Govt moves to prevent benefit fraud enabling Kela´s access to bank

The government has prepared a proposal with the view to prevent intentional misuse of social welfare benefits keeping the provision for allowing access of the Social Insurance Institution-Kela to clients´ financial circumstances directly through the bank and payment account monitoring system with the claimant's consent.

The Ministry of Social Affairs and Health has sent out the draft proposal for comments for bringing necessary amendments to the respective laws in this regard and the deadline for submitting comments is January 28, 2026, said the ministry in a press release on Wednesday.

g comments on a draft government proposal that seeks to prevent intentional misuse of social welfare benefits, reduce incorrect social welfare payments and promote information exchange with the Social Insurance Institution (Kela). Statements may be submitted until 28 January 2026.

The new legislation is largely intended to take effect on March 1, 2027.

According to the proposal, misuse of social welfare refers to wilful or deliberate behaviour whereby individuals seek benefits to which they are not entitled.

This behaviour may include such actions as falsifying account details and invoices, or concealing the claimant's true place of residence in order to obtain benefits.

Requests for investigation submitted in 2024 concerned a total of some EUR 4.3 million in suspected benefit fraud.

“Cases of abuse increase benefit costs, impose a burden on public authorities, and undermine public confidence in the social welfare system. It is intolerable that claimants can defraud Kela of benefits and exploit a benefit system intended to protect the most vulnerable by such means as falsifying bank statements and providing false address details. Fraud prevention may potentially save at least five million euros. Perhaps even more, as this form of criminality is covert," said Minister of Social Security Sanni Grahn-Laasonen.

Benefits may also be overpaid incorrectly for reasons other than abuse, for example due to measures taken by a public authority or because of incomplete information.

It is important to reduce incorrect payments, as they cannot always be recovered. Some EUR 110 million in incorrect payments was recovered in 2024.

The draft government proposal envisages amendments to the Act on Social Assistance, the Act on General Housing Assistance, the Act on Housing Assistance for Pensioners, the Act on the Bank and Payment Account Supervision System, and the Health Insurance Act.

Accounts could no longer be concealed, as the amendment would enable Kela to access details of existing claimant accounts and to use this information to require an explanation of transactions, either from the claimant in person or, with the claimant's consent, directly through the bank and payment account monitoring system.

Kela could then rely on the integrity of information obtained through this system, and would also retain its present right to check the information provided by a claimant in person where any forgery was suspected.

While Kela already uses account transaction information in making benefit decisions, claimants generally provide the required account statements in person. Personal details of claimant finances are already shared between Kela and banks by email, so a direct link to the bank and payment account monitoring system would improve information security.

As per the proposal, claimants could make their own choice as to the method of providing account transaction details. While they could choose to continue submitting account statements to Kela on request, their transactions with Kela would be significantly easier if they opted for direct electronic transmission. Such direct electronic requests would completely eliminate application stages involving the provision of account statements, thereby shortening application processing times.

The draft government proposal would also allow an authority processing an application for basic social assistance to request details of any expenses covered by the claim directly from the payee where fraud was suspected. This amendment seeks to address circumstances in which claimants falsify expense invoices in order to secure greater benefits.

Repeated abuses of subsidised taxi services would be addressed by authorising Kela to disclose claimant personal data to the booking agency that arranges ride sharing.

Misuse of such taxi rides refers to the use of Kela-subsidised taxi services for purposes other than healthcare.

The right to direct reimbursement would be restricted, if a claimant repeatedly misused such subsidies. These claimants would then have to pay for the taxi ride and request compensation from Kela retrospectively.

Kela regularly observes cases in which the registered home address of a family member applying for benefits has been recorded as a poste restante address for extended periods, even though the individuals concerned actually live at the same address.

This practice seeks to ensure that the benefits paid to the family remain unaffected by the earned income of a spouse.

Social assistance claimants may even actually live abroad with no entitlement to assistance paid from Finland. The draft government proposal accordingly also introduces a specific duty requiring social assistance claimants to furnish Kela with truthful and current details of their residential address.

The draft proposal also specifies the rights of Kela to access information, enabling smoother access through the Kanta inquiry and document transmission service to the medical reports and certificates that accompany benefit applications.

The amendments concerning the duty to report social assistance and access by Kela to information would take effect on 1 September 2027, as would changes related to the misuse of Kela taxi ride subsidies.