Frontpage / Changes to the unemployment security system 2024
Due to the Finnish government program, unemployment benefits will change significantly during 2024. We have compiled the key information about the changes on this page.
Last updated on 26 June 2024.
Legal changes 2024 in the order of entry into force
Changes that will take effect on 1 January 2024:
Waiting period will be extended to 7 days
The plan is to extend the unemployment security waiting period by two days. The waiting period refers to a period set at the beginning of unemployment or lay-off during which earnings-related unemployment allowance is not paid. Before, the waiting period was 5 days, which equates to 1 week for a completely unemployed person. After the legislative amendment, the waiting period will be 7 days, which corresponds to approximately one and a half weeks.
The waiting period will be seven days for all waiting periods starting on or after 1 January 2024.
Receiving holiday compensation may postpone the start of benefit eligibility
The phasing of holiday compensation will be restored. This means that, if a person has time off that has not been taken at the end of the employment relationship, the compensation paid for this will postpone the start of eligibility for earnings-related unemployment allowance. Holiday compensation equal to 1 month’s pay postpones the start of entitlement to earnings-related unemployment allowance by approximately 1 month. Currently, holiday compensation does not affect the commencement of entitlement to earnings-related unemployment allowance. The phasing of holiday compensation and the waiting period do not elapse at the same time. The waiting period begins after the phasing of any holiday compensation.
The periodised holiday compensation rule will apply to all employment relationships that end on or after 1 January 2024.
National pension index will be frozen
This means that benefits will no longer increase along with rising consumer prices. The magnitude of the cuts will depend on how much prices will rise. In 2022, the national pension index rose by a total of 8% due to the increase in consumer prices. Regarding earnings-related daily allowance, the impact of the index freeze also partly depends on earnings, as the index adjustment affects the formula for calculating the daily allowance in various ways.
The change will affect benefits as of 1 January 2024.
Changes that will take effect on 1 April 2024:
Child increases will be abolished
Child increases will be removed from unemployment security. Before, child increases ranged from EUR 150 to EUR 285 per month.
Child increases will no longer be payable for any days of unemployment on or after 1 April 2024.
The EUR 300 standard entitlement of earned income will be withdrawn
The EUR 300 standard entitlement of earned income will be removed as of 1 April 2024. Before, recipients of unemployment benefits were able to earn EUR 300 without their wages or business income affecting their daily allowance. Each euro of earned income above the EUR 300 exempt amount reduces the unemployment benefit by 50 cents. In other words, the amendment will cut the benefit for those receiving earned income by a maximum of EUR 150 per month.
The standard entitlement will no longer be taken into account in the calculation of earnings-related unemployment daily allowances claimed on or after 1 April 2024.
Changes that are currently expected to take effect on 1 August 2024:
Job alternation leave system will be abolished
The job alternation leave system will be terminated. Job alternation leave means that a person takes leave from work for a maximum of 6 months and the employer hires an unemployed person for the same period. During job alternation leave, job alternation compensation is paid instead of wages.
The job alternation leave system will end on August 1, 2024.
Changes that are currently expected to take effect in September 2024:
The earnings-related unemployment allowance level will be staggered
The earnings-related unemployment security will be staggered. This means that the unemployment security will decrease
- to 80% of the original level after eight weeks of unemployment (approximately 2 months), and
- to 75% of the original level after 34 weeks of unemployment (approximately 8 months).
Currently, unemployment security is not staggered and the level remains unchanged throughout the maximum duration of the earnings-related unemployment allowance.
According to the draft Government proposal, earnings-related unemployment allowance would be staggered if the employment condition required for the payment of earnings-related unemployment allowance can include work in accordance with the new euro-based model for the period of September 2024 or later.
Subsidised work does not accrue the right to an earnings-related unemployment allowance
The plan is to stop subsidised work from counting towards the employment condition that must be fulfilled to qualify for an earnings-related unemployment allowance. Under the current system, subsidised work counts towards satisfying the employment condition at a rate of 75%.
According to the draft Government proposal, pay-subsidised work would no longer accrue the employment condition if the work started on or after 2 September 2024.
Pay-subsidy work could, however, accrue the employment condition when pay subsidy has been paid for hiring a person with reduced work ability. In such a situation, the employment condition would accrue after the pay subsidy has been paid for 10 months. Starting from 11 months, the employment condition would accrue for 75% of working hours. Any rounding would be made down to the nearest full month of the employment condition.
When pay-subsidised work is not taken into account in the employment condition, it would in future extend the period during which work can be taken into account in the employment condition (so-called review period).
Age-related exceptions will be abolished
Age-related exceptions will be abolished. Age affects many aspects of unemployment security:
- In certain situations, persons aged 55 or over can gain access to education and financial compensation, for example. This an example of the transition security model that was created during the last government as a replacement for the additional allowance days, i.e. the unemployment path to retirement.
- People aged 57 or over may be covered by an obligation to employ that guarantees them a job.
- In certain situations, persons aged 58 or over may receive earnings-related benefits for 500 days instead of 400 days.
- The level of daily allowance for persons aged 58 or over is protected. The protection is relevant when a person is in a low-paid job and becomes unemployed again, with the level of daily unemployment allowance being recalculated.
- Persons aged 60 or over can meet the prior work requirement for earnings-related unemployment allowance in an employment promoting service.
According to the draft Government proposal, protection for the level of the earnings-related unemployment allowance would not be applied if the employment condition required for the payment of earnings-related unemployment allowance can include work in accordance with the new euro-based model for the period of September 2024 or later.
The employment obligation will cease if the obligation begins on or after 2 September 2024.
To qualify for earnings-related employment, you must work for 1 year
The length of the prior work requirement for earnings-related unemployment security will be doubled. Currently, earnings-related unemployment allowance can be obtained after 6 months of work. In the future, a year’s work would be required.
A longer employment condition will be applied, if the employment condition required for the payment of earnings-related unemployment allowance can include work in accordance with the new euro-based model for the period of September 2024 or later.
However, a longer employment condition does not apply if the employment condition has been fulfilled in work or services arranged on the basis of an employment obligation and the work or service has started no later than 1 September 2024.
Example
You have worked a total of 26 calendar weeks by 1 September 2024. Your employment relationship lasts until the end of September, and you will become unemployed starting 1 October 2024.
The calendar weeks you worked up to 1 September 2024 will be converted to the new employment condition months. This means you have collected 6.5 employment condition months under the new 12-month employment condition (24 weeks / 4 weeks = 6 months, 2 weeks = 0.5 months).
If you are paid €930 or more in September, you will collect a full employment condition month. This would mean that, when you become unemployed, you have only collected 7.5 unemployment condition months and are not entitled to daily allowance.
Employment condition for earnings-related unemployment allowances will be based on income
The employment condition for unemployment security will be based on euros, i.e. changed to be income-based. This means that entitlement to daily allowance would not depend on the number of hours worked before unemployment. The amount of work carried out before unemployment would be assessed solely on the basis of wages.
Currently, in order to receive earnings-related unemployment allowance, a person must have worked 18 hours a week for about 6 months. According to the amendment, the weekly hourly limit would be abolished. Instead, the person would be required to have earned a certain minimum amount per month.
According to the government proposal, the income-based employment condition would be applied to wages earned and paid on or after 2 September 2024. Parliament has approved the amendment.
Changes that will take effect on January 1 2025
The increase in unemployment benefits will be abolished on January 1, 2025.
Earnings-related daily allowance can be paid with an increase when a person participates in a service that promotes employment. The Finnish government decided during the framework session that the increase will be abolished on January 1, 2025.
Details of the implementation will be announced when more information about the change is available.
Table to visualise the changes
Present |
After the change |
Entry into force / would be applied |
At the beginning of unemployment, there is a 5-day waiting period during which no unemployment benefit is paid. |
At the beginning of unemployment, there is a 7-day waiting period during which no unemployment benefit is paid. |
1 January 2024 (approved) |
Holiday compensation for untaken holidays does not affect unemployment security. |
Holiday compensation for untaken holidays postpones the start of entitlement to earnings-related unemployment allowance. |
1 January 2024 (approved) |
The unemployment security rises at the turn of the year as a result of the national pension index, which is tied to consumer prices. |
The amount of unemployment security will not change even if prices rise. |
1 January 2024 (approved) |
For children under the age of 18, a child supplement of €150–€285 per month is paid. |
No child supplements are paid. |
1 April 2024 (approved) |
If you are unemployed, you can earn €300 without changing the amount of unemployment benefit. Each euro of earned income exceeding €300 reduces the unemployment benefit by 50 cents. |
Each euro of earned income reduces the unemployment benefit by 50 cents. |
1 April 2024 (approved) |
You can take a 6-month job alternation leave from work. |
The job alternation leave system will be abolished. |
1 August 2024
(approved) |
The amount of unemployment security is the same throughout the maximum duration. |
Unemployment security will decrease
- to 80% of the original level after eight weeks of unemployment (approximately 2 months), and
- to 75% of the original level after 34 weeks of unemployment (approximately 8 months).
|
2 September 2024 (approved) |
Subsidised work accrues the right to earnings-related unemployment allowance at a rate of 75%. (Every fourth working week is ignored.) |
Subsidised work does not accrue the right to an earnings-related unemployment allowance. |
2 September 2024 (approved) |
There are various exceptions based on age which affect the duration and amount of daily allowance. |
Age-related exceptions will be abolished. (Note: details of the changes will be available later.) |
2 September 2024 (approved) |
Earnings-related benefits can be obtained after working while being a member of the fund for 6 months. |
Earnings-related benefits can be obtained after working while being a member of the fund for 1 year. |
2 September 2024 (approved) |
You can receive earnings-related unemployment allowance if you have worked 18 hours a week (for 6 months). |
Earnings-related unemployment allowance can be obtained when you have earned a minimum amount of euros per month (for 1 year). |
2 September 2024 (approved) |
Earnings-related daily allowance can be paid with an increase when a person participates in a service that promotes employment. |
The increase will no longer be paid. |
From January 1, 2025 |
Other changes
Unemployment funds to assist in finding employment
It has been agreed in the Government Programme that unemployment funds can provide employment services to their customers. At present, the funds cannot do anything to promote or support employment.
Combined unemployment insurance and universal earnings-related security will be investigated
It has been agreed in the Government Programme that, by the mid-term policy review, the Government will prepare a model for combined unemployment insurance in order to improve the social security of persons who simultaneously work as entrepreneurs and employees. In addition, it examines the universal earnings-related model and the linear model of unemployment security duration in relation to the prior work requirement.
Further information
Legislative reform project: STM048:00/2023 (in Finnish)
Government proposal (in Finnish)
The legislative reform project includes an extension on the employment condition, removal of the standard entitlement, extension on the waiting period, and the restoration of the phasing of holiday compensation.
Legislative reform project: STM063:00/2023 (in Finnish)
The legislative reform project includes the staggering of the earnings-related allowance, removal of the age-related exceptions, and an amendment that would prevent the employment condition to be accrued from subsidised work.
Legislative reform project: STM049:00/2023 (in Finnish)
The legislative reform project includes the freezing of indices.
Page texts: The Federation of Unemployment Funds in Finland (TYJ)