Part-time work is worth it – adjusted earnings-related daily allowance deplete your payment days more slowly

Topics

• Income security
• Part-time job
• Unemployment

If you work part-time, you can apply for adjusted earnings-related daily allowance. Did you know that adjusted earnings-related daily allowance consumes the maximum payment period of earnings-related daily allowance slower? Julia Laine, an expert on unemployment security, explains how adjusted earnings-related daily allowance affects the number of payment days.

What does the maximum payment period mean?

The maximum payment period for earnings-related daily allowance refers to how long you can receive the benefit. The number of payment days is the same regardless of whether you receive the full or adjusted earnings-related daily allowance.

The maximum payment period is:

• 300 days if you have less than 3 years of work history
• 400 days if you have more than 3 years of work history
• 500 days if you have met the working condition after turning 58 and have at least 5 years of work history within the last 20 years

Adjusted earnings-related daily allowance reduces the maximum payment period more slowly

The maximum payment period is reduced for each day for which you receive earnings-related daily allowance. However, adjusted earnings-related daily allowance paid alongside part-time work reduces the maximum payment period more slowly than full earnings-related daily allowance. This is because adjusted earnings-related daily allowance is lower than full earnings-related daily allowance.

When calculating the impact of adjusted earnings-related daily allowance on the maximum payment period, we start by scaling the adjusted earnings-related daily allowance to correspond to the full earnings-related daily allowance you would receive if you were fully unemployed. After that, we calculate the impact on the maximum payment period.

In practice, this means that even though the maximum payment period remains the same, we will pay you earnings-related daily allowance for a longer period when you work part-time. The more you work, the slower the maximum payment period generally runs out.

The number of payment days depends on how much adjusted earnings-related daily allowance you receive

Example:

• Your full earnings-related daily allowance is 60 € per day.
• In April, you receive an adjusted daily allowance of 30 € per day.
• In this case, ½ of a day is deducted from your maximum payment period for each payment day.
• There are 22 business days in April, meaning 22 payment days.
• The adjusted earnings-related daily allowance paid in April therefore uses up 11 payment days of your maximum payment period.

• In May, you receive an adjusted earnings-related daily allowance of 20 € per day.
• In this situation, ⅓ of a day is deducted from your maximum payment period for each payment day.
• There are 21 business days in May, meaning 21 payment days.
• The adjusted earnings-related daily allowance paid in May therefore uses up only 7 payment days of your maximum payment period.

What if you apply for adjusted earnings-related daily allowance but it cannot be paid? Do the days count toward the maximum payment period in that case as well?

The maximum payment period is counted only for the days on which earnings-related daily allowance is paid. If you apply for earnings-related daily allowance but it cannot be paid, your maximum payment period does not run.

What if there are breaks in my part-time work? Does that affect the maximum payment period?

For example, if you are sick and do not receive earnings-related daily allowance or if your application is denied, the payment days do not count toward the maximum payment period. The maximum payment period only counts down for the days on which you receive earnings-related daily allowance.

The maximum payment period does not expire even if you do not apply for earnings-related daily allowance the entire time. Payments can be resumed later from where they left off.

Note! If you are absent from the labor market for more than 6 months without a valid reason, you may lose the entire remaining maximum payment period and the accumulated working condition. Read more about valid reasons.

How does the staggering in benefits affect the adjusted earnings-related daily allowance and the maximum payment period?

The staggering of benefits means that the amount of the earnings-related daily allowance decreases if unemployment continues for a long time. The staggering applies to all recipients of the earnings-related daily allowance.

The amount of the earnings-related daily allowance decreases for the first time after you have received it for 40 days. The next reduction occurs after 170 payment days. 40 payment days correspond to approximately two months, and 170 payment days correspond to approximately eight months.

Because the adjusted earnings-related daily allowance reduces the maximum payment period more slowly, the thresholds for the staggering are only met once the number of days of adjusted earnings-related daily allowance has accumulated to equal 40 or 170 full payment days. In the adjustment, the tiered structure therefore takes effect later compared to the full daily allowance.

Is it worth saving payment days for the future, i.e., not applying for the earnings-related daily allowance?

If you don’t apply, you’ll save payment days. However, this also means that you won’t receive the daily allowance you could have received. In other words, you’ll receive less money. From that perspective, it’s not worth not applying for the earnings-related daily allowance.