Kela’s role in the reform of employment services, the multisectoral promotion of employment and the Integration Act

Three major reforms will enter into force at the beginning of 2025: a reform of employment services, a reform involving the multisectoral promotion of employment and a comprehensive reform of the Integration Act. Kela has important duties in relation to all these reforms, and consequently, the reforms will also affect our operations and services.

On 1 January 2025, a number of reforms and legislative amendments that apply to Kela will enter into force. These reforms and amendments have a number of points of contact. On this page, you will find key information about the reforms and legislative amendments and the ways in which Kela’s duties will change after the reforms.

Reform of employment services as of 1 January 2025

The reform of employment services (TE services reform 2024) transfers the responsibility for organising employment services from the state to the municipalities. Following the reform, the municipalities' responsibility for funding unemployment benefits will be expanded: in addition to the labour market subsidy, municipalities will also provide funding for the basic unemployment allowance and for the basic amount of the earnings-related unemployment allowance.

Kela’s main responsibilities in relation to employment services will continue to be to provide advice on Kela benefits and services to unemployed persons, pay unemployment benefits and invoice municipalities for unemployment benefits.

How the reform affects Kela’s responsibilities and operations

Kela’s decisions on unemployment benefits are based on labour policy statements. Previously, Kela has received these statements from TE Offices and employees of local government pilots on employment. Following the reform, Kela will receive labour policy statements from municipal employment authorities and the KEHA Centre.

Kela pays unemployment benefits to persons who are not members of unemployment funds or those who have received earnings-related unemployment allowance for the maximum period. Previously, Kela has invoiced municipalities for part of the labour market subsidy when the recipient has received labour market subsidy due to unemployment for 300 days or longer.

As a consequence of the expanded municipal responsibility for funding, Kela will also invoice municipalities for their portion of the funding for basic unemployment allowances and earnings-related unemployment allowances. Kela will begin invoicing municipalities for benefits paid to persons who have received unemployment benefits for more than 100 days. The municipalities’ portion of the funding will gradually increase with prolonged unemployment. Unlike the practice at present, the municipalities' responsibility for funding will extend after the reform to unemployment benefits paid to customers who participate in employment-promoting services.

Multisectoral promotion of employment as of 1 January 2025

At the same time as employment services are transferred to the municipalities, a new Act on multisectoral promotion of employment will enter into force. The new Act replaces the previous Act on Multisectoral Joint Services Promoting Employment.

The Act on multisectoral promotion of employment contains provisions on:

a joint service model for multisectoral support to promote employment
a multisectoral joint service promoting the employment of young people.

Multisectoral support will be organised by the employment authorities, the wellbeing services counties and Kela.

How the new Act affects Kela’s responsibilities and operations

The current multisectoral joint service for employment (TYP service) is aimed at people who have been unemployed for 300 days. Going forward, multisectoral support will be available at any stage of unemployment if there is a clear need for it.

Under the new Act, the providers of the services will be required to coordinate existing services. Multisectoral support requires cooperation between the employment authorities, the wellbeing services counties and Kela, and the cooperation will be set down in an agreement.

Together with its partners, Kela will assess the service needs of unemployed customers who need multisectoral support, plan multisectoral services so that they form coherent entities and assume responsibility for monitoring customers’ employment processes and ensuring they make progress.

Based on an assessment of the customer’s service needs, the employment authority, the wellbeing services county and the unemployed person will prepare a multisectoral employment plan together. Kela will participate in the preparation of the plan if the unemployed person needs rehabilitation arranged by Kela.

Comprehensive reform of the Integration Act as of 1 January 2025

Legislation on integration will be reformed at the beginning of 2025 (KOTO24 reform). The new Integration Act aims to improve the employment rate, employment-supporting skills and language skills of immigrants and to support their integration in society.

After the reform, municipalities will be responsible for assessing whether immigrants outside the workforce need training or integration services and for preparing an integration plan for them. Immigrants in the workforce who become unemployed will be covered by municipal employment services, like other unemployed persons.

Integration requires close cooperation between Kela, municipalities and wellbeing services counties.

What will Kela's role be in the reform of the Integration Act?

Kela benefits and services will continue to form part of integration-promoting services. In practice, this means that we will take immigrants to Finland into consideration in our services and communications. We will also provide other authorities and organisations involved in integration with up-to-date information on Kela benefits and services.

As part of the reform of the Integration Act, we will produce materials that can be used in civic orientation and included in the basic information package for immigrants to Finland.

We will also provide municipalities and wellbeing services counties with information on the benefits of immigrant customers as defined in the Integration Act.

Preparing for the reforms in extensive cooperation

Kela is preparing for the reforms in extensive cooperation with the Ministry of Economic Affairs and Employment, the Ministry of Social Affairs and Health, TE Services, the municipalities, the future employment areas, the wellbeing services counties, the Association of Finnish Local and Regional Authorities, the KEHA Centre and the Centre for Economic Development, Transport and the Environment. Where the reform of integration services is concerned, we are also working with the Finnish Immigration Service, the Digital and Population Data Services Agency and various NGOs.

In addition, we are widely involved in regional study groups under the leadership of the employment areas. Regional cooperation is particularly important when providing services to adults and young persons who need multisectoral support and to immigrant customers.

Kela is also investigating the potential for sharing premises and providing services at local service points in cooperation with municipalities and wellbeing services counties.

TE services reform 2024 – Ministry of Economic Affairs and Employment (tem.fi)

TE24 and KOTO24 (tyomarkkinatori.fi)

Current information on the TE24 and KOTO24 reforms (in Finnish or Swedish at tyomarkkinatori.fi)