Kela: 62k more households in Finland are falling into poverty

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Those households include about 16,000 families with children, according to the social insurance agency Kela.

A church in Helsinki offering food to those in need, photo taken in September 2020 Image: Jorge Gonzalez YLE

According to the Finnish benefits administrator, the Social Insurance Institution (Kela), energy and food prices have risen to about 62,000 additional households.

Those households include about 16,000 families with children, Kela said in a statement released Wednesday.

According to researchers’ models, the poverty rate has increased by a total of 2.5 percentage points as a direct result of the war in Ukraine and the energy crisis.

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“The rising cost of energy is particularly difficult for many families with children, as it is difficult to reduce consumption,” he said Tapio Rasänen, a Kela researcher. He noted that there are no other affordable forms of energy available.

Benefit changes “not enough”

According to researchers, previously announced proposed changes to the Finnish child support system would have little impact on poverty among families with children, Kela noted, adding that some proposed changes could worsen the situation.

The researchers said a 10 percent increase in child support would reduce child poverty by only half a percentage point, the researchers found, and would have a limited effect on the purchasing power of low-income families with children.

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Half a percentage point would correspond to about 5,000 children, the researchers said.

Social insurance company Kela pays child benefit (siirryt toiseen palveluun) to children up to 17 years of age. The benefits, which start at just under 95 euros per month for a single child, increase slightly (siirryt toiseen palveluun) for each additional child.

Meanwhile, the researchers found that increasing child support for single-parent families would reduce the poverty level of families with children by just one-tenth of a percentage point, the researchers said.

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“The child benefit is the subject of much discussion and expectations. However, it only covers a small part of the child benefit and a moderate increase alone would not be enough to correct the weakening purchasing power,” said the minister. Tiina Ristikaria research professor from the Itla Children’s Foundation.

She added that solutions to poverty among families with children should also be sought in targeted benefits and services.

Due to rising prices in the summer, Minister of Finance Annika Saarikko (Cen) suggested that families with children receive a one-time allowance at the end of the year.

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