Social protection expenditure and financing

Quality description (OSF)

Relevance of statistical data

The Finnish Institute for Health and Welfare (THL) annually collects data on social protection expenditure and its financing based on the costs and financing of social activities by the central government, municipalities, non-profit associations, and other organisations. The data are reported at the national level.

The purpose of the statistics is to support decision-making and steering related to social and health policy, especially at the national level. The statistics are intended for decision-makers, planning officials, researchers, and students in the field of social and health care and all those who need basic information on the national and international trends of social protection expenditure and financing.

The data collection is based on the Act on the Finnish Institute for Health and Welfare (668/2008), under which THL’s duties include studying and monitoring the population’s welfare and health as well as studying, monitoring, assessing, developing, and guiding social welfare and health care activities (section 2).

The collection of data on social protection expenditure and financing carried out for the EU’s statistical office Eurostat is based on Regulation (EC) No 458/2007 of the European Parliament and the Council of 24 April 2007, Commission Regulation (EC) No 1322/2007 of 12 November 2007 and Commission Regulation (EC) No 10/2008 of 8 January 2008.

Description of methods

The statistics on social protection expenditure and financing compiled at THL follow the European System of Integrated Social Protection Statistics (ESSPROS), approved in 1996 and updated in 2012, 2016, 2017, 2019 and 2022.

In the European System of Integrated Social Protection Statistics (ESSPROS), social protection encompasses all interventions of public or private bodies intended to relieve households and individuals of the burden of a defined set of risks or needs.

Benefits granted under a social protection scheme may take the form of benefits in cash intended to support incomes, directly provided services and goods, or indirect reimbursements of costs for those within the scope of protection.

Social protection covers risks and needs related to sickness and health, disability and incapacity to work, old age, survivors, family and children, unemployment, housing or social exclusion.

Under the ESSPROS system, social protection expenditure does not include financial aid for students. Tax rebates and interest-bearing loans granted to households are not included in the core system. Expenditure by employers for the employees’ benefit that can be regarded as compensation for work is also not regarded as social benefits. However, social benefits may be conditional on some action to be undertaken by the beneficiary (such as taking part in vocational training), provided that this action does not have the character of salaried work or sale of services. Social protection further excludes all insurance policies taken out on the private initiative of households solely in their own interest. The social security expenditure has been calculated as net expenditure; in other words, client fees for medicines and benefits in kind, for example, are not included. Investment grants provided to an institutional unit specifically for the purpose of delivering social housing through a social protection scheme are included, but investment grants provided to an institutional unit for the purpose of construction in general are excluded.

The definition of social security in ESSPROS statistics requires that there is no simultaneous reciprocal arrangement related to the procedure. This excludes from the sphere of social protection all such measures, in which the recipient is obliged to simultaneously give something of the same value in return. Thus, pay subsidies paid to companies and the part of the costs of health care and medicines that the recipient of the benefit must pay themselves are not covered by social protection. In ESSPROS statistics, social protection expenditure is therefore calculated as net costs. In this report, however, the client fees of services have been added as a separate column in Appendix table 10.

Key data sources for the statistics on social protection expenditure and financing

Data on social protection expenditure and financing are also retrieved from many other organisations' annual accounts and similar data sources. Some of the data are already in standard statistical format, while others are obtained directly from the source in question. The databases maintained by different organisations are continuously updated, and data may have been corrected after they were retrieved for the Social protection expenditure and financing statistics.

Correctness and accuracy of data

The data in the Social protection expenditure and financing statistics are checked by comparing them with the previous years' figures. Data from previous years can also be updated, if necessary. In case other organisations make changes in the way they report their data, THL will consult the data producer where necessary in order to ensure data comparability.

Timeliness and promptness of published data

The Social protection expenditure and financing statistics are produced by THL annually. The statistics for each year are published at the beginning of the year following the year after the statistical year. In particular, the release date is affected by the publication dates of THL’s Public finances of health and social care services -statistics and Statistics Finland’s annual National Accounts statistics.

Preliminary data on the social protection expenditure are published on THL’s website in October of the year following the statistical year.

Availability and transparency of data

Key data are set out in a statistical report published on the THL website. More detailed information on the background data and the concepts and definitions used in the statistics are available on request from the authors of THL's statistical report. All data are public, and the information services are mostly free of charge. The statistics are intended for anyone interested in social protection expenditure in Finland, its financing and its trends.

Comparability of statistical data

THL (previously STAKES) has gathered data since statistical year 1999, before which year the statistics were published by the Ministry of Social Affairs and Health. The data have been released in their current form since 1980. The concepts and definitions are in line with the international ESSPROS classification. Since statistical year 2015, the title of the statistics has been 'Social protection expenditure and financing', while the data content has remained unchanged.

The GDP data in the statistics are updated with the most recent figures available from Statistics Finland. Any changes in the time series may retroactively also change the level of social protection expenditure in relation to GDP of earlier years. The Finnish system of national accounts was revised in July 2014 and is now in line with the ESA 2010 system. The time series of GDP ratios has been updated in the Social protection expenditure and financing statistical report to correspond with the ESA 2010 system.

Statistics Finland updates the GDP figures according to its own release calendar. THL's 2022 statistical report on Social protection expenditure and financing used the GDP figures available on 18 December 2023. (Appendix table 7).

Eurostat’s social protection database is updated continuously. The EU figures used in the report were mainly retrieved on 3 January 2024.

Statistics Finland has no longer produced or reported statistics on the finances and activities of municipalities and joint municipal boards since statistical reference year 2014. As from statistical year 2015, the corresponding data have been published in the Local government finances statistics, the data contents and data collection of which have, however, been revised. The change in the statistical methods also affects the comparability of the data on social and health services provided by municipalities and joint municipal boards as well as data on administration in the Social protection expenditure and financing statistics.

It should also be noted that the calculation methods of financing have been harmonised, and for financing which is itemised by the provider for each function but which cannot be directly allocated to the separate (operational) costs of that function (e.g. administration), an estimate has now been calculated by allocating the items to different functions and financing providers in proportion to the expenditure on benefits related to the function in question.

For 2017, more accurate calculation models have also been applied to such functions as supporting the employment of persons with disabilities, which has not been obtained as a separate cost item since 2015, as well as other social protection services, which have been allocated as accurately as possible to the expenditure on the main category of social protection. The data on pension financing related to unpaid periods were also corrected, and these items were allocated to the central government in full. Employers' compensation for family leaves has also been allocated to income security in the service classification. (See statistical report 2017, Appendix table 10a, and corrected data on 14 August 2019.)

Changes to default calculation values, which are updated every few years and remain valid until the next update point, are associated with the imputed expenditure. In 2018, for example, the data on the structure of labour costs in the main category of sickness and health by cost item, which are updated every four years, reduced the sickness allowance expenditure by 18% compared to the previous year. Similarly, unemployment costs were reduced by a technical change which transferred reimbursement of expenses from the category of services to basic unemployment benefits.

Since 2020, the calculation of the service expenditure in the main category Sickness and health has been specified with regard to primary health care. The procurement costs of the vaccines in the national vaccination programme have been added to primary health care expenditure. The vaccines of the national vaccination programme are procured at the government’s expense to be used by municipalities. Municipalities are responsible for organising the vaccinations in practice. (Vaccinations, Ministry of Social Affairs and Health (in Finnish).)

Since 2020, the calculation of income security expenditure in the main category Family and children has been specified with regard to child maintenance allowance. As from 2020, the child maintenance allowance reported is the amount of child maintenance allowance not subject to recovery (previously, the amount of child maintenance allowance subject to recovery). (see Quality description, Social protection expenditure and financing 2020.)

The drafting and reporting of the statistics on local government finances produced by Statistics Finland ended with the statistical year 2020. As from the statistical year 2021, the Finnish Institute for Health and Welfare has published corresponding data in the Public finances of health and social care services statistics. The statistics contain service category-specific information (in Finnish) on the operating economy and investment expenditure in the healthcare and social welfare sector of municipalities and joint municipal authorities. Because the statistics changed over to a new service categorisation, the data of 2021 are not fully comparable to the previous statistical years (see Public finances of health and social care services 2021, Quality description (in Finnish)). In addition, deficiencies have been observed in the quality of the data reported on the statistical year 2021 by joint municipal authorities. For this reason, some of the data on joint municipal authorities is only available as preliminary data (in Finnish).

From 2021 onwards, more detailed data on the health care and social welfare sector of municipalities and joint municipal authorities will be available in the Public finances of health and social care services statistics than previously in the Local government finances statistics. It has therefore been possible to identify vocational rehabilitation in the category Employment of people with disabilities and transfer it to the main category Other social protection.

The category Special services for substance abusers in the statistics on local government finances, previously used as the source of information, and the category Special services for substance abusers in the Public finances of health and social care services statistics do not fully correspond to each other in terms of their content. In the statistics on local government finances, the mental health and substance abuse services provided in primary health care were combined and allocated to the costs of open services in primary healthcare. In the Public finances of health and social care services statistics, the category Special services for substance abusers contains a set of open services related to help, support, treatment and rehabilitation of persons with substance abuse and mental health problems.

Since the statistical year 2021, the expenditure in specialised healthcare has been divided into outpatient and inpatient care on the basis of their shares in the year preceding the reported statistical year (Health expenditure and financing).

Since the statistical year 2022, basic social assistance towards housing costs is transferred to the main category Housing from the main category Other social protection (social assistance).

Since the statistical year 2022, basic social assistance towards health care costs is transferred to the main category Sickness and health from the main category Other social protection (social assistance).

Clarity and consistency/cohesion

The statistics provide comprehensive information on the distribution of social protection expenditure and financing in Finland. The contents of the Social protection expenditure and financing statistics by ESSPROS main category are described in more detail under the section 'Concepts and definitions' of the statistical report, which also discusses key changes in the time series of expenditure and financing.

Special issues concerning the 2022 statistics

This section is available only in Finnish.

Updated: