Finland’s Social Insurance Institution, Kela, has introduced changes to its guidelines regarding gambling winnings in the context of social assistance. The updates, implemented in October 2024, reflect a growing awareness of the complex relationship between gambling and financial distress among recipients of social aid. These changes are designed to bring greater fairness and provide better financial outcomes for individuals who struggle with gambling while depending on social support.
Previous system focused solely on winnings
Before the recent reform, Kela’s calculations of social assistance for recipients who gambled only accounted for gambling winnings. This approach often resulted in inequitable outcomes, as even small, one-time gambling wins were treated as income, reducing the recipient’s social aid. In many cases, these same individuals quickly lost their winnings, but their social support was reduced regardless of the net result.
The inherent flaw in this method is that it disregarded the full financial reality of gambling. As a result, people who gambled and then lost their winnings could find themselves in severe financial hardship, exacerbated by the reduction in social assistance. “We’ve noticed that small gambling wins could create unreasonable situations for our clients, even when they lose those winnings soon after,” stated Marja-Leena Valkonen, Kela’s benefits manager.
Considering both wins and losses
The new rules mark a shift in Kela’s approach to calculating social assistance for gambling participants. The updated system will now take into account not just the winnings, but also the amounts spent on gambling. This means Kela will evaluate the difference between a recipient’s gambling losses and gains over a longer period of time, rather than focusing on isolated gambling events.
Valkonen explained the reasoning behind the change: “We aim to prevent situations where gambling-related earnings, even small ones, disproportionately affect social support. The new approach allows us to view gambling activity over a longer timeframe, ensuring a fairer outcome for the individual.”
This more holistic assessment aims to ensure that recipients are not unjustly penalised for momentary wins, especially if they continue to gamble and ultimately experience financial loss. By accounting for both sides of the equation—wins and losses—Kela hopes to create a more realistic picture of a recipient’s financial situation.
For Kela clients who gamble, the process will now involve a more detailed evaluation of their gambling activity. This assessment will include tracking the funds spent on gambling and any winnings over a set period, creating a clearer picture of the person’s overall financial status.
Kela’s updated policy comes in response to changes in the Finnish gambling market as well as observations from Kela’s own decision-making processes. The agency estimates that approximately 5 percent of social assistance recipients engage in gambling. For these individuals, the new policy could significantly impact how their gambling activity is factored into their social aid eligibility.
Supporting financial independence and preventing harm
While the new guidelines are meant to address the direct issue of gambling’s impact on social assistance, they are also part of Kela’s broader mission to promote financial independence and reduce the harms associated with gambling. According to Valkonen, Kela is not seeking to dictate how recipients spend their assistance, but it is concerned about the detrimental effects of gambling on low-income individuals. “We don’t control how our clients use their social assistance, but we are naturally worried when low-income people spend their money on gambling,” she said.
Social assistance is intended as a last-resort measure to cover essential living expenses, such as rent and food. When gambling exacerbates financial difficulties, Kela steps in to offer help, sometimes by making welfare notifications to social services, with the consent of the person. This proactive measure aims to intervene before the gambling problem escalates into a crisis.
Valkonen emphasised the importance of early intervention: “We want to assist when gambling deepens financial issues. Gambling problems often only come to light when the situation has already reached a critical point.”?
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