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The administrative branch of the Ministry of Social Affairs and Health’s budget proposal for 2018

Ministry of Social Affairs and Health 10.8.2017 12.14
Press release 108
The administrative branch of the Ministry of Social Affairs and Health’s budget proposal for 2018

The proposal of the Ministry of Social Affairs and Health to the Parliament is an appropriation of EUR 14.95 billion to the ministry’s administrative branch for 2018. This is approximately MEUR 353 more than in 2017.

The Ministry of Social Affairs and Health draft budget includes, for example, increasing employment and shortening the duration of unemployment by using an activation model for the unemployed, eliminating incentive traps by raising young people’s rehabilitation allowance and restraining the growth of rent and housing allowance expenditure, as housing allowance in future increases with the cost of living index and as a square-metre-specific cap is set on the housing allowance.  

Research and innovation activities will be developed by establishing a neuroresearch centre in Finland, as well as an authorising body to administer the use of social welfare and health care data.

The Ministry of Social Affairs and Health draft budget involves increasing the number of places at shelter homes, raising the minimum of sickness, parental and rehabilitation allowances and raising guaranteed pensions.

Of the appropriations for the administrative branch of the Ministry of Social Affairs and Health, 31% is allocated to pensions, 28% to compensating family and housing costs and 18% to unemployment security. The proportion of health insurance is 14% of the appropriation.

Unemployment expenditure expected to fall

The unemployment rate is expected to fall in 2018. This will be due to the predicted improvement of the employment situation and the aim of shortening the duration of periods of unemployment. The employment rate will also be improved by promoting partial employment and entrepreneurship. Prolonged unemployment and exclusion from the labour market is reduced by supporting beneficiaries’ active participation as an alternative to full unemployment.

The Ministry of Social Affairs and Health proposes the activation model for raising the employment rate and reducing the duration of unemployment. The activation model will encourage unemployed people to work and to participate in services that promote employment also for short periods. This will activate people and reduce their exclusion.

The Ministry of Social Affairs and Health proposes that EUR 2.7 billion of the ministry’s administrative branch appropriation is allocated to unemployment security. This is approximately MEUR 133 less than in 2017.

The reduction is mainly due to the drop in the unemployment rate.

Incentive traps removed, housing allowance indexed to cost of living

To remove incentive traps and promote the part-time employment of the disabled and chronically ill, the minimum amount of young people’s rehabilitation allowance and the rehabilitation allowance for vocational rehabilitation will be increased so that it remains at the same level as the guaranteed pension. The proposal will increase central government expenditure by MEUR 0.8.

To increase the lucrativeness of working, the Ministry of Social Affairs and Health proposes that, in future, housing allowance will be raised in accordance with the cost of living index. At present, housing allowance is tied to the rental index which describes the development of rent. Additionally, the Ministry of Social Affairs and Health proposes a square-metre-specific cap. According to estimates, these changes will decelerate the growth of housing costs by a total of MEUR 30 in 2018 and by MEUR 50 as of 2019.

For the compensation of family and housing costs, for basic income support and certain other services, the Ministry of Social Affairs and Health proposes the sum of EUR 4.2 billion. This is MEUR 150 more than in 2017. This increase is mainly due to the fact that students were transferred to within the scope of the general housing allowance as of 1 August 2017.

A neuroresearch centre to be founded in Finland

As part of the research and innovation activities within the health care sector, the Ministry of Social Affairs and Health proposes that MEUR 0.9 be allocated to preparations towards establishing a national neuroresearch centre. In addition, the Ministry of Social Affairs and Health suggests that MEUR 2.6 be allocated to establishing an authorising body to administer the use of social welfare and health care data. This new authorising body would ensure that licences to use the social and health care information resources could be obtained from one place and that the information would be utilised better than ever within the social and health care reform.

The objective of these measures is to make Finland a trailblazer country and an internationally sought-after partner in top health care research, which utilises neuroresearch and social and health care information resources. Another target is to create new businesses and jobs in Finland that tap into the social welfare and health care sector.

Combining committees

The Appeal Committees for Unemployment Security and Social Security will be combined to form the Appeal Committee for Social Security Issues. Due to the increase in the number of appeals, the Ministry of Social Affairs and Health proposes an additional appropriation of MEUR 1.4 for the new appeal committee.

Other research, development and education

For the study on preschoolers’ diets and food-related choices, the Ministry of Social Affairs and Health proposes funding of approximately MEUR 0.6. The objective of the project is to acquire information about 1–6-year-olds’ eating habits, nutrition and food-related choices.

For the development of end-of-life care, the Ministry of Social Affairs and Health proposes an appropriation of MEUR 1.0, the purpose of which is to standardise the foundations for palliative and end-of-life care, regardless of the patient’s place of residence.

For the Ministry of Social Affairs and Health’s key international partner in health policies, WHO, the ministry proposes a sum of MEUR 2.0 as non-assigned voluntary funding.

Central government funding to health care units for their university-level research totals MEUR 15 and central government compensation to health care units for doctor and dentist training is MEUR 96.6.

Increasing places at shelter homes

The Ministry of Social Affairs and Health proposes an appropriation of MEUR 17.6 to increase the number of places at shelter homes. The sum is MEUR 4 more than in 2017. For the treatment of mothers suffering from substance abuse, the ministry proposes an appropriation of MEUR 3. Central government funding for medical and medical helicopter operations is the same as for 2017, i.e. approximately MEUR 29. For compensation to local governments for the costs of urgent social welfare for illegal residents, an appropriation of MEUR 5.3 is suggested.

The Ministry of Social Affairs and Health proposes the sum of MEUR 294 for the social welfare and health care organised by local governments. This is MEUR 112 more than in 2017. The increase is mainly due to the MEUR 100 appropriation proposed for the freedom-of-choice pilot projects in health and social services. The central government transfers to local governments for the organisation of basic public services are included in the Ministry of Finance’s appropriations and in 2018 total approximately EUR 8.43 billion.

Raising sickness, parental and rehabilitation allowances

The minimum amount of the sickness, parental and rehabilitation allowances will be increased to ensure that the net daily allowance is sufficient so that the beneficiary does not need basic income support. This will clarify the social assistance application process. The increase of minimum daily allowances will raise central government expenditure by MEUR 8 in 2018. Entrepreneurs’ qualifying period for sickness allowance will be shortened to one day, which will be financed by raising the daily allowance payment charged from them.

Due to taxi traffic pricing being released from previous regulations, the operations involving travel and reimbursements for travel expenses will be updated.

The Ministry of Social Affairs and Health proposes an appropriation of EUR 2.1 billion for funding health insurance. This is MEUR 144 more than in 2017. The increase is mainly a result of the Competitiveness Pact. Lowering employers’ social security contributions and alleviating the contribution burden of the lowest-income employees will increase the need for funding by MEUR 112 in comparison to 2017.

Pensions to be increased

The Ministry of Social Affairs and Health proposes an appropriation of EUR 4.6 billion for pensions. This is MEUR 92 more than in 2017.

The Ministry of Social Affairs and Health will allocate MEUR 8.8 to raising the guaranteed pension, which will increase it by approximately EUR 8 per month. Also, the basic part of care allowance for pensioners will be increased to approximately EUR 70 per month, resulting in a cost effect of MEUR 10. The objective of this allowance is to help a disabled or chronically ill person to manage in their everyday life.

Health and social services for young people to be updated

Health and social services for young people will be updated in accordance with the youth guarantee. The Ministry of Social Affairs and Health will allocate MEUR 1.5 to this. In addition, the ministry will allocate MEUR 51 to key welfare and health projects in 2018. This is MEUR 0.8 more than in 2017. The key projects include, for example, service voucher and basic income pilot studies, assessment of the allocation of residence-based social security, a reform programme for child and family services, a project for developing the home care of the elderly and strengthening the informal care of people of all ages, a project for promoting health and wellbeing and reducing inequality, and a project for promoting the part-time employment of the disabled and chronically ill.

Health and social services reform and service digitalisation

The funding allocated to the preparation and support of the health and social services reform belongs to the appropriations of the Ministry of Finance, which the ministries use collectively.  For the ICT investments required for the national support of the health, social services and regional government reform, the digitalisation of public administration and services, and for regional and national services, the ministries propose a total appropriation of MEUR 240.2 for 2018.

Promotion of health and functional ability

For the promotion of health and functional ability, the Ministry of Social Affairs and Health proposes MEUR 36. This is MEUR 1.6 more than in 2017. In addition, the Ministry of Social Affairs and Health proposes an increase of MEUR 0.8 for the funding of centres of expertise in the social welfare sector and similarly an increase of MEUR 0.8 to the appropriation for health promotion. This will safeguard the promotion of health and the development of social welfare within the health and social services reform.

Supporting veterans in many different ways

The Ministry of Social Affairs and Health proposes an appropriation of MEUR 181.2 to the support of veterans. Of this sum, MEUR 88 will be allocated to military injuries indemnities, MEUR 40 to the operating costs of institutions for disabled veterans, MEUR 12.6 to field allowances and MEUR 32.7 to the rehabilitation of front-line veterans.

The Ministry of Social Affairs and Health proposes an appropriation of MEUR 6.7 to the rehabilitation of disabled veterans’ spouses, widows and war widows, to the rehabilitation of those who served in certain war-time tasks and to some foreign volunteer front-line soldiers as a front-line allowance. The Ministry of Social Affairs and Health proposes an appropriation of MEUR 1.3 as the central government’s compensation for the care of those who suffered in the wars.

In addition, the ministry proposes raising the front-line allowance of Estonian front-line soldiers from EUR 590 to EUR 2,000.

Substitute activities and temporary help

Farm operators’ and fur producers’ costs of substitute activities will fall by MEUR 16.3 from the previous year and will total MEUR 146. This reduction is due to a needs assessment change. The Ministry of Social Affairs and Health proposes an appropriation of MEUR 16.1 for the administration costs of substitute services. This includes the MEUR 1 allocated to helping farm operators cope at work. The increase is linked to the agricultural crisis package.

Grants to associations and foundations

For grants to associations and foundations to help them promote health and social welfare, the Ministry of Social Affairs and Health proposes an appropriation of MEUR 358.

Additional information  

Special Adviser Kari Synberg, tel. +358 295 163 106 (general questions)
Special Adviser Niina Perälä, tel. +358 295 163 107 (general questions)
Special Adviser Hanna-Maija Kause, tel. +358 295 163 109 (general questions)
Special Adviser Riikka Pirkkalainen, tel. +358 295 163 110 (general questions)
Director General Jaana Koski, tel. +358 295 163 519 (general questions)
Director General Kirsi Varhila, tel. +358 295 163 338 (health and social services)  
Director General Veli-Mikko Niemi, tel. +358 295 163 425 (health and wellbeing)
Director General Outi Antila, tel. +358 295 163 164 (social insurance)
Finance Director Mikko Staff, tel. +358 295 163 214 (budget)
Head of Financial Planning Tomas Forsström, tel. +358 295 163 563 (agencies and public bodies)
Ministerial Adviser Mikko Nygård, tel. +358 295 163 291 (social welfare and health care, central government transfers to local government)
Senior Financial Officer Marianne Koivunen, tel. +358 295 163 573 (social insurance)
Director Jaana Huhta, tel. +358 295 163 407 (families and social welfare)
Director Merja Mustonen, tel. +358 295 163 116 (discretionary government transfers, central government transfers to local government)
Ministerial Adviser Minna Liuttu, tel. +358 295 163 582 (social insurance)
Ministerial Adviser Susanna Grimm-Vikman, tel. +358 295 163 172 (social insurance)
Director Minna Saario, tel. +358 295 163 146 (social and health care reform and service digitalisation)

Elsewhere online

Valtiovarainministeriön ehdotus vuoden 2018 talousarvioksi (VM) (in Finnish)

STM:n talousarvioehdotus vuodelle 2018 (in Finnish)