Social benefits linked to the national pension will rise by 3.5 percent from August, after the Finnish Parliament approved an additional index adjustment in spring.

The boost in benefits aims to improve the purchasing power of low-income households and address the inflation-induced cost of living crisis.

The new rate is effective until December and will be paid out by the state's benefits administrator, the Social Insurance Institution (Kela). Among other things, the increase will apply to national pensions, disability benefits, labour market subsidies and social assistance.

Exceptional revision

Such a mid-year revision of the index is exceptional, as social benefit increases are usually made early in the year. Last January, benefits were increased by 2.1 percent.

The additional index adjustments are estimated to raise Kela's benefit expenditure by 90 million euros in 2022.

According to Outi Antila, director general of Kela, additional increases are clearly needed.

"It was an exceptional mid-year index increase to address higher inflation and provide assistance to those most in need. Increases in indexes are usually made afterwards, at the end of each year," Antila said.

However, inflation is running well ahead of the increases. In June, inflation in Finland was at 7.8 percent and it is forecast to rise further, with some estimates suggesting that price hikes will peak by autumn.