The start of the new year always brings legislative changes that have an effect on all of us. In this blog post, we take a look at some of those changes in Finland in 2021. We discuss how those changes may affect you.
Changes in taxation
As usual, taxes are some of the things that change in Finland in 2021.
The new year will bring slight increases in income taxes for employees. You will see from your payslip that your unemployment insurance payment will rise by 0.15 percentage points. Illness insurance payment will, in turn, rise by 0.18 percentage points.
Many Finnish municipalities increased their municipal tax rates starting Jan 1, 2021. When all of the changes in taxation will be taken into account, the average worker will see their annual taxes increase by 0.2-0.3 percentage points.
Tax increases will also mean more expensive alcohol. The government raised alcohol taxes at the beginning of the year. If the retailers push the tax increases to consumer prices, the price of a bottle of beer, cider, and gin long drink will increase by about 3 cents. A bottle of wine will cost about 22 cents more. A bottle of booze, in turn, will cost about 38 cents more than last year.
Taxes levied on cigarettes will also increase this year. By the end of the year, a pack of cigarettes will cost about 45 cents more than last year.
There are also changes in the taxation of employee benefits. These changes primarily affect transportation-related benefits. These changes are designed to encourage the use of public transportation and electric vehicles and bikes in work-related commutes.
Read more about the changes in taxation from the vero.fi website (unfortunately the page is only in Finnish).
Changes in housing costs
In November of last year, the parliament instituted a law whereby water bills of apartment owners have to be based on consumption. The law took effect at the start of this year.
Previously, the housing company statutes set the basis for the water bills. Most often the basis was a fixed monthly fee per occupant or it could be based on consumption. Now, the bill has to be based on consumption where possible.
Many Finnish apartments already have their own water meters. They became mandatory in new buildings in 2011. Starting from 2013 they also had to be installed in conjunction with large-scale pipe repairs.
Housing companies didn’t, however, have to use them even if they had them. If the housing company statutes named another specific base for the water fee, they had to use that to bill occupants. The new law trumps the housing company statutes.
So, those housing companies that can charge water fees based on consumption have to start doing that no matter what the housing company statutes say. Those housing companies that do not yet have water meters for each apartment have to install them the next time they go through pipe repairs.
Another change that affects housing costs is the rise in heating oil costs. There will be a tax increase for the oil that is used in heating. A family living in a one-family home and burning through 2 200 l of heating oil a year will see their heating bill increase by 74 euros/year.
In Finland, there are about 190 000 one-family homes that heat on oil. The government provides subsidies for those wanting to change to another form of heating also in 2021.
In one-family homes with district heating, heating costs will increase by about 38 euros/year.
Changes related to the Corona pandemic
In some cases, changes in Finland in 2021 mean a reversal of existing rules. Namely, early in the Corona pandemic, the government made it easier for companies to lay-off workers. For example, previously the employer had to notify the employees of lay-offs at least 14 days in advance. Due to the pandemic, the government shortened this to 5 days. At the start of this year, the period lengthened back to 14 days.
Also, the government made it easier to also lay-off fixed-term workers. Prior to the pandemic, an employee with a fixed-term contract could only be laid off if he/she was temping for an employee that would have been laid off as well. Early in the pandemic, the government changed the law so that fixed-term workers could be laid off in a similar manner to permanent workers. This change in law was temporary and starting from Jan 1, 2020, the old law stands.
Last year, KELA subsidized the costs of the PCR Corona test administered in the private health care sector by 56 euros. Starting from the beginning of the year, the subsidy is 100 euros. This increase is valid until the end of this year.
Changes in education
Starting from the fall of 2021, compulsory education continues in Finland until the person is 18 years old. Or until they’ve graduated from upper secondary school (lukio) or a vocational school.
This change in age applies to those who were born in 2005 and thereafter. So, those who are now in 9th grade have to continue forward with their education.
It means that after 9th grade, one has to, by law, continue to upper secondary education, vocational school, or approved programs in adult education colleges.
All university students in Finland, including those in universities of applied sciences, now get their health care services from The Finnish Student Health Service (YTHS). Students have to pay their student health care fees to KELA directly. They will not receive a bill but have to be proactive in paying the fee. Here’s more information on that.
At the start of the year, the government combined two grant programs, EDUFI Fellowship and Finnish Government Scholarship Pool, into one scholarship program. This program is directed at those in the early stages of their Ph.D. work. Its name is now the EDUFI Fellowship.
Changes caused by BREXIT
Not everything that changes in Finland in 2021 is brought on by Finnish legislators. BREXIT is one major change in the world that also generates changes in Finland in 2021.
BREXIT also means changes in the way pets can travel to and from the UK to Finland. But here’s a more comprehensive list of changes brought about by BREXIT.
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