Parliament approves changes to the Unemployment Security Act

The Parliament of Finland has approved several amendments to the Unemployment Security Act. The changes relate to the amount of the earnings-related allowance and satisfying the employment requirement. The Parliament has also decided to abolish the obligation of local authorities to offer work to unemployed job-seekers. The amendments take effect on 2 September 2024.

Amount of earnings-related allowance to decrease over time

Among the changes is a gradual decrease in the amount of the earnings-related allowance. The amount of the earnings-related allowance will drop initially after 40 days of unemployment and again after 170 days of unemployment. At the first drop it decreases to 80% of the full allowance and at the second drop to 75 % of the full allowance.

The new system will be effective as of 2 September 2024. It will apply to claimants who are subject to a 12-month employment requirement and who satisfy the employment requirement after 2 September 2024.

Anyone whose maximum earnings-related allowance period (300, 400 or 500 days) has already started before the rule change are therefore not affected. The new rules only apply to claimants who are subject to a 12-month employment requirement and who resatisfy the employment requirement after 2 September 2024.

Subsidised work to no longer count towards satisfying the employment requirement

Subsidised work no longer counts towards satisfying the employment requirement. Any contracts for subsidised work that begins before 2 September 2024 will be subject to the old (current) rules. The new rules, under which subsidised work cannot be counted towards the employment requirement, applies to subsidised works that begin on or after 2 September 2024.

The new rules will extend the review period during which the employment requirement must be satisfied – which is normally 28 months – by the full length of the subsidised work.

A part of subsidised work will nevertheless still be counted towards the employment requirement in certain circumstances, if the subsidised worker had limited capability for work or was a long-term unemployed person over 60 years of age. In these cases, the first 10 months of subsidised work will not count towards the employment requirement. If the subsidised work continues for a longer period, however, 75 per cent of the weeks worked after the first 10 months counts towards satisfying the employment requirement.

Employment obligation to be abolished

‘Employment obligation’ refers to a statutory obligation of local authorities to offer, under certain conditions, work to unemployed job-seekers aged 57 years and older who have used up their maximum unemployment allowance period.

The Parliament has decided to abolish this concept altogether. It is no longer possible for an employment obligation to arise on or after 2 September 2024. Any employment obligations that have arisen before 2 September 2024 will not be affected by the rule change.

Only work performed under employment obligations that arise no later than on 1 September 2024 counts towards satisfying the employment requirement. The extension of the employment requirement from 26 weeks to 12 months as of 2 September 2024 does not apply to claimants who satisfy the employment requirement through work performed under an employment obligation.

Enrolment in services that promote employment to no longer count towards the employment requirement

Claimants aged 60 years and older are currently able to build employment history that counts towards satisfying the employment requirement by enrolling in services that promote employment on the basis of their local authority’s employment obligation. Even claimants who have already used up their maximum earnings-related allowance period can claim an earnings-related allowance while participating in these activities.

Enrolment in services that promote employment will no longer count towards satisfying the employment requirement. The new rules are effective from 2 September 2024. The exemption whereby an earnings-related allowance can be claimed while participating in these activities even after the maximum earnings-allowance period has been used up will be abolished at the same time. Claimants who enrol in a service promoting employment no later than on 1 September 2024 will not be affected by the rule change if their participation in the programme is based on an employment obligation.

Age-based guaranteed amount of earnings-related allowance to be abolished

The current rules guarantee, that we will not adjust the wage based on which daily allowance is calculated, for claimants aged 58 years and older. The guarantee means that, unlike other claimants, these claimants’ earnings-related allowance is only recalculated if their earnings increase.

The Parliament has decided to abolish the guarantee as of 2 September 2024. Claimants who satisfy the employment requirement no later than on 1 September 2024 will not be affected by the rule change and will still be guaranteed a minimum earnings-related allowance. In other words, the new rules will only apply to claimants who are subject to a 12-month employment requirement and who resatisfy the employment requirement after 2 September 2024.

More information

More information on the legislative amendments can be found on the website of the Ministry of Social Affairs and Health.

You can read more about the unemployment security reform and the schedule of the proposed legislative changes also in our past press releases: Timetable for legislative reforms.