Earnings-related daily allowance

Unemployment funds pay their members earnings-related daily allowance according to the conditions set by the lawIf there are no other obstacles for payment, receiving earnings-related daily allowance requires that:

  • you have been a member of an unemployment fund for at least 26 calendar weeks before your unemployment
  • you are an unemployed job seeker with the TE Office and the TE Office has given the Fund a statement that there are no obstacles for payment
  • you have fulfilled the employment requirement during your membership with an unemployment fund.

Earnings-related daily allowance is generally paid to people who are unemployed and 18-64 years old. However, during layoffs benefits can be paid until the end of the month during which the person turns 68 years old.

The employment requirement and membership requirement

Members that have been insured through an unemployment fund for at least 26 calendar weeks before unemployment (=membership requirement) and that fulfill the employment requirement during their membership period are eligible for earnings-related daily allowance. The employment requirement is 26 calendar weeks long and the fulfillment of the employment requirement is generally examined during the last 28 months preceding unemployment.  

If you do not fulfill the necessary employment requirement or membership requirement to receive earnings-related daily allowance, you can apply for basic unemployment allowance or labor market subsidy from Kela.

Accumulating the employment requirement and the review period

You accumulate the employment requirement when you are a member of an unemployment fund and work at least 18 hours a week in an employment relationship at a job where the pay is based on a collective labor agreement and the statutory social insurance contributions, pension contributions, unemployment insurance contributions, and taxes are deducted. If the industry does not have a collective labor agreement, then the pay for a full-time employee must be at least 1 331 euros a month in 2023 (1 283 euros a month in 2022).  

If teaching in an educational institution, calendar weeks during which you have worked at least half the hours of the lowest weekly teaching requirement for full-time teachers in that field accumulate the employment requirement. For example, in primary and lower secondary schools and high schools you can accumulate the employment requirement with 8 teaching hours a week. If there is no full-time teaching requirement from which to calculate the number of hours needed to accumulate the employment requirement, 8 teaching hours a week will accumulate the employment requirement.

In legislation, teaching means teaching in an educational institution (like a primary school, secondary school, high school, adult education center, vocational school, or higher education institution). People employed by companies that offer private consulting or teaching services are not considered teachers. Day care kindergarten teachers are also not considered teachers. This means they need to work 18 hours a week to accumulate the employment requirement.

You can also accumulate the employment requirement during your paid annual holiday if your pay during your annual holiday is based on at least 18 working hours per week (8 hours per week if teaching). 

The fulfillment of the employment requirement is examined during the last 28 months before your unemployment began. This 28-month so-called review period can be extended for up to 7 years with an acceptable reason stated in the Unemployment Security Act. However, the extension is not possible for time during which you have not been a member of an unemployment fund. Work you have done while studying accumulates the employment requirement if you have been a member of an unemployment fund during your work and studies.  

Acceptable reasons to be absent from the labor market and extend the 28-month review period are full-time studies, sick leave, hospital care, rehabilitation, mandatory military service, mandatory non-military (civil) service, a sentence of imprisonment, job alternation leave, grant periods and caring for a child 3 years old or younger. 

The review period of a person currently active in the labor market can be extended if the work cannot be taken into account in the employment requirement due to restrictions stated in the Unemployment Security Act (such as time during which you have been paid partial sickness allowance or your pay has been reduced due to sickness) or time during which you have participated in an employment-promoting service agreed upon with the TE Office.

Validity of the employment requirement

Once you have accumulated the employment requirement it is valid for the number of days in your maximum payment period (300/400/500 payment days) or until you fulfill the 26-calendar week employment requirement againHowever, if you are absent from the labor market for more than 6 months without an acceptable reason, then you lose the right to earnings-related daily allowance until you fulfill the employment requirement again in its entirety after your absence from the labor market. For instance, job seeking without registering with the TE Office is not considered participation in the labor market according to the Unemployment Security Act. An unemployed person is part of the labor market when they are registered with the TE Office as an unemployed job seeker looking for a full-time job.

You can also lose the employment requirement you have already accumulated by being a full-time entrepreneur for more than 18 months.

The 5-day waiting period

After you have fulfilled the employment requirement and the amount of your earnings-related daily allowance has been calculated, you can be paid earnings-related daily allowance only after the waiting period. The waiting period is equivalent to 5 full weekdays of unemployment, and it must be accumulated within 8 consecutive calendar weeks. If you work part-time during your waiting period, the waiting period will be longer than 5 weekdays because only unemployed time accumulates the waiting period. This means that part-time work slows down the accumulation of the waiting period. You must be registered as an unemployed job seeker with the TE Office to accumulate the waiting period. 

There are certain situations during which it is not possible to accumulate the 5-day waiting period, including but not limited to during suspension periods set by the TE Office, when you are not entitled to daily allowance due to the periodisation of extra compensation paid in relation to the termination of your employment and for applicants that are working part-time, when the application period’s working time is over 80 % of the working time of a full-time employee in the field in question.