Major Welfare Cuts Ahead in Finland: What You Need to Know for 2025
Big changes are coming to Finland’s welfare system in 2025. The government is making deep cuts to housing support, unemployment benefits, healthcare, and social services. The goal is to save money and boost employment, but for many people, the impact could be difficult.
Let’s break down what’s happening—and why.
🏠 Housing Benefits: Tougher Rules and Less Help
Starting from January 1, 2025, the rules for housing support will get stricter:
If you have more than €10,000 in savings (or €20,000 for couples/shared households), your housing allowance will be reduced.
If your assets are over €50,000, you won’t get any support at all.
Summer cottages won’t count toward these asset limits.
Also, Kela will stop paying housing allowance for owner-occupied homes. This change will affect nearly 16,000 households who were getting about €230 a month on average. The government hopes this will save €30 million.
Pensioners’ housing benefits will stay the same, but others will face stricter checks.
💼 Unemployment Benefit Cuts
Changes are also coming to unemployment support:
Partial unemployment benefits will be cut.
People in job training won’t get extra financial support.
Young people will be affected too. For example, 17-year-olds who drop out of school won’t qualify for support, and the rehabilitation allowance (often used for mental health reasons) will only start at age 18.
This means it could become harder for some young people to access the help they need.
🏥 Healthcare Costs Are Going Up
Healthcare will become more expensive in 2025:
The annual deductible for prescription drugs will rise from €50 to €70.
Primary care fees will increase by more than 20%.
Specialist care fees will go up by 45%.
People will also need to pay more out-of-pocket for services, and the yearly spending limits will reset.
At the same time, many key benefits (like unemployment and parental leave allowances) will be frozen—meaning they won’t increase with inflation. As prices rise, more families are expected to need basic social assistance. Kela estimates that this aid will cost €900 million in 2024, up from €760 million in 2023.
🏢 Kela Itself Faces Budget Cuts
Even the agency that pays out these benefits—Kela—is being hit with cuts.
A €50 million budget cut is coming in 2026, around 10% of its operating budget.
On top of that, Kela already has a €45 million savings plan for 2025–2027, which means fewer staff and reduced services.
Kela’s Director General called the new cut a surprise and warned that it could hurt the agency’s ability to respond to emergencies.
🧓 Other Welfare Changes & New Tech Tools
The government aims to save a total of €170 million by making changes across the social and healthcare system. Some of the confirmed actions include:
Lower staffing requirements in child welfare units.
Replacing some elderly home care with digital tools—like AI systems that help with documentation.
Reducing services for people with disabilities and those in rehabilitative work.
The idea is that digitalisation and smaller staff numbers could make the system more efficient—but many are worried it will also mean lower-quality care.
💶 But Wait—Finland Is Still Giving Billions in Aid?
Here’s where things get confusing for many people. While Finland is cutting support at home, it’s still spending billions to help other countries—especially Ukraine.
Let’s break this down simply.
💰 How Finland Is in Debt but Still Giving Aid
Yes, Finland is in debt. And yes, it’s still giving large amounts of financial aid. Here's how this works:
1. Finland’s Growing Debt
At the end of 2023:
The government owed €156.2 billion, which is 55.4% of Finland’s GDP.
The total public debt (including local governments and pensions) was 75.5% of GDP.
In 2023 alone, Finland borrowed €14.2 billion to help pay for its expenses.
So the country is borrowing money—not just to support people in Finland, but also to meet international commitments.
2. Where the Money Is Going
Since Russia invaded Ukraine in 2022, Finland has sent around €3.2 billion in aid:
€2.3 billion in military aid (weapons, equipment, training)
€220 million in humanitarian and development aid
€18 million through the EU’s Civil Protection Mechanism
€550 million to help Ukrainian refugees in Finland (housing, services)
3. How Can Finland Afford This?
Good question. Here’s how:
The government borrows money to fund both domestic and international needs.
It cuts spending elsewhere—like we’re seeing with welfare, healthcare, and Kela.
It sees this aid as a long-term investment in security, peace, and European cooperation.
🧭 Why Is Finland Doing This?
Even during tough economic times, Finland continues to support Ukraine because of a few key reasons:
It’s part of the EU and NATO, and backing Ukraine helps defend European stability.
The government wants to be seen as a reliable international partner.
Helping Ukraine now is seen as protecting Finland’s own future security.
📌 What Happens Next?
Finance Minister Riikka Purra has already said that more cuts might be coming in April 2025.
With one-third of the national budget already going to social and healthcare services, the government believes that reforms are needed to keep the system sustainable.
But the big question remains: Who feels the impact the most?
Many experts warn that these changes could deepen inequality and make life harder for vulnerable groups. As 2025 unfolds, we’ll begin to see the real effects—on both everyday families in Finland and the country’s position on the world stage.
