Amount and payment of general housing allowance

Government proposes cuts to the general housing allowance

The Government is proposing changes that would cut the amount of the general housing allowance for some recipients. The Government proposes that the assets of the household would affect the amount of the housing allowance. In addition, the maximum amount of recognised housing costs in some towns would decrease due to changes in the municipal categories. The changes would come into effect on 1 January 2025. In addition, Parliament has already previously decided that general housing allowance will no longer be available for owner-occupied homes starting 1 January 2025.

How is the amount of general housing allowance calculated?

General housing allowance is not available for all your housing costs. Instead, acceptable housing costs have been defined separately for different types of housing. You can get general housing allowance towards costs such as your rent. A basic deductible is first subtracted from the acceptable housing costs. As of 1 April 2024, general housing allowance can cover up to 70 per cent of your housing costs.

General housing allowance in the Åland Islands

The rules for calculating the general housing allowance in the Åland Island differ from those used in the rest of Finland.

Starting 1 September 2024, the calculation rules applied in the Åland Islands will be as follows: A basic deductible is first subtracted from the acceptable housing costs. The following formula is used to calculate the basic deductible: 0.42 x [T– (667 + 111 + x A + 246 x L)]. The housing allowance is the equivalent of 80 per cent of the remaining amount.

General housing allowance is not available to the following students renting their accommodation:

Åland Island residents studying in the Åland Islands
Åland Island residents studying in mainland Finland

Maximum housing costs

The law specifies maximum amounts for acceptable housing costs based on which one can get general housing allowance. Such amounts are also referred to as maximum housing costs.

The maximum housing costs represent the largest housing allowance you can get, even if your actual housing costs are higher.

Basic deductible

The basic deductible is a sum subtracted from the acceptable housing costs. The size of the basic deductible depends on

the household's monthly income before deduction for taxes
the number of adults and children in the household.

The bigger the income is, the larger the deductible. If the income is very small, there is no basic deductible at all.

Calculation formulas

Calculation formula for the housing allowance

As of 1 April 2024, the amount of general housing allowance is calculated as follows: 0.7 x (acceptable housing costs – basic deductible). Until 31 March 2024, the allowance is calculated as follows: 0.8 x (acceptable housing costs – basic deductible).

If the acceptable housing costs are larger than the maximum amount, the allowance is calculated on the basis of the latter.

Acceptable housing costs by type of housing

Maximum amount of housing costs

Calculation formula for the basic deductible

The basic deductible is calculated using the formulas below, where

T = the combined income of the household
A = the number of adults
L = the number of children
EUR 667 is the standard amount.

As of 1 April 2024	Basic deductible = 0,5 x [T – (667 + 94 x A + 296 x L)]
1 January – 31 March 2024	Basic deductible = 0,42 x [T – (667 + 111 x A + 246 x L)]

Until 1 April 2024, the full rate of the housing allowance is available to households with a monthly income of no more than EUR 667 plus EUR 111 for each adult and EUR 246 for each child in the household. These amounts are tied to the National Pensions Index (About Kela).

As of 1 April 2024, the full rate of the housing allowance is available to households with a monthly income of no more than EUR 667 plus EUR 94 for each adult and EUR 296 for each child in the household. These amounts are tied to the National Pensions Index (About Kela).

Example: Person living alone in rental housing

Jaakko lives alone in a rental apartment located in Turku. He pays EUR 700 in rent each month. Jaakko’s income before taxes is EUR 279.38 per month. Because Jaakko’s income is small, there is no basic deductible.

Up to EUR 447 per month can be recognised as Jaakko’s housing costs. The housing allowance is calculated on the basis of these maximum costs. It is not calculated on the basis of the actual rent (EUR 700) paid by Jaakko.

The housing allowance that Jaakko gets is the equivalent of 70 per cent of the maximum housing costs, or EUR 447 x 0.70 = EUR 312.90 per month. Jaakko pays EUR 387.10 per month himself (EUR 700 – EUR 312.90 = EUR 387.10).

Use our online calculator to see if you can get housing allowance

Online benefit calculator

Payment of the general housing allowance

Kela pays the general housing allowance to your bank account on the first banking day of the month. If you are granted the housing allowance with retroactive effect, it is paid right away. The housing allowance is available retroactively for one month from the date of the application. The general housing allowance is tax-free income.

Kela sends information about the housing allowances paid out to the national incomes register within five days of the date of payment.

Housing allowances that are less than EUR 15 per month are not paid out.

If Kela grants basic social assistance as an advance against expected housing allowance payments, such social assistance is deducted from the housing allowance.

Payment of the housing allowance to the landlord

Kela can pay the housing allowance directly to your landlord’s account if you give your consent.

Kela can also pay the allowance directly to the landlord if you have not paid some or any rent for two months in a row. In situations like this, we will contact you before transferring your payments to your landlord.

How to apply for housing allowance