Changes to Kela unemployment benefits in 2024
Parliament has approved a number of changes to unemployment benefits. Among them are cuts to basic unemployment allowances and labour market subsidies, both of which are paid by Kela. Some of the changes will take effect at the beginning of 2024, others not until later in 2024. This press release summarises all of the changes to Kela unemployment benefits that will be implemented during 2024.
Parliament has approved the Government’s proposed changes to unemployment benefits. They include cuts to the labour market subsidies and basic unemployment allowances paid by Kela. Some of the changes will take effect at the beginning of 2024, others not until later in 2024.
Parliament has also approved cuts to the general housing allowance, which will take effect in 2024.
Entitlement to unemployment benefits will start later
A number of changes that will affect the start of entitlement to unemployment benefits will come into effect on 1 January 2024. They determine how many days a newly unemployed person has to wait before beginning to collect unemployment benefits.
This is known as the waiting period, and will be extended from five days to seven days. The waiting period is seven days if it starts on or after 1 January 2024.
Another new arrangement that will impact unemployment benefits is the periodisation of the end-of-service holiday compensation. Periodisation of the holiday compensation means that if the person who becomes unemployed has days of holiday left when the employment relationship ends, the compensation paid for these days postpones the start of the entitlement to unemployment benefits.
At the beginning of a period of unemployment, the holiday compensation is divided by the unemployed person’s average daily wages at their former job. The result is the number of days by which the start of entitlement to unemployment benefits is moved forward.
The periodisation concerns holiday compensation paid when a full-time job of more than two weeks ends. Periodisation of the holiday compensation applies to contracts of employment ending on or after 1 January 2024.
The data for the image are shown in a table.
Exempt amount removed from unemployment benefits
The 300-euro monthly exempt amount will no longer be applied to unemployment benefits. The exempt amount is the amount of money that a recipient of an unemployment benefit may earn without a reduction unemployment benefits.
The change applies to unemployment benefit claims for any period beginning on or after 1 April 2024. It affects unemployed persons who receive an adjusted unemployment benefit.
When an unemployed person has a part-time job or does incidental work, or is self-employed on a part-time basis, they receive an adjusted unemployment benefit, which means that the benefit is reduced by the earnings. Each euro earned reduces the unemployment benefit by 50 cents.
If an unemployed person currently earns for instance 400 euros during the period of unemployment, the unemployment benefit only decreases by 50 euros due to the exempt amount. After the removal of the exempt amount, earnings of 400 euros will reduce the benefit by 200 euros.
Despite the change, doing part-time work will continue to make sense financially.
The data for the image are shown in a table.
Child increases to unemployment benefits to be discontinued
The child increases that Kela pays as a supplement to labour market subsidies, basic unemployment allowances and commuting and relocation allowances will be abolished.
The changes apply to unemployed persons who care for a child under 18 years of age. They will take effect on 1 April 2024.
A package of family policy measures approved by Parliament includes increases to child benefits, which are scheduled to take effect in 2024.
The data for the image are shown in a table.
Work requirement to be extended and to be based on wage income
The work requirement for employees will be extended from the current approximately six months to 12 months.
In another related change, wages earned during the calendar month will begin to count towards the work requirement. Each calendar month with earnings of at least EUR 930 counts as one month for purposes of meeting the work requirement.
Each calendar month in which earnings are at least EUR 465 but less than EUR 930 counts as half a month towards the work requirement.
Like before, the work requirement does not have to be accrued in a consecutive period of time but over a period of 28 months.
Currently, a person must work at least 18 hours a week in a calendar week for that week to count towards the work requirement based on working time.
Unemployed persons who meet the work requirement for employees are entitled to earnings-related unemployment allowance or basic unemployment allowance. Unemployed persons who are not entitled to basic unemployment allowance may be entitled to labour market subsidy.
The changes to the work requirement apply to all unemployed persons and will take effect on 2 September 2024.
For employees who meet the work requirement by Sunday, 1 September 2024, the work requirement is calculated on the basis of the rules in effect prior to 2 September 2024.
No increases to unemployment benefits in 2024
Between 2024 and 2027, only some of the benefits that are linked to the National Pensions Index will be index adjusted (HE 75/2023).
The labour market subsidies and basic unemployment allowances paid by Kela will not be index adjusted in 2024–2027. The labour market subsidy and the basic unemployment allowance will be unchanged at EUR 37.21 per day in 2024.
The supplementary amount payable with unemployment benefits will also not be increased in 2024. It is EUR 5.29 per day in 2024.
Additional child increases to unemployment benefits discontinued
A time-limited increase of 20 percent was made to the child increase to unemployment benefits for 2023. This additional increase will expire on 31 December 2023.
Rates of the child increases between 1 January and 31 March 2024:
EUR 5.84 per day for one child (previously EUR 7.01 per day)
EUR 8.57 per day in total for two children (previously EUR 10.29 per day)
EUR 11.05 per day in total for three or more children (previously EUR 13.26 per day).
The child increases will be discontinued with effect from 1 April 2024.
Additional information for customers:
Ministry of Social Affairs and Health press release of 12 October 2023: Government proposes several amendments to Act on Unemployment Security to increase employment
HE 73/2023 vp: Hallituksen esitys eduskunnalle laeiksi työttömyysturvalain ja eräiden muiden lakien muuttamisesta
Usein kysyttyjä kysymyksiä työttömyysturvan suojaosan, omavastuuajan ja lapsikorotuksien muutoksista (in Finnish)
Usein kysyttyä työssäoloehdon muutoksista (in Finnish)
All press releases about the changes to social security benefits are available at www.kela.fi/changes.