Amendments and cuts to unemployment security raise questions on whether fund membership is worthwhile in the future. As the legislative amendments will decrease the earnings-related allowance paid out during unemployment or a lay-off period, bringing it closer to the basic unemployment allowance by Kela, many are pondering whether their fund membership is still worth it.
Better financial security
If you are unemployed or laid off, as a member of an unemployment fund you have better financial security than those who have to rely on unemployment allowance provided by Kela. Only unemployment fund members are entitled to earnings-related allowance which, almost without exception, is higher than basic unemployment allowance.
Earnings-related allowance is not a means-tested benefit. This means that it is solely based on prior income and accumulated employment and is not deducted based on the income or assets of other family members. With no means testing, anyone who fulfils the employment condition and other conditions for earnings-related allowance is entitled to earnings-related allowance without having their financial situation assessed. However, unlike earnings-related allowance, the labour market subsidy by Kela is means-tested.
Earnings-related allowance becomes available only after the employment condition is fulfilled. This is not possible without an unemployment fund membership. Starting September 2nd, 2024, the employment condition is fulfilled when a member has received eligible earned income of 930 euros / month, paid during a minimum of 12 months, in the previous 28 months.
Earnings-related allowance also accrues pension, unlike the basic unemployment allowance or the labour market subsidy. Furthermore, fund membership fees are tax-deductible, making the membership even more beneficial.
Even though the protected part of earnings was removed for part-time workers at the beginning of April, the unemployment security system still provides good motivation for on-call and part-time work. Part-time work will increase income even after the removal of the protected part. In addition, the allowance period runs down slower and the worker accrues their right to a new allowance period
Versatile services and support
Unemployment fund members appreciate the high-quality service their membership provides them. Most members use their fund’s electronic services regularly and also take advantage of phone and chat services.
In June, the Parliament of Finland approved a legislative amendment which provides unemployment funds the opportunity to offer employment services to their members, starting in 2025. These services may include, among others, guidance and counselling services, training, assistance with job searches, CV creation and career planning, as well as providing information on vacancies. The purpose of these new services is to provide more comprehensive and timely support for members in finding employment. It is not mandatory to use the services offered by the funds, and using the services has no effect on the right to unemployment benefits.
Main functions, i.e. paying out benefits and providing advisory services, remain the focal point for funds, but the expanded services bring added value and support to members in a changing job market landscape. For these reasons, membership in an unemployment fund is still recommended as it provides better financial security and more comprehensive services than what non-members have available to them.
