The removal of child increases challenges families

Topics

• Income security
• Law change
• Unemployment

The removal of the child increase has had a significant impact on the incomes of the unemployed with families. In April, around 15 000 YTK members received on average more than 150 € less in earnings-related daily allowance due to the removal of the child increase.

Since April, the law has meant that no child increase has been paid on the daily allowance. In March, the YTK Unemployment Fund still paid child increases to 15,316 people, totalling 2.37 € million, or an average of 154,7 € per person.

In total, the YTK Unemployment Fund paid daily allowances to 51 203 claimants in March, which means that before the law change, around 31% of claimants received a child increase.

“In April, some 15 800 of our members received on average just over 150 € less in daily allowance due to the abolition of the child supplement. The change will therefore affect a large number of family claimants,” says Auli Hänninen, CEO of the YTK Unemployment Fund.

Affects tens of thousands of families

In March, the YTK Unemployment Fund accounted for around 38% of all recipients of earnings-related unemployment benefits. This means that around 42,000 people in the whole fund system were without child increases in April.

Including basic social security benefits, around 102 000 people were without child increase in April. At this rate, the abolition of child increases will reduce the total annual benefit payments by around 189 € million, which corresponds to an annual saving of 200 € million estimated in the government’s proposal. This year, the savings will be around 142 € million because the child increase was paid for a period of 3 months.

Fear of financial hardship

The YTK Unemployment Fund asked its members in the March Members’ Pulse survey about preparing for changes in unemployment benefits.

Responses saw the removal of the child increase as a direct negative impact on the well-being of families, with many highlighting how this decision would take money away from children.

Many respondents also felt that there was no way to prepare for the removal of the child increase and feared that it would worsen their already challenging financial situation.

“The abolition of the child increase in income support is annoying. In practice, the money is directly taken away from the children,” said one respondent to the members’ survey.

The YTK Unemployment Fund is committed to supporting its members in every way possible.
“We offer ongoing advice and will start developing employment support services as soon as the law allows us to do so,” says Auli Hänninen.