Tuesday, June 14, 2005

How to raise on baby on 15,20 EUR/day

In the 5/2005 issue of Vauva magazine ("Baby") there is a profile story about how far the daily minimum maternity allowance will get you. Mothers in Finland are entitled to a maternity allowance from the Social Insurance Institution (KELA) based on their income level. For mothers who worked outside the home, were studying, unemployed or the annual income was less than 4,905 EUR the minimum daily allowance is 15.20 EUR (about 18 US dollars).

According to the article, there are some 20,000 families who receive this minimum benefit which was increased from 11,45 EUR/day to 15,20 EUR/day at the beginning of this year.

In 2004, the minimum daily allowance was paid out to 18,151 mothers and 797 fathers.

In addition to the minumum daily allowance, families receive a monthly benefit for each child from its birth to age 17. Its 100 EUR/month for the first child, 110.50 EUR/month for the second, 131 EUR/month for the third, 151.50 EUR/month for the fourth and 172 EUR/month for each subsequent. Single parents get an additional EUR 36.60/month on top of that amount.

For families with low annual incomes, there is the possibility to get further financial assistance in the form of a housing subsidy (for rent or mortgage).

But is this fair...

One example in this article about how to manage your fiances to survive on the minimum allowance was about a 29 year old single mom living in Helsinki. She has been living abroad for the past 7 years, most recently in Ireland. She returned to Finland when she found out that she was pregnant because of the strong social safety net here.

From the social services office, she was able to borrow a stroller and baby bed.

As for monetary benefits, per month she gets:
Maternity/Parental benefit - 403.38 EUR
Child welfare assistance - 118.15 EUR
Child allowance + single parent benefit - 136.60 EUR
Housing subsidy - 452.93 EUR
General living subsidy (toimeentulotuki) - 75 EUR

TOTAL = 1,186.06 EUR/month

Now, I compare that with what's left of the average monthly paycheck (about 2,500 EUR) after taxes and they're not that far off from each other.

But, that's what the social safety net in Finland is about - supporting those who can not support themselves. However, I have two concerns about this particular case.
> Can't a 29 year old in Helsinki with work experience abroad find work to support herself? (I assume she worked since the article talks about her spending 30 - 50 EURs on meals in Ireland without real worries).
> Do we really need to subsidize her entire lifestyle?

She lists the following as her monthly expenses:
Rent - 613.27 EUR (for 56 sq meters WITH sauna and balcony!!)
Phone - 35 EUR
Internet - 25 EUR
Food - 200 EUR
magazines - 25 EUR
diapers - 70 EUR
yoga - 24 EUR
pharmacy - 15 EUR
personal hygiene - 100 EUR
trip to Turku to visit parents - 100 EUR
gifts - 60 EUR

TOTAL - 1,267.27 EUR/month

Sure, we're all entitled to our small luxuries, but come on! My husband and I who both worked full-time lived in a smaller apartment in Helsinki because rent is expensive here! And we didn't dream of having our own sauna or balcony for that amount. 613 EUR/month for rent for someone without an income is a lot. Why not housing in a less expensive area? Why not live at home?

And she talks about how she could save on groceries by substituting 'flavorless Edam cheese for the goat's cheese she now buys, but she just doesn't like it'. Perhaps she could also forgo the shampoo and conditioner she has to buy from the hairdresser. She also prefers to buy new clothes for her baby rather than buy them from the fleamarket. Fine - I agree with her. I'd also rather do all those things, but if I didn't have any money, I'd have to make some compromises.

This is where I begin to wonder if the social support has gone a bit too far. Its my taxes supporting her. I know it would be impossible to monitor how everyone spends the benefit money they receive, but this seems a bit out of hand to me.


Hiipinä said...

It's not _your_ money that is supporting her, it's _our_ money.

What is the choice your are offering? Leave the mother without money begging on the street with the baby? That's not anybody's interest. I guess, though I know it's common way in many countries.

I have three children and I was a student when I had the first one. The money I received at the time didn't make me rich. After that I have graduated and now I am paying taxes in order to support other women. It's my turn now, and probably the mentioned mother will give her share too some day.

Peanut's Dad said...

Sure it is _our_ money. But by definition, our money contains a component of _my_ money. and if it were up to me, I'd rather see that _my_ part of that money was put to better use than supporting the luxury lifestyle of the woman mentioned in this case.

Peanut's mom does not suggest the woman in this case shoudl go begging, she suggests responsibility for actions, living according to your means. This is an abnormal case though. How many single moms do we really know off who lived abroad up till now and came back to ride the welfare system?

I think that what makes this case so irritating are the comments this woman makes about her little luxuries. Luxuries that many working people find hard to afford. It shows a complete disrespect of those who support her. She may think the money comes from the government - but as you say, it is really _our_ money.

I like to think of these things in the term of the "social contract". I agree to support you when you are in need and you agree to support me when I am in need. But both of us agree not to waste eachothers money when we are in the position of being supported. Without that modesty in the end, why would I be willing to support you if I need to watch my own spending?

Peanut's Mom said...

Hi Hiipinä,

As Peanut's dad said, I'm not advocating to send this mother or any other parent out on the street begging. I think the safety net offered in Finland for parents is a wonderful thing and believe it helps lead to a healthy environment for raising children.

i just wonder do you ever feel like some people abuse the benefits that are provided? Or do you wonder if the current system of allocating benefits is entirely fair or could it use some review to make sure that the limited funds were being used in the best way possible?

theo said...

Hmmmm does anyone here actually live on these funds? I do and I can tell you even with no real luxuries in life, my family struggle monthly to meet all our bills. We have a smallish apartment in Itakeskus and two mobile phones after food thats us pretty much broke. Anyone can make a list of expenditure and say things like "why do you need that, and surly you can get by on less" but untill you actually live that way you cannot really understand how hard and monotinous life can be when you cannot do anything.

Also remeber everyone saying you can "live at home" or "live in a cheaper area" is easy to say but would anyone here take their child and live anywhere less than the best place they possibly could?

Peanut's Mom said...

Hi Theo - thanks for your very informed comments. You make a good point and I agree that I would also want to give my child the very best neighborhood to grow up in.

Peanut's dad and I are not entirely without experience in getting by on very little. For nearly a year we lived on my one small salary. We had to make choices about how to spend it and to give up many of those things I would consider small luxuries in life. I remember often the most exciting thing we could afford to do was to go take a walk around Seurasaari and buy some peanuts to feed the squirrels.