From Wage-earner to Entrepreneur
If you have met the wage-earner’s work requirement in a wage-earner’s unemployment fund before becoming an entrepreneur and you join the Entrepreneur Fund within three months of starting your business, you retain the right to unemployment security without interruption. Your uninterrupted right to unemployment allowance is protected by a period of post-protection of up to 18 months from starting the business activities.
In addition, you must join the Entrepreneur Fund within one month of resigning from an employee fund and your membership fees in the employee fund must be paid up until the point of resignation. Please note, that you can be a member in only one unemployment fund, so if you join a new fund you must resign from the previous fund. You have the option to authorize the Entrepreneur Fund to notify your previous fund of your resignation on the membership application form.
If you become unemployed before completing 15 months of membership in the Entrepreneur Fund, you may be entitled to apply for unemployment allowance based on your salaried employment before becoming an entrepreneur. This is called a wage-earner’s period of post-protection.
If you have met the employees work requirement of 26 weeks before becoming an entrepreneur and you switch from an employee fund to the Entrepreneur Fund within three months of starting your business, it is possible retain the right to unemployment security without interruption.
Your right to receive unemployment allowance based on the earnings of your previous employment is called post protection. To qualify for allowance based on post-protection, you must wind up your business operations or no longer be employed in your company within the period of post protection.
The post protection period starts when you start working as an entrepreneur i.e., when
- productional and economic activity in the company has started, and/or
- the company has been registered in the VAT and Prepayment Registers, or
- the company has been registered in the Employer Register
If your self-employment began while receiving unemployment allowance from an employee fund, the post-protection period starts once your right to unemployment allowance ends according to a statement issued by the TE-office. However, if you started your business operations as a four-month entrepreneurship trial period during unemployment, the period of post protection starts on the first day of the entrepreneurship trial period.
Daily allowance based on post-protection
Post-protection based daily allowance is paid to a member, who
- has not yet met the entrepreneurs 15 work requirement, and
- has been self-employed for under 18 months, and
- has a valid employee’s work requirement, and
- has joined the Entrepreneur Fund within one month of resigning from the previous fund
Should you become unemployed during the period of post-protection, we will request relevant membership information from your previous unemployment fund and pay out unemployment allowance, provided your right to daily allowance is still valid.
Accrual of the work requirement
We recommend that you join the Entrepreneur Fund as soon as you start your entrepreneurship. This way you start accruing the work requirement straight away, meaning that your right to entrepreneur’s daily allowance is already met after the first 15 months of your entrepreneurship.
We do not recommend that you remain in an employee fund once you become an entrepreneur, because you cannot accrue the entrepreneur’s work requirement in an employee fund. In addition, the period of post-protection ends after 18 months of entrepreneurship, meaning that if you join the Entrepreneur Fund after operating a business for 18 months, you must accrue the entire 15-month long work requirement to gain the right to apply for earnings-related unemployment allowance.
