Government considering shortening child home care allowance period
The change would save money, while urging women to go to work
The government is considering shortening the eligibility period of the child home care allowance. According to the information gathered by Helsingin Sanomat, the benefit period would be cut from the present three years to two years.
A decision on the matter will be made in connection with other cost-cutting measures in the government’s budget framework negotiations at the end of March.
At present, the Social Insurance Institution of Finland (Kela) provides child home care allowance to families with a child under the age of three who is not in municipal daycare.
The child can be looked after by either of the parents or some other relative, or by a private child care provider.
”Keep your hands off children’s care and education. They are the future”, urges Helsinki resident Katja Nieminen, who has been at home with her children Samuel, 4, and Seela, 2, for four years.
”It is very important that the society shows a green light to children’s home care and that it is supported even this much”, Nieminen notes.
The child home care allowance is paid separately for each eligible child. For one child under the age of three the allowance is just under EUR 330 per month.
In addition, a care supplement is paid for one child eligible for the care allowance. Its maximum amount is approximately EUR 175 per month. However the amount of the care supplement depends on the monthly income of the family and on the family size.
The government is not planning to reduce the amount of the child care allowance, but simply to shorten the eligibility period for the benefit.
The reduction would be a sort of missile with twin warheads: a structural reform and a cost-cutting measure.
If the eligibility period were shortened, women would be urged to go back to work earlier. In economic terms, it would increase the supply of labour. In plain language, it would increase the state’s tax revenues and the amount of money left for consumption.
From the perspective of equality, it would improve women’s position in the labour market, as well as their career and salary development.
On top of this, the reform would save the state approximately EUR 30 to 40 million annually.
All other government parties are willing to shorten the care allowance period, but for the Christian Democrats the decision is a difficult one to swallow.
The Christian Democrats stress family values, which is why they want to support children’s home care for as long as possible.
”I do not believe that the state would save a lot of money by cutting the home care allowance”, Katja Nieminen contemplates.
A final model for the reform has not yet been settled.
A potential compromise could be to pay a partial child home care allowance through the third year, during which time the parents could work part-time.
Today, Kela pays a partial care allowance to parents who work up to 30 hours per week. The current partial care allowance is roughly EUR 94 per month, but it could be increased.
In 2010, the number of Finnish families receiving a child home care allowance was 120,000. In addition, 20,000 families received a partial care allowance.
At the end of 2010, slightly more than half of children aged 9 months to 2 years were cared for with the help of the home care allowance.
The number of 1-year-olds benefiting from the support was 37,000, while that of 2-year-old children was 22,000. However, fewer than 9,000 three-year-old children received the allowance in 2010.
The shortening of the eligibility period of the child home care allowance is only one item on the government’s long cost-saving list.
No decisions have been made as yet, but the six-party coalition government has promised to prevent the country from falling deeper into debt.
How this is to be done and the size of the public sector cutbacks is causing some friction between the two major coalition partners, the National Coalition Party and the Social Democrats.
Within the Parliamentary opposition, the publication of the article in Friday's newspaper prompted an immediate and vigorous response.
The leader of the Centre Party Mari Kiviniemi opined that it was a "declaration of war".
"If the article in Helsingin Sanomat is correct, the Centre Party is taking this as a declaration of war. We will do our utmost to ensure that Finnish families are not brought to their knees", Kiviniemi wrote in a press release headlined "Hands off the home care allowance!"
Kiviniemi stated that this was "one more piece of proof of what the Centre Party has been warning people about".
"The way the blue-red coalition government is heading means hard time for families, for the weakest, and for Finns living outside the big urban centres. We have seen this under [Harri] Holkeri (who led a coalition featuring the National Coalition Party and the SDP from 1987 to 1991), under [Paavo] Lipponen, and now in Jyrki Katainen's time", she writes.
The Social Insurance Institution of Finland: Child Home Care Allowance