Had child benefits been indexed to inflation, the current 95-euro monthly payment for a first child would now exceed 150 euros.
The purchasing power of child benefits administered by Finland’s social insurance institution, Kela, has declined sharply since the early 2000s.
Kela’s researchers found that the purchasing power of child benefits has declined by roughly a third over the past two decades.
The erosion is driven primarily by the fact that the benefits are not indexed to inflation. This means their real value is steadily eroded over time, with declining purchasing power contributing to rising child poverty.
In 2025, the child benefit for a first child was roughly 95 euros per month. Had it been indexed, the payment would be closer to 156 euros. For a second child, the benefit would rise from about 105 to roughly 174 euros under an inflation-linked system.
In 2011–12, child benefits were temporarily indexed to pensions before the mechanism was frozen. In 2016, indexation was removed from the legislation altogether.
“Without index protection, the real value of the benefit is gradually eroded by inflation. This happens slowly and often less visibly than direct cuts, even though the impact on the finances of families with children is significant,” said Tapio Räsänen, a senior researcher at Kela.
The child benefit is currently paid from the start of the month following a child’s birth until they turn 17.
However, the Finnish government is planning major changes to the country’s child benefit system.
Under the proposals, parents would receive a flat payment of 100 euros per child per month, as well as for each subsequent child, until they reach the age of 18.
