Legislative amendments strengthening livelihoods of employees to remain in force until end of year — central government to contribute to financing of earnings-related allowances paid during layoff

The financial position of people in need of unemployment security will be strengthened in a situation where many have been unemployed or laid off. The central government will temporarily contribute to the financing of earnings-related allowances.

The temporary amendments made to the Unemployment Security Act, the Act on Financing Unemployment Benefits and the Act on Unemployment Funds will remain in force until the end of the year.

The following temporary amendments will remain in force:

• The normal five-day waiting period before a person is eligible for unemployment security will still not apply from 1 July onwards. This concerns earnings-related unemployment allowance, basic unemployment allowance and labour market support.  The allowances payable for these days will be funded by the central government.
   
• The reduced requirement concerning the period of employment for wage-earners would still entitle to unemployment allowance from 1 July onwards. Fulfilling this work requirement is a condition for receiving unemployment allowance. The required period of employment for wage-earners would still be 13 calendar weeks, whereas without the temporary amendments in force, the period would be 26 calendar weeks. For non-owner family members of entrepreneurs, the required period of employment would be 26 calendar weeks instead of the 52 calendar weeks.
   
• The maximum time limit of unemployment allowance will be temporarily suspended.  The maximum time limit of unemployment allowance will be temporarily suspended for fixed-term employees who have been made redundant or those who are partially employed, for example.

The legislative amendments will enter into force on 1 July 2020 and will remain in force until 31 December 2020.

Because of the temporary changes to the Unemployment Security Act, the Government Decree concerning the income that is taken into account when determining unemployment benefits will also be temporarily amended. 

The amendment to the Decree will enter into force on 7 July 2020 and will remain in force until 31 December 2020. The Decree will also apply to those who have fulfilled the work requirement before the Decree’s entry into force. 

Central government to temporarily contribute to financing of earnings-related allowances

Earnings-related allowances paid on the grounds of layoffs are financed from the Employment Fund contributions (94.5%) and the membership fees of unemployment funds (5.5%). The central government does not normally contribute to the financing of earnings-related allowances paid during layoff. Because of this, there has been an unexpected spike in the Employment Fund’s expenses in particular. 

The central government will temporarily contribute to the financing of earnings-related allowances paid during layoff. The central government will fund the portion of earnings-related unemployment allowance in a layoff period that corresponds to basic unemployment allowance. This funding will be allocated to unemployment funds as central government transfers.

Central government transfers will be allocated for all earnings-related allowances paid between 1 April 2020 and 31 December 2020. The legislative amendments will enter into force on 1 July 2020 and will remain in force until 31 December 2020. 

Inquiries:

Marjaana Maisonlahti, Senior Ministerial Adviser, tel. +358 295 163 288