The 2023 brochure of Entrepreneur Fund
testClick below to read the brochure of Entrepreneur Fund.
Click below to read the brochure of Entrepreneur Fund.
An extra index amendment will be made to affect social security benefits linked to the National Pensions Index on August 1, 2022. As a result, daily allowances, among other, will increase from € 34,50 to € 35,72.
In addition to the basic daily allowance, this extra index amendment will affect the amounts of increased component applicable to basic daily allowance, labour market subsidy, increased component applicable to labour market subsidy as well as child increases. Accordingly, income-related unemployment daily allowances, job alternation compensations, start-up grants and commuting and relocation allowances will also increase. In other words, the index amendment will increase the basic component equalling the basic daily allowance, which is used to calculate income-related daily allowances.
Index amendments are typically made at the turn of the year. However, this spring the Finnish Parliament approved a legislative initiative, based on which benefits linked to the National Pensions Index will increase by 3,5 percent now in August. The purpose of this extra index amendment is to safeguard benefit receivers’ solvency as inflation accelerates.
The below table shows how benefit levels, amounts and decreases will change starting August 1, 2022. For more information, please visit the websites of the Finnish Government.
Parliament has taken a decision on temporary amendments to the Unemployment Security Act. These amendments enable unemployment benefits to be paid starting from the first day of unemployment, without observing a five-day self-risk period during which no benefits would normally be paid. In addition, Kela can pay labour market subsidy to entrepreneurs during ongoing entrepreneurial business.
The law amendments will remain in force over the time period January 1 through February 28, 2022.
Based on the amendment, payment of daily unemployment allowance starts on the first day of unemployment, i.e., without a five-day self-risk period. Normally, a five-day self-risk period without unemployment benefit would apply. For people working partially, the self-risk period is based on days of unemployment or lay-off.
The amendment concerning self-risk time is applicable in cases, where the first day of the self-risk period falls within the time period January 1 through February 28, 2022.
Please note that the amendment does not concern self-risk periods which have started in December or earlier, even though a part of the self-risk period would fall within January or February. Accordingly, unemployment benefits may be paid during self-risk periods falling within March or later, as long as the first self-risk period day has been in February.
In accordance with the law amendment, entrepreneurs may be paid a labour market subsidy by Kela, in case their business income has been reduced as a result of the corona pandemic. However, labour market subsidy can be granted only in case a limit income of € 1,104 per month per person working for the company in an entrepreneurial position is met.
In cases where unemployment has started on January 1, 2022, those concerned may already have received their first decisions on income-related allowance. In such cases, benefit payments to cover the self-risk period could not be granted at the time when the decision was made, since the law amendment was still in process. The remaining share covering the self-risk period will be paid as soon as the law amendment has been confirmed. Unemployment funds will take care of such retroactive payments without separate request.
In June 2020, the exempt amount observed within unemployment security was increased to Euro 500 by way of temporary law amendment. Starting December, the exempt amount will be back to Euro 300. The change takes force according to application period start date. This means that the exempt amount Euro 500 will still apply to application periods starting no later than November 30, 2021. For application periods starting December 1, 2021, or later, the exempt amount will be back to Euro 300 (€ 279 per four weeks).
Exempt amount refers to the extent of income from part-time work or short-term jobs, or income from part-time entrepreneurial work, which do not affect your daily allowance. For the part that your salary exceeds the exempt amount, each Euro earned cuts your allowance by fifty cents. More information about adjusted daily allowances: https://yrittajakassa.fi/en/did-you-become-unemployed/during-unemployment/how-do-part-time-and-full-time-work-affect-your-allowance/
Unemployed persons may qualify for a commuting and relocation allowance, if they accept employment involving a workplace located far away from their current place of residence. The commuting and relocation allowance amounts to Euro 726 -1 045 per month. Allowance can be paid for a maximum of two months.
By way of a temporary law amendment, travel time requirement for a two-way commuting distance was reduced from three hours to two hours for full-time work. For part-time work, the commuting distance has already been two hours. You meet this two-hour commuting distance if your travel time to work, one-way, is more than one hour.
Regulations for the commuting and relocation allowance will go back to normal, and a commuting distance of three hours will be required again for full-time work starting December 1, 2021. This change takes force according to start date of employment contract. For employment contracts starting no later than November 30, 2021, a commuting and relocation allowance may be obtained for full-time work based on a commuting distance of two hours. For employment contracts starting December 1, 2021, or later, the commuting distance requirement will be three hours.
Positive economic and employment developments are expected to take off once a sufficient number of residents have been vaccinated. Recent news has served to weaken trust and subsistence in to bear with the ongoing situation. Right now, increased efforts in Finland and the EU to improve the situation beyond what we can actually see in public would be needed.
The Entrepreneur Fund did well in 2020. We increased our staff resources right away in spring and were well prepared for an increase in benefit payments. Support measures put in place for entrepreneurs were a great help for our members. Businesses were not terminated to any large extent. Our members mainly made use of the € 2,000 support available to sole entrepreneurs and labour market subsidy provided by Kela.
As a whole, we paid out benefits to 1,657 members, as compared to 1,594 last year. On a monthly basis, we paid out benefits to 734 members in January and to 976 in December. We are still finalising our calculations concerning extent of employment periods, but periods of unemployment have been clearly longer than last year.
We paid out some € 14,6 Million in benefit, which is 14 % more than € 12,6 Million last year.
Increasing membership count
When the corona pandemic started in March, we could see a burst of new membership applications – 650 new members joined the fund. The monthly average for the whole year was 430 new members. In all, 5,000 new members joined. This was our best outcome after the so-called new conditions took force in 2015, i.e., when there was a substantial increase in the lower limit for YEL work income required for membership. Our membership count is now approaching 31,000.
Entrepreneurs had to face the fact that successful business is not due to one’s own measures only, external factors can have a dramatic affect. Some 4,500 memberships were terminated. The main reasons for resigning the fund were salary work and retirement.
As a whole, there has been clear improvement in recognition and awareness and the Entrepreneur Fund is in a good position to continue its operations. 2021 does seem a little diffuse, but we are prepared for a strong unemployment increase. Yesterday brought some good news: the temporary labour market subsidy for entrepreneurs will continue until end June. It would be important to arrange for one more application round for the support available to sole entrepreneurs as well.
Now the entire population is becoming seriously exhausted and the situation seems unbearable. Listening to our entrepreneurs is important. Government measures are of central importance, but more should be done. All of us working in the entrepreneur field do all we can to contribute to keeping companies up and running. My sincere wish to all entrepreneurs all over the country: Stay together, stand up for your staff and your business – this helps us all to keep going!
Wishing you plenty of fighting spirit,
Merja Jokinen
Fund Manager
Entrepreneur Fund
