General social security benefit is step towards simpler social security system

General social security benefit is step towards simpler social security system

The Government has submitted a proposal to Parliament for an act on general social security benefit. In the first stage, the general social security benefit would be a new social security benefit for unemployed jobseekers, replacing labour market subsidy and basic unemployment allowance. The legislation concerning the general social security benefit is scheduled to enter into force on 1 May 2026.

In the first stage, the general social security benefit would be a new social security benefit for unemployed jobseekers, replacing the labour market subsidy and basic unemployment allowance paid by the Social Insurance Institution of Finland (Kela).

According to the government proposal, the general social security benefit would be paid if an unemployed jobseeker was not entitled to the earnings-related unemployment allowance or their period of earnings-related unemployment allowance had ended and they needed financial support. The amount of the general social security benefit would correspond to the amount of the current labour market subsidy, the basic unemployment allowance and the basic amount of earnings-related unemployment allowance (EUR 37.21 per day in 2025).

The condition for receiving the general social security benefit would be that the person is in need of financial support. In other words, the benefit would be granted on the basis of means testing. As in the case of the current labour market subsidy, means testing would mean that the person's income other than earned income would affect the amount of the general social security benefit for the part of income exceeding the income limit. Such other income would include rental income and other capital income. The general social security benefit would taper against increasing income from work linearly. In other words, the benefit would be adjusted to take the recipient's earned income into account. This is also currently the case with unemployment security. At present, each earned euro reduces the unemployment benefit to be paid by 50 cents.

The general social security benefit would be granted and paid by Kela. Kela is preparing a single application model where clients can apply for unemployment benefits (in future, general social security benefit) and housing allowance using a single application. In the future, the plan is to expand the model to cover other benefits, too. Clients would not need to know the benefit system in detail; instead, they would be guided to apply for the right benefits, according to their life situations.

Receiving the general social security benefit would include an activation period to prevent prolonged unemployment and social exclusion. In particular, the aim is to shorten the periods of unemployment among young people. During the activation period, jobseekers would have meetings that are part of the service process and take place, as a rule, in person at an office of the employment authority. These meetings would focus on establishing the reasons for prolonged unemployment and referring jobseekers to the necessary services. Jobseekers under the age of 25 would participate in the activation period after receiving the general social security benefit for eight months and jobseekers aged 25 and over after receiving the benefit for 18 months.

The act on general social security benefit is scheduled to enter into force on 1 May 2026.

• Government proposal for the act on general social security benefit (in Finnish)
• General social security benefit

Preparation of new benefit model advances in stages

In line with the Programme of Prime Minister Petteri Orpo's Government, the Government will implement a reform of basic social security to improve the profitability of work, streamline social security and simplify benefits, taking into account the recommendations and reports issued in the Social Security Committee's interim report.

In the first stage, the benefit would simplify social security for the unemployed by replacing labour market subsidy and basic unemployment allowance. In the next stage, the work would continue to harmonise and combine basic social security benefits and to incorporate the current housing allowances gradually into the general social security benefit. The aim is to create a general social security benefit that would, in the future, include a basic allowance for living costs, an allowance for housing costs and a discretionary allowance as last-resort social security.

The first stage of the model for the general social security benefit was prepared by experts from the Ministry of Social Affairs and Health, the Ministry of Economic Affairs and Employment, the Ministry of Finance, the Finnish Institute for Health and Welfare and Kela.

The general social security benefit is part of the social security reform. The Social Security Committee monitors the preparations for introducing the general social security benefit.

• Social security reform

Impact of the act on general social security benefit assessed together with other proposals

The memorandums assessing the combined impacts of social security changes, which were published today by the Ministry of Social Affairs and Health, also cover the act on general social security benefit. In addition, the Ministry of Social Affairs and Health and the Ministry of Economic Affairs and Employment have together prepared an assessment of the combined impacts of the government proposals concerning social assistance, general social security benefit, and employment services and unemployment security sanctions.

• Memorandums assessing combined impacts of Government's social security changes now published (Press release 22.9.2025)

Inquiries

Liisa Siika-aho, Director General, tel. +358 29 516 3085, [email protected]
Annu Jaakkola, Special Adviser to the Minister of Social Security, tel. +358 29 516 3560, [email protected]