According to Kela’s Research Manager Anneli Miettinen, many people still think that the answer is “the one with a lower income.” In reality, the answer is not that simple. According to Kela’s calculations, parents should share their family leave, even if the parents have different income levels.
“Families also often tend to have significant expenses, such as mortgage payments, that coincide with the period when their children are young or in their infancy. Families often calculate quite carefully how they should use their family leave days. Thanks to Kela’s Family Leave Calculator, the net effect of family leave on the family’s income is easier to determine than before,” says Miettinen.
Parents can use Kela’s Family Leave Calculator to see how dividing family leave between parents in different ways affects the family’s income.
After the 2022 reform, the birthing parent is now entitled to pregnancy allowance for 40 working days. The birthing parent cannot give up and turn over these 40 days to another person. In addition, the birthing parent receives 160 working days of parental allowance. Of these 160 days, the birthing parent may give up and turn over a total of 63 working days to the other parent, either in part or in full.
The non-birthing parent, such as the father, also receives 160 working days of parental allowance. Of these 160 days, 97 are earmarked for the non-birthing parent. They may also give up and turn over the remaining 63 working days to the other parent, either in part or in full.
A parent can also give up and turn over their parental allowance days to their spouse who is not the parent of the child, to the other parent’s spouse, or to another person who is also the child’s carer.
Miettinen urges both parents to use at least their allocated 97 working days of family leave. If a parent does not use their earmarked days, no one else may use them either, so the family loses them.
Example
In Kela’s indicative example, parent A’s salary is 2,200 euros per month, and parent B’s salary is 6,200 euros. If only parent A, i.e. the one with a lower income, uses the earnings-related parental allowance days in full, plus the child home care allowance, for a total of 18 months of leave, the household’s gross income for two years would be 178,210 euros, and net income would be 121,520 euros. If parent B, i.e. the one with a higher income, uses the 97 days of parental allowance earmarked for them, the family would have 2,110 euros more at their disposal over the course of two years. This leads to a lower gross income of 175,300 euros, but to a higher net income of 123,630 euros.
“When people try to calculate which option is better financially, they usually only look at the gross income. But taxes often balance things out,” says Miettinen.
Dividing the child home care allowance evenly is not always a good idea
In addition to parental allowance, many families also make use of the child home care allowance. A family may receive this benefit if their child is under 3 years of age and does not attend day care, but is being cared for at home instead. The basic part of the child home care allowance is the same for everyone, 377 euros per month, regardless of income. Low-income families may be entitled to a care supplement, the maximum of which is 202 euros per month.
“Child home care allowance is an extremely popular benefit. Nearly 90 percent of families use it. Most often it is the mother who stays at home and uses the child home care allowance,” says Miettinen.
However, the amount of child home care allowance is so small that before using it, both parents should use up their earnings-related family leave first. In the previous example with parent A and parent B, the parents should divide their parental allowance days evenly, but the same does not apply to child home care allowance. If the parents divide their parental allowance days and child home care allowance equally, the family’s gross income will drop to 159,720 euros and net income to 118,470 euros. When compared to the example where parent A with a lower income would use all their allowance days, the total amount of money at the family’s disposal would be 3,050 euros lower over the course of two years.
Anneli Miettinen pictured on the left/above.
If the parents have the same income level, the smartest solution financially would be to divide all allowance days equally, including the child home care allowance.
In addition to the financial aspect, Miettinen urges families to also consider other factors affecting the distribution of allowance days.
“I definitely think that family leave days should be divided equally! After all, the stage when the child is an infant or very small is very short, and when we talk about the amount of leave, we are talking about just a few months. The benefits of a more even distribution of family leave can be seen in the long term. For example, according to studies, long family leaves have a negative impact on the career and salary development of mothers. A more even distribution of family leave improves the position of women in society, which means that it also promotes equality.”
Collective agreements support families
The law determines the amount of family leave. Whether the leave is paid or not is defined in the collective agreements negotiated by trade unions.
In the spring of 2023, TEK, together with other YTN unions, negotiated for more equal paid family leave for all collective agreements in the private sector agreed at the time. Later, TEK and other JUKO unions negotiated to make these terms apply also to the municipal, wellbeing services county and central government sectors. Thanks to these negotiations, the paid leave of the non-birthing parent was extended to 28–36 working days. The birthing parent will receive approximately three months of paid leave also in the future.
After the paid family leave ends, Kela will pay for the parental allowance. The compensation level of the daily allowance decreases as the person’s income level increases.
You can calculate the amount of your parental allowance on Kela’s website (in Finnish or Swedish): laskurit.kela.fi/vanhempainpaivaraha-laskuri