Job alternation leave
Requirements for payment of compensation during job alternation leave
You can take job alternation leave if:
- You have been working full-time (at least 75% of the maximum working hours agreed for the sector)
- Your employer has agreed to you taking job alternation leave
- Your employer will hire a person registered as an unemployed job-seeker with the TE Office for the duration of your leave
- Your employment with the same employer has continued without interruption for at least 13 months before your leave begins, and
- You have been working for at least 20 years before your leave begins.
There is a maximum age limit for job alternation leave. The job alternation leave must be commenced at least three years before the person seeking this leave reaches the minimum age for retirement pension as provided for under the pension law. The upper age limit does not apply to anyone born before 1957.
The employment period of 13 months may include unpaid absence of no more than 30 days. Only absence resulting from sickness or accident may be regarded as time comparable to employment. For example, treatment-free time does not meet the aforementioned requirement.
If you have previously taken job alternation leave, you must work for five years between two leaves.
If you are unsure about meeting the condition regarding employment history, contact your unemployment fund. If you have questions about other requirements for taking job alternation leave, contact any TE Office.
Work history can include other forms of work than paid employment
Before taking job alternation leave you must obtain your pension record (also referred to as the employment record) to confirm that you meet the condition regarding previous employment of 20 years.
In calculating the work history period, periods of maternity, special maternity, paternity and parental allowance, periods of special care, treatment-free time, and time spent in compulsory military or civil service shall be taken into account. Up to a maximum of a quarter of the period of employment (2.5 years) may consist of such time comparable to employment.
Work undertaken between the ages of 18 and 22 also meets the condition regarding previous employment for job alternation leave despite note having accumulated pension contributions for this work.
Work carried out in a country other than Finland, the EU/EEA or Switzerland does not count towards the work history on which job alternation leave is based.
Calculation of earnings-related pensions changed on 1 January 2007. Your employment prior to that date accumulates according to the hours worked, whereas from 1 January 2007 your employment is calculated by comparing your annual income with the limits of the basic pension under the Employees’ Pension Act.
Amount of alternation compensation
The full amount of the job alternation compensation is 70% of the earnings-related allowance you would be entitled to during a period of unemployment. Job alternation compensation does not include any childcare component or the increased component of the earnings-related allowance, and neither are these considered in calculating the amount of compensation. Earned income for the minimum of 52 weeks preceding the job alternation leave is taken into consideration when calculating the earnings-related allowance on which the compensation is based.
Working income during the job alternation leave period
If you work for your employer during your job alternation leave, you cannot claim the job alternation compensation. The job alternation leave will, however, be included in this time.
If you work for another employer, the amount of your compensation is calculated on the basis of the adjusted earnings-based allowance. There is no EUR 300 salary protection component for income as is included in the earnings-related allowance.
You are not entitled to job alternation leave compensation for periods of full-time employment of over two weeks.
Impact of social benefits
Social benefits you receive are deducted from your job alternation leave compensation in the same way as with earnings-related allowance. Check: The amount of daily allowance
As with the earnings-related allowance, the job alternation compensation is taxable, pay-as-you-earn income. The unemployment fund receives its members’ tax information directly from the tax administration. Should you have an amended tax card, you must send the original to your fund.
The impact of fringe benefits and free time compensation
In calculating job alternation compensation, fringe benefits are counted in your pay, unless you keep receiving them during your leave. In such cases, fringe benefits will not affect the amount of your job alternation compensation. Nor will your benefits reduce your income during job alternation leave.
Pay which you have earned during employment immediately before your leave, but which you receive during the leave, does not reduce the amount of your job alternation compensation. For example, holiday bonuses and profit- and performance-based pay received during your job alternation leave do not influence the amount of alternation compensation.
Alternation compensation limits
There is no entitlement to the alternation allowance for the period for which you are remunerated by your employer or for full-time work done for another employer that lasts more than two weeks. Full-time business activity, custodial punishment, and military service prevent the payment of alternation compensation.
Benefits that prevent the payment of earnings-related allowance include several pensions, full or partial sickness allowance, maternal, paternal or parental allowance, and rehabilitation allowance.
Benefits and leave for the purpose of caring for a child for more than 18 days will lead to the termination of your job alternation leave.
Job alternation leave in a nutshell
Job alternation leave means that you do not attend to your work for up to half a year and your employer will hire an unemployed person for this period. You will not receive a salary during this period, but rather job alternation leave compensation.
Such compensation is 70% of the unemployment allowance you would be entitled to during a period of unemployment.
Unemployment funds pay job alternation compensation to their members. Send your job alternation compensation claim to your unemployment fund at the beginning of your leave. Before you take job alternation leave, check with your unemployment fund that you meet the condition of having worked for 20 years. If you are not a member of an unemployment fund, you can claim job alternation compensation from Kela.
To confirm your employment history, request your pension record from the Finnish Centre for Pensions.
Applying for job alternation leave compensation
You must claim job alternation compensation from your unemployment fund after your period of leave has started. The attachments to the claim form must include at least a copy of the job alternation agreement and your salary certificate.
There is no personal liability period for job alternation compensation. Contrary to earnings-related allowance, you do not need to submit follow-up claims for job alternation compensation. You must, however, immediately notify the fund of changes (such as employment) affecting compensation.
Before the free start
You must send the required documents for the job alternation leave to the TE Office before your leave begins. These include alternation agreement, the substitute’s employment contract, and an explanation of your unpaid absences over the preceding 13 months (e.g. salary certificate).
Be sure to apply for earnings-related allowance no later than three months from the first day of the job alternation leave period for which you are applying.