Receiving a short-term job possibly facilitated by a legislative amendment

The provisions concerning the adjusted daily allowance under the Unemployment Security Act are about to be changed so that the payment process of the daily allowance would be speeded up, when an applicant receives a job. Under the current legislation, the earned salary will decrease the unemployment allowance of the applicant, who works part-time or occasionally, during the period when the work was done. For instance, if an applicant has worked part-time during 1.9. – 30.9., the salary for this period will decrease the unemployment allowance from September. As the salary is often paid the following month, the daily allowance cannot be paid before the applicant has received the salary. If the payday is, for instance, on 31.10., the daily allowance for September cannot be paid until then. Consequently, receiving a part-time or occasional work may delay the payment of the unemployment allowance significantly.

According to a proposed revision to change the law, the earned salary paid during the application period would affect the unemployment allowance. In practical terms, this would mean that the earned salary for work done in September would decrease the allowance from October. In that case, the applicant would receive the full allowance in September, because the salary has not been paid in September. Hence, the salary actually received on a given month would affect the amount of the unemployment allowance on that same month.

Adjusted daily allowance can be paid, if the working hours on the application period do not exceed 80 per cent of the working hours of a full-time employee in the same sector. The working hours would still be reviewed according to the actual hours when the applicant has worked, but if the salary would be paid the next month, also the exceeding of the working hours would affect the next month’s application period. For instance, if one has worked part-time during 1.9. – 30.9., and if the working hours would exceed the 80 per cent limit and the salary would be paid in October, the application from September would be paid in full. The salary would only affect the application from October and it would be rejected due to the 80 per cent working hours limit.

Work would accumulate the employment condition as usual, that is, the working weeks and the salary would still be taken into account according to the actual periods when the work was done. When the daily allowance would be decreased would not be changed by this.

In addition, the amendment would not affect the activity model when fulfilling the activity requirement. The working hours would still be reviewed according to the actual period when the work was done.

The proposed legislative amendment would not cause any changes to those who are temporarily laid-off for shortened working weeks or are laid-off due to weather conditions. The changes would neither concern those who are temporarily laid-off for shortened working weeks and would receive income from part-time work or full-time work that lasts less than two weeks. In these cases, the daily allowance would be adjusted to the income in the same manner as now, that is, the income would decrease the daily allowance from the actual period when the work was done. However, the salary received during the application period would increase the daily allowance for those who are laid-off for shortened working days.

Aim of the legislative amendment is to promote partial employment and receiving a short-term job. This would reduce red tape and income traps related to receiving a job. The other aim of the proposal is to enhance usability of the national income register when adjusted daily allowance is paid. This would reduce administrative burden of the applicant, the employer, Kela and the unemployment fund.

Government’s proposal can be found here (in Finnish and in Swedish).