Programme of Prime Minister Petteri Orpo’s Government was published on 16 June 2023 and as expected, it also included many changes to earnings-related security. The law will not change immediately, and the amendments will need to undergo legislative drafting before entering into force. Not all the stated policies will necessarily be implemented as entered in the Government Programme.
The Parliament has approved the first of two sets of legislative amendments concerning unemployment insurance, which cut the amount of unemployment insurance and limit the right to benefits. Some of the changes will take effect on January 1, 2024, and some later in the year.
The government's second presentation on changes to unemployment insurance is scheduled to be issued in February of next year. The subsequent set of legal amendments includes the staggering of the earnings-related daily allowance and abolishing the age-related exemption rules.
The first changes will enter into force on January 1, 2024. We will update the information below as soon as the content and effective dates of the legal changes are confirmed.
According to the Government Programme, the amount of earnings-related unemployment allowance would fall to 80% after 2 months (8 weeks) of unemployment. The amount would fall to 75% after 8 months (34 weeks) of unemployment.
Effect per month: If the monthly salary is € 2,500
Monthly salary Earnings-related allowance ⇒ 2 months Earnings-related allowance 2-8 months Earnings-related allowance 8 months ⇒ € 2,500/month € 1,515/month € 1,212/month € 1,136/month € -303/month € -379/month
Effect per month: If the monthly salary is € 3,000
Monthly salary Earnings-related allowance ⇒ 2 months Earnings-related allowance 2-8 months Earnings-related allowance 8 months ⇒ € 3,000/month € 1,730/month € 1,384/month € 1,298/month € -346/month €-432/month
According to current information, it will enter into force in September 2024.
At present, the child increment is paid for children under the age of 18. The child increment is EUR 7.01 per day for one child, EUR 10.29 for two children and a total of EUR 13.29 for three or more children.
In 2023, an additional increase was made to the child increment of the unemployment security, which will be removed at the beginning of 2024. Due to the removal of the increment the child increment will decrease by 25–48 euros per month, depending on the number of children.
Parliament is also considering two amendments to the law that affect child increments. The government has proposed freezing index increases for the years 2024–2027. As a result, the usual index increase for the child increment would not be made at the turn of the year.
According to the Government Programme, no child increment would be paid at all in the future.
The law change has been approved, will enter into force on April 1, 2024.
Effect per month:
Child increment according to the number of children in 2023 The increase is omitted, impact/monthOne child: 7,01 €/day -150.71 €/month Two children: 10,29 €/day -221.23 €/month Three children: 13,26 €/day -285.09 €/month
Currently, 26 calendar weeks,(half a year) of employment entitles you to earnings-related daily allowance, whereas in the Government Programme, the requirement would be 12 months.
The law change has been approved, will enter into force in September 2024.
Currently, the employment condition accrues on the basis of working hours. According to the Government Programme, the employment condition would in future accrue on the basis of wages paid. However, the details of this are not yet clear, so we cannot currently say what the impact of the change will be on our members.
The law change has been approved, will enter into force in September 2024.
Examples of how monetary valuation affects employment condition
How are employment condition weeks that are completed before September 1, 2024 calculated for the 12-month employment condition?
Conversion rule:
1–2 employment condition weeks by September 1, 2024 = ½ euro-based employment condition month
3–4 employment condition weeks by September 1, 2024 = 1 euro-based employment condition month
Example 1:
An applicant has accumulated 22 working-time-based employment condition weeks by September 1, 2024. Since the employment condition has not been fulfilled and the applicant is not yet entitled to daily allowance, their case is processed in accordance with regulations of the 12-month euro-based employment condition.
Under the euro-based employment condition, 22 employment condition weeks completed by September 1, 2024 equal 5.5 employment condition months.
Fulfilling the 12-month employment condition would require the applicant to accumulate another 6.5 euro-based employment condition months. In practice, this means that starting September 2, 2024, they must receive at least 930 euros in work-based salary, excluding any holiday compensation or a holiday bonus, during a period of 6 calendar months (6 employment condition months) and at least 465 euros during one calendar month (½ employment condition month).
Example 2:
If an applicant has accumulated 18 employment condition weeks during the period of Jan 1 - Sept 1, 2024, it equals 18 / 4 = 4.5 employment condition months. The employment condition is fulfilled if the applicant also receives at least 930 euros in work-based salary during 7 calendar months (excluding any holiday compensation or a holiday bonus) and at least 465 euros during one calendar month after September 2, 2024.
Unemployment benefits are only paid after the qualifying period, which is currently five working days. In future, the qualifying period would be increased to seven days.
The law change has been approved, will enter into force on January 1, 2024.
Effect per month: approx. € 150 (2 x the amount of your daily allowance)
In future, 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.
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.
The law change has been approved, will enter into force on January 1, 2024.
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.
The protected part of earnings is the amount of money you can earn without affecting the amount of earnings-related daily allowance. At present, the protected part in part-time work is a maximum of EUR 300 per month, which means that this is how much you can earn without it reducing the amount of your earnings-related daily allowance.
The law change has been approved, will enter into force on January 1, 2024.
Effect per month:
2023 calculations
For an applicant with a monthly salary of €2,500, the full daily allowance is €70.48/day
Monthly salary € 2,500/month Salary for part-time work € 1,400/month Protected part of earnings € 300/month Remaining salary € 1,100/month 50% of the remaining salary affects the daily allowance € 550/month The remaining 50% is divided by the number of days worked during the application period 21.5 days/month Sum deducted from applicant’s full daily allowance € 25.58/day
Full earnings-related allowance/day Adjusted earnings-related allowance/day Adjusted earnings-related allowance /month € 70.48/day € 44.90/day € 965.35/month
2024 calculations
For an applicant with a monthly salary of €2,500, the full daily allowance is €70.48/day
Monthly salary € 2,500/month Salary for part-time work € 1,400/month Protected part of earnings Remaining salary 50% of the remaining salary affects the daily allowance € 700/month The remaining 50% is divided by the number of days worked during the application period Sum deducted from applicant’s full daily allowance € 32.55/day
Full earnings-related allowance/day Adjusted earnings-related allowance/day Adjusted earnings-related allowance /month € 70.48/day € 37.93/day € 815.49/month
Decrease in adjusted daily allowance following the law reform € -149.86/month
Under the Government Programme, age-related exceptions will be abolished. Age affects many aspects of unemployment security:
The government has not given details of which age-related exemptions might be affected by the changes.
According to current information, it will enter into force in September 2024.
According to the Government Programme, the Government will examine a model for transitioning to universal earnings-related security.by the mid-term policy review. Universal earnings-related security means a model where all wage earners would be entitled to earnings-related daily allowance regardless of whether they belong to an unemployment fund.
We do not yet have details on this, but we will follow how this progresses.
Job alternation leave has enabled employees to take a break from work and, correspondingly, offered unemployed jobseekers an employment opportunity for the duration of the job alternation leave. This system would now be abolished altogether.
According to the government's draft proposal published on December 12, 2023, the abolition would take effect in such a way that the job alternation leave could still start on July 31, 2024. The job alternation leave that started in July could continue for the maximum number of 180 calendar days.
For the job alternation leave to be considered to have started by 31 July 2024, the job alternation agreement should be submitted to the TE Office and the start date of the employment contract replacing the alternation leave should be no later than 31 July 2024.
The purpose of the government's proposal on the abolishment of the Act on Job Alternation Leave is to be presented to the parliament in February.
The job alternation leave system is scheduled to be abolished on August 1, 2024.
In the current situation, the employment condition accrue from pay subsidy work 75 percent of the working condition, i.e. at least 35 calendar weeks of work have been needed to fulfill the 26 calendar week working condition. This would now go away and the working condition would not accumulate at all. A legislative proposal on the matter has not yet been issued.
According to current information, it will enter into force in September 2024.
Not all of the stated policies will necessarily be implemented as entered in the Government Programme. The amendments will enter into force in 2024 at the earliest, and we will provide details about them as soon as we receive more information.
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