The Work Requirement
Work requirement refers to the period of time you are required to both work as an entrepreneur and make pension insurance contributions based on at least the minimum income level (€ 14,803 in 2024) during your membership in the Entrepreneur Fund, to gain the right to apply for earnings related unemployment allowance. For entrepreneurs, the work requirement is 15 months.
Accrual of the work requirement
Members of the Entrepreneur Fund accrue the work requirement when working as an entrepreneur as outlined in the Unemployment Act. In the context of unemployment security, working as an entrepreneur is defined as being employed in your company and making YEL- or MYEL contributions based on at least € 14,803. For part-owners of a company insured under TyEL, the gross annual TyEL income must be at least € 14,088 (or € 1233,58 per month) to accrue the work requirement.
The entrepreneur’s work requirement is met once you have been a member in the Entrepreneur Fund for at least 15 months within the latest 48 months while making sufficient pension insurance contributions, in periods of at least 4 months.
This period of 48 months is called a review period. The review period cannot be extended to include time outside of the Entrepreneur Fund membership. All periods of employment lasting at least 4 months are added to your work requirement with each period of employment counted towards the work requirement only once.
The review period can be extended up to seven years for reasons such as maternity leave, home care of a child under 3 years of age, sick leave, and full-time studies. You are entitled to apply for a reduced membership fee for a time that extends the review period.
Pension insurance premiums must be paid for a period of time to be counted towards the work requirement. Individual pension schemes do not accrue the work requirement.
Wage-earner’s post- protection period
If you have met the wage-earner’s work requirement before becoming an entrepreneur and you switch from an employee fund to the Entrepreneur Fund within three months of starting your business activities, it is possible 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.
If you were to become unemployed before 15 months of membership in the Entrepreneur Fund, you would be entitled to apply for unemployment allowance based on your salaried employment before becoming an entrepreneur.
Please note that if you work both as an entrepreneur and as an employee you should choose your unemployment fund based on which of these is your main job.
Social benefits and the accrual of work requirement
It is not possible to accrue the work requirement when receiving sickness allowance, partial sickness allowance or maternity allowance or other such benefit, or when receiving unemployment allowance or labour market subsidy on account of terminated business activities or the termination of self-employment. However, temporary labour market subsidy for entrepreneurs paid out by Kela due to the COVID pandemic does not affect the accrual of entrepreneur’s work requirement.
However, if you are employed full-time in your company and have a valid pension insurance you may be able to accrue the work requirement during for example, partial rehabilitation allowance, partial disability pension, child home care allowance, financial aid for students, family care, informal care or whilst receiving a grant. Please contact our customer service for more information on the matter.
Validity of the work requirement
Any work requirement accrued remains valid when you pay either a membership fee based on your insurance level in the Entrepreneur Fund or the reduced membership fee, provided you qualify for it.
If you are absent from the labour market without a valid reason for more than six months, your work requirement accrued so far expires.
Valid reasons to be absent from the labour market are sickness, institutional care, military service, non-military service, full-time studies, home care of a child under three years of age or any reason comparable.