New calculation formula for sickness and rehabilitation allowances to be introduced on 1 January 2025 – allowances for the lowest-income recipients will not be affected

Summary:

Parliament has approved the changes proposed by the Government to the formula for calculating sickness and rehabilitation allowances. The changes will go into effect at the beginning of 2025. 

In 2024, sickness and rehabilitation allowances have been calculated according to the following principles: The amount of the sickness allowance has been 70 per cent of a person’s annual income divided by 300, up to an annual income of EUR 35,769. For income above that limit, only 20 per cent of the annual income, divided by 300, has counted towards the allowance.

Under the new formula, the annual income limit for 2025 will be EUR 28,241. Next year, the 70 per cent earnings replacement rate will only apply to income up to that limit. At the same time, the replacement rate for income in excess of the limit will drop from 20 to 15 per cent, which means that for income exceeding the limit, only 15 per cent of the annual income, divided by 300, will count towards the allowance. The annual income limit is adjusted yearly by a wage coefficient.

According to benefits manager Milla Kaitola, the new calculation formula will also affect the partial sickness allowance, which is equal to half of the regular sickness allowance.

More recipients will have their allowance calculated at the lower earnings replacement rate

The changes in the sickness and rehabilitation allowance calculation rules are aimed at producing savings of about EUR 60 million per year. An estimated 196,000 recipients of sickness allowance and 14,000 recipients of rehabilitation allowance per year will be affected by the changes.

In 2023, 306,200 persons received sickness allowance. The average allowance was EUR 60 per day. The Government estimates that the new calculation formula will reduce allowances by an average of EUR 12.51 per day. 

“The new formula will have no impact on the sickness and rehabilitation allowances paid to persons with EUR 28,241 or less in annual income or to those who receive the minimum rate of the allowance. This means that persons with average earnings of about EUR 2,400 per month or more may get a smaller allowance”, Kaitola says.

The change will bring a corresponding reduction in the allowances paid to employer customers. Sickness allowance, rehabilitation allowance and partial sickness allowance can be paid to the employer if the employer pays the employee a salary during a leave of absence. 

The new calculation formula will apply to cases where a person becomes entitled to sickness, partial sickness or rehabilitation allowance on or after 1 January 2025. It will not apply to cases where the entitlement arises before 1 January 2025. 

Clients do not have to do anything now and do not need to contact Kela.

The new calculation formula will have no impact on the amount of the sickness allowance for donors

The sickness allowance available to human cell, tissue or organ donors is not calculated according to the new formula. Instead, the current formula will be used until the end of 2025. The Government plans to adjust the amount of the sickness allowance for donors to correspond to that of the infectious disease allowance starting from the beginning of 2026. 

Learn more

• Government proposes amendments to the Health Insurance Act that would affect the calculation of the sickness allowance and redirect savings (Ministry of Social Affairs and Health press release at stm.fi, in Finnish)
• Changes to social security benefits
• Sickness allowance 
• Rehabilitation allowance
• Partial sickness allowance