Family Policies: Finland (2014)

Introduction
The family policies currently in effect in Finland resulted from a series of compromises over time between many different interest groups. The country’s universal family policy system dates back to 1947, when a family wage system was introduced. The following year, the family wage was replaced by a universal child allowance system. A shift in the family policy realm away from an emphasis on poverty relief and towards the social rights paradigm can be observed during this period. (Forssén 1998, 23–25.)

In the 1950s and the 1960s, female labour market participation expanded. While an earnings-related maternity allowance system was introduced in 1964, its economic significance was minor. Relatively few family policy innovations were made in these decades. Instead, the emphasis in public policy was on developing sickness insurance and pensions. (Forssén 1998, 26; Hiilamo 2002, 73–79.)

The 1970s saw a fundamental change in the situation. After a heated discussion and the emergence of a broad social movement supporting women’s employment, the Child Day Care Act was passed in 1973. It granted the right to day care for all children who needed it, and led to a significant increase in public funding for day care. The reform can be seen as a defeat for the supporters of home care; i.e., for the Centre Party and the Conservatives. (Hiilamo 2002, 79–121.) 

However, providing day care places to all of the children who needed care was found too expensive. Many municipalities started to pay supplementary allowances to parents who did not use their right to enrol their children in public day care. Reflecting the strong influence of the Centre (former Agrarian) Party, a national child home care allowance system was established in 1985, and took full effect in 1990. (Hiilamo 2002, 129–131.) Since then, families have basically had the freedom to choose between enrolling their children in day care or caring for them at home, as both options are publicly supported.

The main aim of and justification for these family policies has been to give each family the flexibility to arrange childcare to suit their individual needs. Because in Finland women and mothers usually work full-time, the home care allowance has led to a reduction in female labour force participation, rather than to an increase in part-time employment among women. (Hiilamo 2002, 85–86.) Thus, the primary goals of parental leave policies have been to promote the sharing of childcare responsibilities within the family, to support fatherhood, and to minimise the damage that long periods of absence from the workforce may do to a woman’s career. However, mothers are still far more likely than fathers to care for children under age three at home during the parental leave period. (Haataja 2004.) As the current parental leave system appears to place higher cost burdens on female-dominated sectors, there have been calls for a more equal distribution of family leave costs (Haataja 2014, 35). In 2013, the government decided to divide the child home care allowance period between parents so that each parent could use no more than half of the total allowance of 832 days (STM 2014).

 

Childcare provision
The underlying principle of the development of the childcare system in Finland has been freedom of choice. In the 1960s, a variety of interest groups started to demand that women have equal opportunities to participate in the labour market. As a result, the Child Day Care Act was passed in 1973. But rather than settling competing demands for different kinds of support, the law provided an internationally unique synthesis of these preferences. Since 1990, families have been able to choose between enrolling their children in public day care or caring for their children at home until each child is three years old. As the cost of private day care is also reimbursed, there is public support for nearly all childcare arrangements. (Hiilamo 2002; Anttonen 1999.)

After the parental leave period (when the child is 9-10 months old), parents are entitled to enrol the child in public day care until the child starts school (the year the child turns seven). The care may be provided in a public day care centre, a family day care setting, or a group family day care setting. The fees are based on the size of the family and their income, as well as on the number of hours of day care needed. (Ministry of Education and Culture.) The maximum monthly fee is 238 euros for the youngest child in day care and 215 euros for the second-youngest child. The fee for a subsequent sibling is 20% of the first child’s fee. (kela.fi.)

In 2014, the government decided to restrict the universal right to day care as follows: if a parent is at home on parental leave, on a child home care leave, or on a leave of absence, the child will be entitled to day care on a part-time basis only (Government Proposal draft 2014).

Under the Child Home Care and Private Day Care Act, parents are entitled to take home care leave until the child turns three years old. The only precondition for receiving home care allowance payments is that the child must not be enrolled in a public day care centre. The allowance consists of two parts: a fixed care allowance amount and a means-tested care supplement. The monthly care allowance is 341 euros for one child under age three, 102 euros for each additional child under age three, and 66 euros for an older sibling who is still under school age. (kela.fi.)

Many municipalities also pay a so-called municipal supplement to parents who do not use their right to enrol their child in public day care. The amount of the supplement depends on the municipality. In 2013, the average monthly supplement was 178 euros. Of the parents of nine- to 24-month-old children, 49% were receiving home care allowance payments, and 35% of them were receiving a municipal supplement. (Kela 2014, 16.) The uptake of the child home care allowance is highly gendered, as only 6% of those receiving the allowance are men (Kela 2014, 59).

A private care allowance may be claimed if the childcare is arranged by a private service producer, parish, or NGO. Charges in private day care are set by the service provider. The private care allowance (174 euros) and a means-tested supplement are paid separately for each child eligible for the benefit. (kela.fi.) A municipality may also pay families with children in private care a municipal supplement, which was 392 euros on average in 2013 (Kela 2014, 17).

 

Parental leave (including maternity protection)
Finland was the last Nordic country to adopt the maternity allowance system; i.e., in 1964 (Haataja 2004). Maternity leave had already been introduced in 1922 in conjunction with the Contracts of Employment Act, but mothers had not been entitled to any compensation for the loss of income while on leave (Hiilamo 2002, 110)

While a discussion of the injurious effects of maternity leave on the labour market position of women started in the 1970s, the parental leave system was not developed until 1980. A paternity leave of two weeks was introduced in 1978, but it was conditional on the mother’s consent, as her maternity leave period was shortened accordingly. (Haataja 2006, 17–18.) The “daddy month”—i.e., a paternity leave which did not involve a shortening of the parental period—was finally introduced in 2003 (Haataja 2004). Since 2013, a paternity leave of nine weeks has replaced the daddy month (kela.fi). 

At present, parental leave is divided into three different periods: maternity leave, paternity leave, and parental leave. The length of maternity leave is 105 working days (approximately five weeks before and 13 weeks after childbirth), during which the mother is entitled to maternity allowance payments. A special maternity allowance is paid to expectant mothers who, due to health hazards, have to stop working before the actual maternity allowance period is scheduled to begin.

Paternity leave lasts a maximum of nine weeks, and may be taken in shorter periods until the child turns two years old. However, the father can take only up to three weeks of paternity leave while the mother is receiving maternity or parental allowance payments. The parental leave is 158 working days (approximately 26 weeks), and may be divided between the parents. Both parents are simultaneously entitled to partial parental allowance if they work part-time and share the parental leave. (kela.fi.)

In 2012, the average level of parental allowance payments was 75% of previous income. If the parent was not employed before the birth, a minimum per diem allowance of 24 euros (2014) is paid. Some 96% of employees covered by collective agreements in the private sector are entitled to a paid maternity leave. Paid paternity leave entitlement is less common, but is becoming more frequent. (STM 2011.) In the case of paid parental leave, the allowance is paid to the employer.

Parental allowances are taxable income (Miettinen 2012), and are financed from health insurance (Haataja 2004), which consists of the employer’s sickness insurance contribution and the employee’s health insurance payment. The minimum per diem allowance and 0.1% of the earnings-related parental allowance are financed by the state. (STM 2011.)

In most families, the bulk of the parental leave is taken by the mother. In 2013, only 9% of parental allowance payments were to fathers; thus fathers took an average of  24 days of parental leave. In recent years, however, the share of parental allowance paid to fathers has been growing: between 1995 and 2013 the share of  parental leave days taken by fathers has increased by 140%. (Kela 2014, 46.)

 

Family allowances
The family allowance system has four main components: tax deductions, maternity benefits, child allowance, and housing allowance. Since 1948, all families with children have been entitled to maternity benefits, which may be claimed as a “maternity package” (childcare items) or as a non-recurring cash grant. The Child Allowance Act went into effect in 1949. The allowance was universal from the beginning, but in 1962 the amount of the allowance was scaled so that subsequent children received a higher allowance. This can be seen as a pro-natal initiative, as a higher child allowance is a concrete incentive to have multiple children. In 1994, the level of child allowance was raised significantly and the family policy tax deduction system was practically abolished. With this reform, even greater emphasis was placed on the child allowance system. (Hiilamo 2002, 87–114.)

The housing allowance system has evolved over time. From the late 1940s to the 1960s, the allowance was granted to low-income families with large numbers of children. Since 1987, the housing allowance has been a universal means-tested benefit intended for all low-income households. (Hiilamo 2002, 91–111.)

In 2009, 94% of families expecting their first child claimed the maternity benefit as a maternity package (Bogdanoff & Hämäläinen 2011, 6). The package contains children's clothes and other necessary items, such as bedding, cloth nappies, and childcare products. The alternative tax-free lump sum of 140 euros was chosen by 36% of all families (ibid.). In the case of a multiple birth, the maternity benefit is multiplied accordingly. Adoptive parents are also eligible for the maternity benefit.

In 2014, the monthly child allowance is 104 euros for the first child, 115 euros for the second child, 147 euros for the third child, 168 euros for the fourth child, and 190 euros for subsequent children. Single parents are entitled to a supplement of 49 euros per child. The allowance is tax-free and is paid until the child turns age 17. A single parent may also receive a child maintenance allowance if the parent liable to pay maintenance does not do so. (kela.fi.)

Low-income households are eligible to receive a general housing allowance. The eligibility for and the amount of this allowance depends on the number of persons in the household, and the household’s income and assets. The maximum allowance is 80% of reasonable housing costs (as defined by law). (kela.fi.)

Of all of the family allowances (housing allowance not included) paid by the Social Insurance Institution of Finland in 2013, 48% consisted of child allowance payments and 0.3% consisted of maternity benefit payments. A total of 1.5 billion euros were paid in child allowances in 2013 (Kela 2014, 57). In an effort to lower national debt levels, the government decided in 2014 to cut child allowance expenditures by 110 million euros (8%) (HE 165/2014). There was, however, strong opposition to the decision. In response to the outcry, the government introduced a tax deduction for low-income and middle-income families with children for the years 2015-2017. (HS 2014.)

 

Marriage
The main law governing marriage in Finland is the Marriage Act of 1929. However, the law was fundamentally reformed in 1987 in response to shifts in views on marriage. Following the reform, marriage was principally an economic contract, and the intimate details of the union were left to the spouses themselves. For example, the law no longer took a stand on the distribution of work within the marriage. (Gottberg 2010, 3.)

Either a public register office or a parish of the Evangelical Lutheran Church or the Greek Orthodox Church must verify that there are no statutory impediments to a couple’s marriage, such as a prior marriage or a registered partnership still being in effect, or a family relationship between the partners. In the 1987 reform, the minimum age for marriage was set to 18 for both spouses; the previous minimum age for women had been 17. Disability-related impediments to marriage were also abolished. (HE 62/1986; Marriage Act.)

The Act on Registered Partnership was passed in 2001. Under this law, a partnership of two individuals of the same sex could be registered, provided both partners were over age 18. The examination of impediments to registration is governed by the provisions in the Marriage Act. The legal implications of registration differ from those of marriage in several respects. Examples of legal rights and responsibilities that do not apply in a registered partnership are the right to a joint adoption in the Adoption Act (22/2012), the rules regarding the family name of a spouse in the Names Act (694/1985), and the rules regarding the establishment of paternity on the basis of marriage in the Paternity Act (700/1975) (Act on Registered Partnerships.)

In 2009, the legislation was amended so that a partner of a registered partnership could adopt a child of the other partner, after which both are to be regarded as the legal parents of the child. However, only married couples are permitted adopt a child jointly. (Gottberg 2010, 255.)

In 2013, a campaign for same-sex marriage legislation was launched. Under the Citizens’ Initiative Act (12/2012), an initiative can be treated as a bill if a minimum of 50,000 signatures supporting the initiative are collected within a six-month period. The initiative in support of same-sex marriage collected nearly 167,000 signatures. In November 2014, the Finnish parliament narrowly approved the initiative, paving the way for the full legalisation of same-sex marriage . (Citizens’ Initiative Campaign Tahdon2013; HS 2014; Population Register Centre.)

 

Divorce
Unilateral no-fault divorce was introduced with the amendment of the Marriage Act in 1987 (effective since 1988). Courts no longer had to take a stand on the guilt or innocence of the spouses, the grounds for divorce, or any claim for damages. Marriage has been described as an economic contract with a six-month term of notice. (Gottberg 2010, 44.) 

In practice, the spouses have the right to a divorce after a reconsideration period of six to 12 months. The reconsideration period begins on the date when the joint petition of the spouses for the dissolution of the marriage is filed with the court or the court registry, or the petition of one spouse is served on the other spouse. After this reconsideration period, the spouses may be granted a divorce upon their joint request or upon the request of one of the spouses. The request must be made within one year of the beginning of the reconsideration period. Spouses who have been separated for the past two years without interruption have the right to a divorce without a reconsideration period. (Marriage Act.)

While a marriage starts with the premise of separate property, when a marriage ends, each spouse has a claim to the property of the other spouse. Each spouse thus has the right to half of the net matrimonial property. However, a spouse does not have the right to property that has been excluded from the scope of marital property by a marriage settlement or a will. (Gottberg 2010, 14–15.)

The provisions of the marriage act on divorce also apply to the dissolution of a registered partnership (Gottberg 2010, 3). 

 

Cohabitation and civil unions
The regulations of the marriage act do not apply to cohabitation. Cohabiting partners have no mutual maintenance liabilities, rights to each other’s property, or rights to a common surname. (Gottberg 2010, 58–59.) However, cohabitation has several statutory implications. In laws regulating social insurance legislation and income taxation, cohabitation and marriage are seen as equivalent in many respects. In terms of benefit eligibility and service pricing, cohabiting partners are required to support each other and the children in the household, even though the law does not recognise maintenance liability. (Gottberg 2010, 2.) 

In 2011, Act on the Dissolution of the Household of Cohabiting Partners was passed. The law is applicable to cohabiting partners who have lived in a shared household for at least five years or who have, or have had, a joint child or joint parental responsibility for a child. If a cohabiting partner or the heir of a deceased cohabitating partner so demands, a separation of the cohabiting partners' property will be carried out when the cohabiting partnership ends. When the property is divided, each partner will keep his or her own property. If the partners have joint property, co-ownership must be dissolved on demand. However, a cohabiting partner is entitled to compensation if, through contributions to the shared household, he or she has assisted the other partner in accumulating or retaining his or her property, such that dissolution of the household solely on the basis of ownership would result in the unjust enrichment of one partner at the expense of the other. The law also enhances the protection of a partner in case of death: a partner may be entitled to a discretionary allowance from the estate of the deceased partner. (Act on the Dissolution of the Household of Cohabiting Partners.)

In terms of the relationship between parents and their children, cohabitation has only minor effects. Since the passage of the Paternity Act of 1976, the family and maintenance rights of a child have been the same regardless of the type of union of the parents. From 1983 onwards, the custody of the child has been independent of whether the parents are married or cohabiting. Previously, only married couples could have a joint custody of a child. (Gottberg 2010, 132–133.) However, when a child is born, how the relationship between the father and the child is established depends on the type of union of the parents. If the parents are married, a presumption of paternity on the basis of marriage is applied; whereas if the parents are cohabiting, paternity must be established by an acknowledgement and a decision of the court. (Gottberg 2010, 136–137.)

 

Authors – Contributors
Kaarina Korhonen
Population Research Unit, University of Helsinki

 

Bibliography