Budget 2024 | Why is the purchasing power of students being cut but not of pensioners, Minister Grahn-Laasonen?

The government the savings made in the public finances are above all in the interest of the younger generations, comments the Minister of Social Security Sanni Grahn-Laasonen (kok) savings for study support.

“I understand that cutting decisions made to balance the public finances are difficult to accept. But they are done because in this economic situation the government has very few options,” says Grahn-Laasonen to HS.

Students are in the last days expressed their opinion among other things, study support giving up index increases against. Starting next year, the government will cut the purchasing power of students when it freezes the index increases of the tuition fee. Thus, the study grant does not increase, even though the cost of living increases, i.e. the purchasing power of the study grant decreases.

Sanni Grahn-Laasonen states that recent forecasts show that the state’s economic situation is even more difficult than expected, and that despite the cuts, the state’s debt is growing to “wild numbers”.

Next year, Finland will take on 1.4 billion euros more in debt than the Ministry of Finance estimated back in August.

“The government’s savings program must be implemented. And it is also in the interest of the young generations – and above all the young generations -,” says Grahn-Laasonen.

Bridge currently a childless student can receive a maximum of 279.38 euros per month. If the index check was not frozen, the amount would increase next year by 15.63 euros per month. In the coming years, the impact will be even greater.

The estimate comes from the government’s draft presentation, which was published on Friday.

According to the government’s program, a separate comprehensive reform of the study support will also be started during the government’s term, but its content is not yet known.

Yet last spring the chairman of the coalition, the current prime minister Petteri Orpo said in Demokratti magazine that the index freeze would not apply to student support.

Why was the index freezing of study support still done?

According to Grahn-Laasonen, the freeze was already agreed upon in government negotiations, among all government parties.

“If there was an alternative to whether to make cuts or not, then surely any government would prefer not to make cuts and weaken social security and student benefits. But the state is getting into debt at such a breakneck speed,” says the minister.

“Leaving students out when talking about this scale is very difficult. And it would also be socially difficult to justify why students would be left out of index savings, for example, when it applies to almost all other benefits.”

Index freezes in addition to the study allowance, they concern, among other things, earnings-related unemployment insurance, labor market support, basic daily allowance and housing allowance.

Excluded from them are pensions, subsistence allowance, disability benefits, frontal allowances, alimony and the annual deductible for medicines. Although the freeze does not apply to pensions, it does apply to pensioners’ housing allowance.

Large savings would have been available, for example, by index freezing pensions. How is their exclusion justified?

“It was a joint decision of the government. The government did not want to cut pensions.”

Why?

“The government did not want to make a decision that would affect already earned pensions.”

Grahn-Laasonen emphasizes that, as minister, he will implement the jointly agreed government program, which will also be followed by next year’s budget.

Index freeze means that certain benefits linked to the national pension and the consumer price index will not be increased in the coming years, but will remain at this year’s level.

In practice, it is a cut to the purchasing power of those receiving benefits, because the cost of living is expected to rise due to rising prices.