Other income and benefits
Other benefits or restrictions may affect your entitlement to an earnings-related daily allowance so that they either prevent you from receiving the daily allowance or reduce the amount. In some cases they have no effect on the entitlement to a daily allowance or the amount.
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Other benefits or restrictions may affect your entitlement to an earnings-related daily allowance so that they either prevent you from receiving the daily allowance or reduce the amount. In some cases they have no effect on the entitlement to a daily allowance or the amount.
The right to an earnings-related daily allowance is affected by, for example, social benefits that prevent the payment of a daily allowance, labour market restrictions and restrictions related to the employment. These may prevent the payment of a daily allowance in full.
Some social benefits may reduce the earnings-related daily allowance. These benefits are deducted from the daily allowance monthly, in which case the month is calculated to include 21.5 days. Deductive social benefits do not affect the overrun of the maximum period of the daily allowance, but each day with reduced payment reduces the maximum period by one day.
Below we have compiled the most common periods or benefits that prevent you from receiving a daily allowance. This list is not exhaustive.
- You have a set waiting period
- An unpaid time period, i.e., a mandatory waiting period, has been set for you by the employment authority
- You will receive a salary or equivalent compensation from your employer for the period of notice
- You will receive other financial benefits related to the termination of employment from your employer (for example, a severance package or a “golden handshake”)
- You are being paid for your annual leave period for full-time work
- You are receiving an old age pension
- You are receiving maternity, special maternity, paternity and parental allowance or special care allowance
- You are receiving a sickness or partial sickness allowance
- You are receiving a rehabilitation allowance, a full disability pension or a rehabilitation assistance
- If you are under 25 years of age and have not completed vocational training leading to a degree after comprehensive school or upper secondary school, and you have not applied for at least two study places in the joint application process.
Below is a breakdown of some of the most common benefits that reduce the earnings-related daily allowance. This list is not exhaustive.
- Part-time pension
- Partial disability pension under the earnings-related Pensions Act
- Child home care allowance paid to the family (care allowance and care increase)
- Daily allowance and accident pension under the Accident Insurance Act
- Supplementary pension arranged by the employer
- Invalidity benefit received from another state.
The amount of an earnings-related daily allowance is not affected, for example, by the following social benefits. This list is not exhaustive.
• Child allowance
• Housing allowance
• Family pension
• Social assistance
• Disability allowance
• Voluntary pensions purchased by yourself
• Partial early old-age pension
If you have worked part-time while getting your pension, your earnings-related allowance is determined from the income from part-time work, in which case the amount of the full earnings-related daily allowance is lower than the daily allowance determined from the income from full-time work.
As a rule, a partial early old-age pension does not affect earnings-related unemployment allowance. In other words, the pension is not a benefit that prevents you from receiving earnings-related unemployment allowance and is not deducted from the allowance. However, a partial early old-age pension may have an impact on the amount of full earnings-related unemployment allowance calculated by the fund and on the payment status of the allowance.
You can apply for partial early old-age pension from your employee pension institution. You can retire on a partial early old-age pension at the earliest when you turn 61 if you were born in 1963 or earlier. If you were born in 1964, you can retire on a partial old-age pension at the age of 62.
- Withdrawing the pension early reduces your pension permanently for the rest of your life.
- The amount of pension to be paid is permanently reduced by 0.4 per cent for each month you retire before your actual old-age retirement age.
- When you retire on a partial old-age pension, you can choose whether you want to receive 25% or 50% of your accrued pension
- Partial early old-age pension is not tied to a reduction in working hours. This means that you can work shortened hours or, if you wish, also normal full hours while receiving the pension
Effects on how the amount of earnings-related unemployment allowance is determined
The amount of earnings-related unemployment allowance for the period while you receive partial early old-age pension is determined immediately before the start of unemployment or temporary lay-off.
If you have worked full-time while receiving your pension, the period which you receive the pension has no effect on the amount of the daily allowance.
If you have worked part-time while receiving your pension, your daily allowance is determined based on income from part-time work. In this case, the amount of the full daily allowance is less than the allowance determined based on income from full-time work.
Effects on the payment of earnings-related security
If you have worked full-time, receive a partial early old-age pension and are unemployed or laid off, the payment of your daily allowance is not affected. In other words, you will receive a full daily allowance even if the partial early old-age pension continues while you are unemployed. The partial early old-age pension is not deducted from your daily allowance.
If you have worked part-time, receive a partial early old-age pension, and become unemployed or are laid off, you will be paid adjusted daily allowance, and the wages for part-time work paid during the four-week or one-month conciliation period will affect the amount of earnings-related allowance. The partial early old-age pension is not deducted from your daily allowance.
Example 1: Full-time work and partial early old-age pension
You have worked full-time while receiving a partial early old-age pension. Your full-time salary is 2,500 euros per month, of which the amount of full daily allowance is 70.94 euros. Your become unemployed and after the waiting period, receive the full daily allowance of 70.94 euros per day.
Example 2: Part-time work and partial early old-age pension
You have worked part-time while receiving a partial early old-age pension. Your part-time salary is 1,875 euros per month, of which the amount of full daily allowance is 58.32 euros. You become unemployed. You are still paid the part-time salary of 1,875 euros during your first adjustment period. After the waiting period, there is no adjusted daily allowance left to be paid. If the next application period no longer has a payday for the part-time work, you will receive the full daily allowance of 58.32 euros per day for the following period.
You can get more information from your pension company
Please find out the amount of your pension from your own employee pension institution before applying for a partial old-age pension.
You can also find more information about the partial old-age pension on the website of the Finnish Centre for Pensions.