Government proposes to change the calculation formula for sickness and rehabilitation allowances starting 1 January 2025
The Government is proposing a change to the calculation formula for sickness and rehabilitation allowances. This would mean a stricter limit on annual income, which would result in more customers receiving their allowance at the lower earnings replacement rate. Also, customers whose annual income exceeds the limit would receive a smaller allowance than before. The changes would also impact the partial sickness allowance and would go into effect on 1 January 2025.
At present, the sickness allowance for persons with an annual income up to EUR 35,769 is the equivalent 70 per cent of their annual income divided by 300. For income above EUR 35,769, only 20 per cent of the annual income, divided by 300, counts towards the allowance.
The Government proposes to change the calculation formula by lowering the limit on annual income from the current EUR 35,769 to EUR 27,633. This would mean that the 70 per cent earnings replacement rate would only apply to income up to EUR 27,633. Also, customers would receive less allowance for any part of their income above the specified limit, because only 15 per cent (down from 20 per cent) of their annual income, divided by 300, would accrue towards the allowance.
The proposed changes to the calculation formula would also apply to the partial sickness allowance, which uses the same formula for annual income.
The changes would result in a smaller allowance for individual customers and employer customers especially in higher income brackets.
The changes would not apply to persons whose annual income is EUR 27,633 or less.
It has also been proposed that the minimum age limit for sickness and rehabilitation allowance should be raised. Read more about the proposal to raise the age limit.
Changes have also been proposed to the rehabilitation allowance for young persons and the rehabilitation allowance for young persons paid during vocational rehabilitation. Read more about the proposed changes to rehabilitation allowances.
If the proposal is approved by Parliament, the changes will come into effect on 1 January 2025.
Your sickness allowance or partial sickness allowance would be calculated according to the new formula if you are deemed medically unfit for work as of 1 January 2025 or later.
Your rehabilitation allowance would also be calculated according to the new formula if you start rehabilitation on or after 1 January 2025.
We will provide more information on any changes and their timing once Parliament has reviewed the government proposal.
The proposed legislative amendment has not yet been approved by Parliament. If you receive sickness allowance, partial sickness allowance or rehabilitation allowance and your right to the allowance began before 1 January 2025, the proposed changes will not affect the amount of your allowance. You do not have to do anything now, and you do not need to contact Kela.
We will provide more information on any changes and their timing once Parliament has reviewed the government proposal.