Families staying home longer could lose more than €5,000 under proposed benefit model, according to calculations by Finland’s Social Insurance Institution, Kela, reported by Yle.

The model would replace the home care allowance with a parental allowance period extended by six months, adding three months to each parent’s quota. Families caring for a child at home until no later than the age of one year and nine months would receive more in total benefits during that period than under the current system.

For a two-earner family whose child starts early childhood education at 18 months, the increase could reach €1,000 if both parents use their additional three-month quotas. Any unused benefits allocated to the other parent would be lost. If only one parent used their extra quota, the financial advantage over the home care allowance would end when the child was about 18 months old.

Families caring for a child at home until the age of three would receive more than €5,000 less in total support, Kela’s calculations found. Kela special researcher Tapio Räsänen said the model would encourage shorter periods of home care, as families staying home longer would need to prepare to cover the costs, for example with savings.

Kela used a microsimulation model for its calculations and did not include any possible municipal supplement to the home care allowance. The Ministry of Finance has proposed abolishing the allowance. The National Coalition Party has proposed replacing it by adding 40 days to the current number of earnings-related family leave days.

Among families with children born in 2022, 76 per cent used the home care allowance. The periods for which it is used have become shorter.