Changes in the accrual of the employee work requirement for wage-subsidised work and participation in employment-promoting services as of 2 September 2024

As of 2 September 2024, participation in employment-promoting services will no longer count towards the work requirement. Periods of wage-subsidised work will count towards the work requirement only in certain cases. At the same time, the earnings-related unemployment allowance will be graduated so that the sum of the allowance decreases as the duration of unemployment grows.

The accrual of the employee work requirement for employment-promoting services and wage-subsidised work will change on 2 September 2024. The change is due to new legislation adopted by Parliament on changes to the employee work requirement.

At the same time, the earnings-related unemployment allowance will be graduated so that the sum of the allowance decreases as the duration of unemployment grows. The changes to the earnings-related unemployment allowance will also enter into force on 2 September 2024.

Participation in employment-promoting services will no longer count towards the work requirement

As of 2 September 2024, participation in employment-promoting services will no longer count towards the work requirement for wage and salary earners.

 However, if the employment-promoting service began on 1 September 2024 or earlier, it will still continue to count towards the work requirement.

As a rule, wage-subsidised work will no longer count towards the work requirement

As a rule, wage-subsidised work will no longer count towards the work requirement for wage and salary earners. Previously, 75 per cent of all wage-subsidised work has counted towards the requirement.

Under the changed legislation, wage-subsidised work will only count towards the work requirement if the work is intended to find employment for a person with reduced work ability or for a long-term unemployed person who is 60 years old or more. Even then, however, wage-subsidised work will only begin to count towards the work requirement after 10 months of work, and only 75 per cent of the work will count towards the requirement.

Nevertheless, the full duration of the wage-subsidised work will still count toward the reference period for the work 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 will thus fulfil this obligation sooner than is now the case. Additionally, wage-subsidised work will count in full towards the qualifying period for the labour market subsidy.

The changes will take effect on 2 September 2024. However, if the wage-subsidised work began on 1 September 2024 or earlier, 75 per cent of the work will continue to count towards the work requirement.

Earnings-related unemployment allowance will be reduced in prolonged unemployment

The earnings-related unemployment allowance will be graduated so that the sum of the allowance decreases as the duration of unemployment grows.

The earnings-related unemployment allowance will be reduced by 20 per cent after it has been paid for 40 days. After 170 days of payment, it is reduced by a further 25 per cent of the original amount.

However, the earnings-related unemployment allowance cannot 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 of the reduction of earnings-related unemployment allowances at different income levels.

The changes to the earnings-related unemployment allowance will take effect on 2 September 2024. Payments that have started before the law entered into force will not be affected.

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