Limitations on earnings-related allowance

Last updated 21.12.2023

We may not always be able to pay you earnings-related daily allowance. This may be because the conditions are not met, there is a labour policy barrier to payment, or there is no earnings-related daily allowance to be paid. Sometimes we cannot pay because some restrictions on earnings-related daily allowance prevent us from paying.

Age

We cannot grant you earnings-related daily allowance if you have not reached the age of 18.

If you were born before 1965, we can grant you earnings-related daily allowance until the end of the calendar month during which you turn 65.

If you were born in 1965 or later, we can grant you earnings-related daily allowance until the end of the calendar month during which you reach the lowest retirement age referred to in the Pensions Act. In these age groups, the lowest retirement age is linked to a change in life expectancy. More information on pensions is available from the Finnish Centre for Pensions.

However, regardless of your age, we may exceptionally grant you earnings-related daily allowance until the end of the calendar month during which you turn 68 if your work is prevented

• lay-off
• a reason comparable to a lay-off, or
• due to an industrial action that has no dependency on your terms of employment or working conditions

Absence from the labour market

You are not entitled to unemployment benefit if

• you are performing military or civilian service (including refresher training and supplementary service)
• you are serving a prison sentence
• if you are in hospital or other institutional care, or if
• you are prevented from being in the labour market due to a comparable reason

If you are absent from the labour market for more than six months without an acceptable reason, we cannot grant you earnings-related daily allowance until you have again fulfilled the working condition after your absence.

You have an acceptable reason for absence from the labour market due to

• illness
• inpatient care
• rehabilitation
• military service
• civilian service
• full-time studies
• scholarship period
• the birth of a child
• care of a child up to three years of age, or
• any other comparable reason

Number of benefit days per week

The total number of unemployment benefit days and working, waiting period and compensation days per calendar week may not exceed five.

So we can pay for no more than five days a week. All working, waiting period and compensation days reduce the number of days on which we can pay the benefit.

Unemployment benefit day is the day on which you receive unemployment benefit. The benefit days also include the days that your entitlement to unemployment benefit has been denied on a labour policy basis or due to the sequencing of the benefit paid to you.

The working day is the day on which you work, the waiting period day is the waiting period according to the Unemployment Security Act and the compensation day is the day on which you receive some other compensation, such as sickness allowance, parental allowance or weekday holiday compensation.

Part-time working days and adjusted earnings-related daily allowance paid on the same day are counted as one day of benefit.

Incapacity for work

If you are unable to work, you are not entitled to unemployment benefit and we cannot pay you earnings-related daily allowance. However, there are a few exceptions to this, which you can read more about in the section on disability.

Preventive social benefits

Other social benefits you receive may prevent us from paying you earnings-related daily allowance. You can read more about social benefits that prevent payment of earnings-related daily allowance in the section on them.

Limitations due to employment or service

We cannot pay you earnings-related daily allowance for the period for which you are entitled to a salary for the period of notice or equivalent compensation. It does not matter whether the employer actually paid the compensation in question or not. The right to pay for the period of notice is crucial.

We cannot pay you earnings-related daily allowance for the period for which you are entitled to annual holiday pay based on full-time work pay. If you are completely unemployed, this will not come up, because unattended leave will be paid to you at the end of your employment as a holiday compensation. By contrast, if you have previously worked full-time and have continued part-time, you may be entitled to holiday pay based on full-time work for the same period when applying for adjusted earnings-related daily allowance. Then we will not be able to pay you earnings-related daily allowance.

We cannot pay you earnings-related daily allowance for any other period of leave based on law or collective agreement. Such is, for example, the shortening of working hours, or so-called pekkaspäivät.

Holiday compensation

If you are entitled to a holiday compensation when your employment ends, we cannot pay you an earnings-related allowance immediately.

Holiday compensation prevents us from paying you an earnings-related allowance for the period for which you are paid holiday compensation. For example, if you receive holiday compensation for a month’s salary, we cannot pay you an earnings-related allowance until a month later.

We will periodize the holiday compensation if it is paid on the basis of an employment relationship that ended on or after 1.1.2024.

The periodizing is done by dividing your monthly salary by 21.5 first. This is how we find out your calculated daily salary, by which we divide the amount of holiday compensation. We round down the remainder of the division to full days. The end result is the number of days during which we cannot pay earnings-related daily allowance.

The accrual period is not counted in calendar days because the total number of days of unemployment benefit and days of work, deductible and compensation in any one calendar week cannot exceed five. In practice, therefore, only five days per week are used up.

The suspension period set by the Labour Market Authority and the period for holiday compensation may run concurrently. However, the waiting period and the periodizing of holiday pay cannot run concurrently, since only days for which the daily allowance is payable can be counted towards the waiting period.

Mid-week holiday compensation

Mid-week holiday compensation can affect the amount of your earnings-related daily allowance. The effect is situational. Read more about the mid-week holiday compensation.

Severance pay

We cannot immediately pay you an earnings-related allowance if you receive a severance payment based on an agreement between you and your employer when your employment ends.

The severance pay prevents us from paying you an earnings-related allowance for the period for which the severance pay is paid. For example, if you receive three months’ pay as severance pay, we cannot pay you an earnings-related allowance until three months have passed.

So when you receive a financial benefit as compensation for the termination of your employment, we cannot pay you an earnings-related allowance immediately. However, remember to register as a jobseeker. This will ensure that your entitlement to an earnings-related allowance is maintained during the period of severance pay.

Working time bank

We cannot immediately pay you earnings-related daily allowance if you have been paid cash compensation from the working time bank within two months before or during the full-time lay-off.

The cash compensation paid from the working time bank prevents us from paying you earnings-related daily allowance for the period that the cash compensation corresponds to as a salary.

We will pay cash compensation for the lay-off days specified in the lay-off notice. If the cash compensation has been paid during the lay-off, we can also make a sequencing from the date of payment of the cash compensation.

Effect of gain on sale of business assets

If you have ceased your main business activity, you are not entitled to unemployment benefit for the period for which the capital gain on the sale of your business assets is amortised. We will calculate how many days the capital gain corresponds to in the basic unemployment allowance and for this period you will not be entitled to income-related unemployment allowance.

Capital gains from fixed assets or other long-term investments are also considered to be related to the closure of the business if they were made in the six months before the closure.

Capital gains on business assets are spread over a maximum period of 24 months. However, capital gains are not amortised if the business has been in operation for 18 months or less, or if the balance sheet total of the last financial year of the enterprise less the liabilities of the business does not exceed EUR 20 000.

When you apply for unemployment benefit after you have ceased your main business activity, we will calculate the capital gain even if you have not yet sold your business assets.

The impact of a labour dispute

During a labour dispute, we cannot pay you an income-related daily allowance if you are immediately unemployed as a result of a strike or lockout. Nor can we pay you an earnings-related allowance if you are indirectly made redundant as a result of a strike or lockout if the purpose of the industrial dispute is also to bring about changes in your employment and wage relations.

We can pay you an earnings-related daily allowance without prejudice to the labour dispute if you were totally unemployed before the labour dispute started. Similarly, we can also pay you an earnings-related daily allowance without prejudice to a labour dispute during a full-time lay-off if the lay-off notice was given before the notification of the labour dispute.

If you are prevented from working by a strike or lockout that has no direct or indirect link with your terms and conditions of employment or working conditions, we can pay you an earnings-related daily allowance without prejudice to a labour dispute. However, this is also subject to the suspension of your pay and your registration as a jobseeker with the employment services. In these situations, the employer has a certain obligation to pay you wages. The earliest we can pay you an income-related daily allowance is when this employer’s obligation ends.