Restructuring protection model for over 55-year-olds – extended unemployment benefit will be discontinued
As a result of a law amendment that will enter into force in 2023, a new restructuring protection package for persons aged 55 or over will be implemented.
Restructuring protection includes a restructuring protection allowance, which is equivalent to one month’s pay, and the right to restructuring protection training. In addition, the age limit to qualify for the extension will rise for those born in 1963 and 1964. Those born in 1965 or later will not be eligible for extended benefits at all.
Extended unemployment benefit will be discontinued
Earnings-related unemployment allowance is usually paid for a maximum of 300–500 days. Additional days (i.e. extended benefit) refer to the right to earnings-related unemployment allowance after this cut-off period. In order to be eligible for additional days, a certain age must be reached before the end of the cut-off period, and one must have a five-year work history during the 20 years preceding unemployment. The age limit is currently 61 or 62 years, depending on the year of birth.
The age limit for additional days will increase by one year per age group, starting from those born in 1963. Those born in 1965 or later will not be eligible for additional days at all. This means that the reform will affect the right to earnings-related unemployment allowance from 2025 onwards, when those born in 1963 reach the current extension age limit of 62 years. The extended unemployment benefits will be completely discontinued in 2030.
|Year of birth||Extension age limit after amendment||Government proposal|
|1957–1960||61 years||no change|
|1961–1962||62 years||no change|
|1963||63 years||age limit will rise|
|1964||64 years||age limit will rise|
|1965||not eligible for extension||eligibility for extension will be removed|
Restructuring protection package for persons aged 55 or over
A new restructuring protection package for persons aged 55 or over will be implemented at the beginning of 2023. Those eligible for restructuring protection are entitled to a restructuring protection allowance, training and longer time off for re-employment:
- the restructuring protection allowance is equivalent to one month’s pay
- restructuring protection training lasts no more than 6 months, and is equivalent to no more than 2 months’ pay
- paid leave to find employment is 5 days longer than usual
To be covered by the change security, the person must:
- have been dismissed on production-related or financial grounds (termination of fixed-term employment does not meet the condition) on 1 January 2023 or thereafter.
- have reached the age of 55 by the time of termination
- have been employed by the same employer for at least five years by the time of dismissal
- have registered as a job seeker at the TE Office within 60 days of termination.
The date of termination means the date on which the notice of dismissal was given. Therefore, if the period of notice is long, you must register with the TE Office before the unemployment period has even begun.
Applying for restructuring protection allowance
You must apply to the unemployment fund for restructuring protection allowance within three months. If you are not a member of an unemployment fund, you can apply to Kela (The Social Insurance Institution of Finland) for restructuring protection allowance. The amount of the restructuring protection allowance is the same, regardless of whether it is paid by an unemployment fund of Kela. The unemployment fund pays restructuring protection allowance even if your membership in the unemployment fund has started right before the dismissal and you have not been a member long enough to receive earnings-related unemployment allowance.
How restructuring protection allowance affects other benefits
The restructuring protection allowance does not affect unemployment security or other benefits, with the exception of social assistance. You do not have to be unemployed to receive the allowance. The allowance is paid even if you immediately get a new job at another employer.
Restructuring protection training
Restructuring protection training lasts no more than 6 months and is equivalent to no more than 2 months’ pay. Restructuring protection training is provided by the TE Office or the Centre for Economic Development, Transport and the Environment (“ELY-keskus”). Participation in restructuring protection training is voluntary, and refusal to participate will not result in the loss of unemployment benefits.
Article has been published earlier 7th of July 2022.