Proposal to end the payment of national pensions to recipients outside Finland in 2025: How pensioners would be affected | KelaSkip to content
Press release

Proposal to end the payment of national pensions to recipients outside Finland in 2025: How pensioners would be affected

Published 26/6/2024

The Government’s proposal for ending the payment of national pensions to recipients outside Finland is being circulated for comments. If the proposal is adopted, Kela will stop paying old-age and disability pensions to recipients in other EU or EEA countries or in Switzerland or Great Britain with effect from the beginning of 2025. The proposed change does not apply to survivors’ pensions, child increases or front-veterans’ supplements, nor will it affect the payment of earnings-related pensions.

As part of the general government fiscal plan for 2025–2028, the Government has outlined plans to stop the payment of benefits available under the National Pensions Act to persons living outside Finland. This would produce annual savings of around EUR 38 million.

The national pension is a basic benefit paid by Kela for persons whose earnings-related pension is small or who have not accrued any such pension. National pensions can be paid in the form of old-age and disability pensions.

The proposed changes would only affect national pensions. Earnings-related pensions would continue to be paid as normal.

For the time being, Kela will continue paying benefits available under the National Pensions Act to recipients outside Finland. The recipients need not take any action yet.  Kela will send the affected customers a decision letter telling them about the end of pension payment.

National pension to be redefined as a minimum benefit

The purpose of the law amendment is to redefine the national pension as a so-called minimum benefit within the meaning of the EU legislation.

According to EU law, pensions are classified as either pension benefits, which are payable to countries that apply the EU regulations (EU and EEA countries, Switzerland and Great Britain), or as minimum benefits, which can only be paid to the recipient’s country of residence. The guarantee pension paid by Kela has already been defined as a minimum benefit. The proposed change would extend this practice to the national pension.

There are also differences in the ways in which the two types of benefit are calculated. Therefore, it is possible that pension recipients who now live in Finland but who have lived or worked in another EU or EEA country or in Switzerland or Great Britain will have their pension reviewed to comply with the new provisions.

Pensioners who are already living abroad

If the proposed change is adopted, Kela will starting 1 January 2025 no longer pay old-age and disability pensions to recipients in countries that apply the EU regulations (EU and EEA countries, Switzerland and Great Britain).

Survivors’ pensions (spouses’ and orphans’ pensions), child increases and front-veterans’ supplements will continue to be paid to recipients in these countries.

Customers living in Australia, Chile, Israel, Canada or the United States will not be affected, because each of them has a bilateral social security agreement with Finland that covers pensions. Pensions will continue be awarded and paid to recipients in these countries.

Pensioners who move abroad after the law amendment has entered into force

Pensions that Kela is paying to customers who move permanently abroad after the amendment has entered into force will be discontinued from the first of the month following the move.

Under the proposed amendment, pensions would continue to be available during a temporary stay abroad.

Survivors’ pensions (spouses’ and orphans’ pensions), child increases and front-veterans’ supplements would continue to be paid to recipients in countries that apply the EU regulations (EU and EEA countries, Switzerland and Great Britain).

Pensions would continue to be paid as normal to recipients in Australia, Chile, Israel, Canada and the United States.

Pensioners who have lived or worked abroad

If the proposed amendment is adopted, national pensions will become a so-called minimum benefit, which is calculated differently from the way national pensions are calculated at present.

Therefore, it may be necessary to review some national pensions that are being paid to recipients living in Finland. The review involves recalculating the national pension in accordance with the rules that apply to minimum benefits. Pensioners who have previously lived or worked in an EU or EEA country or in Switzerland or Great Britain may be affected by the review.

Kela will provide more details at a later date.

Forthcoming developments

The proposal for the amendment of the National Pensions Act is currently being circulated for comments. The proposal may be revised after the commenting stage has ended. It is not yet known what the final proposal will look like or when it will be submitted to Parliament.

Kela will monitor the developments closely and provide further information this autumn.

Further resources

 

Last modified 26/6/2024