Housing benefits

Social policyLotta Aarikka

Background information for the Representative Council

WHY?A policy paper amendment is entered in the board programme:15. AMENDMENT OF AYY’S SUBSISTENCE POLICY PAPER CONCERNING THE HOUSING SUPPLEMENT OF STUDENT FINANCIAL AID• Currently, the policy paper strictly determines that a student

must receive the housing supplement of student financial aid. However, the policy should be changed in terms of what is needed from housing benefit. Currently, there is a debate about whether it would be profitable to change a student's housing benefit to the general housing allowance. SYL will most likely bring the discussion to the general assembly in 2015 and AYY's view should be completed at that time.

Only this one section is opened from the subsistence policy paper.

WHAT NOW?

1. What is the housing supplement of student financial aid?

2. What is the general housing allowance?3. What is the students’ rent level like4. Comparison of housing supplement of

student financial aid and the general housing allowance

5. If students were transferred from one aid to another, who wins and who loses?

6. Questions

HOUSING SUPPLEMENT OF STUDENT FINANCIAL AID?• Students who do not have children and live in rented

accommodation may receive the housing supplement of student financial aid.

• For students who study in Finland, 80 per cent of the acceptable housing costs mentioned in the rental agreement (rent or maintenance charge in right-of-occupancy accommodation + fixed water, electricity and equipment costs mentioned in the rental or right-of-occupancy agreement)

• EUR 26,90–201,60 per month, tied to student financial aid.• If you do not receive student financial aid / are not entitled

to student financial aid, you neither receive the housing supplement (during the summer, for example).

• For students under 18 years of age, the total income of parents have effect on the amount of the housing supplement, whereas a spouse’s income does not have effect

HOUSING SUPPLEMENT OF STUDENT FINANCIAL AID?• Accommodation owned by or rented from a

parent, the maximum supplement is EUR 58.87 per month

• Spouse + one rental agreement: housing costs= 50%

• Spouse+ separate rental agreements: housing costs= (rent + rent) : 2

• Roommate + separate rental agreements= rent according to a student’s own rental agreement

• Roommate + one rental agrement: housing costs= 50% of the rent, special cases are taken into account

WHAT IS THE GENERAL HOUSING ALLOWANCE LIKE?• The general housing allowance may be granted to

students with children, to owner-occupied homes, and to those who receive the sickness allowance and have used the maximum period of student financial aid.

• 80% of the difference between the acceptable housing costs and the basic deductible. • The basic deductible is determined on the basis of household income

and the number of adults and children in the household. Children have more emphasis in the calculation.

• The municipality and the size of the household have effect on the maximum amount.

• Assets are no longer counted as income, but the profit from the assets will continue to have effect.

WHAT IS THE GENERAL HOUSING ALLOWANCE LIKE?• The allowance is reviewed if the income reduces by EUR

200/month or increases by EUR 400 month. • Income changes are taken into account from the beginning of the

following month, in which the change in income is valid since the 1st day of the month. If your income changes on 15 Apr 2015, for example, the housing allowance is reviewed from 1 June 2015 onwards.

• The housing allowance includes an earned-income deduction of EUR 300, which is made on total income from work or self-employment of each member in the household.

• This sum is not taken into account when Kela reviews income that affects the housing allowance. Therefore, if the worker receives a salary of EUR 1,000, for example, EUR 700 will be taken into account as income. The earned-income deduction applies to all the receivers of the allowance and will enter into force on 1 Sept 2015.

WHAT IS THE STUDENTS’ RENT LEVEL LIKE?

WHAT IS THE STUDENTS’ RENT LEVEL LIKE?

• The housing supplement of student financial aid was last increased in 2005 but the rents paid by students have increased by over three per cent in a year over the same period.

• At the same time, the average paid housing allowances have approached the maximum monthly amount of the housing supplement (€201.60/month).

• When reviewing the average rent, it should be taken into account that they describe the average level of the entire country and therefore do not very well describe the situation in the metropolitan area.

COMPARISON OF HOUSING SUPPLEMENT OF STUDENT FINANCIAL AID AND THE GENERAL

HOUSING SUPPLEMENT

ADVANTAGESAND DISADVANTAGES

• Housing supplement: • Dependent on the student financial aid (the year-round

aspect and the monitoring of study progress).• If you live alone and receive the supplement for 12 months

a year, you may earn EUR 7,920 a year.• Personal – a spouse’s income does not affect• One income limit both for student financial aid and the

housing supplement.

• General housing allowance:• Separate form of assistance.• If you live alone and receive assistance for 12 months a

year, you may earn EUR 8,760 a yearBUT• The level and income limits depend on the household

(spouse and the number of children)- brings back the ”clarification” of cohabitation also for roommates.

• Two income limits: one for student financial aid and one for the general housing allowance.

If students were transferred from

one aid to another, who wins and who

loses?

CALCULATE ONLINE

• You can play with the general housing allowance here:

https://easiointi.kela.fi/aylaskenta_app/AYLaskentaApplication?&lang=fi

• You can play with the housing supplement of student financial aid here:

https://easiointi.kela.fi/otlaskenta_app/OTLaskentaApplication?&lang=fi

THIS IS THE WHOLE PICTURE

THIS IS THE WHOLE PICTURE

ANSWERSHow does Kela monitor you income earnings regarding housing benefit?• Kela checks the housing benefit

automatically every year• Similar to the follow-up of student grant and

income earnings control which are conducted yearly

• Kela sends you a letter regarding the yearly review of the housing benefit about two months in advance.

• You must apply for the yearly review (can be done online) a month before the check up. If you do not apply on time, the housing aid will be suspended.

• If there are changes in your income earnings you will have to report that to Kela yourself. If you fail to do this the matter will be inspected at the latest in the yearly review and the ”extra” housing benefit will be collected back.

ANSWERSWhat are the sanctions for earning more income than ”allowed”?

• Benefits will be collected back by Kela.• This can be implemented by deducting them from

other benefits if you are entitled to any (>30 e/month).

• You can make a payment plan with KELA’s collection center

• More information: http://www.kela.fi/web/en

ANSWERSWhen it comes to general housing allowance, are basic unemployment allowance and student grant considered as income?• Nope.

• The following are not considered as income in general housing allowance: (Sorry no translation but many things as you can see)

Toimeentulotuki, Lapsilisä, Kansaneläkelain mukainen lapsikorotus, Äitiysavustus, Sotilasavustus, Opintoraha ja asumislisä, Lapseneläke, Alle 16-vuotiaan vammaistuki, 16 vuotta täyttäneen vammaistuki, Eläkettä saavan hoitotuki, Rintamalisä ja ylimääräinen rintamalisä, Omaishoidon tuen hoitopalkkio, Kulukorvaukset ja ylläpitokorvaukset; Apurahat ja avustukset, kun ne eivät liity toimeentulon turvaamiseen; Perhepäivähoidon kustannusten korvaukset, Sotilasvammalain mukaiset korvaukset; Vian, vamman tai haitan perusteella maksettavat korvaukset; Lapsen elatusapu ja elatustuki, Tapaturmavakuutuslain mukainen haittaraha, Työllistymisraha; Ulkomailta maksettava etuus tai tulo, kun ne vastaavat yllä mainittuja etuuksia ja tuloja; Satunnaiset tulot (esim. perintö, lahja, satunnainen myyntivoitto tai vastaava), Lapsen tulot(tulot huomioidaan vain silloin, kun lapsi tai hänen puolisonsa on tuen hakija), Palkkaan liittyvät kulukorvaukset (km-korvaukset ja matkapäivärahat)

ANSWERS

What’s the maximum general housing allowance (how much can you receive max)?• The law defines the maximum amount for the

housing expenses of a household, according to which the expenses can, at a maximum, be taken into account • The maximum expenses depend on the size of the

household and the municipality of the location of the apartment.

• The maximum expenses are reviewed yearly with the help of rent index defined by Statistics Finland

ANSWERSWhat’s the maximum general housing allowance (how much can you receive max)?• Household size 1 person (no children)

• 508€ (Helsinki)• 492€ (Espoo, Kauniainen, Vantaa)

• Household size 2 persons (no children)• 735€ (Helsinki)• 706€ (Espoo, Kauniainen, Vantaa)

• More information: http://www.kela.fi/web/en/housing

ANSWERSWhat’s the minimum general housing allowance (how much do you have to earn as income in order not to receive any general housing allowance?• Household size 1 person (no children, all

income earnings)• 1928 € (Helsinki) • 1888 € (Espoo, Kauniainen, Vantaa)

• Household size 2 persons (no children, all income earnings)• 2595 € (Helsinki) • 2523 € (Espoo, Kauniainen, Vantaa)

• More information: http://www.kela.fi/web/en

ANSWERSHow does increase in income earnings affect the beneficiary’s level of the general housing allowance in practice?• Depends on the nature of the income. In

general housing allowance two ”forms of income” are considered• Continous income = The continous income

earnings of a household, continuing for at least three months after the granting or reviewing date of the general housing allowance.

• Average income = If the ”new” income earnings do not continue longer than three months after the granting or reviewing date, the monthly income is calculated as the average monthly income (income that is estimated to be earned by the household during the year the benefit is received).

ANSWERSExample 1- Lives

alone- No

children- No

income

ANSWERSExample 2- Lives

alone- No

children- Summer

job: income for 3 months 2000€ (6000€/12 = 500 €/ month)

ANSWERSExample 3- Lives

alone- No

children- Summer

job: income for 3 months 2000€

- Part-time job: income 600 €/month (5400 €/ 9 months)

QUESTIONS1/2Which option is ”better” – depends on which of the following issues are more important than others (?)1. The overall level of the aid

2. Year-round aspect

3. Individual aspect (vs the household)

4. Flexibility of income limits

5. Adequacy of income limits

6. Development of the aid

7. Development of basic income

8. Significance of study credits

QUESTIONS 2/2We have to choose one option, which one?• ”We should develop the housing supplement

of student financial aid instead of the transfer.”• Probably no use of waiting for a general increase

or the increase of the maximum rent covered.• Students’ own aid – threat or opportunity?

• ”We should transfer to the general housing allowance and develop it.”• Household-aspect and roommate/cohabitation

problems, separate income limits and other problems.

• There is more people power but also lobbyists with different agendas.