Housing benefits for families and pensioners
Housing policies in the Nordic countries
The schemes on housing policy vary greatly from country to country. In addition to housing benefits, a subsidy may be granted that partly or fully covers any deposit payable, to enable people with poor finances to find appropriate and reasonable accommodation.
In all the Nordic countries except the Faroe Islands, housing benefits are also payable to pensioners. The amount of the benefits depends on a pensioner’s personal income, rent costs, etc. Housing benefits to pensioners are exempt from tax in all Nordic countries.
Families: The benefit is only payable to families living in rented accommodation.
Pensioners: The benefit is also available to pensioners who own their own house or flat. However, since 1 July 2008 it has only been available in the form of a loan. The Pensions Act states that a heating supplement may be granted to help cover heating costs.
Housing benefit is payable to both retirement and disability pensioners awarded disability pension before 2003 under the old system. For disability pensioners awarded disability pension after 2003 the housing benefit is not payable. Pensioners who have been allocated special accommodation for elderly people by local authorities receive housing benefits on particularly favourable terms.
Families: General Housing Allowance is intended for low-income households. It is available for both rental and owner-occupied homes. The housing allowance is determined by the number of adults and children in the household, the municipality in which their home is located and their monthly income before taxes.
Legislative changes and the financial crisis led to minor annual variations throughout the 2000s. The number of recipients was at its lowest in 2008. Following the financial downturn, more people applied for housing benefits in 2009 than previously.
The situation evened out in 2010 and 2011, but since 2012 the number of recipients has been increasing rapidly. More and more people are living alone, and income remains at a lower level among some groups of single people. These factors have led to an increase in the proportion of people living alone and drawing housing benefits, compared to families with children.
Pensioners: Housing benefits may be granted on the grounds of age or when the individual in question becomes entitled to a pension. They are payable to pensioners with low incomes, regardless of whether they live in their own home or in rented accommodation.
The costs of heating and water, if they are not included in the rent, are also taken into consideration. Location and family size determine the extent of the costs that can be covered per year. Since 2008, housing benefits to pensioners have been considered separate benefits in their own right – in other words, they are no longer part of the basic pension.
Families: Housing benefits are mainly divided in to three groups. Firstly, interest benefits may be available for those who pay interest expenses on loans for the purchase or construction of residential housing for their own use. The same applies to those who have purchased the right of habitation or a share in a lease purchase apartment.
The amount of the mortgage is taken into consideration when awarding the interest benefit.
Secondly, housing benefits for people who live in rented accommodation. The basic amount of housing benefits rises according to the number of persons in the household, irrespective of their age; thus, it is not bound by the type of the family. Housing benefits are linked to both earnings and assets. All earnings and assets of the applicant and of all members of the household aged 18 and older, are added together, forming a joint earnings base and asset base. If this joint base is above the threshold for housing benefits, it reduces the amount of housing benefit payments.
The basic amounts are reviewed each year, considering wage trends, price level changes and the economy. The state controls interest benefits and housing benefits.
Thirdly, the municipalities oversee special housing support to tenants. All local municipalities are obliged to provide special housing support. Special housing benefits are intended for tenants living under difficult social and financial conditions. The municipal authorities are responsible for setting rules on such benefits, such as the benefit amount and terms.
Pensioners: Housing benefits are also available to pensioners who pay interest expenses on loans of residential housing for their own use and pensioners who live in rented accommodation. Housing benefits are tax free and have been considered separate benefits and are not part of the basic pension. The housing benefit is not directly linked to rent costs, but all earnings and assets are added together which reduces the amount of housing benefit payments if it is above the threshold for housing benefit. Same rules apply for everyone, regardless of occupation.
Families: The national scheme covers everybody over the age of 18, except students, military personnel, and those in civilian service (conscientious objectors), the latter two of which have separate housing benefit schemes. Housing benefit is available to people in rented accommodation and to homeowners.
Pensioners: All recipients of pensions or social insurance are entitled to housing benefits. The ratio between household income/wealth and housing expenses determines an individual’s eligibility for housing benefits.
Families: Housing benefits are intended for families with children and for people aged 18–28 years with low incomes. Housing benefit is available to people in rented accommodation and to homeowners. It is payable as a preliminary subsidy based on income information supplied by the applicant. Each calendar year, a calculation is made to determine the final amount. The amount of the preliminary benefit depends primarily on the family’s income, but housing costs, location and family size are also taken into consideration.
Pensioners: Housing benefits are payable to retirement pensioners, recipients of sickness and activity benefits, and recipients of survivor’s pensions who have low personal incomes. Housing benefits are subject to national rules.