Different offices of unemployment security

Unemployment fund, TE Office, Kela. What are the differences between these offices? In this blog we’ll dive in to the wonderfully exciting world of unemployment offices.

The Finnish social security system may sound rather monstrous as it is, and I’m not even beginning to argue that it is not leaning towards it. However, no one has deliberately designed this monstrosity just to pick on ordinary citizens, but the system has gradually evolved into its current form over the years.

Unemployment security is part of this social security system. If you become unemployed, the society will support you during the unemployment period until you find a job or start retraining. This support is a good thing. No one should be ashamed of drawing the dole, because that’s why it was invented in the first place. And also for that reason the unemployment funds are for: to support you financially when you need it the most.

Just to get a picture of the unemployment security system in its entirety can be quite difficult, because the legislation was not made from scratch but has been shaped, fixed and shaped again piece by piece.This is another important reason why the unemployment fund is for: we want to help in putting some order to the jungle of laws for you.

But where to start, if you don’t know where to start? Let’s start here then. It’s good to know at least where to contact, if you become unemployed. Hence, let’s go through the main differences between the unemployment fund, TE Office and Kela.

Unemployment fund

The main function of the unemployment fund is to grant benefits, that is, earnings-related daily allowance (commonly known as earnings-related allowance or just daily allowance), job alternation compensation and mobility allowance. In the Unemployment Fund of Finnish Industrial Workers – yes, that is our official name, but you may also hear us talking about Industrial Unemployment Fund or Teollisuuskassa in Finnish – the earnings-related allowance is paid the most by far, but, until further notice, we haven’t refused to pay alternation compensation or mobility allowance either. We are quite nice people back here in the unemployment fund.

Currently there are 26 unemployment funds in Finland. 24 of them are for wage-earners and two for entrepreneurs. Members of the Industrial Unemployment Fund are wage-earners and working in various industrial sectors. Joining the unemployment fund is voluntary and by paying the membership fee you are entitled to apply for the three benefits already mentioned above. Obviously there are some criteria you need to meet to apply for the benefit. Fortunately, if you meet the requirements, we won’t be drawing any lottery tickets when paying the benefit to you.

Members of the funds are usually divided by different trade sectors. For instance, a welder can join the Industrial Unemployment Fund but a history teacher can’t. This arrangement has its benefits. For example, in the Industrial Unemployment Fund we are well aware of the details in the collective agreement of the technology industries. It’s quite crucial for your benefit’s sake to know what this collective agreement says.

TE Office

Public Employment and Business Services is most commonly known as TE Office. TE comes from the Finnish words työ that means work and elinkeino which means business, or, one might argue that correct translation would be the means of earning one’s living, but we’ll stick to business this time. What does this TE office do then?

The most important tasks of the TE Office are helping the unemployed find a job and to retrain. It is not always easy to cut through the legislative jargon, when TE Office refers to measures for unemployed jobseekers to improve their working preparedness, services promoting employment, and services that improve employment abilities. I will not even mention the terms in Finnish. Be that as it may, TE Office provides all of these and some more. Just to cut it short, they basically mean some sort of training.

Additionally, TE Office issues labour policy statements, which are required for the unemployment benefits to be paid. Unemployed must seek actively for a job in order to receive the benefit. Hence, if you are applying for earnings-related allowance from the unemployment fund, it is more than recommended to contact the TE Office first and register yourself as an unemployed jobseeker. Remember to do it as soon as possible, that is, on the first day of unemployment at the latest. Otherwise we in the unemployment might be a tad sticky about paying the benefit. Our apologies, but we do not have a say in this.

Kela

The Social Insurance Institution of Finland, or simply Kela, is a dear but more governmental stepsister of the unemployment funds. Kela is an abbreviation from Kansaneläkelaitos, and can be directly translated to people’s pension institution.

The nice thing about Kela is that you do not need to join Kela as it is universal to all Finnish citizens and most others living in Finland permanently as long as you belong to the Finnish social security. If you are not sure whether you are within the Finnish social security system, check it from Kela directly. However, it gets more dull when you figure out that Kela doesn’t grant earnings-related unemployment benefits.

Kela is responsible for most of the social benefits in general. Along with unemployment benefits, Kela provides for the periods that you are for instance sick, retired or if you are studying full-time. That said, Kela is not an unemployment fund, but you can apply for unemployment benefits from Kela as well. The benefits Kela grants are basic unemployment allowance and labour market subsidy. The former is basically earnings-related allowance without the earnings-related part, or, to be more precise, in reverse the earnings-related allowance consists of the amount of basic unemployment allowance added with earnings-related component. For the latter, you can apply for labour market subsidy from Kela, when you are unemployed but do not meet the conditions of earnings-related allowance or basic unemployment allowance.

So, if you’re not a member of an unemployment fund, or if you have just joined and have not met the 26 weeks’ membership and employment condition yet, you need to turn to Kela. Yes, the membership in an unemployment fund costs, but note that the amount of earnings-related allowance is, without exceptions, at least the same as the amount of basic unemployment allowance. In most cases it is significantly better. During the maelstrom of working life, membership in an unemployment fund is more than advisable. Especially if your employment relationships are uncertain or short-term, insuring yourself against unemployment in an unemployment fund pays itself back in no time.

What have we learned?

Although there are many offices and unemployment as well as the red tape may appear frightening, it is always good to remember that the unemployment funds, Kela and TE Office are there to help you during unemployment periods. You can always call or visit us in the Industrial Unemployment Fund and we’ll help you as well as we can. On our behalf I can promise you that there are no bogeymen in our unemployment fund answering your questions.

Antti Hautamäki

Communications Specialist

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