By year-end 2019, around 535,000 women and 394,000 men had accrued pension for periods of child care. Pension accrues for child care to a parent who gets a maternity, paternity, parental or child home care allowance. 

 “The number will exceed one million this year,” development manager Jari Kannisto (Finnish Centre for Pensions) predicts. 

Although the figure is high, the number of Finns accruing pension for child care has been on the decline for a long time already. Since many people with families receive several benefits for child care during a year, for example first a maternity or paternity allowance and then a parental or child home care allowance, the trend is most clearly visible when we look at the annual number of family benefit recipients. 

 “The trend is clear. Since fewer children are born, less family benefits are granted. This trend has been accentuated since 2016. 

In 2018 and 2019, the birth rate in Finland was record low.  Last year, only 45,600 children were born.  

 “Ten years ago, around 60,000 children were born in Finland,” Kannisto says. 

According to Kannisto, as the working age population increasingly packs itself into growth centres, a growing share of child care benefits are paid in growth centres.  Currently, a considerable part of those receiving child care benefits live in Uusimaa.  

 “Although nativity is historically low in Helsinki and the total fertility rate in Uusimaa is among the weakest in Finland, more people in Uusimaa earned a pension for child care than did people in Pirkanmaa, North Ostrobothnia and Southern Finland combined. 

Pension accrues based on parent’s annual earnings 

The basis for the pension accrual for periods of the maternity, paternity and parental allowance are the earnings from work or income from self-employment.  For periods of the home care allowance, pension accrues based on a fixed amount: 757.14 euros per month. 

 “For example, a woman born in 1985 who gave birth to a child this year, earned a gross monthly wage of 3,000 euros, received a maternity or parental allowance for 10 months and a child home care allowance for 14 months would accrue 48 euros in earnings-related pension for the family leave period. If she were working instead of being on family leave, she would accrue a pension of 80 euros,” Kannisto explains. 

If the woman had no income before the child was born, she would earn a pension for the period of child care based on the basic daily allowance, that is, as if she received a monthly wage of 757.14 euros. 

Calculator shows impact of child care on pension 

The calculator of the Finnish Centre for Pensions calculates the pension that accrues for periods of child care benefits and the amount of pension that would accrue for work during the equivalent period. The calculator is indicative. 

Pension for child care has accrued under current rules as of the year 2005.