If you can’t think of anything else, just cut to students’ income

A few weeks ago, a civil servant working group led by the Ministry of Finance published a report on eliminating incentive traps. In addition to representatives of different ministries, the working group also included representatives of the Government Institute for Economic Research and the Social Insurance Institution. The expectations for the group’s results were high. Minister of Finance Petteri Orpo stated that he wanted the working group to provide concrete suggestions for eliminating incentive traps. The aim of the group was therefore to find out how we could change to welfare system so that it would always be worthwhile accepting and doing any kind of work.

So, what did this working group have in mind for the students? The working group suggested to the government that additional research should be done and that the conditions for granting students the housing allowance should be changed so that the student loan is taken into account. The situation would then be the same as it is for social assistance: whether or not a student has taken out the loan, the 650 euros would be included in the calculations of students’ income when granting the housing allowance. Including the student loan in the calculations for granting the housing allowance could cut the housing allowance received by students by 80–200 euros per month. The justification that the working group offered for these huge cuts to students’ income was that it would reduce the amount of work that students do during their studies, and therefore shorten the time spent studying.

So the working group suggested that the income of students should be cut, which would increase their poverty risk gap by 5 %, in order to achieve changes to behaviour that the group cannot guarantee. These cuts would also be up against the government parties’ own aims regarding the student financial aid. It would seem like the working group ran out of ideas and decided to lean on the most traditional of government mantras from the past decade: if you can’t think of anything else, just cut students’ income.


Silja Silvasti,

Social Policy Adviser, SYL



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