Finance Minister Riikka Purra’s (ps.) announcement to stop paying national pensions abroad is causing confusion in Sweden, where the vast majority of national pension recipients live abroad.
Minister of Finance Riikka Purra announced that the government will stop paying national pensions to people living abroad. The decision is part of the government’s billions of cuts and tax extortion package. According to Purra’s estimate, the decision will save state spending by 38 million euros per year.
National pension is paid abroad to about 25,000 people, the majority of whom, i.e. 18,000, live in Sweden.
The government bases its decision to the EU Court’s decision from 2017, which, for example, Sweden has followed since the beginning of last year. The EU court interprets that Sweden’s guaranteed pension is part of the minimum subsistence income, which is paid only to those living in the paying country.
Now the Finnish government interprets the national pension as proportional to the decision. That’s why the government plans that the national pension will only be paid to people living in Finland in the future.
The decision has awakened Swedish Radio’s Finnish edition including confusion and anger.
According to the editorial information, 17,500 of the Swedish-Finns who receive a national pension receive an old-age pension and 500 receive a disability pension. The average national pension paid to Sweden is around 130 euros per month.
A compensatory guaranteed pension from Sweden?
The government’s decision only applies to national pensions, not occupational pensions.
You can get a national pension if the other pension income is less than 1,601 euros per month for a single resident and less than 1,435 euros per month for a partner. The size of the occupational pension affects the national pension. The maximum amount of national pension, i.e. 776 euros per month, is received by a person who has practically no earned pension.
The government has just decided to stop paying, but the details are still being prepared by the Ministry of Social Affairs and Health. The change will come into effect at the turn of the year.
It is still difficult to assess the overall impact of the decision on the income of an individual pensioner. Inevitably, the income will not be cut by the same amount, because people living in Sweden, for example, may be entitled to the Swedish guaranteed pension.