Restructuring protection allowance and removal of additional days (early retirement)
From the unemployment fund, you can apply for mobility allowance as well as restructuring protection allowance in addition to earnings-related daily allowance.
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Restructuring protection allowance
Restructuring protection generally refers to support measures carried out jointly by the employment authorities and the employer in situations where an employee is dismissed for production-related or financial reasons. Its goal is to promote the re-employment of the dismissed person and to ease the transition to a new career path. This basic form restructuring protection applies to all dismissed employees.
The expanded restructuring protection package is a special, more comprehensive support package for dismissed employees aged 55 and over. Se otettiin käyttöön vuoden 2023 alusta alkaen.
Those eligible for the expanded restructuring protection have the right to:
- restructuring protection allowance, which corresponds to one month’s salary. The restructuring protection allowance is paid out by an unemployment fund or Kela.
- restructuring protection training, with a maximum length of 6 months and a value equivalent to up to 2 months’ pay. Restructuring protection training is provided and arranged by the employment authority.
- employment leave, which lasts 5 days longer than usual.
Application instructions for restructuring protection allowance are available in the Applying Guide.
You are eligible for expanded restructuring protection and entitled to restructuring protection allowance if:
- you have been terminated due to production-related and financial grounds
- you have reached the age of 55 years no later than on the date of termination
- your employment has lasted for at least 5 years, either continuously or with interruptions of no more than 30 days, with the employer terminating the relationship
- you have registered as a jobseeker at Job Market Finland within 60 days of the date of termination. The date of termination is the day you have received your notice of termination. Therefore, if the period of notice is long, you must already register as a jobseeker during the period of notice before the employment relationship ends and the unemployment period begins.
The employment authority examines whether you fulfil the prerequisites for restructuring protection allowance and provides a labour market policy statement to the payer of the allowance.
You are not entitled to restructuring protection allowance if:
- the employment relationship is terminated due to a fixed term coming to an end.
- the termination of employment, originally based on production-related or financial grounds, is cancelled during the period of notice and the employment relationship continues.
- the employment relationship ends during the period of notice on grounds related to the employee’s personal characteristics.
- the termination of the employment relationship is accompanied by a termination agreement, and the termination has not been made on production-related or financial grounds.
- the employment relationship ends due to bankruptcy.
- the employer is undergoing corporate reorganisation.
However, you do not lose your right to restructuring protection allowance if your termination is based on production-related or financial grounds, and you are later re-employed with the same employer with same or similar duties on the basis of a re-employment obligation.
The amount of the restructuring protection allowance approximately corresponds to one month’s salary.
It is calculated from the insurable salary income received from the terminating employer during the 12 calendar months prior to the termination.
In calculating the amount, other income deemed earned income, such as holiday bonus, holiday compensation and performance bonuses, are also taken into account.
Any unpaid periods from the 12 months reduce the amount of the restructuring protection allowance.
It is also important to note that wages paid to persons over the age of 65 are not subject to earnings-related pension or unemployment insurance contributions, which means that such wages cannot be taken into account when calculating the restructuring protection allowance.
Restructuring protection allowance is taxable income.
Tax is withheld from the restructuring protection allowance in accordance with the additional rate indicated in the salary tax card or the rate indicated in the tax card for benefits.
If you do not want the tax to be withheld in accordance with the additional rate indicated in the salary tax card, submit your revised tax card for benefits.
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The restructuring protection allowance does not require its beneficiary to be unemployed. In other words, payment can already commence during the period of notice. The allowance is paid even if you are immediately re-employed by another employer.
The restructuring protection allowance does not affect unemployment security or other benefits, with the exception of social assistance.
Restructuring protection training has a maximum length of 6 months and a value equivalent to up to 2 months’ pay.
Restructuring protection training is provided by the employment authority.
Participation in restructuring protection training is voluntary, and refusal to participate will not result in the loss of unemployment security.
Additional days of unemployment security, often referred to as early retirement, have allowed unemployed individuals aged 61–62 to continue receiving earnings-related allowance until the age of 65, even after the initial 300–500-day maximum payment period.
With the adoption of extended restructuring protection allowance, the age limit required to qualify for additional days of unemployment has been raised to 63 years (for those born in 1963) and to 64 years (for those born in 1964). Those born in 1965 or later will no longer be entitled to additional days at all.
The paying of additional days of unemployment allowance will fully end for all age groups in 2030.
If your employment has been terminated due to production-related and financial grounds, you may be eligible for employment leave during your period of notice. Employment leave means that you can continue to receive salary while absent from work, provided that you agree upon it beforehand with your employer. The leave is intended for e.g. independent jobs seeking, job interviews or using job search support services.
The duration of your employment leave depends on the length of your period of notice, either 5, 10 or 20 days. If you are eligible for extended restructuring protection, you get 5 more days of employment leave.
For more information on employment leave, please contact the employment authority.