Description of benefit 2018–2019: Statistics on unemployment protection in Finland

This text has been created for statistical purposes. Up-to-date information on benefits can be found on Kela’s website at www.kela.fi.

Economic security for the unemployed is provided in Finland by means of unemployment benefits: unemployment allowances and labour market subsidies. Unemployment allowance is paid by Kela as a basic unemployment allowance and by unemployment funds in the form of an earnings-related allowance. Labour market subsidy is paid by Kela. For a description of the Kela-provided unemployment benefits, see Statistics on the benefits paid by Kela in respect of unemployment.

The unemployment allowances are based on the Unemployment Security Act (1290/2002), which provides compensation to unemployed residents of Finland for the financial loss due to unemployment. The benefits help job seekers to overcome the economic barriers to employment and improve their prospects of entering or returning to the labour market. Amendments to the Act are described in the appendix to Kela’s Statistical Yearbook.

Earnings-related unemployment allowance

Unemployment funds pay earnings-related unemployment allowance to members who meet the work requirement. A person must have been a member of an unemployment fund for at least the period of time required in order to meet the work requirement.

For wage and salary earners, the work requirement is fulfilled if they have completed 26 calendar weeks of eligible employment during the preceding 28 months. Self-employed persons are expected to have completed at least 15 months of substantial self-employment during the four years preceding unemployment.

The earnings-related unemployment allowance consists of a basic amount equal to the basic unemployment allowance, an earnings-related amount and a child increase. The earnings-related amount is determined by reference to the recipient’s earnings before unemployment. It is equal to 45% of the difference between the daily salary and the basic amount. If the monthly salary is larger than the basic amount multiplied by 95, the earnings-related amount is equal to 20% of the amount exceeding this limit.

During participation in employment promoting services, the earnings-related unemployment allowance can be paid at an increased rate for up to 200 days. The increased earnings-related amount is equal to 55% of the difference between the daily salary and the basic amount, and 25% of the amount exceeding the limit.

The maximum length of time on unemployment allowance varies according to the recipient’s work history and age. It can be 300, 400 or 500 days. Another 500 days of eligibility are available as soon the recipient requalifies. Recipients who remain unemployed after the maximum eligibility period for earnings-related allowance is over can claim labour market subsidy. Elderly unemployed persons can, under certain conditions, be paid earnings-related unemployment allowance past the maximum limit until they reach the age of 65 in the form of so-called additional days.

Members of unemployment funds for self-employed persons are eligible for earnings-related unemployment allowance. The conditions regarding fund membership and the work requirement are different than those that apply to employees. It is a condition of eligibility that the self-employed person has ended self-employment or stopped working in the company.