Effect of earned income

If you are in part-time employment, the amount of earnings-related allowance is adjusted so that the full allowance is reduced by half of the amount of your employment income in excess of the standard entitlement of 300 euro a month.

If you work no more than 80 per cent of the maximum working hours agreed for your sector, you can be paid adjusted earnings-related allowance during part-time employment, full-time employment of less than two weeks, and lay-off periods. If you have been laid off, your working hours will be reviewed by calendar week. If you are in part-time employment or in full-time employment that continues for no more than two weeks, your working hours will be reviewed in periods of four calendar weeks or one month.

If you are self-employed, you can claim adjusted earnings-related allowance, provided that the TE Office considers you to be part-time self-employed or that your self-employment lasts no more than two weeks.

You cannot claim earnings-related allowance during periods of full-time employment that last for more than two weeks. In such cases, you can claim the full earnings-related allowance for the days of unemployment during the payment period, provided that there are no other obstacles to payment.


Amount of adjusted earnings-related allowance

Fifty per cent of your employment income earned during the adjustment period and exceeding the standard entitlement is deducted from your full earnings-related allowance. The adjustment period is either one month or four weeks.

If the adjustment period is one month, the amount of the standard entitlement is 300 euro. If the adjustment period is four weeks, the amount of the standard entitlement is 279 euro.

One-month adjustment period: Full earnings-related allowance less (0.5 x [pay-300] / 21.5) = 1 day’s earnings-related allowance.

Four-week adjustment period: Full earnings-related allowance less (0.5 x [pay-279]/ 20) = 1 day’s earnings-related allowance.

Example:
Your full allowance is 70 euro per day. You work for one week and receive 730 euro in pay. The standard entitlement of 300 euro is deducted from your pay. Half (215 euro) of the remaining pay (430 euro) results in a decrease in your allowance. The 215 euro is divided by the number of working days in the adjustment period (21,5). This amount (10 euro) is then deducted from your earnings-related allowance. That means that you are paid an allowance of 60 euro per day.

You can claim adjusted earnings-related allowance for each day of the adjustment period (five days per calendar week), provided that there are no other obstacles to payment.

Your adjusted allowance and your earned income may total no more than 100 per cent of the pay on which your earnings-related allowance is based.


Maximum payment period and resetting of the condition regarding previous employment

If you claim adjusted allowance, the maximum payment period is calculated differently, in order to make it last longer:

Example:
If you are fully unemployed, your earnings-related allowance is 50 euros per day, and you are paid 200 euros per month in adjusted earnings-related allowance, the number of days deducted from the maximum payment period during one month is four (200/50=4).

Each day of adjusted payment of the increased earnings-related component count towards the maximum payment period, regardless of the amount of benefit paid.

When you claim adjusted allowance, you will meet the condition regarding previous employment as normal.


Claiming earnings-related allowance for a shorter working week

A shorter working week means that you have been laid off for one or more full days per week. In such cases, you can claim the full allowance for each full day you are laid off, provided that during the calendar week you work for no more than 80 per cent of the maximum working hours agreed for your sector.


Which income affects adjustment

Earned income taken into consideration in adjustment:

  • basic pay for work and related bonuses and compensations;
  • holiday pay and holiday bonus, and holiday compensation for the parts that are not deferred;
  • pay for annual leave based on part-time employment;
  • pay for the period of notice insofar as your unemployment benefit claim is not rejected on the basis of the right to receive pay for the period of notice;
  • profit-based pay, e.g. commission, bonus and share of profits;
  • endowment insurance premium paid by the employer;
  • insurance premium on voluntary pension insurance paid by the employer, for its taxable parts;
  • compensation in money saved in and withdrawn from a working hours bank;
  • scholarships and grants paid by the employer for their taxable parts;
  • compensations based on intellectual property rights, such as royalties, charges for consumption, copyright fees and compensations for employee inventions;
  • fees paid to employee representatives and labour protection delegates and fees paid on the basis of cooperation between the employer and the employees, under the Act on cooperation in State agencies and institutions (laki yhteistoiminnasta valtion virastoissa ja laitoksissa 651/1988);
  • paid fees;
  • fees comparable to wages;
  • pay received under pay security, insofar as it would constitute adjustable earnings in the event it were paid by the employer;
  • service charges;
  • earned income from business activities, excluding net income from forestry as calculated in accordance with the Agricultural Income Tax Act (maatilatalouden tuloverolaki 543/1967);
  • earnings-related component of income from dividends;
  • earnings-related component of disguised dividends; and
  • other comparable income.


Income not taken into consideration in adjustment:

  • deferred financial benefits paid by the employer;
  • holiday compensation for employment lasting over two weeks;
  • pay for annual leave based on full-time employment;
  • customary non-taxable fringe or personnel benefits;
  • insurance premium on voluntary pension insurance, for its non-taxable parts;
  • pay for waiting periods;
  • compensation for damages;
  • money gifts;
  • scholarships and grants for their non-taxable parts;
  • interest benefit of employment-based loans;
  • additional benefits paid by sickness funds;
  • income from personnel funds;
  • profit distribution items;
  • pay received under pay security insofar as it would not constitute adjustable earnings in the event it were paid by the employer;
  • employment-based share issue;
  • share option;
  • dividend income for capital income;
  • disguised dividends for capital income;
  • fees paid for holding a position of trust;
  • days when work is prevented by cold weather in the construction and forest industries – allowance for the fully unemployed is paid for such days; and
  • other comparable income.


How to claim

Attach to the claim form your pay information for the period you are claiming for. Your income will be taken into consideration on the basis of your pay period. It is good practice to inform your fund of the key conditions of your employment by attaching a copy of your employment contract to your first claim form.

You must be registered as a job seeker at the TE Office, even when you are in part-time employment or in temporary full-time employment.

Sivu päivitetty viimeksi 02.01.2017

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