Taxation|The care industry went on its toes because of the government’s intention to cut the household deduction.
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The government plans to cut the household deduction, which worries the care industry.
With the help of the deduction, for example, low-income pensioners have purchased private services.
Surgeries can increase the pressure on the elderly to transfer to public health services.
The leaders of the Taxpayers’ Federation and Hyvinvointiala ry criticized the cuts.
Man bought the services of a home care provider with her own money because she wanted to be helped by one and a certain trusted employee. Thanks to the household deduction, he got some of the expenses he paid back as tax refunds.
This is the true story of the CEO of Hyvinvointiala ry Sanna Aunesluoman from close quarters, he says.
“It (the reduction) has made it possible for low-income pensioners to use such services. For example, foot care for diabetics is key preventive work to prevent the disease from getting worse.”
Now the government plans to cut the household deduction so that the care industry is on its toes.
Household deduction means tax breaks when you buy certain works for your home. Such are, for example, renovations, cleaning and care services.
The reduction was created to increase work and eradicate the gray economy. The temptation to pay the timpuri from under the counter disappears when you get a tax advantage with the help of official receipts.
Now the government wants to cut one hundred million euros from the reduction.
The greater part of the reductions go to renovations, as only three percent is used for care and nursing services. Behind the small number, however, there is a public health domino effect, if seniors increasingly turn to public services.
“This puts especially the elderly in an even more difficult situation, because it is difficult to get home care in welfare areas,” says Aunesluoma.
Then there is the psychological advantage. According to Aunesluoma, the reduction creates freedom of choice.
“It motivates you to keep yourself in shape so you don’t end up in a nursing home. It emphasizes personal responsibility.”
Domestic science-care and nursing work has so far benefited more in terms of taxation than the act of renovation.
In renovations, you can deduct 40 percent of the portion of the work purchased from the company, but in maintenance work it is 60 percent.
Now the government proposes a uniform compensation percentage of 35 percent. Maximum limits in euros are also calculated.
“There were no signs of this in the air. No attempt has been made to motivate this in any way. I haven’t seen any other justification than asking for money,” says the CEO of the Taxpayers’ Union Teemu Lehtinen.
He is especially bothered by the almost halved percentage of nursing work. Lehtinen agrees with Aunesluoma’s view that surgery puts pressure on public health services.
“Rather, the aim should be to make it possible for even more people to live at home with support services.”
Many companies in the service sector use the household deduction as a selling point. Taxpayers and the Welfare Industry believe that companies can run into difficulties.
“This is destabilizing the entire industry in a very dangerous way,” says Lehtinen.
According to a study published in January 2021 by the State Economic Research Center and the Institute for Salaries the household reduction did not contribute significantly aims to increase jobs and reduce tax evasion. The support was also then – and still is – largely aimed at high-income earners.
State will have to take on more than 12 billion euros in debt next year to cover its expenses. Doesn’t the poor economic situation justify the government’s planing?
“I’d rather tax alcohol and tobacco, the harms than the benefits,” Veronmaksajien Lehtinen suggests.
The welfare sector, on the other hand, envisages a targeted household reduction for the elderly, the size of which would be 50 percent of the work. The euro ceiling would be 10,000 euros.
According to Aunesluoma, the whole would be more affordable for the public finances than similar home care organized by the welfare regions. In order for the reduction to go to the right address, it could be limited to people over 70 years old.
Budget presentation will be submitted to the parliament at the end of the month.
“This is definitely the worst and strangest of the tax solutions in the budget tussle. Why has this been done at all?” Lehtinen wonders.
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