Starting from the beginning of 2025, a significant change will take place in the housing allowance system in Finland. The Social Insurance Institution-Kela announced in a press release that general housing allowance will no longer be available for owner-occupied homes. This decision will have a direct impact on households who rely on this financial support to cover their housing costs.
According to the press release, interest payments on housing loans for right-of-occupancy homes will also no longer be taken into account when calculating housing allowance. This means that households living in right-of-occupancy homes will need to find alternative ways to manage their housing expenses.
It is important to note that these changes do not apply to the housing allowance for pensioners. Pensioners will continue to receive housing allowance as usual, without any disruption in their benefits.
For households living in owner-occupied homes, December 2024 will be the last month for which general housing allowance is available. After that, Kela will stop paying housing allowance for owner-occupied homes automatically. This means that affected households do not need to take any action themselves, as the payments will cease on their own.
The press release also clarifies that the change does not apply to right-of-occupancy or part-ownership homes. General housing allowance will still be available for these types of homes. However, interest payments on housing loans for right-of-occupancy homes will no longer be recognized as housing costs starting from January 1, 2025.
It is important to understand what constitutes an owner-occupied home in the eyes of Kela. Even if there is a rental agreement in place, a home is considered owner-occupied if certain conditions are met. For example, if a self-employed person lives in a home held by a company where they own at least 50 percent of the company, or if a household owns at least 50 percent of the home, it will be classified as an owner-occupied home.
In cases where a beneficiary of an estate lives in a home owned by the estate and is responsible for the housing costs similar to an owner, the home will also be considered owner-occupied. General housing allowance granted for such homes will be discontinued as well.
For households facing financial difficulties after the housing allowance has ended, Kela suggests using the calculator for social assistance to determine if they are entitled to basic social assistance. This tool can help individuals estimate if their income and assets are sufficient to cover essential living expenses such as food and housing.
In conclusion, the changes in the housing allowance system in Finland will have a significant impact on households living in owner-occupied homes. It is important for affected individuals to be aware of these changes and to explore alternative options for managing their housing expenses. Kela’s support tools can provide valuable assistance to those in need of financial help during this transition period.