Unemployment security glossary

A C D E F H I J M N P R S T U W #

A

Adjusted daily allowance

Adjusted daily allowance can be paid to a member who has accepted a part-time job, a full-time job lasting a maximum of two weeks (casual work) or who receives income as a part-time entrepreneur or self-employed person.

The amount of adjusted daily allowance is obtained by deducting 50% of the earned income or entrepreneurial income exceeding the standard entitlement earned during the adjustment period (application period) from the full daily allowance for the unemployed. The standard entitlement is EUR 300 for a month and EUR 279 for a 4-week application period.

According to the temporary changes to unemployment security, the standard entitlement for earned incomes is exceptionally EUR 500 for a month and EUR 465 for a 4-week application period. Read more about the temporary changes here.

C

Certificate of additional days

A member can, if desired, choose to retire on an old-age pension already at the age of 62, in which case a certificate of additional days paid is needed for the pension company. The certificate of additional days is requested from the unemployment fund when applying for daily allowance for the month preceding retirement. 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.

Child increase

Earnings-related allowance consists of the basic component, earnings-related component and child increase that, in 2020 is EUR 5.28 for one child, EUR 7.76 in total for two children and EUR 10.00 in total for three or more children per day. Child increase is paid for children under the age of 18 in the member’s care.

Compensation equivalent to the salary for the notice period

Compensation equivalent to the salary for the notice period is not established earned income and is therefore not taken into account when calculating the amount of earnings-related allowance. You are not entitled to daily allowance for the period of the compensation equivalent to the salary for the notice period.

D

Deferral of payment

A financial benefit paid at the end of an employment relationship is deferred as of the last day of the employment relationship and you are not entitled to unemployment benefit for the deferral period. The number of days to be deferred is obtained by dividing the amount paid out by the computational daily pay. Days from Monday to Friday are counted towards the deferral period.

Determination of wages

The wages on which the daily allowance is based are determined from the established income of at least the 26 paid weeks immediately preceding unemployment. The wages on which the daily allowance is based are re-determined once the employment condition of 26 weeks is fulfilled.

If less than one year has elapsed since the start of the previous maximum period and the amount of daily allowance was determined at that time, a new daily allowance is not determined and a waiting period is not set despite the fulfilment of the employment condition.

E

Earnings-related allowance

Earnings-related allowance is a benefit paid out by the unemployment fund to its members who are unemployed and have fulfilled the employment condition. Earnings-related allowance consists of the basic component, earnings-related component and possible child increase.

Employment condition

The employment condition is fulfilled when a member has been in paid employment for at least 26 calendar weeks during the 28 months immediately preceding unemployment. At a weekly level, the 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.

Employment condition review period

The employment condition review period refers to the period within which the employment condition of 26 weeks must be fulfilled. The review period is the 28 months immediately preceding unemployment, but the review period may be extended for an acceptable reason by a maximum of seven years. Acceptable reasons include, for example, illness, full-time study and the birth of a child.

Employment promotion measure

Employment promotion measures are defined in Chapter 10 of the Unemployment Security Act and in the Act on Public Employment and Business Service. Employment promotion measures include labour market training, independent study, training in job seeking, work trials, rehabilitative work and career training. Unemployment benefit is paid for the period of employment promotion measures and the daily allowances paid for the measure period are counted towards the maximum period of daily allowance.

The temporary changes to unemployment security affect partly in employment promotion measures. Read more about it here.

Exemption from the membership fee

An exemption from the payment of membership fees may be granted for a period for which the applicant claims unemployment allowance from Kela or is absent from the labour market for an acceptable reason, such as illness or study. The exemption from the membership fee also applies to period for which the unemployment fund pays out earnings-related allowance or job alternation compensation.

Expense allowance

Expense allowance is paid for the period of employment promotion measures to compensate for travel and upkeep costs. No expense allowance is paid during independent studies.

Expense allowance can also paid for the duration of training organised abroad. Expense allowance is EUR 9 or EUR 18 (EUR 16.82 in NORD training) per day and it is tax-free income.

F

Follow-up application

A follow-up application refers to an application filled in after the first application for earnings-related allowance, and it can be submitted if the employment condition has not been fulfilled again or it has been less than three months since the last application. The follow-up application is filled in for four calendar weeks or a calendar month if the member has income to be adjusted on a monthly basis.

H

Holiday bonus

Holiday bonus refers to the former bonus paid when returning to work after a holiday, which amount to 50% of holiday pay. Holiday bonus is not established earned income and is therefore not taken into account when calculating the amount of daily allowance.

Holiday compensation

Holiday compensation is paid for holidays not taken by the end of an employment relationship that lasted more than two weeks. If all holidays were taken during the employment relationship, no holiday compensation is paid. Holiday compensation is not established earned income and is therefore not taken into account when calculating the amount of daily allowance.

Holiday compensation is not deferred.

Holiday pay

Holiday pay is established earned income paid for the annual leave period, and it is taken into account when calculating the amount of daily allowance. You are not entitled to daily allowance for the annual leave period.

I

Increased earnings-related component

An increased earnings-related allowance can be paid for 200 days for the period of employment promotion measures. The amount of the increased earnings-related component is 58% of the difference between the daily wage and the basic component. If the monthly salary exceeds the basic component amount times 95, the increased earnings-related component is 35% for the part in excess. Increased earnings-related allowance with child increases may not exceed the amount of daily wage on which the allowance is based, however, it is at least equal to the basic unemployment benefit amount with child increases.

Independent study

Independent study is an employment promotion measure as defined in Chapter 10 of the Unemployment Security Act and in the Act on Public Employment and Business Service. Unemployment benefit is paid for the independent study period and the daily allowances paid for the measure period are counted towards the maximum period.

According to the temporary changes to unemployment security, TE Office can make exemptions on how the independent studies of a job seeker have progressed and give extra time, if the studies have been delayed due to coronavirus. Read more about it here.

J

Job alternation compensation

The amount of job alternation compensation paid for the period of job alternation leave is 70% of the amount of earnings-related allowance of the member. Child increases or increased earnings-related components are not taken into account when calculating the job alternation compensation.

M

Maximum working hours

The payment of daily allowance or adjusted daily allowance requires that the work done during the application period (or review period) does not exceed 80% of the maximum working hours of a full-time employee applicable to the sector. If there is no collective agreement in the sector, the regular working hours under the Working Hours Act, 40 hours per week, are considered the maximum working hours.

Maximum payment period

Earnings-related allowance is paid for five days a week during the period of unemployment, for a period of 300–500 days. The maximum period depends on the applicant’s age and length of employment history.

Membership condition

The membership condition is met when a person has been a member of the unemployment fund for at least the preceding 26 weeks.

N

Notice of termination

A notice of termination is issued when an employment relationship of an indefinite duration is terminated. The notice of termination indicates, for example, the reason for the termination and the end date of the employment relationship.

P

Payment notice

We will send a payment notice in connection with each payment of daily allowance. The payment notice indicates, for example, the amount of daily allowance, gross amount paid, withholding tax, payment period, and the number of days accrued in calculators. In eService, you can select how you want the payment notice to be delivered: by text message, electronically or by mail.

Post-protection

A member of a fund for wage earners who has started as a full-time entrepreneur can retain the membership in the fund for wage earners for the so-called post-protection period, i.e. 18 months. A person who has become unemployed during the post-protection period may claim earnings-related allowance of the former amount from the fund for wage earners for the full maximum period of 500 days. The post-protection ceases when the member fulfils the entrepreneur’s employment condition or has been an entrepreneur for more than 18 months. Post-protection also applies to those who transfer from a fund for entrepreneurs to a fund for wage earners under the same conditions. The entrepreneur’s post-protection ends when the member fulfils the wage earner’s employment condition.

R

Resetting the maximum period

The days counted towards the maximum period are reset each time that the member fulfils the employment condition of 26 weeks and the daily allowance is re-determined.

Revised tax card (for benefit)

You can request a revised tax card for benefit from the tax authorities for withholding tax from unemployment benefits. When the revised tax card for benefit is submitted to the fund, the withholding rate is changed in accordance with the revised tax card.

Right to additional days

The right to additional days refers to the right to daily allowance after the maximum period has elapsed.

For a person born in 1950–1954, unemployment allowance can be paid until the end of the calendar month during which the person reaches the age of 65. A right to additional days develops if the member has reached the age of 59 before the maximum period has elapsed and has been in pensionable employment for at least five years during the last 20 years.

For a person born in 1955–1956, daily allowance can be paid up to the age of 65 if the person has reached the age of 60 before the maximum period has elapsed and has been in pensionable employment for at least five years during the last 20 years.

For a person born in 1957-1960, daily allowance can be paid up to the age of 65 if the person has reached the age of 61 before the maximum period has elapsed and has been in pensionable employment for at least five years during the last 20 years.

For a person born in 1961 or after, daily allowance can be paid up to the age of 65 if the person has reached the age of 62 before the maximum period has elapsed and has been in pensionable employment for at least five years during the last 20 years.

S

Salary for the notice period

Salary for the notice period is established earned income that is taken into account when calculating the amount of earnings-related allowance. You are not entitled to daily allowance for the period of the salary for the notice period.

Shortened working day

A temporary lay-off can be implemented by shortening daily working hours, i.e. as shortened working day, in which case the fund will pay out adjusted earnings-related allowance for the calendar weeks during which the member has had shortened working days.

Shortened working week

With a shortened working week, working hours are shortened by one or more working days, in which case you can claim earnings-related allowance for the temporary lay-off days.

Standard entitlement

The earnings-related allowance includes a standard entitlement and income that falls below it does not affect the amount of daily allowance paid out. The standard entitlement is EUR 300 for a month and EUR 279 for a 4-week application period.

According to the temporary changes to unemployment security, standard entitlement will temporarily be set to EUR 500 per month and EUR 465 for a 4-week application period. Read more about it here.

Statement

The TE Office issues a labour policy statement to the fund. This is prepared after the applicant has registered as a jobseeker with the TE Office. The statement indicates, for example, the applicant’s entitlement to daily allowance and the period of employment promotion measures or the suspension period. The labour policy statement is binding on the fund.

Suspension period

The TE Office may impose a suspension period if a daily allowance applicant has, for example, resigned from his/her job without a valid reason or caused the termination of employment, refused training or work, or failed to attend a session to prepare or review a plan for employment or a substitutive plan thereof. The length of the suspension period varies from 15 to 90 days, depending on the grounds on which it was imposed, and the TE Office issues a binding statement regarding the suspension period to the unemployment fund. You are not entitled to daily allowance for the suspension period except for the period of employment promotion measures agreed with the TE Office, in which case daily allowance is paid concurrently with the suspension period.

T

Tax decision

A tax decision is an account of the taxable income or confirmed loss for the tax year. The tax decision indicates the income used as the basis for taxation the deductions made from it. The fund needs a personal tax decision from the last confirmed period of taxation when the member has entrepreneurial income or income from agriculture.

Temporary lay-off certificate

A temporary lay-off certificate is a certificate issued by the employer indicating at least the reason for the temporary lay-off, its start date, duration or estimated duration. The temporary lay-off certificate is submitted to the fund at the start of the temporary lay-off.

U

Unemployment pathway to retirement

The unemployment pathway to retirement refers to the right to additional allowance days after the maximum period has elapsed.

For a person born in 1950–1954, unemployment allowance can be paid until the end of the calendar month during which the person reaches the age of 65. A right to additional days develops if the member has reached the age of 59 before the maximum period has elapsed and has been in pensionable employment for at least five years during the last 20 years.

For a person born in 1955–1956, daily allowance can be paid up to the age of 65 if the person has reached the age of 60 before the maximum period has elapsed and has been in pensionable employment for at least five years during the last 20 years.

For a person born in 1957 or after, daily allowance can be paid up to the age of 65 if the person has reached the age of 61 before the maximum period has elapsed and has been in pensionable employment for at least five years during the last 20 years.

W

Wage subsidy periods

The TE Office may grant an employer a wage subsidy for the salary expenses of an unemployed person if the job seeker cannot find employment in the open labour market or is not placed in training.

75% of employment for which a wage subsidy is paid is counted towards the employment condition. If the wage subsidy is paid on the basis of employment obligation for the elderly, the entire employment period is counted towards the employment condition.

Waiting period

A waiting period, or self-liability period, is set before the payment of daily allowance starts. The waiting period is five unemployed days or the equivalent hours of five full working days, and it must be accrued during eight consecutive calendar weeks. Days from Monday to Friday may be counted towards the waiting period, but not the days for which the member would not be entitled to daily allowance anyway. Job search must be valid with the TE Office also for the waiting period. The waiting period is set when calculating the amount of daily allowance.

If less than one year has elapsed since the previous waiting period and determination of daily allowance, a new waiting period is not set despite the fulfilment of the employment condition. Similarly, the amount of daily allowance is not re-determined.

Working hours bank

The overtime worked by an employee is collected in the working hours bank and can be used as holidays or paid out at a later date. If an employee is paid a monetary compensation from the working hours bank within two months of the start of full-time temporary lay-off or during temporary lay-off, the monetary compensation prevents the payment of daily allowance for the deferral period of the compensation. The deferral of the monetary compensation withdrawn from the working hours bank is conducted in the same way as the deferral of holiday compensation paid for annual leave not taken by the end of an employment relationship. If the temporary lay-off is implemented as shortened working days, the earnings withdrawn from the working hours bank are taken into account as income in the payment of adjusted daily allowance.

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80% protection

When the employment condition of 26 calendar weeks is fulfilled during the maximum period, the recalculated daily allowance is at least 80% of the previous daily allowance. This 80% comparison does not take into account the child increase. There is no 80% protection if the new employment condition of 26 calendar weeks is fulfilled only  after the maximum payment period.