The change security allowance is part of a more comprehensive change security model, which has been designed to compensate for the phasing out of extended allowances.
The model consists of the change security allowance as well as change security training and certain other improvements to the unemployment security of elderly people. The change security allowance is a separate benefit paid by unemployment funds or Kela.
Eligibility criteria for the change security allowance
The TE Office makes an assessment as to whether or not a claimant qualifies for change security and issues a statement to the claimant’s unemployment fund. In order to qualify, the following the claimant’s employment contract must have been terminated by their employer on financial or production-related grounds. The claimant must have reached the age of 55 years on the day of their termination at the latest. The claimant must have been employed by the same employer for a period of at least five years with no more than 30 days of interruptions between contracts in total. The claimant must have signed up as jobseeker with the TE Office within 60 days of their termination.
Restrictions on change security allowance
You are not entitled to the change security allowance if there occur changes during the notice period.
There is no right to change security allowance, if
- termination of service by mutual agreement between employer and employee
- the employee resigns himself/herself
- termination of service in the event of bankruptcy, restructuring or death of the employer
- the employer withdraws the dismissal and the employee continues to work for the same employer
Amount of the change security allowance
The change security allowance is equivalent to the claimant’s average monthly earnings. The amount is calculated on the basis of the claimant’s earnings during the previous 12 months. The information is retrieved from the Incomes Register.
The calculation of the amount of the change security allowance factors in the claimant’s wage or salary as well as any other employment-based payments received from the employer who has terminated the claimant’s contract. These include, among others, any holiday bonuses, holiday compensation and performance-based bonuses paid to the claimant.
Tax is withheld from the change security allowance according to the additional percentage set for the salary. If you want to reduce your tax rate, you can submit a revised tax card for the benefits.
Change security allowance claims and payments
Change security allowance claims are processed by the unemployment fund whose member the claimant was on the day of their termination. The allowance must be claimed within three months of termination. The allowance can be granted while the claimant is still serving out their notice period. The application form can be found in Openetti.
There is no need to enclose any supporting documents with your application. Please remember to let us know if your circumstances change during your notice period.
Important to remember!
You must sign up as a jobseeker with the TE Office within 60 days of the date of dismissal! (note, that the date of dismissal is a different thing than the date when the employment relationship ends).
The process of claiming a change security allowance
- Sign up as a jobseeker with the TE Office within 60 days of the date of dismissal
- Submit a change security allowance application to your unemployment fund. You will find the application form in Openetti.
- Your unemployment fund will check your eligibility for a change security allowance with your local TE Office.
- Let your unemployment fund know if your circumstances change during your notice period. This refers to, for example, your employer’s changing their mind about your termination and keeping you on after all.
- Your unemployment fund will issue a formal decision on your change security allowance application and, if your application is successful, pay you your allowance.
You can read more about the unemployment security for ageing people from the link below.