Skip to content
Login to Openetti

How will the earnings-related allowance change at the end of the year?

If all amendments proposed to Parliament by the government are ratified, the Act on Unemployment Security will change on 1 January 2017 more than it has for a very long time. The following summary describes how the amendments as we understand them will affect the right to earnings-related allowance, should they be ratified. 

Amendments affecting the determination of the right to earnings-related allowance and the amount and duration of the allowance:

1. The maximum length of the daily allowance period will be shortened from 500 to 400 or 300 days, depending on the length of the unemployed member’s work history. 

2. The waiting period will be lengthened from five weekdays to seven. 

3. The right to an increased component paid on the basis of a long work history will be revoked

4. The increased component paid for the duration of employment promotion measures will be cut from 58/35% to 55/25%. 

5. In the future, pay-subsidised work will count less against the employment condition

6. The provisions on adjusted allowance will be changed for certain cases of employment through entrepreneurial activity

7. Pay cuts for production-related or financial reasons will not decrease the earnings-related daily allowance

Amendments applying specifically to independent studies

1. The increased component paid for the duration of independent studies will be cut from 58/35% to 55/25%. 

2. The expense allowance (EUR 9 or 18/day) will no longer be paid for independent studies to recipients of earnings-related daily allowance

3. The subsidised period will be extended to a maximum of 48 months, but only if the studies are aimed at completing basic studies

Changes to the labour-policy obligations of daily allowance recipients and to the consequences for reproachable action (TE offices will provide additional information)

1. The provision on the travel-to-work area will be repealed in its entirety. 

2. Regional mobility, or the time a daily allowance recipient is obligated to use for commuting

3. As the provision on the travel-to-work area will be repealed, the possibility to resign without losing the right to an earnings-related daily allowance would no longer exist if the place of employment is located outside the travel-to-work area. 

4. The period of time without compensation (suspension period) will be extended if the job-seeker refuses guaranteed employment

5. The obligation to accept full-time employment will be made stricter

6. The obligation to use the job-seeker’s own car (if any) will be extended

7. Unemployed persons will be obligated to participate in all services offered to them

8. The new job or recruitment trial for assessing the job-seekers suitability will be adopted

9. Periodic interviews every 3 months

Accepting employment will be supported with a new benefit, the mobility allowance

Unemployment funds will start paying a new benefit, the mobility allowance.

1. Mobility allowance will be paid to persons entitled to unemployment benefits who accept paid work with a minimum duration of 2 months and at least 18 regular weekly working hours.
2. In addition, at the start of employment, the daily commute must exceed 3 hours on average for full-time employment and 2 hours on average for part-time employment.
3. This benefit does not prevent the payment of adjusted earnings-related daily allowance or reduce its amount.
4. The benefit will have to be applied for before the start of paid employment.
5. The amendment would enter into force on 1 January 2017, and

6. Government proposal 209/2016 vp

Other amendments

1. The amounts of the pay subsidy paid to employers and the startup grant paid to entrepreneurs will be reduced, and the maximum payment period of the startup grant will be shortened. 

  • The basic allowance could be used for funding.

2. The payment of basic income support will be transferred from municipalities to Kela

  • Income support paid against a future earnings-related daily allowance will still be deducted from the daily allowance when it is paid.

3. The basic income pilot study will be launched

  • Kela will launch a pilot study for basic income. 
  • If a recipient of basic income fulfils the employment condition and becomes a recipient of earnings-related daily allowance, the basic income will be deducted from the allowance paid. 

Amendments ratified earlier in the Pension Act package

1. Impact of new pensions

  • The payment of a “career pension” will preclude the payment of earnings-related daily allowance. 
  • Partial early old-age pensions will not have an impact on the right to earnings-related daily allowance, which can be received alongside a partial early old-age pension.
  • Previously granted partial pensions will still be deducted from the earnings-related daily allowance.