Earnings-related allowance

Earnings-related allowance is paid for the period of unemployment or temporary lay-off and for the period of employment promotion measures agreed in the plan for employment. Earnings-related allowance can be paid when you meet the labour market policy criteria and the membership and employment conditions.

In addition, you must meet the conditions for claiming unemployment benefits, for instance:

  • you are aged between 17 and 64 (up to the end of that calendar month when you turn 68 years, if you have been laid off). You can receive daily allowance until the end of the month in which you turn 65;
  • you live in Finland;
  • you have registered as an unemployed job seeker with the TE Office;
  • you seek full-time employment; and
  • you are fit for work and available for the labour market. A person who is unable to work may be entitled to earnings-related allowance in the case of a prolonged incapacity for work if the maximum sickness allowance period has elapsed and the other conditions are met.

Information on earnings-related allowance

Can I claim earnings-related allowance?
When can you not claim the daily allowance?
What is the amount of my daily allowance?
What is adjusted daily allowance?
For how long can daily allowance be paid?
Recalculation of daily allowance
Waiting period
Suspension period (or, karenssi)
Sickness during unemployment

Can I claim earnings-related allowance?

In order to claim earnings-related allowance, you must be a member of the unemployment fund for at least 26 weeks and fulfil the employment condition of an employee during the membership. We will review the fulfilment of the membership and employment conditions when processing your application for the earnings-related allowance.

In addition, you must also meet the labour market policy criteria. The fulfilment of labour market policy criteria is reviewed at the TE Office, which will issue a binding statement regarding the matter to the fund.

Labour market policy criteria

Register as an unemployed job seeker with the TE Office. You register as a job seeker by filling in an electronic registration form (in Finnish) at the latest on the first day of unemployment or temporary lay-off. You can also register before the start of unemployment or temporary lay-off. After registration, the TE Office will contact you to agree on further measures and a possible personal meeting.

If you are participating in local government pilots on employment, you will need to register yourself via TE Office’s electronic registration form as well.

Membership and employment conditions

The employment condition is fulfilled when you have been in paid employment for at least 26 calendar weeks during the 28 months immediately preceding unemployment. The employment need not be continuous; you can also accrue weeks that count towards the employment condition in shorter periods over the review period of 28 months.

At a weekly level, the employment condition is fulfilled when

  • there are at least 18 working hours during a calendar week;
  • the work is done in an employment relationship and is subject to insurance, i.e. withholding tax and unemployment and social insurance contributions have been paid for it; and
  • the pay is in accordance with the collective agreement. If there is no collective agreement in the sector, the pay for full-time work must be at least EUR 1,283 per month in 2022.
  • the pay from work of the creative and performance sector must be at least EUR 298.37 (in 2022).

Employment condition review period

The employment condition review period of 28 months may be extended for an acceptable reason by a maximum of seven years.

Acceptable reasons for an extension include, for instance, sickness allowance from Social Insurance Institution of Finland (Kela), family allowance, child homecare allowance, student allowance or if you are in compulsory military service or non-military service.

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When can you not claim the daily allowance?

Entitlement to earnings-related allowance is affected by, for example, social benefits that prevent the payment of the daily allowance, labour policy restrictions and restrictions related to the employment relationship. These may prevent the payment of the daily allowance completely.

Some social benefits decrease the earnings-related allowance. These benefits are deducted from the daily allowance at a monthly level, in which case a month is calculated to include 21.5 days. Social benefits that decrease the allowance do not affect the lapsing of the maximum period, but each day paid out reduced counts as one day towards the maximum period.

Periods and benefits that prevent the claiming of daily allowance

Below, we have compiled a list of the most common periods or benefits that prevent the claiming of daily allowance. The list is not exhaustive.

  • You have been set a waiting period;
  • You have been set a suspension period during which you are not entitled to unemployment benefits at the TE Office if you have resigned or refused work or training;
  • You receive a salary for the notice period or equivalent compensation from your employer;
  • You receive another financial benefit related to the termination of the employment relationship (e.g. severance package) from your employer;
  • You receive holiday pay for the annual leave period for full-time employment;
  • You claim old-age pension or early old-age pension;
  • You claim maternal, special maternal, paternal or parental allowance or special care allowance;
  • You claim sickness or partial sickness allowance;
  • You claim rehabilitation allowance or indemnity for loss or earnings under the rehabilitation provisions of accident insurance, motor insurance or the Military Injuries Act;
  • You are younger than 25 years and have not completed a study degree providing vocational skills after comprehensive school or high school and have not applied to at least two study places.

Benefits that reduce the amount of the daily allowance

Listed below are some benefits that reduce the amount of earnings-related allowance. The list is not exhaustive.

  • Part-time pension;
  • Partial disability pension under employment pensions acts;
  • Child home care allowance (care allowance/care supplement).
  • Daily allowance and industrial injury pension under the Employment Accidents Insurance Act;
  • Supplementary pension provided by the employer, exceeding the minimum requirements under the Employees Pensions Act;
  • Disability benefits received from another state;

Benefits that do not affect the daily allowance

The following benefits do not affect the amount of earnings-related allowance:

  • Child benefit;
  • Informal care support or family care support paid by the municipality;
  • Housing allowance;
  • Family pensions;
  • Social assistance under the Social Welfare Act;
  • Disability allowance;
  • Care allowance under the National Pensions Act;
  • Maternity allowance;
  • Adoption grant; and
  • Partial early old-age pension.

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What is the amount of my daily allowance?

An earnings-related allowance is calculated from your earned income of at least 26 calendar weeks preceding unemployment. The weeks used to determine the daily allowance must fulfil the employment condition.

Income taken into account in the determination includes

• monthly or hourly pay;
• holiday pay for the annual leave period, pay during sickness and salary for the notice period;
• wage supplements, such as overtime compensation, evening work bonus, shift work bonus, contract bonus, midweek holiday compensation;
• performance-based pay, such as various incentives and bonuses;
• taxable fringe benefits; and
• pay received under pay security.

The determination does not take into account

• holiday bonus and holiday compensation;
• tax-free fringe benefit;
• financial benefit paid by the employer that is associated with the termination of employment relationship, or a so-called golden handshake;
• compensation equivalent to the salary for the notice period and indemnity;
• savings in a working hours bank or monetary compensation withdrawn from a working hours bank;
• pay for suspension periods; or
• income from options and dividends.

The daily pay used to determine the daily allowance is obtained by dividing the wages of the 26 employment weeks by the number of working days included in this period (5 days per week, i.e. 130 days). Days for which no wages have been paid due to an acceptable absence, such as unpaid sick leave, are not counted as working days.

If you have been in seasonal employment, your earnings-related allowance can be determined based on the earnings of the 12 months preceding unemployment. This requires that the amount of work done and thus the earnings have been considerably higher than usual.

A deduction equivalent to the employment pension, unemployment insurance and health insurance daily allowance contributions is made from your monthly pay used to determine the daily allowance. This is 4.29% in 2022.

Estimate the amount of your allowance
(You will be transferred to TYJ’s website)

What does the amount of daily allowance consist of?

Daily allowance consists of the basic component and earnings-related component.

  • The basic component equals the basic unemployment allowance, which is EUR 34.50 per day in 2022.
  • The earnings-related component is 45% of the difference between daily pay and the basic component. If the pay is more than EUR 3,277.50 per month, the earnings-related component is 20% for the exceeding amount.

A child increase is also paid, amounting to

  • EUR 5.41 for one child under the age of 18 in your care;
  • EUR 7.95 in total for two children; and
  • EUR 10.25 in total for three or more children per day.

The child increase is paid for a maximum of three children.

You can use the daily allowance calculator to calculate an estimate of your incoming daily allowance. The exact amount of daily allowance will be defined in the decision issued by the unemployment fund.

When is increased allowance paid?

If you participate in an employment promotion measure, increased earnings-related allowance can be paid for a maximum of 200 days. Claiming an increased earnings-related component requires that the measure has been agreed upon in the plan for employment with the TE Office.

The increased earnings-related component amounts to 55% of the difference between the daily wage and the basic component. If the pay exceeds EUR 3,277.50 per month, the increased earnings-related component is 25% for the exceeding amount.

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What is adjusted daily allowance?

Adjusted daily allowance can be paid out if you have received income and if:

  • you are in part-time employment at the employer’s initiative;
  • your daily working hours have been shortened due to a temporary lay-off;
  • you have accepted a full-time job lasting a maximum of two weeks;
  • you are employed as a part-time entrepreneur or self-employed person; or
  • you are employed as a full-time entrepreneur for a maximum of two weeks.

Adjusted daily allowance is paid for every weekday of the adjustment period for which you are entitled to the benefit.

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For how long can daily allowance be paid?

You can claim daily allowance from the unemployment fund five days a week for 300–500 unemployment days.

The maximum period depends on your employment history and age:

 Employment history  Maximum period
 3 years or less  300 days (about 14 months)
 Over 3 years  400 days (about 18 months)
 Minimum of 5 years in employment during the previous 20 years and your employment condition is fulfilled after you have reached the age of 58  500 days (about 23 months)

Fulfilling the employment condition again

If you fulfil the employment condition of 26 calendar weeks again, the maximum period starts from the beginning.

Earnings-related allowance is recalculated when the employment condition is fulfilled if more than one year has elapsed since the commencement of the previous maximum period. The commencement of the maximum period refers to the first daily allowance day paid out.

Earnings-related allowance will not be recalculated when the employment condition is fulfilled if the new maximum period begins within one year of the commencement of the previous maximum period and the allowance was calculated at that time.

If you fulfil the employment condition again during independent studies or labour market training, daily allowance will not be recalculated during the service.

When the maximum period is reached

Once the maximum payment period has elapsed, you can apply for a labour market subsidy from Kela. You will receive a written decision regarding the end of your entitlement to the earnings-related allowance with the last payment notice. Submit the decision to Kela or the TE Office.

Earnings-related allowance can also be paid after the maximum period if you are entitled to additional days.

Right to additional days

The right to additional days means that the earnings-related allowance can be paid out notwithstanding the maximum period up to the end of the calendar month during which you reach the age of 65.

You may be entitled to additional days of earnings-related allowance if you are

born in, and Before the maximum period has elapsed have reached the age of
1957-1960 61 years
1961-62 62 years
1963 63 years
1964 64 years

In addition, you must have been employed for at least five years during the last 20 years.

You do not have to apply for additional days separately; we will review it automatically based on your application for earnings-related allowance.

After your entitlement to daily allowance has ended, you can apply for old-age pension. Those born before 1958 can, if desired, choose to retire on an old-age pension already at the age of 62 without an abatement of early retirement.

If you have been paid additional days and are about to apply for old-age pension:

  • ask us for a certificate of additional days; and
  • send the certificate to your pension insurance institution.

It is not possible to issue the certificate at an earlier date because the pension company needs the information concerning the additional days of the month preceding retirement. Those born in 1958 or later can retire on an old-age pension at the age of 63.

Example, how to ask for a certificate of additional days

Open Unemployment Fund has paid you additional days of earnings-related allowance. You are retiring for old-age pension on 1 of April. You can request for the certificate of additional days, when you have received earnings-related allowance for 1 of March (or longer) at the earliest.

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Recalculation of daily allowance

When you have been in employment that fulfils the employment condition again for 26 calendar weeks during the review period of 28 months, and more than one year has elapsed since the commencement of the previous maximum period, the level of daily allowance is recalculated.

Your earnings-related allowance will not be recalculated when the employment condition is fulfilled again if the new maximum period would begin within one year of the commencement of the previous maximum period and the allowance was determined at that time. Even if daily allowance is not determined again (and no waiting period set), the maximum period starts from the beginning each time the employment condition is met.

At a weekly level, your employment condition is fulfilled when

  • there are at least 18 working hours during a calendar week; and
  • the pay is in accordance with the collective agreement. If there is no collective agreement in the sector, the pay for full-time work must be at least EUR 1,252 per month in 2021.

If you fulfil the employment condition during independent studies or labour market training, daily allowance will not be recalculated during the service.

Example, daily allowance is not recalculated

You will fulfil the employment condition again on 16 February 2018. The last time your daily allowance was calculated and a waiting period set was in February 2017, and the first paid day was and the maximum period started on 18 February 2017.

The first paid day of the new maximum period without a waiting period would be 17 February 2018, within one year of the commencement of the previous maximum period on 18 February 2017. Daily allowance will not be determined again and no waiting period will be set. The payment of daily allowance will be continued from 17 February 2018 with the allowance calculated in February 2017. The maximum period starts from the beginning.

 

Example, daily allowance is recalculated

You fulfil the employment condition again on 8 December 2019. The last time the daily allowance was calculated and a waiting period set was on 15–19 December 2018, but not a single day of daily allowance was paid out.

The first unemployment day is 9 December 2019. However, the payment of daily allowance did not commence in 2018, so the maximum period starting dates cannot be compared. A waiting period is reset from 9 December 2019, and the amount of daily allowance is recalculated. The maximum period starts from the beginning.

When you are a recipient of daily allowance, the unemployment fund counts the accrued weeks in employment. Therefore, you yourself do not need to monitor when you fulfil the employment condition again.

Protection rules for calculating a new daily allowance

When you fulfil the employment condition again during the maximum period, your level of daily allowance is at least 80% of the previous allowance. There is no 80% protection if the new employment condition is fulfilled only after the maximum payment period.

If you have reached the age of 58 and fulfil the employment condition, the amount of daily allowance will not change unless the pay calculated based on the new income information is higher than the previously calculated pay on which the daily allowance is based.

If you are aged 57–59 and have fulfilled the employment condition doing work arranged on the basis of an employment obligation, the amount of daily allowance will not change unless the pay calculated based on the new income information is higher than the previously calculated pay on which the daily allowance is based.

If your employment condition includes times when you have participated in employment promotion measures (via TE Office’s services) and you are aged 60 years or over, your earnings-related allowance will not be recalculated.

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Waiting period

The waiting period (also known as personal liability period) is five days of unemployment on which you have been registered as an unemployed jobseeker with the TE Office. If you have working hours from part-time or casual work during the application period, the waiting period is a number of hours equivalent to five days.

Days from Monday to Friday are accepted as waiting days, and a calendar week may include a maximum of five waiting, unemployment and working days. The days making up the waiting period must accrue during eight successive calendar weeks. Time during which you are not entitled to daily allowance (e.g. during deferral of a financial benefit) cannot be counted towards the waiting period.

Midweek holidays can be counted towards the waiting period if you have registered with the TE Office before the midweek holiday and the employer is not obliged to pay midweek holiday compensation in a temporary lay-off situation.

In practice, there is no waiting period during employment promotion measures. The waiting period accrues simultaneously with daily allowance being paid out for the measure period.

If you are in part-time or casual employment, the waiting period is fulfilled once an unemployment period equivalent to five days of unemployment (in hours) has accrued.

Resetting of waiting period

A waiting period is set when you fulfil the employment condition and the maximum payment period starts from the beginning.

However, a waiting period will not be set if you fulfil the employment condition and the new maximum period starts within one year of the commencement of the previous maximum period.

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Suspension period (“karenssi”)

If you have resigned without a valid reason or caused the termination of your employment, the TE Office will set a suspension period during which you are not entitled to unemployment benefits.

The TE Office will issue a binding statement regarding the suspension period to the unemployment fund, and you will not be entitled to daily allowance for the suspension period. An exception are employment promotion measures agreed upon with the TE Office during which daily allowance is paid out simultaneously with the suspension period.

Suspension period must not be confused with five days waiting period.

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Sickness during unemployment

Apply for sickness allowance, if you are sick for over 9 days (including Saturdays). You cannot receive earnings-related allowance, if you receive sickness or partial sickness allowance, or, if your employer pays you salary for sickness period. If certain conditions are fulfilled, you are able to receive earnings-related allowance for the waiting period of sickness allowance.

Read more about the sickness allowance from Kela’s website.

If you are sick for less than 9 days

If you were sick for no more than 1+9 days (the day you got sick and 9 sickness days including Saturdays), sickness allowance should not be applied for from Kela. However, it must be reported in the application for earnings-related allowance. Report “sick” in the daily account of the application starting from that day that you got sick. Report the duration of your sickness period, if you already know it. You can send the applications according to the normal application periods.

Waiting period during sickness

If you get sick, also the days that you have been incapable of work after the start of your unemployment period are taken into account when counting the waiting period. This applies, if you have not received either salary for sickness from your employer, sickness allowance or any other benefit due to the waiting periods of these benefits.

300 days of sickness allowance has been paid

If your disability to work continues and you have received the maximum 300 days of sickness allowance, you can apply for earnings-related allowance from the unemployment fund. Remember to register with the TE Office as an unemployed jobseeker, if you have received the maximum amount of sickness allowance days.

It is necessary to send some additional attachments in order to process your application for earnings-related allowance. In this case, please contact our customer service. Depending on your circumstances, we will give you detailed instructions on what attachments to submit.

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