Library of Congress

Law Library of Congress

The Library of Congress > Law Library > News & Events > Global Legal Monitor

Finland: Plan to Cut Childcare Benefits Considered

(Mar. 5, 2012) Finland's government is considering shortening the time period in which some families can receive funding from the government to cover the costs of private childcare. According to a news report that appeared in the first week of March 2012, the period in which a family could receive benefits would be reduced from three years to two. (Government Considering Shortening Child Home Care Allowance Period, HELSINGIN SANOMAT INTERNATIONAL EDITION, (Mar. 2, 2012).)

According to the Finnish Social Insurance Institution (Kela), in the current plan, the amount a family receives depends on its size and income. The allowance is paid to families with a child under the age of three, as long as they are not using municipal day care; the amount can be supplemented for additional children younger than school age, with the same stipulation. If a family adopts a child, the period of time in which they are eligible for the funding is extended for two years from the time when benefits were first paid to the family, until the child reaches school age. (Child Home Care Allowance, Kela website (last updated Jan. 1, 2012).)

The reduction in the time period for the benefits is being considered as a cost-saving measure; it is estimated that the savings would amount to €30-40 million (about US$39.6-52.8 million) each year. In addition, the proposal could result in parents entering the workforce sooner after children are born, potentially increasing the workforce and thus the tax base. If the proposal does not garner enough political support, a compromise program in which only partial benefits would be paid for the third year might be considered. A decision is expected by the end of March. (Government Considering Shortening Child Home Care Allowance Period, supra.) As of the end of 2010, 120,000 families in Finland were receiving the home care allowance. It was a factor in the care of more than half the children in the country between the ages of nine months and two years. (Id.)