Strategic Dimensions: -0,2, 1631, 2519, 1,373 and 0,9680
For 2016 Ministry of Social Affairs and the Health has a budget of 13.0
billion EUR so 24 % of all government spending. It’s a huge amount and it has impact
to our everyday life. Every year is counted wage coefficient, the life expectancy factor and
indexes such as
consumer price index, national pension and employment pension index. The thing whit these figures are
that they might increase, decrease or be freeze. Have you ever thought that which indexes and calculations
have impact on budget or what do the numbers behind it mean?
-0,2
Consumer Price Index describes the price development of the
households resident in Finland owned goods and services. It’s calculated by the
method in which the prices of different commodities are weighted together their
shares of consumption. The inflation was in end of the year 2015 -0,2 %. Why
the figure has remained negative? The reasons for this are for example average housing
loan rates, fuel compared to consumer prices, etc. are lower than year ago.
1631
The National pension Index is determined by the change of consumer price
index. The Social Insurance Institution establishes the index every year and in
2016, the national pension index value was 1631. It’s used for review large
part of the Kela benefits. The year 2016 brings among other things these changes:
- 50€ initial deductible for pharmaceutical product benefit
- Travel allowances deductible rises
- Sickness allowance is reduced from 24.02€ to 23.93€
- Celiac sufferers diet allowance is removed
- Maintenance support is reduced
Earnings-related pension index pensions in payment are reviewed.
Earnings-related pension change in the share of wages in calculating the index
is 20 per cent and the change in prices 80 per cent. In 2016, earnings-relatedpension index is 2519, the same as in 2015. This means that benefits linked to earnings-related
pension index do not rise this year.
1,373
Wage coefficient adjusted pensionable merit, in accordance with the laws of pension income
limits and amounts.
In the wage weight change in earnings is 80 per cent and 20 per
cent of the price. In 2016 the
wage coefficient is 1.373. For what is this used for? This is
used eg. Sickness, maternity, paternity and parental benefits, special
care allowance, as well as the
definition of the rehabilitation allowance income limits.
0,96800
In 2016, the life expectancy coefficient is 0.96800. The life expectancy coefficient is intended
to limit the lifetime pension spending growth and encourages the continuation
of work resulting from the lengthening. When the average life expectancy rises,
the life expectancy coefficient will reduce the monthly pensions. If you retire
transferring wants to maintain the level of the pension to which he would have
earned in accordance with the retirement age without a life expectancy
coefficient, he will have to work longer. So how long we should work before we
are in the pension age? Time will tell.
What will the strategic dimension be
after 2016?
To maintain the well-being of society we need to work harder and cut some
of our services to survive. Let's hope that Finland is now in the bottom and
the only direction is to go up! What will the strategic dimension be after
2016?
Thanks for the clarifications! Most of these indexes are really not that well known among the public, so when the news tell "such-and-such" index has now risen by certain per cent, most of us don't immediately understand what it means and what aspects of our lives it affects. And I join you in hoping that we've now seen the bottom and are heading up!
ReplyDeleteI fully agree. Most of us do not think about, where every one is due and how it affects our everyday life. It was very instructive to deepen the knowledge to this topic. Now I understand better Finnish economy or at least part of it.
ReplyDeleteReally interesting information, thank you Katrina for this post :) There was a many good points, so I just have to concentrate to the irrelevant one... ;) As you mentioned, there has been changings in the Kela benefits for year 2016, i.e the Celiac sufferers diet allowance (23,60€/month) has been removed. I think it's a good thing that Kela/Government is going through every allowances and measures those critically - when Celiac suffers diet allowance was set in past, the knowledge of the dietary needs was little, there were not too many options in grocery store for glutein-free food and it was much expensive - So there was a clear need for this allowance in the past, but not in today. Now internet is full of glutein-free recepts, grocery stores are marking their products better and there is indeed more cheeper options for Celiac-suffering diet. I think our society is full of these quite small allowances that we should look again, are they all relevant or not. Whit this we could free more money to those allowances that are critical and need more funding. Taru K / Team 24/7
ReplyDeleteThank you Taru for sharing your thoughts. I totally agree with you. The point you rise up isn't irrelevant. It is actually the point Finnish society has to focus more on the future. There are many benefits which are today irrelevant because the development develops. These 'loopholes' should be in the focuse and should be systematically removed from the law as a beenfits. By that we could get the economy to recover as well as more equal society.
ReplyDelete