Tax and benefit changes under Prime Minister Petteri Orpo’s government are projected to reduce incomes for Finland’s lowest-income households by 8%, or about €80 a month per adult on average, according to the Finnish Institute for Health and Welfare (THL). The analysis covers the 2023–2027 government term.
Who loses, and who gains
THL links the losses mainly to cuts to housing allowance and unemployment benefits. Unemployed people face the largest losses in euros, while students face the largest proportional drop. At the other end of the income distribution, THL estimates a gain of roughly €50 a month per adult in the highest-income tenth, driven mainly by tax cuts affecting people in work.
More people on low incomes
The study projects that around 102,000 more people, including about 22,000 children, will fall below the low-income threshold. THL’s earlier estimate projected an increase of 110,000 people, including 27,000 children. The new model uses monthly Finnish Tax Administration income data to account for changes in household income over time.
How the reforms affect social assistance
THL’s revised estimate puts the increase in the number of social assistance recipients at about 30,000. Its earlier estimate was about 100,000 and carried considerable uncertainty. Social assistance is Finland’s last-resort benefit.
Sources: Finnish Institute for Health and Welfare, Yle News and Kaleva.
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