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Description of Benefit 2018: Statistics on sickness allowance
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/english.
Sickness allowances are governed by the Health Insurance Act (1224/2004). All permanent residents of Finland are insured under the Health Insurance Act. Amendments to the Act are described in the appendix to Kela’s Statistical Yearbook.
The sickness allowances comprise sickness allowance and partial sickness allowance. The sickness allowance is paid as compensation for loss of earnings caused by illness lasting less than a full year. A person who has already received sickness allowance for the maximum period of entitlement may, however, after having returned to work, get sickness allowance for an additional 50 working days on the basis of the same illness. The purpose of the partial sickness allowance is to support the continued employment and return to work of persons who are incapacitated for work.
Sickness allowance. Sickness allowance is payable to insured persons aged between 16 and 67 who are unable to perform their regular work or an essentially similar gainful activity because of illness. It is payable after completion of a waiting period consisting of the first day of illness and the following nine working days. Employers are required to provide continued pay during the waiting period.
Self-employed persons are entitled to an allowance under the YEL Act (Self-employed Persons’ Pensions Act) from the day after the onset of illness until the waiting period for sickness allowance is completed. Thus, Kela pays an allowance under the YEL Act for a maximum of nine working days. The allowance under the YEL Act does not apply to self-employed farmers who are paid sickness allowance by their pension provider the Farmers’ Social Insurance Institution (MELA).
The sickness allowance may be determined on the basis of the following:
- taxed earnings
- pre-incapacity earnings, provided that the amount of – earnings has increased significantly
- certain other benefits received in the period preceding the allowance.
The sickness allowance may also be paid at a fixed minimum rate.
Sickness allowance is payable for a maximum of 300 working days. The maximum period of entitlement includes all sickness allowance days paid during the two years preceding the incapacity for work. If an employee or a self-employed person after having received sickness allowance for the maximum period has returned to work and the same illness continues to cause incapacity for work after the person has been at work for an uninterrupted period of over 30 days, Kela may pay sickness allowance for an additional 50 days although the maximum period of entitlement has been reached. Despite the completion of the maximum period of entitlement, sickness allowance may be payable also when a person suffers from a new illness which has not caused incapacity for work during the maximum period of entitlement, and which is not related to an earlier period of incapacity for work.
Partial sickness allowance. Partial sickness allowance can be granted to persons between the ages of 16 and 67 who were in full-time employment at the onset of work incapacity and who despite the incapacity are able to perform part of their full-time duties without endangering their health and recovery. The employee makes an agreement with the employer about a 40% to 60% reduction of the working hours. The working hours of a self-employed person must be reduced equally. In addition to his/her pay, the person in question will get partial sickness allowance.
As is the case with the regular sickness allowance, partial sickness allowance is paid following the completion of a waiting period. There is no waiting period if incapacity entitling to sickness allowance starts or continues immediately after a preceding period of sickness allowance or rehabilitation allowance. Partial sickness allowance can be paid for a maximum of 120 working days. The maximum period includes all days of paid partial sickness allowance during a period of two years.
Special care allowance
The special care allowance is payable for the parents of a sick child under 16 years of age who participate in the treatment or rehabilitation of their child in a hospital or hospital outpatient clinic, in home care which forms a part of hospital or outpatient treatment, or in adaptation training or rehabilitation courses based in law. A criterion of eligibility is that the person caring for the child is prevented from performing their regular work and is not paid a salary for the period in question.
During home care and the care of a child aged 7 years or over in a hospital or an outpatient clinic, the special care allowance is paid only if the illness is severe.
During hospital and outpatient care and during rehabilitation courses, special care allowance payable on the basis of the same illness is, as a rule, paid for a maximum of 60 working days and, in the case of home care, for an additional 60 working days at the maximum. For weighty medical reasons, the maximum time limits may be exceeded.
Amount of the allowance
The sickness allowance is normally linked to taxed earnings. The allowance is calculated on the basis of the recipient’s earnings minus work-related expenses and a deduction for insurance contributions.
The partial sickness allowance is 50% of the preceding sickness allowance or 50% of the sickness allowance that the recipient would have been entitled to at the onset of incapacity for work. The allowance payable under the YEL Act (Self-Employed Persons’ Pensions Act) is determined solely on the basis of earnings insurable under the Act. When determining the sickness allowance payable after the allowance paid under the YEL Act, any other earnings the claimant may have are also taken into account.
When calculating the amount of the allowance, the annual earnings, reduced by the deductions referred to above, are divided by 300. In 2018, the sickness allowance per day was equal to 70% of a person’s earnings divided by 300 up to an annual earned income of €30,394. When the annual earnings exceed the income limit, the allowance is less than 70%. There is no maximum limit to the amount of the allowance. The amounts on which the allowance is calculated are adjusted annually with a wage coefficient determined under the earnings-related pension scheme. In 2018, the increase was 0.14%.
Minimum-rate allowance. In 2018, the minimum allowance was €24.64 per working day. Until the end of 2018, a waiting period of 55 days was applied. If annual earnings were less than the amount determined by law (€1,428 in 2018), no sickness allowance was paid during the first 55 calendar days following the onset of incapacity for work. During that time, and if the recipient’s earned income was €1,428 – €10,151 (as of 2018), the sickness allowance was paid at a rate which was lower than the minimum rate. Persons with no or low income were paid a minimum-rate allowance after 55 calendar days. A minimum-rate allowance could, however, be payable immediately after the waiting period (the first day of illness and the following nine working days), if, at the onset of work incapacity, it was obvious that the incapacity would continue for at least 300 working days.
The sickness allowance can be calculated on the basis of an earlier benefit provided that the recipient was a student, unemployed, or had participated in rehabilitation, and also provided that the allowance, calculated this way, would be higher than if it were calculated on the basis of earned income.
Like the sickness allowance, the amount of the special care allowance is calculated on the basis of the recipient’s annual earned income. In 2018, the special care allowance per day was 70% of a persons earnings divided by 300 up to an annual earned income of €37,167 and, for the part exceeding that amount, 40% up to an annual earned income of €57,183 and, for the part exceeding this amount 25%. There is a specified minimum rate of special care allowance, €24.64 per day (2018).
All sickness allowances are subject to tax.
Other compensations for loss of earnings
Persons who have been ordered to stay away from their place of work by virtue of the Infectious Diseases Act are paid an infectious disease allowance under the national health insurance scheme. This entitlement also extends to the guardians of a child under 16 who has contracted an infectious disease, provided that they are prevented from performing their regular work. The infectious disease allowance is a full compensation for the loss of income suffered, and it is granted for the entire period in which the decision on absence from work is valid, without any maximum time limit.
Organ, tissue or cell donors are paid a donation allowance for the time that they are prevented from performing their regular work.
Health insurance compensations payable to the employer
Payment to the employer. Employers who pay a salary to an employee who is on sick leave are entitled to the part of the sickness allowance that does not exceed the salary. If an employee has more than one employer, the allowance is divided between them on a pro rata basis. Similarly, if the recipient of the allowance is both employed and self-employed, the allowance is prorated between the salary and the income under the YEL or MYEL Act.
Compensations for annual leave costs. Employers who pay their employees a salary or compensation in respect of their annual leave which coincides temporally with a maternity, paternity or parental allowance are entitled to compensation for their costs under the health insurance scheme. No compensation for annual leave costs is available for recipients of parental allowance who are working. The compensation is paid to the employer afterwards when the parental allowance period has ended. The compensation for annual leave costs is determined based on earnings and it equals the amount of holiday pay or the amount of holiday bonus increased with the coefficient 1.26.
Compensations for family leave costs. Employers have since 2017 had the option of claiming a €2,500 lump-sum compensation for a female employee who takes paid maternity leave. This family leave compensation is available to employers who pay full-time employees a salary during at least one month of their maternity leave. An employer that pays an adoptive mother salary during her parental leave is also eligible for family leave compensation. A prerequisite for family leave compensation is that the employee must have at least 3 months’ service before the maternity leave or, in the case of an adoptive mother, before the parental leave, and that the employment must last at least one year.
Coordination with other areas of social security
The sickness allowance usually takes precedence over the disability pension payable under the legislation on earnings-related pensions, but is secondary to compensations available under accident and motor insurance plans. It takes precedence over compensations payable under the Act on the Compensation of Crime Damage. But it is secondary to rehabilitation allowance and to compensations for loss of income paid during rehabilitation.
If an insured has received unemployment allowance under the earnings-related benefit scheme for a period of unemployment, the part of the sickness allowance which is equal to the unemployment allowance is paid to the unemployment fund. Unemployment allowance paid by Kela is also adjusted, i.e. sickness allowance is paid retrospectively in order to compensate for the unemployment benefit.
If the Patient Insurance Centre has paid compensation for patient injury for the same period of work incapacity, the sickness allowance is paid to the Patient Insurance Centre.