Sweden Finland Austria

Child benefits
The family allowances in Finland were nominally unchanged from 1994 to 1995. In 1996
they were reduced significantly, from 570 FIM/month to 535 for the first child, from 720

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FIM/month to 657 for child no. 2 and from 910 FIM/month to 779 for child no. 3. These
rates were unchanged in 1997. The impact of this is contained in table 4.8.
Table 4.8. Impact on disposable income from allowance for children. 1.5 APW income level, couple.
1994
1995
1996
1997
1)
1 child
increase in disp. income %
5.6
5.2
4.7
4.5
2 children
increase in disp. income %
12.8
11.9
10.5
10.0
3 children
increase in disp. income %
21.8
20.3
17.4
16.5
1) Preliminary calculation (
Elements').
The changes here are probably the most 'visible' in the Finnish tax/benefit scheme in the
period and the impact is a clearly reduced positive effect on disposable income from family
allowances. However, in 1996 Finland still had the most generous child allowances among
the 7 countries included in 'Elements' for that year if measured as in table 4.8.
Parental benefits 
The base for calculation of parental benefits was reduced by 3.5 per cent in 1994 and by
4.5 per cent in 1995, 1996 and 1997 just as in the earningsrelated U.B. scheme. In 1996 the
stepwise scheme was changed in such a way that the benefits were reduced. The timeseries
of impacts is contained in table 4.9.
Table 4.9. Impact on disposable income of maternity leave benefit. 1.5 APW income level plus child 
allowance for 2 children, couple.
1994
1995
1996
1997
2)
Benefit in 281 days,
1)
Reduction in disp. income %
6.1
6.2
7.4
7.3
Benefit in 14 weeks,
Reduction in disp. income %
1.8
1.6
1.9
2.0
1) The father has 18 days and the mother has 263 days.
2) Preliminary calculation (
Elements').
The effect of the parental leave benefit is shown for a couple (1.5 APW income) getting
child no. 2 in relation to a couple (1.5 APW income) already having 2 children. It is

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assumed that the father has 18 days of parental leave and the mother 263 days in the case
with maximum duration. There are, however, many other possibilities for splitting the
parental leave between the parents. The mentioned assumption reflects the minimum rights
for the father. The second calculation reflects the common duration, 14 weeks, used in
'Elements', and in this case only the mother participates.
The change in 1996 is clearly seen. The change from 1994 to 1995 is hard to detect. In the
281 days case it is the situation for the husband which is slightly inferior in 1995 compared
to 1994 (ratio of disposable income as benefit recipient to disposable income as fully
employed) while that for the wife is unchanged (a relatively strong increase in benefits for
the wife is contributing to this result). In the 14 weeks case the situation for the wife is
slightly better in 1995 than in 1994 (measured by the same ratio as just mentioned) due to
the benefit increase and taxation just at that income level. The changes in 1997 are mar-
ginal.
Summary
There have in most cases been a deterioration in the situation of benefit recipients com-
pared to persons with only earned income. Relatively strong declines have been experi-
enced for pensions and child benefits, two areas where Finland has a high standard, and
still has even after the reductions. It should be noted that changes in taxation and social
contributions often contribute significantly to the impact of the different benefit schemes.

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