GUIDELINES

Tax withholding from benefits paid by the unemployment fund

Earnings-related allowance and job alternation compensation are taxable income. Taxes are generally withheld by the payer according to withholding information received directly from the tax authorities.
 
The applicable withholding rate is the basic rate for wages up to the daily income limit which is marked on the tax card. If the allowance exceeds the income limit, taxes for the sum in excess will be withheld according to the additional rate.
 
According to instructions issued by the tax authorities, taxes on earnings-related allowance are withheld at a rate which is two percentage points higher than the basic and additional rates. However, the withholding rate shall be at least 20 per cent.
 
 In the event that earnings-related allowance is paid with the increased earnings-related component or the earnings-related component for transition assistance, taxes are withheld at a rate which is four percentage points higher than the basic and additional rates.
 
Taxes on job alternation compensation are withheld at a rate which is three percentage points lower than the wage withholding rates.
 
If you have a tiered tax card, no increases will be made to the withholding rate; taxes will be withheld at a minimum rate of 20 per cent.
 
Taxes are always withheld in accordance with the valid tax card. If you wish to change your withholding rate during the year, submit the new tax card to the unemployment fund in original. The new withholding rate will be used from the payment period following the receipt of the new tax card.

Benefit	Change to withholding rate for wages	Minimum
earnings-related allowance	+ 2 percentage units	20%
increased benefits: increased earnings-related component and earnings-related component for transition assistance	+ 4 percentage units	20%
job alternation compensation	– 3 percentage units	-

How to appeal against a decision

Unemployment funds always issue a written decision on the claimant's application.
 
 If the claimant is dissatisfied with the decision, he or she can appeal the decision to the Unemployment Security Appeals Board in writing in accordance with the instructions for appeal attached to the decision. The appeal must be submitted within 30 days of receiving notice of the decision.
 
 Appeals concerning daily allowance paid by a fund should be submitted to the relevant unemployment fund, which will forward it to the Unemployment Security Appeals Board.
 
 The decision of the Unemployment Security Appeals Board may be appealed to the Insurance Court.
 
 Appeals regarding decisions of the Unemployment Security Appeals Board should b e submitted to the relevant unemployment fund, which will forward it to the Insurance Court.
 
Wage security

The wage security system is designed to safeguard the employee's employment-related receivables in the event of the employer's bankruptcy or insolvency. Application for wage security is through an Employment and Economic Development Office.

The application forms for wage security are available from the Employment and Economic Development Offices. Applications are accepted by Employment and Economic Development Offices and the employment departments of Employment and Economic Development Centres. Applications for wage security must be made within three months of the date when the receivables become due.

If the processing of the wage security application has not been completed when applying for unemployment allowance, the unemployment fund determines the amount of unemployment allowance payable to the claimant on the basis of wages paid. You must in any event notify the fund of your application for wage security. After receiving a decision on wage security, you should send a copy of the decision to the unemployment fund so that the fund can correct the amount of unemployment allowance.

Further information: Employment and Economic Development Offices and the employment departments of Employment and Economic Development Centres.

Payment of unemployment benefit to a municipal body

Unemployment benefits may be paid to a municipal body (generally social services) either in part or in full. The benefit is payable upon request by the municipal body and for pressing reasons until further notice or for a fixed term for the maintenance of the beneficiary, his or her family and the children under his or her care.

Recovery proceedings

If a beneficiary of unemployment benefit has outstanding debts in recovery, the unemployment fund is notified by the execution office. The amount informed by the execution office is distrained from the unemployment benefit, excluding the protected portion. As a rule, one third of pay, pension, unemployment benefit and maternity allowance may be distrained.

A protected portion is always secured for the subsistence of the debtor and his or her family. From the beginning of 2010 the protected portion is EUR 20.82 per day for the debtor and EUR 7.48 per day for persons under the debtor's maintenance (e.g. children).

Misuse of unemployment security

The payment of unemployment security is intended to secure the subsistence of the unemployed job seeker and to compensate or alleviate the financial loss resulting from unemployment. Failure by the claimant to notify any income received from employment, social benefits, entrepreneurship or other relevant details is considered a misuse of unemployment benefits.

Unemployment funds report all wilful misuse to the police, which is why it is important to fill in the application form carefully and to remember to notify the fund of any changes in your unemployment circumstances.

Unemployed job seekers are required to exercise due care and have the duty to personally find out any restrictions to their eligibility for unemployment benefits.

Recovery of benefits

In the event of unemployment benefit having been paid without cause or in excess, the excess amount is recovered. The unemployment fund will give the member the opportunity to be heard in connection with the recovery procedure.

The claim for recovery may be waived in part or in full in the event that it is deemed reasonable and that the unfounded payment of unemployment benefit was not the result of fraudulent actions by the beneficiary or if the amount of unfounded payment is deemed minor.

The unemployment fund and the member may draw up a payment plant regarding repayment.

Retroactive pension

It may take relatively long to receive a decision on pension. This may lead to a situation where the person is retroactively paid pension for a period for which unemployment benefit has already been paid. If a person has received unemployment benefit for a period for which he or she is retroactively granted

• national pension or pension on the basis of an employment or service relationship or business activity,
• change-of-generation or farm closure pension,
• farm closure compensation,
• farm closure support or daily allowance under the Sickness Insurance Act,
• rehabilitation allowance under the Rehabilitation Allowance Act,
• allowance or accident pension under the Employment Accidents Act,
• the unemployment fund (or the Social Insurance Institution of Finland) is entitled to recover the amount of employment benefit paid without cause from the retroactive payment of pension, farm closure compensation,
• farm closure subsidy, daily allowance or accident pension.