Government proposes changes to wage-subsidised work, earnings-related unemployment allowances and age-related exceptions to unemployment benefit rules

The Government has put out a proposal under which wage-subsidised work would in most cases no longer count towards the work requirement. The proposal would also do away with some age-related exceptions to unemployment benefit rules.

Further, the Government proposes a gradual reduction of the earnings-related unemployment allowance in case of prolonged unemployment.

Parliament is expected to approve these changes in early 2024. All of the changes would take effect on 2 September 2024.

Wage-subsidised work would in most cases no longer count towards the work requirement

Under the Government’s proposal, wage-subsidised work would in most cases no longer count towards the work requirement for employees. Currently, 75% of all wage-subsidised work does count towards the requirement.

However, doing wage-subsidised work would extend the reference period for meeting the work requirement.

Wage-subsidised work aimed at employing a person with reduced work ability, or a person who is long-term unemployed and aged 60 or over, would continue to count towards the work requirement, but only after 10 months of employment. In such cases, 75% of the wage-subsidised work would count towards the requirement.

If TE Services imposes an obligation of employment on a person who has been assigned a mandatory waiting period, those in wage-subsidised work would fulfil this obligation sooner than is now the case. Additionally, wage-subsidised work would count in full towards the qualifying period for the labour market subsidy. Currently, only the part of wage-subsidised work that counts towards the work requirement is recognised for these purposes.

The changes would take effect on 2 September 2024.

However, if the wage-subsidised work began on 1 September 2024 or earlier, 75% of the work would continue to count towards the work requirement.

Age-related exceptions to unemployment benefit rules would be abandoned

The Government proposes to abandon certain age-related exceptions to unemployment benefit rules.

According to the proposal, participation in employment-promoting services would no longer count towards the work requirement.

In addition, the TE Services and the municipalities would no longer be required to provide access to employment opportunities or employment-promoting services to older unemployed persons whose right to unemployment allowance is about to end due to their exhausting their entitlement to the allowance.

Ending the age-specific exceptions to unemployment benefit rules would affect Kela’s clients aged 57 years or older.

The changes would come into effect on 2 September 2024. They would not apply to wage-subsidised work or employment-promoting services that began before the law became effective.

Earnings-related unemployment allowance would be reduced in prolonged unemployment

The Government proposes a graduated reduction of the earnings-related unemployment allowance if unemployment is prolonged.

According to the proposal, the earnings-related unemployment allowance would be reduced by 20% once paid for 40 days. After 170 days of payment, it would be reduced by a further 25% of the original amount.

However, it could not be reduced to a level lower than the basic unemployment allowance.

A press release (in Finnish) by the Federation of Unemployment Funds in Finland contains examples showing how much earnings-related unemployment allowances of varying amounts would be reduced if the Government’s proposal is approved.

The changes to the earnings-related unemployment allowance would take effect on 2 September 2024. Payments that started before the law is scheduled to take effect would not be affected.

Additional information for customers:

 Ministry of Social Affairs and Health press release on 29 February 2024: Hallitus esittää muutoksia ansioturvan porrastamiseen ja työssäoloehdon kertymiseen (in Finnish)

HE 13/2024 vp:Government proposal for the amendment of the Unemployment Security Act and certain other Acts of Parliament (in Finnish)

All press releases about changes to social security benefits are available here.