The standard of living of the population in Finland is quite high, even compared to other states of the European Union. The good economic climate of the country allows most Finnish pensioners to have decent payments, and, in addition, even receive certain benefits or allowances.
Retirement age
Until recently, the retirement age in Finland was 59 years old. However, after the pension reform, age has increased. The state has established a single threshold for men and women, after which you can retire. Today, it is 65 years old.
If desired, citizens can go on a well-deserved rest at 63 years. However, in this case, the amount of pension payments will be reduced. The statutory accruals will be reduced by 0.4% for each month of retirement earlier than the established age. At the same time, for the fact that a person will continue to work after 65 years, he is entitled to an increase in the size of his pension. Moreover, a certain amount of surcharge (0.6%) will be carried out for each month worked.
Finnish pensioners for the most part receive good payouts. Many can afford to go on a trip, buy a car or even a small country house somewhere by the sea. In Finland, the state is trying to build a pension system so that every elderly citizen can lead a comfortable life after finishing work.
Features of the Finnish pension system
Finland's pension system is a mixed form of social benefits. Insurance savings in the Pension State Fund are two main sources consisting of state and accumulative (private) parts.
The first provides for minimum payments guaranteed by the state, due to citizens who have failed to accumulate or have insufficiently accumulated funds in their pension account. This part is mandatory for any citizen and is paid taking into account inflationary changes.
The second half of the pension in Finland consists of contributions and deductions from the earnings of working citizens. Its sizes may be different. Basically, the amount of payments for this part is determined by the level of income of the citizen and economic indicators. In this regard, clear boundaries are difficult to define. The sizes of the funded pension for the male and female population are different (for women, a lower threshold is set).
Pension in Finland may be paid depending on certain criteria. In addition to the basic ones - guaranteed and private - there are other types of pension payments: labor, national, old-age pension, disability pension, widow's.
Guaranteed retirement benefits
This type of pension payment is a kind of additional amount, which is not enough up to the cost of living. Thus, the minimum pension in Finland cannot be less than 700 euros.
Guaranteed payments are calculated from the budget and relied even to those citizens who have recently moved to live in the country. However, there are certain clearly defined terms for permanent residence. So, for residents of neighboring countries of the European Union, this period should be from three years, for citizens arriving from other states - from five years.
Labor pension
The pension that a citizen earned on his own is called a labor or funded pension. As in many other countries, in Finland the amount of the pension is formed by contributions or contributions from the employer (the employee himself) to the appropriate fund. However, insurance savings can accumulate both in the state fund - for public sector employees, and in private - for entrepreneurs and employees of private firms.
The size of such savings directly depends on the length of service and the level of wages. In some cases, retirement can reach more than 60% of wages.
Excluding individual cases, the average pension in Finland is considered to be within the labor limit. Its size can be somewhere around 1800 euros for men and a little less for women. The largest pensions are for residents of Helsinki, as well as the population of the Aland Islands. From the labor part of payments, a tax of 22% is compulsory calculated.
National pension
KELA is involved in social insurance payments to people who for some reason do not have an accumulated part of their pension or have accumulated a very small amount. Means of livelihood relate to older people who have reached 65 years of age. The exception is citizens who are unemployed due to disability; they can count on this type of compensation much earlier.
Such a payment, in fact, is auxiliary, and unlike the funded payment does not imply tax deductions. The fixed amount of the national pension, if an elderly person is lonely, is 628.75 euros, for older people in a marriage 100 euros less. At the same time, a pension in Finland cannot be less than the minimum living wage (700 euros), the remaining amounts are provided by state allowances. National payments are assigned only to citizens of Finland and also to permanent residents (at least 3-5 years old) foreigners.
Retirement pension
An old-age pension in Finland is calculated taking into account the following factors:
- the aggregate of all contributions for the period of employment;
- social status that a citizen occupied before retirement;
- the age that a person planning to retire has reached;
- marital status (single people get a couple of hundred more than those in marital ties;
- the presence of disability.
Also, one can retire for work in certain labor fields by old age, already having 38 years of experience. Such factors include: work in hazardous production, the presence of dangerous or difficult working conditions, and moral-difficult work.
Special cases of accrual of pensions
Some types of allowances are subject to slightly different rules or even exceptions apply. Additional pension payments in Finland are calculated on the basis of the national part, but are not paid in full. The indivisible share of the people applies only if the citizen has never had a funded part.
On the other hand, there are socially unprotected segments of the population living in the country. These include single elderly people, widows who have lost heads of household, widowers, persons with health restrictions, mainly those with disabilities. This category of citizens has the right to a basic state pension, as well as an income one. The minimum size of payments from the income part of such a group of people will be greater than that of ordinary elderly people.
Provided that the person, due to objective reasons, is not able to service himself anymore, he is assigned a home assistant. If one of the relatives takes care of the elderly person, then compensation will be paid to him (on account of wages). In the event that being at home is not possible, a pensioner has the right to reside in a nursing home. Part of the necessary funds for the maintenance of such citizens is allocated by the state. Old people who live alone can count on an additional 50 euros to the amount paid to an elderly person with a family.
Pension for foreigners
Finland's pension system provides for the possibility of calculating benefits for older people, regardless of their place of residence. Moreover, even permanent residence in another state does not matter if a foreign citizen once worked in Finland. However, the employee should have been officially employed, and deductions should have been made for him.
The Finnish pension industry does not require confirmation from a foreigner of the fact that a certain period of work has been in the country, since all insurance contributions are recorded in a single computer system. What kind of pension will be granted to an alien in Finland upon reaching the appropriate age depends not only on the length of service acquired in the country, but also on the economic situation at the time of payment.
Ability to receive a pension abroad
Former Finnish citizens who have left for permanent residence in another state are also entitled to a Finnish pension. Insurance benefits will depend on the country of residence chosen. The beginning of payments will be made not from the period when a person stopped working in a foreign country, but according to how old pensions are established by law in Finland.
In addition, the tax system will play an important role. During the first three years, in the case of moving to permanent residence, a person who previously had a Finnish passport is taxed according to local laws, and then the laws of the country of residence. The Finnish state concluded a mutual tax treaty with France, Portugal, and Spain.
Benefits and benefits for pensioners
Regardless of the type of pension received, senior citizens are entitled to certain benefits. The main state preferential program in Finland is the provision of compensation for housing. The purpose and amount of payment is determined depending on the size of the pension and other income. First of all, the participants in this program are elderly people with low insurance payments. Housing is an overwhelming burden for them, so the state takes responsibility for paying the rent.
In addition, senior citizens have discounts on bus, train, airplane flights, and can also receive free or partially paid subscriptions to sports facilities, tickets for a performance, a museum, and so on.
In addition to benefits, Finnish social security may award additional benefits. For certain reasons, including chronic illness, disability, the benefit is paid without fail.