A legislative amendment by the Government enters into force on September 1, 2024, revising the employment condition that forms the basis of earnings-related allowance by making it euro-based. In the future, daily allowance is no longer dependent on the number of hours worked but on the salary paid during a calendar month. At the same time, duration of required employment condition is extended.
What does employment condition mean?
Employment condition is the required duration of employment while being a member of an unemployment fund before becoming entitled to earnings-related allowance for unemployment or layoff. If you have fulfilled the employment condition while you were a member of an unemployment fund, you are entitled to earnings-related allowance. This is almost always larger than basic daily allowance. If you have not fulfilled the employment condition while you were a member of an unemployment fund, you are entitled to basic unemployment allowance provided by Kela. If you do not fulfil the employment condition, you are not entitled to earnings-related or basic unemployment allowance, but you can apply for labour market subsidy from Kela.
According to the current Unemployment Security Act, entitlement to earnings-related allowance requires salaried employment of 26 calendar weeks (approximately six months), for a minimum of 18 hours a week, while being a member of an employment fund, during the 28-month reference period that precedes the unemployment or layoff. This stipulation will change on September 2, 2024, when the legislative amendment enters into force.
What does euro-based employment condition mean?
Euro-based employment condition means that, in the future, entitlement to earnings-related allowance is based on specific earned income, paid out during a calendar month. Accrual of employment condition is based on salary paid during a calendar month, specifically on so-called salary for insurance purposes that accrues the employment condition. For instance, holiday compensation and holiday bonus are excluded. The employment condition accrues each calendar month: 930 euros of salary paid during a calendar month accrues one employment condition month, and 465–929.99 euros of salary paid accrues one half of an employment condition month (2024 level). You need a total of 12 paid calendar months of employment condition accrued during a 28-month reference period. If the accrued employment condition consists only of half months, you need a total of 24 paid calendar months.
Euro-based employment condition means that, in the future, entitlement to earnings-related allowance is based on specific earned income, paid out during a calendar month.
The euro-based employment condition is applied starting on September 2, 2024. Beginning on that date, one full or one half of a euro-based employment condition month can be calculated towards the employment condition. Calendar months that predate September 2, 2024 but are included in determining the employment condition are converted to employment condition months in accordance with the new stipulation. In practice, 1–2 employment condition weeks and the salary earned during that time is converted to one half of an employment condition month. Similarly, 3–4 employment condition weeks and the salary earned during that time is converted to one full employment condition month.
What does membership condition mean?
Fund membership is one of the requirements for receiving earnings-related allowance. In practice, fulfilling the membership condition requires a certain period of unemployment fund membership. Under current legislation, the membership condition is 26 weeks (six months). After the legislative amendment has entered into force on September 1, the membership condition likewise extends to 12 months.
