that affect the benefit amounts.
The Government proposes freeze of the index
The Government proposes that in 2024–2027 index adjustments be made to only some of the benefits that are tied to the National Pensions Index (HE 75/2023).
The following Kela benefits will be increased by 5.9 per cent in line with the National Pensions Index as of 1 January 2024: national pension, guarantee pension, front-veterans’ supplements, survivors’ pensions, disability benefits, basic allowance of the conscript’s allowance, basic amount of the social assistance and annual maximum limit on out-of-pocket medicine costs. The size and amounts of the increases by benefit are shown in the table at the end of the press release.
If Parliament approves the Government proposal, no index adjustments will be made in 2024–2027 to the following Kela benefits: labour market subsidy and basic unemployment allowance, child care allowances and study grant as well as the minimum amounts of sickness allowance, partial sickness allowance, parental allowances, special care allowance, sickness allowance on account of human cell, tissue or organ donation and rehabilitation allowance. The amounts of these benefits would thus remain the same as in 2023.
The freeze of the index proposed by the Government does have an upper limit, however. If the freeze of the index reduces the real value of the benefits by more than 10.2%, normal index adjustments will again be made to the benefits.
According to the Government proposal, index adjustments would also not be made to the criteria according to which the general housing allowance and the housing allowance for pensioners are determined in 2024–2027. For instance, the maximum amount of the housing costs that are taken into account for the general housing allowance would not be increased. The fixed charges and the maximum amounts of housing costs for the housing allowance for pensioners would also not be increased with the index in 2024–2027.
The Government proposes increases and cuts
The Government proposes (HE 75/2023) increases to the child benefits. The plan is that the child benefit for the fourth, the fifth and any subsequent child would be increased by 10 euros as of 1 January 2024 and the child benefit for children under 3 years of age by 26 euros per month as of 1 April 2024. In addition, the single-parent supplement to the child benefit would be increased by 5 euros.
This year the annual maximum limit on out-of-pocket medicine costs has been kept at the same level as last year (592.16 euros per calendar year). The Government proposes (HE 57/2023) that the annual maximum limit on out-of-pocket medicine costs be increased with the increase to the National Pensions Index for 2024. According to the Government proposal, the annual maximum limit on out-of-pocket medicine costs in 2024 will be 626,94 euros.
The child increases to the unemployment benefits have been paid increased by 20% in 2023. The temporary increases will end on 31 December 2023. In the period 1.1-31.3.2024 the child increases to the unemployment benefits will be 5,84 euros per day for one child, in total 8,57 euros per day for two children and in total 11,05 euros per day for three or more children. The Government proposes (HE 73/2023) that the child increases to the unemployment benefits be abolished as of 1 April 2024.
The Government proposes (HE 60/2023) that the minimum amounts of the rehabilitation allowance for young people and the rehabilitation allowance paid during periods of vocational rehabilitation be reduced to 31.99 euros per working day as of 1 January 2024 (now 36.91 euros per working day).
Rates of the benefits in euro and income limits starting 1 January 2024.
Kela will inform about the benefit amounts and related income limits for next year again at the end of the year when all the Government proposals have been considered. The attached table shows the benefit amounts as of 1 January 2024, assuming that Parliament approves the Government proposals.