The new year always brings with it legislative and other changes that can have an effect on our daily lives. In this blog post, we will look at some changes in Finland in 2022 that most likely will have that.
We start with changes in the Finnish tax code. Some of these will have a negative effect on your pocketbook. Some, in turn, will have a positive one. Then we will move on to other changes. These include changes in social benefits and in labor legislation.
Changes in taxation
For example, the tax credit for household expenses relating to household work, nursing, and care are increasing in 2022. These increases are temporary increases. They are valid for 2022 and 2023. These increases are:
- The maximum deduction is now 3 500 €. It is normally 2 250 €.
- The deduction is now 60 % of the work-related expenses specified on the invoice, and 30 % of the wages that the household pays to the worker. The percentages increased 40 and 15 respectively.
- There’s also an increase in the tax credit related to the move from oil heating to more sustainable energy sources.
One negative change affects those with a home loan. The deduction for home-loan interest has been going down since 2012. This year, the deduction will decrease from 10 % to 5 %. Starting from next year, home loan interests are no longer deductible at all.
As usual, there are also slight changes in the tax-like social security payments Finnish employees make from their earnings. This year these changes mean a very slight increase in the take-home pay of employees.
Depending on where you live, you might see an increase or decrease in your municipal tax rate. According to the Tax Payers Association of Finland, the municipal tax rate increases in 16 municipalities and goes down in 12. It stays the same in the other 281 Finnish municipalities.
From 2022 onwards, we no longer have to pay car taxes on fully electric cars or on nitrogen-powered cars. Environmentally friendlier company cars will also have a lower taxable value starting in 2022. This latter deduction is valid fixed term from 2022 to 2025.
The cigarette tax has increased from the start of 2022. On average, a pack of cigarettes is now 0.5 € more expensive than last year.
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Changes in social benefits
The year 2022 brings several changes to KELA benefits. Some of these changes took effect at the start of the year. Some will take effect later this year.
For example, the family leave reform that brings changes to the duration and timing of parental leaves and parental allowances will take effect on August 1. These changes apply to families where the estimated due date of the baby is 4 September 2022 or later. In the case of adoptive families, these new provisions affect families who are adopting on or after 31 July 2022. You can read more about the family leave reform here.
2022 saw an increase in family benefits. The minimum amount of the maternity, paternity, and parental allowances and of the special care allowance went up. The new amount is 29.67 €/day. Previously it was 29.05 €/day.
Also, the rate of the child maintenance allowance went up from 167.35 €/month to 172.59 €/month.
Student financial aid recipients got an increase in the annual income limits for this year. This year, the annual income limit will be 15 630 € for students receiving financial aid for 9 months.
There’s also an increase in unemployment benefits this year. The basic unemployment allowance increased from 33.78 €/day to 34.50 €/day. The same goes for the labor market subsidy. There was also an increase in the supplementary amount and in the child increase.
Other benefits that saw a slight increase this year include
- general housing market allowance,
- the basic amount of social assistance, and
- the minimum amount of the sickness allowance, and
- the minimum amount of rehabilitation allowance.
On the other hand, we will be required to pay slightly more in medicine costs before we hit the maximum limit of out-of-pocket medicine costs. Last year the maximum limit was 579.78 €/year. This year it is 592.16 €. After that, we will pay a 2.50 € co-payment for each reimbursable medicine for the rest of the year.
Other changes in Finland in 2022
Some of the legislation relating to the Finnish labor market and labor relations also changed at the start of 2022.
Previously, we wrote about the planned changes to the non-competition rules of the Employment Contracts Act. Those changes have now taken effect.
The Act on Co-operation within Undertakings has also been revamped. This Act pertains to workplaces employing 20 or more people.
Here are two notable changes to the Act.
The first major change has to do with employees’ access to information about the employer’s future.
Employers are now required to communicate with employees or their representatives on a regular basis. Each workplace falling under the act decides the practicalities of such regular communication but it should happen quarterly. In smaller companies (with 20-29 employees), such communication has to happen at least twice a year.
Topics that the new law lists as discussion topics include, for example,
- future prospects and financial situation,
- rules, policies, and practices of the workplace,
- personnel structure and how personnel are used, and
- needed skills and development of those skills.
A plan for the development of the workplace has to be a part of such communication. The law has a list of things that need to be included in the plan.
The second important change relates to change negotiations.
As in the old Act, this new one stipulates that before any major changes that affect the personnel are taken, the employer has to negotiate with employees or their representatives. In this new law, employee representatives have a stronger role than before.
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