The new transition security scheme for people aged 55 and over will be introduced from the beginning of 2023. Transition security includes a transition security allowance, the right to education and an extended re-employment leave. The new transition security replaces the previous system of additional allowance days of unemployment security.
As a member of the KOKO fund, you can apply for transition security allowance from KOKO. Non-members of an unemployment fund can apply for transition security allowance from Kela.
Who is entitled to transition security?
You can apply for transition protection if
- your employment has been terminated on or after 1 January 2023
- your employment was terminated for financial and production-related reasons
- you have reached the age of 55 before your employment was terminated
- you have been employed by the same employer for at least five years.
Transition security allowance
The transition security allowance is a one-off compensation equal to your average one month’s salary. Receiving the allowance does not affect your unemployment security or other benefits, with the exception of social assistance.
The payment of the transition security allowance can be paid during the notice period even if your employment has not yet ended. The allowance is also paid even if you immediately find new employment with another employer. However, note that if you are immediately re-employed by the employer who dismissed you, the transition security allowance may be recovered.
The transition security allowance is paid from the unemployment fund even if your membership in the unemployment fund has started just before the termination of your employment and you have not been a member of the fund for a sufficient period of time to receive earnings-related unemployment allowance.
Applying for transition security
1. Register with the TE Office of the termination of your employment
In order to receive transition security, register with the TE Office as a jobseeker within 60 days of the termination of your employment. The TE Office will assess your eligibility to transition security and notify you of their decision.
The date of termination is the date on which the notice of termination was given. This means that if your notice period is long, you need to register with the TE Office even before your employment ends.
2. Apply for the transition security allowance from KOKO fund
After having received a statement regarding transition security, you can apply for transition security allowance on eService. You can already apply for the transition security allowance during the notice period. Please note that the application must be submitted within 3 months from the end of the employment.
Please send us a revised tax card for benefits. If a tax card for wages is used for the transition security allowance, the additional withholding rate will be applied.
3. Apply for transition security training through the TE Office
You can apply for transition security training through the TE Office. Participation in transition security training is voluntary. The training is provided through the TE Office or the ELY Centre, and it can last up to 6 months.
Transition security and paid re-employment leave
The paid re-employment leave that employees whose employment is terminated for financial and production-related reasons are entitled to is 5 days longer than usual for those covered by the transition security package.
Amount of transition security allowance and taxation
The transition security allowance is equal to approximately one month’s salary. It is based on the salary subject to unemployment insurance paid by the employer terminating the employment and other earned income paid during the 12 calendar months preceding the date of termination. Holiday bonuses and holiday compensation, as well as performance-based bonuses, are also taken into account.
Example
The transition security allowance is taxable income. We recommend that you send your revised tax card applied to KOKO fund well in advance for the payment of the benefit. If your salary tax card is used for the benefit, tax will be withheld at the additional rate.