The Finnish Government is currently preparing several legislative reforms that can affect Finnish unemployment security system. These reforms are intended to provide more incentives for work and as a result to increase employment; moreover, proposed measures are to simplify the unemployment security system and to strengthen general government finances. Based on the latest information, proposed changes would enter into force gradually throughout the year 2024.
The proposed changes include among other things extension of the waiting period during which earnings-related unemployment allowance is not paid and the increase of the length of employment history required to qualify for an unemployment allowance, decrease of the level of unemployment security, abolishment of the child supplements, cancelation of the job alternation leave etc.
The details and exact schedule for all these changes will become clearer later. Below is a comparison table showing the current situation versus the upcoming most notable changes.
CURRENT SITUATION:
At the start of your unemployment, there is a waiting period (personal liability period) that is equivalent to five full working days during which earnings-related unemployment allowance is not paid.
EFFECTIVE DATE / CHANGE AFTER REFORM:
1 January 2024
At the start of your unemployment, there is a waiting period that is equivalent to seven full working days during which earnings-related unemployment allowance is not paid.
CURRENT SITUATION:
Holiday compensation does not affect the start of entitlement to earnings-related allowance.
EFFECTIVE DATE / CHANGE AFTER REFORM:
1 January 2024
Holiday compensation paid at the end of full-time work lasting more than two weeks would postpone the payment of unemployment allowance. This implies if a person has unused vacation days at the end of employment relationship, the compensation paid for them will postpone the start of eligibility for unemployment benefit. Holiday compensation equivalent to one month's pay postpones the start of entitlement to earnings-related allowance by about one month.
NOTE: The waiting period (personal liability period) begins after the postponement due to possible holiday compensation received.
CURRENT SITUATION:
Unemployment security amount increases at the turn of the year as a result of the National Pensions Index tied to consumer prices. This means that benefits increase in line with rising consumer prices.
EFFECTIVE DATE / CHANGE AFTER REFORM:
1 January 2024
The amount of basic daily allowance will no longer change even if prices rise.
CURRENT SITUATION:
A child supplement of 150 to 285 euros per month is paid for those recipients who have children under the age of 18.
EFFECTIVE DATE / CHANGE AFTER REFORM:
1 April 2024
The child supplements would no longer be payable.
CURRENT SITUATION:
An unemployed person can earn up to EUR 300 per month without any reduction in unemployment benefit. This is so called "exempt amount" or "protected amount" (in Finnish, suojaosa). Each euro of earned income above this exempt amount decreases the unemployment benefit by 50 cents.
EFFECTIVE DATE / CHANGE AFTER REFORM:
1 April 2024
The protected amount (suojaosa) will be terminated, and all earnings will affect the unemployment benefit.
CURRENT SITUATION:
Employee has the option to take job alternation leave (in Finnish, vuorotteluvapaa) from work for a maximum of six months.
Job alternation leave is an agreement between the employer and the employee where a person with a long employment history takes time off work and the employer hires an unemployed jobseeker as a substitute for the duration of this leave. Employee gets job alternation compensation that is paid by an unemployment fund or the Social Insurance Institution of Finland (Kela).
EFFECTIVE DATE / CHANGE AFTER REFORM:
1 August 2024
The job alternation leave will be discontinued.
CURRENT SITUATION:
The level of unemployment security remains the same throughout the maximum duration of the earnings-related unemployment allowance.
EFFECTIVE DATE / CHANGE AFTER REFORM:
1 September 2024
- The level of unemployment security will decrease:
- to 80% of the original level after first eight weeks of unemployment (approx. 2 months),
- to 75% of the original level after 34 weeks of unemployment (approx. 8 months).
CURRENT SITUATION:
75% of working hours in pay subsidy work (in Finnish, palkkatuki) can be counted towards the employment requirement. To meet the employment requirement, you need to have worked at least 35 calendar weeks.
EFFECTIVE DATE / CHANGE AFTER REFORM:
1 September 2024
Working in а pay subsidy work will no longer accrue the employment condition.
CURRENT SITUATION:
There are different age-based exceptions that affect the amount and maximum period of earnings-related unemployment allowance.
EFFECTIVE DATE / CHANGE AFTER REFORM:
1 September 2024
Age-based exceptions will be abolished. (Note: details about the changes will be available later.)
CURRENT SITUATION:
An unemployed person is entitled to earnings-related unemployment allowance after six months of employment.
EFFECTIVE DATE / CHANGE AFTER REFORM:
2 September 2024
An unemployed person is entitled to earnings-related allowance after full year’s employment history. Thus, the Government is proposing to double the length of employment history required to qualify for an earnings-related unemployment allowance.
CURRENT SITUATION:
The work requirement is met and you can receive earnings-related unemployment allowance once you have worked 18 hours per week for approximately 26 weeks (6 months).
EFFECTIVE DATE / CHANGE AFTER REFORM:
2 September 2024
The employment requirement is met and you can receive earnings-related unemployment allowance if you earned a minimum monthly salary throughout one year.
Please note that the information provided above is subject to change. The latest changes can be found on the website of the Federation of Unemployment Funds in Finland (TYJ).
Published 21.11.2023, FINREPO