Government proposes changes to Kela unemployment benefits
The Government is proposing a number of changes to the labour market subsidies and basic unemployment allowances paid by Kela. The proposed changes would affect the benefit rates and qualifying criteria. Parliament is expected to approve the changes before the end of 2023, and they would come into effect during 2024. This press release provides summarised information on all the changes that are currently being prepared and that concern the unemployment benefits paid by Kela.
The Government is proposing changes to the labour market subsidies and basic unemployment allowances paid by Kela. Some of the changes are planned to take effect at the beginning of 2024 and others would take effect later in 2024.
The Government has also proposed changes to the general housing allowance.
Parliament is expected to approve the legislative changes concerning the unemployment benefits before the end of 2023. Kela will inform the customers about the effects of the changes after this.
Later start to entitlement to unemployment benefits
According to the Government proposal, the waiting period for the unemployment benefits would be extended from five days to seven days. The waiting period is intended to be seven days if it starts on 1 January 2024 or later.
In addition, the periodisation of the holiday compensation would be reinstated. Periodisation of the holiday compensation means that if a 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.
The periodisation would concern holiday compensation paid when a full-time job of more than two weeks ends. The holiday compensation is intended to be periodised if it is paid for an employment relationship that ends on 1 January 2024 or later.
The exempt amount on the unemployment benefits to be removed
In the Government proposal, the plan is to remove the exempt amount on the unemployment benefits of 300 euros per month. The exempt amount is the amount of money that a recipient of an unemployment benefit may earn without a reduction in the unemployment benefit.
The change would concern those who receive an adjusted unemployment benefit and application periods for an unemployment benefit that start on 1 April 2024 or later.
When unemployed persons have part-time jobs or incidental work, they receive an adjusted unemployment benefit, which means that the earnings reduce the amount of the unemployment benefit. Each euro earned from part-time work 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 in accordance with the proposal, earnings of 400 euros would reduce the benefit by 200 euros.
Despite the change, working part-time would still make sense financially also henceforth.
Child increases to the unemployment benefits to be removed
According to the Government proposal, the plan is to remove the child increases to the labour market subsidy, the basic unemployment allowance and the commuting and relocation allowance.
The changes would concern unemployed persons who care for a child aged under 18 years. The changes are intended to take effect on 1 April 2024.
The family package that the Government has prepared includes increases to the child benefits as of 1 April 2024.
Fulfilment of the work requirement to be based on the wage amount
According to the Government proposal, the work requirement for wage-earners would henceforth be fulfilled based on the wage income during the calendar month.
Unemployed persons who meet the work requirement for wage-earners or self-employed persons 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.
Currently the work requirement is fulfilled for calendar weeks during which the person has worked at least 18 hours. The plan is that henceforth the work requirement is fulfilled if the wage income during the calendar month amounts to at least 930 euros.
The work requirement could henceforth also be fulfilled for periods of half a month, if the wage income during the calendar month is less than 930 euros but at least 465 euros.
In addition, the work requirement would be extended from the current approximately six months to 12 months. Employment would not have to be continuous to count towards the prior work requirement, but the length of the review period would continue to be 28 months.
The changes to the work requirement would concern all unemployed persons and take effect on 2 September 2024.
Kela will inform about the effects of the changes in its communication channels
During the autumn Kela will publish more information about the changes to the unemployment benefits and their effects in different situations at kela.fi/unemployment and in other channels.
Additional information for customers:
- Ministry of Social Affairs and Health press release on 10 September 2023: Government proposes several amendments to Act on Unemployment Security to increase employment
- HE 73/2023: Government proposal for the amendment of the Unemployment Security Act and certain other Acts of Parliament
- Usein kysyttyä työttömyysturvan lisäpäivien poistosta ja muutosturvasta
- Usein kysyttyjä kysymyksiä työttömyysturvan suojaosan, omavastuuajan ja lapsikorotuksien muutoksista
- Usein kysyttyä työssäoloehdon muutoksista
- All press releases about the changes to the social security benefits are available at www.kela.fi/changes.