Government proposes changes to the housing allowance for pensioners

The Government is proposing an indexation freeze to the pensioners’ housing allowance for 2024-2027. The allowance is linked to the National Pensions Index. The charges for heating, water and maintenance and the maximum amounts of housing costs would also not be adjusted in 2024–2027. Other rules for determining the housing allowance for pensioners would remain unchanged. 

The Government put out a proposal in October to pause index adjustment of the housing allowance for pensioners for the period 2024-2027. The allowance is linked to the National Pensions Index. Also the charges for heating, water and maintenance and the maximum amounts of housing costs, both of which are set out yearly in a decree, would not be adjusted in 2024–2027.

Under the proposal, the planned changes would expire sooner if the National Pension Index score reaches 2009. The score is confirmed in accordance with its governing law. This means that the changes will expire before the end of 2027 given a sufficient increase of the National Pensions Index.

Other rules for determining the housing allowance for pensioners will remain unchanged

The Government has proposed several changes to the general housing allowance paid out by Kela, but they do not apply to the housing allowance for pensioners. As an example, and in contrast to the general housing allowance, the housing allowance for pensioners will remain available for owner-occupied homes. The compensation percentage (85%) and the additional deductible percentage (41.3%) will stay the same as well. 

Parliament is expected to consider the Government’s proposal before the end of the year. 

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