Pension accrual for Finns on childcare breaks on track to hit one million

The number of Finnish citizens that have accrued pension for periods of childcare hit 930,000 by the end of 2019, and is on track to hit one million by the end of 2020.

The latest figures from the Finnish Centre for Pensions reveal that by the end of 2019, around 535,000 women and 394,000 men had accrued pension for periods of childcare. Those on maternity, paternity, parental or child home care allowance automatically get pension accrual.

“The number will exceed one million this year,” Finnish Centre for Pensions development manager, Jari Kannisto, predicts.

Although the figure is high, the number of Finns accruing pension for childcare has been on the decline for a long time. Since many people with families receive several benefits for childcare during a year, such as maternity or paternity allowance and then a parental or child home care allowance, the declining trend is more clear when compared with the number of other family benefits.

“The trend is clear. Since fewer children are born, less family benefits are granted. This trend has been accentuated since 2016. In 2018 and 2019, the birth rate in Finland was record low. Last year, only 45,600 children were born. Ten years ago, around 60,000 children were born in Finland,” Kannisto said.

The basis for pension accrual for periods of maternity, paternity and parental allowance is on earnings from work or income from self-employment. For periods of the home care allowance, pension accrues based on a fixed amount of €757.14 per month.

“For example, a woman born in 1985 who gave birth to a child this year, earned a gross monthly wage of €3,000, received a maternity or parental allowance for 10 months and a child home care allowance for 14 months would accrue €48 in earnings-related pension for the family leave period. If she were working instead of being on family leave, she would accrue a pension of €80,” Kannisto explained.

If the woman had no income before the child was born, she would earn a pension for the period of child care based on the basic daily allowance, that is, as if she received a monthly wage of €757.14.

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