Raised age limit for several Kela benefits paid to young people

Summary:

Parliament has approved a Government proposal, according to which the minimum age limit for several Kela benefits will be raised from 16 to 18 years. The change concerns rehabilitation subsidy, disability pension, rehabilitation allowance, sickness allowance and disability allowances from Kela. In addition, 17-year-olds who have suspended their compulsory education will no longer be entitled to unemployment benefit. 

“Harmonising the age limits will simplify the complicated social insurance system as a whole. Harmonisation also fits the goals for the preparation of the model for a single general social security benefit,” says Milla Kaitola, Benefits Manager. 

How the age limits for the benefits will change  

The following changes would apply to young people born in 2009 or later:

The minimum age limit for national pension and guarantee pension will be increased from 16 to 18 years. This means that 18 will be the earliest possible age for receiving a rehabilitation subsidy or disability pension paid out in the form of national pension, and any supplementary guarantee pension as well as guarantee pension granted to immigrants on the basis of incapacity for work. The same will apply to care allowance for pensioners. 

The minimum age limit for sickness allowance, partial sickness allowance, rehabilitation allowance, partial rehabilitation allowance and rehabilitation allowance for young persons will be increased from 16 to 18 years.  

The following change would apply to young people born in 2008 or later:

17-year-olds who have suspended their compulsory education will no longer be entitled to unemployment benefit.  

The following change would apply to young people receiving disability allowances:

From the beginning of 2027 disability allowance to persons under 18 years of age will be paid in the form of disability allowance for children. At the same time, the minimum age limit for disability allowance for adults and care allowance for pensioners will be raised to 18 years. 

The changes will mostly take effect on 1 January 2025. The changes would not apply to those receiving benefits at present. Customers do not need to contact Kela because of them. The changes concerning disability allowance will take effect on 1 January 2027. The payment of disability allowances granted prior to the change will continue until the disability allowance ends or until a review of the disability allowance becomes necessary due to changes in the customer’s circumstances.

Background to the changes in age limits and their effects

The changes are based on a wish to change the age limits so that they correspond to the age of compulsory education and the parents’ maintenance liability.

The changes are expected to decrease public expenditure by about 6.9 million euro in 2025, about 35.8 million euro in 2026 and about 48.5 million euro annually as from 2027. The changes are also thought to make the disability benefit system clearer and more coherent. 

At the end of 2023, there were 673 recipients of national pension and guarantee pension under 18 years of age, 786 recipients of sickness allowance and about 10,000 recipients of rehabilitation allowance. Unemployment benefit was granted to 140 persons under the age of 18 in 2023. 

The changes are expected to increase the need for social assistance. The expenditure on supplementary and preventive social assistance paid by the wellbeing services counties may also increase. 
 
“When evaluating the effects of the changes in age limits, other upcoming changes in the social security benefits for young people must also be considered, such as the target group for vocational rehabilitation for young people and the abolishment of the right to rehabilitation allowance for Nuotti coaching. The changes may lessen the referral to rehabilitation services for young people, the incentives to participate in rehabilitation and the rehabilitation outcomes. They may also lead to an increase in the number of recipients of other benefits intended to secure an income for the recipient,” says Karoliina Koskenvuo, Research Professor at Kela. 

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