New terms for earnings-related unemployment benefit

Front page ❯ New terms for earnings-related unemployment benefit

The eligibility criteria for unemployment benefits will change on September 2, 2024. The major change concerns the required work history to qualify for unemployment benefits. Currently, one can receive earnings-related benefits after six months of work. Starting from September, one year of employment will be required. During the employment period, membership in an unemployment fund is mandatory.

Employment requirement until September 1, 2024: 26 calendar weeks (approximately six months)

Employment requirement starting from September 2, 2024: 12 calendar months (1 year)

At the same time, the calculation of work will be done differently. Currently, entitlement to daily allowance is based on calendar weeks during which a person has worked at least 18 hours. From September onwards, entitlement to daily allowance will no longer depend on the number of hours worked before unemployment. Instead, the adequacy of prior work will be assessed solely based on earnings. By earning at least 930 euros per calendar month, one can fulfill the employment requirement for one month. By earning at least 465 euros, one can fulfill the employment requirement for half a month. Therefore, entitlement to earnings-related benefits can arise from, for example, 10 full months and 4 half months of employment.

After September, it is essential for the accumulation of daily allowance entitlement when the salary is paid. The earning period (the period when the work corresponding to the salary is performed) is relevant only when salaries or bonuses are paid over a long period or if payment is delayed due to the employer. For example, if you do freelance work for different employers in October and November, and receive payment for all of these in December, the daily allowance entitlement accrues only for December. However, bonuses earned over the whole year are distributed to affect the entire year.

The work does not need to be continuous. Payment months from the previous 2 years and 4 months can be included. If, for instance, you have been studying, ill, in the military, on civilian service, on family leave, on a grant period, or taking care of a child under 3 years old, work months can be counted for a longer period. In the longest scenario, months from 9 years and 4 months ago can be included.

Salary / calendar month * The period accrues towards the earnings-related employment requirement
At least 930 € a month
465 € – 930 € 1/2 month
Under 465 € No accrual

 

Whom does the change affect?

To qualify for earnings-related benefits, six months of work is sufficient if the last week of work counted towards unemployment benefits ends on September 1, 2024, or earlier. If unemployment begins after this date and you have been employed in September 2024 or later, accruing entitlement to earnings-related benefits requires 12 months of work.

The payment of the salary is not yet relevant when the work was performed before the implementation of the law change. If the work was done in August and the payment is made in September, the 26-week work requirement applies.

From September 2024 onwards, the old and new laws are practically applied concurrently for a year. This is because, at the earliest, by September 2025, a person could have fulfilled the employment requirement according to the new law. Until then, it’s typically a combination. For earnings-related benefits, work weeks until September 1, 2024, are taken into account, and work months after September 2, 2024. Work weeks until September 1, 2024, are converted into months, with four weeks counting as one month. Any remaining weeks contribute to forming a month, with three weeks forming a full month and one or two weeks forming a half month accruing entitlement to earnings-related benefits.

Working weeks until September 2, 2024 Months accruing entitlement to earnings-related benefits
1 weeks 0,5 month
2 weeks 0,5 month
3 weeks 1 month
4 weeks 1 month
10 weeks 8 weeks/4 = 2 months, 2 weeks = 0,5 month 2,5 months
15 weeks 12 weeks/4 = 3 months, 3 months = 1 months 4 months
20 weeks 20 weeks/4 = 5 months 5 months
30 weeks 28 weeks/4 = 7 months, 2 weeks = 0,5 months 7,5 months
40 weeks 40 weeks/4 = 10 months 10 months

Exception: If entitlement to earnings-related benefits has accrued based on so-called employment obligation work or service (työllistämisvelvoite), and the work or service started no later than September 1, 2024, earnings-related benefits can be paid based on 26 weeks of work.

Calculating the Amount of Daily Allowance

The daily allowance amount is calculated based on the result of those work weeks and work months that accrue entitlement to earnings-related benefits. The salary is considered gross, i.e., before tax deductions.

Holiday pay and compensation are not included in the salary.

The monthly salary is converted into a daily wage by dividing the sum by 21.5. The divisor remains 21.5 even when dealing with a half-month of employment.

The salary used as the basis for the daily allowance does not exactly match the gross salary you receive in reality, as it undergoes a percentage deduction equivalent to the employee’s pension and unemployment insurance contributions as well as the sickness insurance daily allowance contribution. In 2024, the deduction is 3.76%. The daily allowance calculator takes this deduction into account, so you can enter your actual monthly salary into it.

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