The income of student couples is most often based on the study grant, housing supplement and student loan. If one of them starts receiving a salary, the financial balance will quickly turn into imbalance in a glaring manner.

The fault lies with housing allowance and the way it is calculated per household. In a two-student household, every euro of salary that exceeds 829 euros a month will decrease the shared housing allowance by 42 cents. Even one spouse receiving a wage can be enough to take the entire shared housing allowance down to zero. The other spouse will then be left with only a study grant of 253 euro.

Merely changing up how often each one does the dishes is not always enough to make the situation equal again. Sadly, breaking up will often end up being the only solution.

The calculation formula for the housing allowance is a huge equality trap for student couples in particular. The study grant is clearly the lowest primary form of financial assistance, which is why the imbalance suddenly grows so much. Student couples often keep their finances separate if the relationship is still on its gentle first legs. Becoming a supporter for another is a tough commitment, one for which not many are yet ready.

We must not trivialise the problem, it is real. In the Social Barometer published a few months ago, 59 percent of social workers wanted the housing allowance for students and youths under 25 years to be granted on an individual basis.

The most tempting solution is to make the entire housing allowance fully individual, but due to the price tag of around 500–600 millions of euro and some questionable impacts on income distribution, it has not been commonly seen as a realistic solution as is. The more targeted measures have been discussed more.

Suggestions include a so-called consideration period for young couples, where the housing allowance remained on an individual basis for some time even after moving in together. One possibility would be to change the calculation formula for maximum allowed housing costs compensated by the housing benefit, implement a kind of protected income for the other spouse or change how the household incomes are taken into account. In theory, there are several solutions, but we need to have the courage to propose, simulate and look into them.

Solutions are needed, since the housing allowance being granted per household presents an obstacle to young people and students moving in together, and thus prevents them from reaching important milestones in their life. It is about more than just money.

Sakari Tuomisto

Social Policy Adviser