Social security | Pensioners’ income may decrease next year by up to 240 euros per year, while medical costs will increase

The government the cutting decisions made next year will also start to be reflected in the pensioners’ disposable income.

This is evident from the memorandum published by the Ministry of Social Affairs and Health on Monday, which examines the combined effects of cuts and tax increases next year.

According to the memo, next year almost ten percent of those aged 65-74 will see their income decrease by 1-4.9 percent from the current level. Eleven percent of those over 75 will have their incomes reduced by the same amount.

A decline of more than five percent in the income level of pensioners is, on the other hand, rare.

In the memo the effects of the government’s actions have been illustrated in various example cases.

For example, a pensioner living alone in a rental whose earnings are around 2,250 euros per month will see their income drop by 20 euros per month, i.e. 240 euros per year.

The changes in income are mainly due to the index freezing of the basis of the pensioner’s housing allowance, the steepening of the income reduction for the pensioner’s housing allowance, the reduction of the pension income deduction for income taxation and other changes in income taxation.

The smaller the pensioner’s earnings, the less the income will also decrease. On the other hand, according to the sample calculation in the memorandum, the income of those receiving an occupational pension of more than 2,500 euros per month will not decrease.

Particularly however, the change in disposable cash income is due to the increase in healthcare customer fees next year, as well as increases in the initial deductible and value added tax for medicines.

The theoretical maximum increase in customer fees per person next year will be 225 euros per year, or an average of just under 19 euros per month.

The significance of the change may be significant, especially for an elderly pensioner, the memo states. Customer fees for people over 65 will increase by an average of 39 euros per year, or more than three euros per month.

When if the increase in health care payments is considered at the level of the entire population, will they increase the health expenses of all income categories on average.

“However, the increase in payments is focused on lower incomes and the decrease in payments on higher incomes,” the memo states.

In particular, health spending increases second and third in the lowest income deciles, where more than half of the people see health spending increasing. The highest income decile, on the other hand, is the only one where health expenditures decrease more often than they increase.

According to the memorandum, the difference is due to the fact that low-income people use more public healthcare and less private healthcare.

Therefore, the increase in coil compensations for private healthcare will benefit those with higher incomes the most.

Particularly students and unemployed recipients of earnings security the income level fell already this year for example, due to the cuts in housing allowance and the staggered earnings security. Even last year, the government avoided making such cutting decisions that would have affected the income level of pensioners. The decrease in the income level will continue next year as well.

Minister of Social Security Sanni Grahn-Laasonen (cook) is justified previously, the fact that students and recipients of earnings security basically have better conditions to rise from low income through employment than some other groups.

The impact assessment has been made in cooperation between the Ministry of Social Affairs and Health and the Ministry of Finance, and it is mainly based on calculations made with the microsimulation model maintained by Statistics Finland.