Social protection expenditure and financing

Quality report

Data description

Statistical presentation

The statistics provide comprehensive information on the distribution of social protection expenditure and financing in Finland. The time series of the statistics starts from 1980. The contents of the Social protection expenditure and financing statistics by ESSPROS main categories 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.

The national data described in this report refer to 2023 and international data to 2022. The information is collected once a year. Preliminary statistics for each year are published in October of the year following the statistical year. Final statistics for each year (including the statistical report) are published at the beginning of the year following the year after the statistical year.

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.

Relevance

The data content, data collection and statistical method of the statistics on Social protection expenditure and financing have been developed in accordance with the European System of Integrated Social Protection Statistics (ESSPROS). 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 20221.

Data content of the statistics

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. 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.

The statistics cover social security expenditure and funding data on the costs and funding of providing social protection of central and local government, associations, organisations and other actors. The costs of social protection provided by associations and organisations are only included in the calculation regarding grants and outsourced services paid by the state and municipalities. The funding of social benefits is classified in the categories of state, municipal, employer, insured and other funding. Other funding includes capital income from social security funds.

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.

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. 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. In this report, however, the client fees of services have been added as a separate column in Appendix table 10.

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. 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 data are reported at the national level by calendar year. The statistics show euro and percentage data; euro at current prices, euro at prices in the reported statistical year, euro according to purchasing power parity (see Concepts and definitions), categories’ percentages of total expenditure, different funders’ percentages of total funding, expenditure in proportion to the population (population 31 December) and expenditure in proportion to GDP.

Statistical processing

Source data

Data sources for the statistics on social protection expenditure and financing:

Data collection

Data collection for the statistics is carried out annually.

Some data are obtained directly from public statistical reports, database reports and other public data sources. Some of the data is obtained as a request for information, in which case the organisations extract the data from their information systems and report them to THL at a sum level. Information is received by request for information from the Finnish Centre for Pensions, the Financial Supervisory Authority, the Funding Centre for Social Welfare and Health Organisations (STEA), the Insurance Centre and the Social Insurance Institution (KELA).

Data validation

The data in the Social protection expenditure and financing statistics are checked by comparing them with the previous years' figures. In addition, the material is validated according to Eurostat validation rules, by which, for example, pensioner data is used when validating pension expenditure.

Data compilation

Source data is classified according to the ESSPROS statistical framework. As source data changes or becomes more detailed, the necessary changes to the classification of statistical data are made. These are described in the Concepts and Definitions section of the statistical report and in the statistical quality report.

The calculation of social welfare and health care services is based on net operating expenditure. Operating expenditure includes operating costs, depreciation, decreases in value and payment transfers. Operating income includes operating income, changes to stocks of products, production for own use and payment transfer income. Net operating expenditure is obtained by subtracting operating income from operating expenditure.

In the social expenditure calculation, the central government transfer received by municipalities for the provision of services has been divided into funding for individual services in proportion to the costs of services produced. Central government contribution was calculated as the basic services central government transfer percentage of expenditure for the year in question. In this respect, the contributions are calculational.

Total funding is calculated to be distributed between different benefits in proportion to the costs of the benefits to be financed, if the contributions are not directly available according to the different benefits of a target group.

The validation process of statistical data involves checks of permitted values and logical checks. In the validation process, deviating values are separately verified for Eurostat.

Data revision

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.

Data from previous years can also be updated, if necessary. Corrections to the data afterwards and their impact on the statistics are mostly minor. The time series data available on the statistics homepage is continuously updated as needed.

Quality assessment of the statistics

Accuracy and reliability

For practical reasons, small-scale, informal and incidental types of support such as whiprounds, Christmas collections, ad-hoc humanitarian aid and emergency relief in the event of natural disasters, which do not require regular management and accounting, are not included in the statistics.

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 punctuality

The Social protection expenditure and financing statistics are published by THL annually. Preliminary statistics for each year are published in October of the year following the statistical year. Final statistics for each year (including the statistical report) are published at the beginning of the year following the year after the statistical year. Only time series statistics on social security expenditure at the main group level are published in the preliminary data.

Coherence and comparability

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 2023 statistical report on Social protection expenditure and financing used the GDP figures available on 18 December 2024 (year 2023 provisional). (Appendix table 7).

Eurostat’s social protection database is updated continuously. The EU figures used in the THL's 2023 statistical report were mainly retrieved on 3 December 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.

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 Social and Health Care Financial Data -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. Since 2023, a statistical report has been published on the data in addition to database reports. Because the statistics changed over to a new service categorization, the data of 2021 are not fully comparable to the previous statistical years. 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. From 2021 onwards, more detailed data on the health care and social welfare sector of municipalities and joint municipal authorities will be available in Social and Health Care Financial Data -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 Social and Health Care Financial Data -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 Social and Health Care Financial Data -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 (the category is calculated to be divided into two parts, one of which in this statistics is allocated to category 8.2.2. Substance abuse and addiction services and the other to category 8.2.3. Other). From 2023, the breakdown of substance abuse and addiction services and mental health services in the classification is more detailed, which in this statistics is reflected as a more detailed division of costs between the main group Other social security’s categories 8.2.2. Substance abuse and addiction services and 8.2.3. Other.

Since 2017 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.

Since 2017 the data on pension financing related to unpaid periods were 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.) From 2022, the allocation of family leave allowances paid to the employer has been further detailed in the statistics by transferring the allowances from category 1.1.1. Sickness allowance under National Health Insurance category to category 5.1.3. Salary during entitlement to parents' benefits.

Changes to default calculation values, which 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 wellbeing services counties. Wellbeing services counties are responsible for organising the vaccinations in practice. (Vaccinations, Ministry of Social Affairs and HealthLink to an external websiteAvautuu uudessa välilehdessä.)

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.)

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 -statistics).

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).

Since the statistical year 2023, statutory employment services of municipalities are included in the statistics.

Institutional mandate

The production of the statistics is based on the Act on the Finnish Institute for Health and Welfare (688/2008) and the Act on Statistics (280/2004). One of the official tasks of the Finnish Institute for Health and Welfare is to produce statistical data on the health and welfare of the population, the factors affecting them, and the use and functioning of healthcare and social welfare services to support decision-making, development and research. THL’s statistical production practices are guided by the instructions, recommendations and regulations of Eurostat and the Official Statistics of Finland as well as the principles of statistical ethics.

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.

Data sharing and publishing

The Finnish Institute for Health and Welfare publishes the data in advance at the time indicated in the statistics publication calendar. The data is made public to all users at the same time.

Key data are set out in a statistical report published on the THL's 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.

Preliminary data on the social protection expenditure are published on the THL's website in October of the year following the statistical year. The preliminary data are published at the main group level.

Confidentiality

As an authority, the Finnish Institute for Health and Welfare is tasked with reporting collected data regarding national health and welfare. The data used to draw up THL’s statistics is primarily confidential, and personal data may not be published. The protection of processed data is based on the Act on the National Institute for Health and Welfare (688/2008), the Statistics Act (280/2004), the Act on the Openness of Government Activities (621/1999), the EU General Data Protection Regulation (EU) 2016/679 and the Data Protection Act (1050/2018) as well as other regulations guiding the activities of the Institute.

Special issues concerning the 2023 statistics

This section is available only in Finnish.

1 ESSPROS Manual and user guidelines. The European System of Integrated Social Statistics (ESSPROS). 2012 Edition. Eurostat, Methodologies and Working papers, ISNB: 978-92-79-24751-4. (Pdf 1 722 kt)Link to an external websiteOpens in a new tab [13.11.2024]. Newer versionsLink to an external websiteOpens in a new tab.

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