How does the index freeze affect earnings-related daily allowance?

Topics

• Income security

It has been reported in the media that the government is cutting unemployment benefits by nearly 80 euros a month. However, this is not a new cut to unemployment benefits. Rather, it is an estimate of how the index freeze for the years 2024–2027 will affect the level of unemployment benefits.

Index adjustment

Normally, the amount of unemployment benefits is adjusted annually based on the index. The purpose of the index adjustment is to ensure that the benefit keeps pace with general price increases. When the index is frozen, the benefit amount does not increase as it normally would.

For earnings-related daily allowances, the index freeze applies to the basic portion of the daily allowance. In practice, this means that earnings-related daily allowances will not be increased in line with price rises during the years 2024–2027. You will therefore not receive less earnings-related daily allowance because the euro amount of the benefit has now been reduced. However, the daily allowance will be lower than it would be without the index freeze.

The index freeze also affects the general social security benefit paid by Kela.

The impact of the index freeze

The estimated monthly impact of approximately 80 euros cited in public discourse reflects the cumulative effect of index freezes between 2024 and 2027. This does not mean, therefore, that a new, separate cut to unemployment benefits is now on the horizon.

The index freeze was one of the legislative changes for 2024. It can be difficult to notice the index freeze, as it is specifically reflected in the fact that the amount of the earnings-related daily allowance does not change.

What do you need to do?

You don’t need to do anything because of the index freeze. Apply for your earnings-related daily allowance as usual on OmaYTK. You can see the amount of your daily allowance in your decision and payment details.