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tatement on the government proposal for amending certain social security acts (HE 75/2023 vp) ) (TAS 682/2023, issued 7.11.2023)

On 8 November 2023, the Ombudsman for Equality issued a written statement to the Employment and Equality Committee of Parliament on the index increases of benefits and sums linked to the National Pensions Index and cost of living index in 2024–2027 as well as on the amendment to section 7 § of the Child Benefit Act. 

In their statement to the Committee, the Ombudsman evaluated the government proposal from the perspective of gender equality in accordance with the Ombudsman's remit.  

Freezing of index increases

The Ombudsman for Equality stresses that, in reality, freezing index increases constitutes an income cut for their recipients and that such cuts are distributed between the genders in a markedly unequal fashion.  

Women clearly outnumber men among the recipients of the minimum parental allowance under the Health Insurance Act. According to the proposal, in 2022, 84 per cent of the recipients of minimum parental allowance in were women while 14 per cent were men. It must also be noted that, on average, women have longer parental allowance periods than men, i.e. they are paid the benefit for longer periods than men. In this regard, the proposal has a pronounced effect on the financial standing of women.

General housing allowance and housing allowance for pensioners is paid more often to women than to men. According to the proposal, single parents (who are mostly women) are the second-largest group of housing allowance recipients. Freezing the housing allowance will have a direct impact on their standard of living. Furthermore, the payment of general housing allowance is often connected to the other benefits mentioned above. In single-parent families, the simultaneous enjoyment of several benefits is even more common than on average.  

The Ombudsman for Equality emphasises that cumulative effects should be given particular consideration in freezing the index increases. The Ombudsman also notes that the proposal's negative effects on gender equality should not be compensated with social assistance.

Section 7 of the Child Benefit Act

According to the Social Insurance Institution of Finland's estimate, freezing the index increases would increase the number of children living in low-income families by 2.8 per cent. According to the estimate, families with small children or many children as well as single-adult households are at particular risk of poverty. The decrease in the actual level of these primary benefits is to be compensated with proposed increases to the child benefit.  

The Ombudsman for Equality finds the proposed amendments to be commendable in themselves. The proposal states that child benefit is paid more often to the mother than to the father, and the recipients of the single-parent supplement to the child benefit are mainly women. Therefore, the proposed increases to the child benefit can be considered to affect women more often than men. The proposal can thus be considered to partially improve the status of women.   

The Ombudsman for Equality nevertheless notes that the proposal also involves factors that erode the significance of these increases to benefits. Child benefit increases should cover the increased expenses incurred from the maintenance of a child, not compensate for other cuts.  

According to experts, the proposed freezes to index increases would increase the number of people receiving social assistance. The proposed increases to child benefits will not provide additional income to these families in the lowest income bracket, since the child benefit is considered as income when calculating social assistance. The proposal states that the increase in the child benefit paid for children under three would be taken into account in the combined impact of freezing the index increases to child home care allowance. The actual impact of the aforementioned section 7 of the Child Benefit Act on, for example, the position of female single parents with very low income can nevertheless remain negligible if the household is also receiving social assistance.  

It should also be noted that the freezes to index increases proposed by the government, which also apply to the minimum parental allowances and child care allowances, simultaneously have a negative impact on benefits paid to women in particular.  

Even though increasing the child benefits of families at the greatest risk of poverty is a move in the right direction, the proposal does not suggest that this could in reality compensate for the cuts or improve the status of low-income women.  

Legislator's obligation to promote gender equality

The Ombudsman for Equality points out that the Act on Equality between Women and Men obliges the authorities to promote gender equality in a purposeful manner. This obligation also applies to the legislator.

A comprehensive assessment of combined impacts should be made when making changes to social benefits, including an assessment of gender impact, in order to avoid unexpected or unreasonable effects. This impact assessment should cover both direct and potential indirect gender impacts. Longer-term impacts on various groups of people should also be taken into account.  

The gender impact assessment included in HE 75/2023 is very brief. Simply listing the allocation of various benefits to the genders cannot be considered to constitute a comprehensive gender impact assessment that would support decision-making. A gender impact assessment should take into account the actual impact of the proposed amendments on the realisation of gender equality.  
The Ombudsman for Equality reminds the legislator that extensive simultaneous changes and changes affecting the same benefits at different times involve major risks to fundamental and human rights. The effects of the proposed amendments intersect significantly, which can have a major impact on gender equality in addition to their other effects.  

The amendments' cumulative impact on various groups of people should be assessed. The assessment of combined impacts has bearing on the assessment of the proposal's compliance with the Constitution if the cuts accumulate on the same households in a significant manner. The Ombudsman for Equality hopes that it will not go unnoticed that nearly all of the statements issued in response to the proposal considered the impact assessments to be insufficient. These assessments were especially incomplete with regard to the combined impacts of the benefit cuts laid out in the government proposal.  

The Ombudsman for Equality suggests that, at minimum, a retrospective assessment plan be included in the bill in Parliament, especially including a gender impact assessment and sufficient resources for its implementation.  (TAS 682/2023)

The Ombudsman for Equality’s full statement in Finnish is enclosed.