The
government has submitted a proposal to Parliament to raise the employment rate
of persons aged 55 or over. The aim of the proposal is to improve the
employment rate, labour market position and wellbeing at work of persons aged
55 and over. Note that the legislative amendments have not yet been approved by
Parliament. We will provide further information as the legislative amendments
progress and we receive more information about them. The amendments are
expected to enter into force on 1 January 2023. The illustration below lists
the main features of the proposal, followed by a more detailed description of
the content of the proposal.

Phasing out extended allowance

According
to the proposal, extended allowance would be phased out so that persons born in
1965 or later would no longer be entitled to additional unemployment allowance
days. For those born in 1963 and 1964, the age limit for the right to an
extended allowance would be raised by one year per year of birth.

Introduction of the change security model

Employees
who have worked for the same employer for at least five years and who have been
made redundant for production-related and financial reasons would be entitled
to extended employment leave. They would also be entitled to change security
training acquired by the Employment and Economic Development Office, the value
of which would correspond to two months’ salary. In addition, they would be
entitled to a change security allowance corresponding to one month’s salary,
which would be paid to members of unemployment funds by their own fund and to
other employees by Kela.

The right
to change security would require the person to register as an unemployed job
seeker within 60 days of being laid off. The TE Office would arrange an initial
interview within five working days of registration as an unemployed job seeker,
assess the right to change security, and agree with the dismissed person on
arranging change security training in the employment plan. The training would
be acquired by the TE Office or the ELY Centre and should generally start
within three months of the termination of employment. The duration of the
training would not exceed six months.

The amount
of the change security allowance would correspond to the average wages paid in
the 12 months preceding the dismissal. The value of the change security
training would also be calculated on the basis of the average wages for the
previous 12 months.

The possibility of reducing working hours will
be strengthened

The right
of persons aged 55 or over to reduce their working hours would be strengthened
by amendments to the Working Time Act. Employers should primarily organise the
work so that such employees can, if they wish, retire on a partial early
old-age pension, a partial disability pension or a partial sick leave.

Employees
who have worked for the same employer for at least three years could also, at
their own request, start working part time. However, the right to reduced
working hours would not be subjective, and the special needs related to the employer’s
activities would have to be taken into account. Furthermore, if an employee
reduced their working hours at their own initiative, this would still not
entitle them to an adjusted unemployment benefit, nor would a new benefit be
proposed for this. A reduction in working hours would therefore be at the
employee’s own cost.

More
information on the government proposal can be found on Parliament’s website