Kela Introduces New Guidelines on Net Winnings in Finland

Kela, the Social Insurance Institution of Finland, has introduced new guidelines to address net winnings from gambling when calculating social assistance. The aim is to ensure that vulnerable individuals aren’t put into financial difficulty due to the way gambling winnings have been treated in the past. With 5% of social assistance recipients using these funds for gambling, Kela is taking steps to prevent further harm and protect low-income households.

Kela Updates Guidelines on Net Winnings and Social Assistance to Prevent Financial Difficulties

Kela, Finland’s Social Insurance Institution, has updated its approach to handling gambling winnings in relation to social assistance. Starting this month, the institution will consider net winnings—a broader view of a person’s gambling activity over time—rather than simply looking at individual gambling wins. The change aims to safeguard recipients of social assistance from being negatively impacted by one-off gambling transactions, which could otherwise reduce the amount of assistance they receive.

Key Points:

1. Net Winnings Considered for Social Assistance: Kela will now look at net gambling winnings, rather than just one-off wins, when determining social assistance eligibility.
2. Protecting Financial Stability: The new guidelines are designed to prevent people from being put in a financially difficult position, particularly those reliant on social assistance.
3. Gambling and Social Assistance Overlap: Approximately 5% of social assistance recipients use their benefits for gambling, and Kela is aiming to address this issue.

Addressing Gambling and Financial Assistance

The update to Kela’s guidelines comes after recognizing the challenges that gambling winnings can create for recipients of social assistance. Under the previous system, individual gambling wins were counted as income, which could lead to a reduction in the amount of financial assistance provided. However, this approach did not take into account the potential losses that the individual may have experienced over time, putting many in an even more precarious financial situation.

By focusing on net winnings, Kela aims to provide a more comprehensive and fair assessment of a person’s financial situation. This change is part of a broader effort to ensure that social assistance recipients are not unfairly penalized for gambling activities, while still addressing the potential harms associated with problem gambling.

Marja-Leena Valkonen, Kela’s Benefits Manager, explained: “We at Kela do not tell our customers how they should use their social assistance, but naturally we are concerned if people with a low income use their money on gambling. Social assistance is a last-resort form of financial aid meant for essentials such as rent and food.”

Preventing Financial Harm

Kela’s decision to adopt net winnings as the key metric is also intended to prevent financial difficulties from escalating among social assistance recipients. As 5% of social assistance beneficiaries reportedly use these funds for gambling, there is concern about the potential impact on their overall financial stability.

By evaluating gambling over a longer period, rather than focusing on one-off wins, Kela hopes to mitigate the financial risks associated with gambling addiction and ensure that individuals still receive the support they need for basic living expenses.

This new approach also aligns with Kela’s commitment to responsible gambling. Valkonen added: “We want to help those whose financial problems are made worse by gambling.”

Finland’s Evolving Gambling Legislation

These updates come amid broader changes in Finland’s gambling industry. In July 2024, the Ministry of the Interior submitted draft legislation to overhaul the country’s gambling regulations, which included provisions to end Veikkaus Oy’s monopoly on betting, online slots, and casino games. This shift signals Finland’s intention to create a more open and regulated gambling market, addressing the evolving landscape of gambling in the country.

The new legislation and Kela’s revised guidelines indicate that Finland is taking a holistic approach to managing the risks and benefits of gambling, particularly when it intersects with social welfare.

By updating its guidelines to focus on net winnings, Kela is taking proactive steps to protect social assistance recipients in Finland from the financial risks associated with gambling. These changes reflect the broader efforts by the Finnish government to address gambling-related harm, ensure fair treatment for those reliant on social benefits, and prepare for the upcoming reforms in the country’s gambling industry.