A client outside a TE Office in Pasila, Helsinki, in March 2023. The earnings-based unemployment allowance system will change noticeably at the start of next month, with recipients losing 20 per cent of the allowance after an unemployment period of eight weeks and another roughly 7 per cent after an unemployment period of eight months. (Vesa Moilanen – Lehtikuva)
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THE EARNINGS-BASED unemployment allowance will decrease significantly in Finland on 1 September.
Helsingin Sanomat reported earlier this week that starting next month the allowance will decrease gradually as the period of unemployment continues, to about 80 per cent of the initial level at the eight-week mark and to about 75 per cent of the initial level at the eight-month mark.
An allowance of 1,690 euros a month – the average in 2023 – would thereby decrease to 1,350 euros after eight weeks and to 1,270 euros after eight months.
The re-design will be implemented in phases. The gradual reductions will be not be applied to allowances paid for ongoing periods of unemployment, or to allowances paid for new periods of unemployment for which the working weeks used to determine eligibility for the benefit occurred before September.
About two-thirds of the recipients are expected to be affected by the reductions on an annual basis, according to an earlier report by the daily newspaper.
The Finnish government re-designed the allowance to both shorten periods of unemployment and reduce public spending, with its proposal estimating the direct impact on finances at roughly 150 million euros a year. The Ministry of Finance has also projected that the re-design will improve the financial incentive to seek and accept job opportunities such that about 13,000 people will join the ranks of the employed, injecting more than 300 million euros into state coffers.
The re-design also introduces stricter eligibility criteria for the benefit, with the work requirement lengthening from 6 to 12 months.
Aleksi Teivainen – HT
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Source: www.helsinkitimes.fi
