Glossary of terms

Glossary

This page contains explanations of commonly used concepts
and terms related to unemployment security.

Glossary of terms related to unemployment security

Accrual period of financial benefits

A financial benefit is a separate compensation received from the employer based on an agreement or other plan related to the termination of the employment relationship. A financial benefit paid at the end of the employment relationship is considered to be accrued over a period starting from the last day of the employment relationship. The employee is not entitled to an unemployment allowance during this period. The number of days in the period is calculated by dividing the amount of the financial benefit by the daily pay. The period includes days from Monday to Friday.

Additional days

Additional days of earnings-related unemployment allowance before retirement. Members are entitled to additional days of earnings-related unemployment allowance before retirement after reaching a certain age.

For more information, see the section on Right to additional days of allowance.

Adjusted unemployment allowance

An adjusted allowance may be paid to a member who has accepted part-time work or full-time work lasting no more than two weeks (occasional work), or who has income from part-time business activities or self-employment.

The amount of the adjusted daily allowance is calculated by deducting from the full unemployment allowance 50% of the wage income or income from business activities earned during the adjustment period (application period).

The wage income and the adjusted unemployment allowance in total may not exceed the amount of the wages that is the basis of the daily allowance. However, the adjusted unemployment allowance is paid in the same amount as what the person would be entitled to as an agreed basic allowance.

C

Child increment

The child increments have been removed from unemployment benefits on April 1, 2024 (link to law changes)

The amount of the child increment depends on how many children the applicant has. The child increment is paid for the member’s dependent children under the age of 18 (up to three children). Read more

Commute and relocation allowance

The purpose of the commute and relocation allowance is to encourage people to accept work even if it means travelling further away from home. The commute and relocation allowance is paid towards your commuting or removal costs when you accept a job or a training place required for a job that requires a long commute. Read more about the commute and relocation allowance.

D

Days of bad weather

In the event of a weather barrier, you can apply for a daily allowance from the fund under certain conditions.

Distribution of adjustable income and working time

If, during the adjustment period, wage income is paid for an earning period longer than one month on the basis of a single employment contract and this differs from the usual salary payment period, the wage income is divided to affect the month of payment and the same number of subsequent months as what the earning of the income is based on. If the adjustment period is four calendar weeks, the income is divided into four-week adjustment periods according to their income-earning.

Working time is also divided to affect the month of payment and the same number of subsequent months as what the earning of the income is based on. If the adjustment period is four calendar weeks, the working time considered in the adjustment is divided into four-week adjustment periods according to their income-earning.

The effect of income is not levelled over several adjustment periods if it has been earned in full-time work or work considered as business activities of more than two weeks.

E

Earnings-related unemployment allowance

A-Kassa pays its members earnings-related allowance for the period of unemployment or temporary lay-off, as well as for the duration of employment-promoting services agreed in the employment plan. In addition to the basic part of the unemployment allowance and possible child increments, the unemployment fund pays its members an earnings-related part determined by the member’s salary.

Employment condition

You can receive an earnings-related daily allowance when you have fulfilled the labour market policy conditions, the membership conditions of an unemployment fund, and the employment conditions.

Employment condition until 1.9.2024: The employment condition is met when the member has been in paid employment for at least 26 calendar weeks during the 28 months immediately before unemployment. At the weekly level, the employment condition is met when the member works as least 18 hours during the calendar week and their pay is in accordance with the collective agreement.

Employment condition from 2.9.2024: The employment condition is met when the member has been paid at least 12 months of salary income of 930 euros/month during the 28 months preceding the unemployment.

The 28-month review period can be extended by a maximum of 7 years due to, for example, illness, full-time studies, care for a child up to the age of three or another acceptable reason comparable to these.

Entrepreneurs’ post-protection

A member of an employee fund who has become self-employed full-time can retain their membership in the employee fund for a period of 18 months. If the person becomes unemployed during this period, they can receive the same amount of earnings-related unemployment allowance as before from the employee fund for the maximum period of 300 to 500 days. The post-protection ends when the member meets the employment condition for self-employed persons or after they have been self-employed for more than 18 months.

A person transferring from the Entrepreneur Fund to an employee fund is also entitled to post-protection under the same conditions. The self-employed person’s post-protection ends when the member meets the employment condition for employees.

eService

eService refers to the online service used by A-Kassa. Read more about the eService.

Exemption period from membership fees

There are no exemption periods from the A-Kassa membership fee if you are only a member of the unemployment fund.

If you are also a member of a trade union, you can ask your union’s members services about exemptions from membership fees during unemployment or studies. See the list of our trade union partners.

F

Final salary

Final salary is paid to the employee at the end of the employment relationship. It includes all unpaid salaries, additional compensations and holiday compensation for untaken holidays which you have earned during your summer employment. Some industries also pay out a holiday bonus.

When the amount of earnings-related allowance is calculated, your holiday period salary is accounted for in case you have taken the holiday. However, holiday bonus and holiday compensation and not included in the calculation.

Follow-up application

A follow-up application refers to applications submitted after the initial application for earnings-related unemployment allowance. You can submit a follow-up application if the employment condition has not been re-met or if the previous application is less than three months old. The follow-up application is submitted for a period of four calendar weeks or one month, such as 16 February to 15 March.

H

Holiday bonus

Holiday bonus, or end-of-holiday pay, is 50% of the holiday pay. Holiday bonus is not regular wage income and is not taken into account when calculating the amount of unemployment allowance.

The rules on holiday bonus may differ depending on your collective agreement.

Holiday compensation

As a rule, holiday compensation is paid for unused holidays at the end of an employment relationship that has lasted more than two weeks. If all holidays have been used during the employment relationship, no holiday compensation is paid. Holiday compensation is not regular wage income and is not taken into account when calculating the amount of unemployment allowance.

Holiday compensation is not considered to be accrued over a period after the employment ends and does not postpone the start of the payment of earnings-related unemployment allowance.

The rules on holiday compensation may differ depending on your collective agreement.

Holiday pay

Holiday pay is regular wage income paid during the period of annual leave and is taken into account when calculating the amount of earnings-related unemployment allowance. You are not entitled to a daily allowance for the period of annual holiday from full-time work.

I

Incomes Register

The Incomes Register is a digital database maintained by the Tax Administration used to report data on wages, pensions and benefits. Payers of income such as employers and benefit payers report data to the Incomes Register in real time for each recipient and payment transaction.

At A-Kassa, we use data from the Incomes Register when processing our members’ allowance applications. Employers and other payers report wage and salary earners’ income data to the national Incomes Register. A-Kassa uses income data to calculate the amount of earnings-related unemployment allowance.

Increased earnings-related component

Earnings-related unemployment allowance can be increased for 200 days while the member participates in services promoting employment. The amount of the increased earnings-related component is 55% of the difference between the daily wage and the basic part. If the monthly salary exceeds the basic part by 95 times, the increased earnings-related component is 25% of the amount of salary in excess of this.

The increased earnings-related component, including child increments, cannot exceed the daily wage on which the allowance is based and is always at least equal to the basic part plus the child increment.

The increase part will be removed on January 1, 2025.

Interruption of work due to industrial action

If your work is interrupted due to industrial action in another industry, you may be entitled to earnings-related unemployment allowance. Read more about how a strike affects unemployment security.

J

Job alternation allowance

The amount of job alternation allowance paid during the period of job alternation leave is 70% of the amount of the member’s earnings-related allowance. Child increments and the increased earnings-related component are not included in job alternation allowance.

L

Labour policy statement

The Employment and Economic Development Office (TE Office) issues a labour policy statement to the fund after the applicant has registered as a jobseeker with the TE Office. The labour policy statement indicates, among other things, the applicant’s right to an unemployment allowance and the period of participation employment-promoting services or unpaid waiting period. The labour policy statement is binding on the fund.

M

Maximum payment period

Earnings-related unemployment allowance is paid five days a week for the period of unemployment, up to a maximum of 300 to 500 days. The maximum period depends on the age of the applicant and the length of their work history. Periods of employment accrued after age 17 may be counted towards the employment condition.

If your work history is less than three years, you can receive an earnings-related allowance for up to 300 days. You can receive the earnings-related allowance for 400 days when you have been working for more than three years. If you are over 58 years of age when the employment condition is met and have worked at least five years in the last 20 years, you are entitled to the maximum period of 500 days.

Maximum working hours

Payment of the unemployment allowance or adjusted allowance requires that the work performed during the adjustment period (or the review period) does not exceed 80% of the maximum hours of a full-time worker in the industry. If the industry has no collective agreement, the maximum working hours is 40 hours per week as defined in the Working Hours Act.

Membership condition

You can receive an earnings-related daily allowance when you have fulfilled the labour market policy conditions, the membership conditions of an unemployment fund, and the employment conditions.

Membership condition until 1.9.2024: The membership condition is met when you have been a member of an unemployment fund for at least the previous 26 weeks.

Membership condition from 2.9.2024: The membership condition is met when you have been a member of an unemployment fund for at least 12 months.

N

Notice of temporary lay-off

A notice of temporary lay-off is a certificate written by the employer that indicates at least the reason for the lay-off, its start time and duration or estimated duration. The lay-off notice must be submitted to the fund when the temporary lay-off begins.

Notice of termination

Notice of termination is given when the employer terminates a non-fixed-term employment relationship. The notice of termination states the reason for the dismissal and the end date of the employment, among other things.

Notice pay

Pay during the notice period is regular wage income and taken into account when calculating the amount of earnings-related unemployment allowance.

The employee is not entitled to unemployment allowance for the period of notice from full-time work.

P

Pay determination

The pay on which the daily allowance is based is determined from the member’s regular earnings over at least 26 paid weeks immediately before unemployment. The pay on which the daily allowance is based is re-determined when the 26-week employment condition is met.

If less than one year has passed since the last start of the maximum period and the amount of the daily allowance has been determined, the allowance is not re-determined and no waiting period is applied even though the member meets the 26-week employment condition.

Pay in lieu of notice

Pay in lieu of notice, or severance pay, for the period of notice from full-time work is not regular wage income and is not taken into account when calculating the amount of earnings-related unemployment allowance. The employee is not entitled to unemployment allowance for the period of pay in lieu of notice.

Pay subsidy work

The TE Office may grant an employer a pay subsidy for the hiring costs of an unemployed person if the jobseeker is not employed on the open labour market or placed in training.

In pay subsidy work, 75% of the hours are counted towards the employment condition. If the pay subsidy work has been arranged on the basis of the obligation to employ older workers, the pay subsidy work is counted towards the employment condition in full.

Payment statement

We send a payment statement with each payment of earnings-related unemployment allowance. The payment statement shows the amount of the allowance, the gross amount paid, withholding tax, the payment period and the number of days accumulated towards the maximum days of allowance.

In the eService, you can choose whether you want to receive payment statements by SMS, email or mail.

80% protected component

In the eService, you can choose whether you want to receive payment statements by SMS, email or mail.

Periodisation of holiday compensation

Holiday compensation affects the right to earnings-related unemployment allowance in such a way that annual holidays not taken by the end of the employment relationship will postpone the start of earnings-related unemployment allowance payments by as many days as the holiday compensation paid corresponds to the average salary for the number of working days. This is called the periodisation of holiday compensation.

The periodisation applies to full-time employment that has lasted more than two weeks and has ended. Holiday compensation paid for part-time employment are not periodised but are adjusted when the daily allowance is paid.

The periodisation of holiday compensation does not affect lay-offs, because then the employment relationship does not end completely.

For example, if you are paid a holiday compensation equivalent to a month’s wages when your employment ends, it is possible to start accruing the waiting period and pay the unemployment benefit only when this paid period ends, in this case, after about a month.

Example of periodization:

The person’s full-time employment, which lasted more than two weeks, has ended on January 31, 2024. At the end of his employment, he has been paid 1,500 euros in holiday compensation for annual leave that he has not taken.
His average monthly salary has been 3,000 euros and his daily salary 3,000 euros: 21.5 days = 139.53 euros/day.
The holiday compensation is divided by the average daily wage of 1,500 euros: 139.53 euros/day = 10 days.
10 payable days, i.e., two weeks from the end of the employment relationship, are used for the periodisation of holiday compensation.
Earnings-related daily allowance cannot be paid from 1 February to 14 February 2024. After the period, the waiting period is taken into account, which is seven days, i.e. starting on February 15, 2024 and lasting until February 25, 2024.
The payment of the earnings-related daily allowance can therefore start on 26 February 2024.

Protected part of earnings

The protected part of the adjusted earnings-related daily allowance was removed on April 1, 2024 (link to law changes)

Earnings-related unemployment allowance includes a protected part. Income you earn below this amount does not affect the amount of your unemployment allowance. The protected part of earnings is 300 euros when the application period is one month and 279 euros with an application period of four weeks. The protected part is applied from your pay before taxes.

R

Reimbursement of expenses

Reimbursement of expenses is paid for the duration of services promoting employment in order to compensate for travel and meal costs. Expenses are not reimbursed during self-motivated studies.

Reimbursement of expenses can also be paid for the duration of training abroad. The reimbursement is 9 or 18 euros (16.82 euros in NORD training) per day and is tax-free income.

Reset of maximum days

The maximum days of unemployment allowance are reset when the member meets the 26-week employment condition.

Revised tax card for the payment of unemployment allowance

You can request a revised tax card with a new withholding tax rate for the unemployment allowance in the Tax Administration’s MyTax service. You can submit the revised tax card directly to the fund in the same service.

After the revised tax card for the allowance is submitted to the cashier, your withholding rate is changed according to the new tax card.

Right to additional days of allowance

Earnings-related unemployment allowance is usually paid for a maximum of 300 to 500 days. Additional days refer to the right to earnings-related unemployment allowance after this maximum period. Read more about the right to additional days.

S

Self-motivated studies

Self-motivated studies are an employment-promoting service as defined in chapter 10 of the Unemployment Security Act and the Act on Public Employment and Business Services. During self-motivated studies, the member is paid an unemployment allowance and days paid for the duration of the studies count towards the maximum days.

Services promoting employment

Services promoting employment are defined in chapter 10 of the Unemployment Security Act and the Act on Public Employment and Business Services.

Services promoting employment include labour market training, self-motivated studies, job search coaching, work trials, rehabilitative job activities and career coaching.

During participation in services promoting employment, the member is paid an unemployment allowance and days paid for the duration of the studies count towards the maximum days of unemployment allowance.

Shortened workday

A temporary lay-off can be implemented by shortening the employee’s daily hours, in which case the fund pays an adjusted earnings-related unemployment allowance.

Shortened workweek

In a shortened workweek, hours are reduced by one or more full workdays, in which case earnings-related allowance can be received for the days of lay-off.

Strike pay

During a strike, you must apply for possible strike pay from your trade union. In some cases, the unemployment fund may also pay unemployment benefits during a strike.

If your work is prevented directly or indirectly due to industrial action (such as a strike or lockout) that seeks to affect the terms of your employment relationship, you are not entitled to earnings-related allowance paid by the unemployment fund for the days when the strike is ongoing.

Instead, in these situations, you can apply for strike pay from your trade union or from the union that declared the strike.

Tax decision

Your tax decision is the statement of taxable income or confirmed loss for the tax year. The tax decision shows the income used as the basis for your taxation and deductions made from it.

The fund needs your personal tax decision for the last confirmed taxation if you have business income or farm income.

Taxation

Your tax decision is the statement of taxable income or confirmed loss for the tax year. The tax decision shows the income used as the basis for your taxation and deductions made from it.

The fund needs your personal tax decision for the last confirmed taxation if you have business income or farm income.

Transition security allowance

Transition security allowance and the right to transition security training are part of the transition security package for persons aged 55 and over. Those covered by transition security are entitled to a transition security allowance, training and extended employment leave. Read more about transition security allowance.

U

Unpaid waiting period

The TE Office may impose an unpaid waiting period if the applicant for the daily allowance has: resigned from work or caused the employment to be terminated without a valid reason
refused training or employment
failed to attend a meeting for drafting or reviewing the employment plan or a plan replacing the employment plan.

The list is not exhaustive.

The length of the unpaid waiting period varies from 7 days to 60 days depending on the reason. The TE Office issues a statement on the waiting period that is binding on the unemployment fund. During the unpaid waiting period, the member is not entitled to unemployment allowance. An exception to this is during employment-promoting services agreed with the TE Office, when the daily allowance is paid despite the waiting period.

W

Waiting period

There is a waiting period before the payment of the unemployment allowance begins. The waiting period is seven days of unemployment or its equivalent and must be met over a period of eight calendar weeks. The waiting period may include days from Monday to Friday, but not those days for which the member is not entitled to the unemployment allowance.

You must be registered as a jobseeker at the TE Office also during the waiting period. The waiting period is applied when the amount of the unemployment allowance is calculated.

A new waiting period is not applied if the maximum payment period would start within one year of the start of the previous maximum period and if the waiting period has already been applied at the start of the maximum period of the previous period of payment of unemployment allowance.

Working time account

Overtime worked by the employee is ‘banked’ in the working time account and can be taken as time off or paid in cash at a later date.

If an employee is paid cash compensation from the working time account within two months before the start of the full-time lay-off or during a lay-off, the cash compensation prevents the payment of the unemployment allowance for the accrual period of the compensation. Cash compensation paid from the working time account is accrued over a period in the same way as the accrual of a financial benefit paid at the end of an employment relationship.

If the lay-off is implemented as a shortened workday, earnings withdrawn from the working time account are considered income in the adjusted unemployment allowance.

Glossary of terms

Glossary