Amount of the earnings-related allowance and length of the allowance period
Amount of the earnings-related allowance
The amount of your earnings-related allowance is calculated based on your regular wage during the period that counts towards satisfying the employment requirement. Your income from every calendar week that counts towards the employment requirement is taken into account. Your holiday pay and holiday compensation are deducted from your taxable income. Any compensation that you may receive on the basis of the termination of your employment is not considered to be part of your regular wage and is therefore not taken into account in the calculation of the amount of your earnings-related allowance.
An amount equivalent to your pension contributions, unemployment insurance premiums and daily sickness allowances is also deducted from your pay. The deduction is 4,29% in 2022 (4,34% in 2021).
Basic daily allowance, earnings-related component and child support supplements
The earnings-related allowance is made up of a basic daily allowance, an earnings-related component and child support supplements.
- In 2022, the basic daily allowance is EUR 34,50 per day.
- The earnings-related component is 45% of the difference between the basic daily allowance and your daily wage.
If your monthly wage exceeds a certain threshold, the earnings-related component is 20% for the amount above the threshold. The threshold is EUR 3277,50 in 2022.
You can receive a child support supplement if you have a child under the age of 18 in your care. In 2022, the child support supplement is EUR 5,41 per day for one child, EUR 7,95 per day for two children and EUR 10,25 per day for three or more children. The child support supplement is paid for a maximum of three children.
Your full earnings-related allowance including child support supplements cannot exceed 90% of the daily wage on which your allowance is based. Your earnings-related allowance is always at least equal to the basic daily allowance.
Increased earnings-related allowance
You can be paid a higher earnings-related allowance if you have agreed with the TE Office to participate in a service that promotes employment.
You can receive the earnings-related increment for a maximum period of 200 days.
The earnings-related increment is 55% of the difference between your daily wage and the basic daily allowance. The increment is 25% for any amount above the threshold.
Your daily allowance with the earnings-related increment added on and including child support supplements cannot exceed the daily wage on which your allowance is based.
Review period for the calculation of the amount of the earnings-related allowance
The amount of your earnings-related allowance is calculated taking into account your pay during the period that counts towards satisfying the employment requirement. To satisfy the employment requirement, you must have worked for 26 calendar weeks during a review period of 28 months.
In some circumstances, the review period can be extended by up to seven years. Examples of acceptable reasons for extending the review period include illness, institutional care, full-time study, rehabilitation, military service, alternation leave, birth of a child and care of a child up to the age of 3. You can read more about the review period under Employment requirement
Length of the allowance period
Earnings-related allowances are paid for a maximum period of 300, 400 or 500 days. To qualify for a maximum period of 400 days, you must have worked for at least three years before becoming unemployed. If you reached the age of 58 years before becoming unemployed and have worked for at least five years in the last 20 years, you can receive an earnings-related allowance for a maximum period of 500 days.
|Up to three years of employment in total
||300 days (approximately 14 months)
|More than three years of employment in total
||400 days (approximately 18 months)
|Five years of employment in the last 20 years and you are 58 years old or older
||500 days (approximately 23 months)
Earnings-related allowances are paid for a maximum of five days a week. Only days for which you are paid an allowance use up your maximum period.
If you work part-time, you use up your maximum period more slowly. When you have worked at least 18 hours a week for 26 weeks, you will resatisfy the employment requirement and your maximum period will reset.
If you are still unemployed when your maximum earnings-related allowance period runs out, you can apply for labour market subsidies from the Social Insurance Institution (SII). More information about labour market subsidies is available from the Social Insurance Institution (SII)
When your maximum period is up, you may qualify for so-called extra days of earnings-related allowance until you reach the age of 65 years if
- you were born in 1955 or 1956 and turn 60 before your maximum earnings-related allowance period runs out, or
- you were born between 1957 and 1960 and turn 61 before your maximum earnings-related allowance period runs out, or
- you were born in or after 1961 and turn 62 before your maximum earnings-related allowance period runs out.
You also must have worked for at least five years in the last 20 years.
You do not need to apply for extra days separately. Just submit your earnings-related allowance application to your unemployment fund as normal. We will check whether you are entitled to extra days when we process your application. We will not issue a separate decision on your entitlement to extra days.
The amount of your earnings-related allowance will not be recalculated when you are on extra days.
You can continue to receive an earnings-related allowance based on extra days until you qualify for an old-age pension or until the end of the calendar month in which you reach the age of 65 years.
Changes to the entitlement to extra days
The parties in the Government decided in December 2020 to abolish the system of extra days of unemployment security, also known as the ‘unemployment pathway to retirement’.
The Government explained that the age limit for extra days would be raised by one year for each age group starting with those born in 1963 and that the entitlement to extra days would be removed altogether from those born in or after 1965. The reform would therefore begin to affect eligibility for an earnings-related allowance in 2025, when those born in 1963 reach the current age limit of 62 years for extra days.
It is important to note that this reform of the Unemployment Allowances Act has not yet been enacted.
Early old-age pension
You can switch from extra days to an old-age pension without incurring an early-retirement penalty when you reach the age of 62 years if
- you were born between 1950 and 1957, and
- you are 62 years old or older, and
- you have received at least one extra day of earnings-related or basic daily allowance during the month preceding the start of your pension.
You can ask us for a certificate of the extra days of earnings-related allowance that we have paid to you, which you can submit to your pension provider with your early old-age pension application.