Tuesday, June 07, 2005

Our little baby is already making 100 EURs/month

Well, technically its really us, her parents, who are earning an additional 100 EURs/month since the birth of our baby, "Peanut".

The amount is from the Finnish social system and is paid to all parents with a child until the child reaches the age of 17. This family allowance (lapsilisä) is a social benefit to help parents purchase those basic child care items.

Unlike many of the monetary benefits paid by the social system, this is not subject to taxation and neither is to pro rated according to a families other income. While I certainly appreciate the additional income, however small it may be, I wonder if this is really a logical distribution of benefits. Honestly, in our case we don't really "need" the 100 EURs/month, whereas I can imagine there are families where it makes the difference of being able to live within their budget or not. Wouldn't it be more logical to allocate, say 200 EURs/month to these families and have some of us do without the benefit?

We've decided to put the monthly benefit for Peanut in a savings account which we are starting for her where all other gifts, etc will go. It'll be hers to do with as she pleases when she gets old enough. At this rate, she'll earn 1200 EUR/year and by the time she is 17, she'll have 20,400 EUR or even more assuming that the money is held in an interest-bearing account or invested prudently in bonds or similar. With that amount, Peanut will be able to begin a good education, start her own business or travel around the world -- all valuable life experiences.

When a family has more than one child, the family benefit amount increases per child.

The specifics are available on the KELA website.

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