Transition security allowance is part of the transition security model that came into effect at the beginning of 2023. Transition security is meant for people that have turned 55 years old. People eligible for transition security have the right to:
- transition security allowance, which is equal to approximately one months’ salary,
- transition security training for up to 6 months and worth up to 2 months’ salary and
- paid employment leave for 5 days longer than normally.
To be eligible for transition security you must have:
- had your employment contract terminated on financial or production-related grounds on or after 1.1.2023,
- been at least 55 years old on the day that you received your notice of termination,
- worked with your employer consecutively (or with interruptions of no longer than 30 days) for at least 5 years by the day you received your notice of termination and
- registered as a job seeker with the TE Office within 60 days of the day you received your notice of termination.
Please note that if your notice period is long, you must register with TE Office before your unemployment begins, because the 60-day deadline is calculated from the date you received your notice of termination.
The TE Office will determine whether you are eligible for transition security or not and give the payor a binding labor policy statement regarding the matter.
Applying for and the amount of transition security allowance
Apply for transition security allowance from your own unemployment fund. You can send an application during your notice period or after your employment relationship has ended, as long as the application is sent no later than 3 months after your employment relationship has ended. If you are not a member of an unemployment fund, you can apply for transition security allowance from Kela. The amount of transition security allowance is the same regardless of who pays the benefit.
Transition security allowance is a one-time payment that is equal to approximately one months’ salary. The amount is calculated using the salary information available in the Incomes Register from the last 12 months prior to the date that the notice of termination was given.
The unemployment fund will pay transition security allowance to all those that apply for and are entitled to it and that have been members of the Fund when they received their notice of termination, even if their membership period is not long enough for them to be entitled to earnings-related daily allowance. You do not need to be unemployed to receive transition security allowance, so you can be entitled to transition security allowance even if you are directly employed by another employer.
Taxation of transition security allowance
Transition security allowance is taxable income that is taxed using the additional withholding rate of your tax card for wages. If you submit a revised tax card for benefits before the payment of your transition security allowance, we will use the tax rate on your tax card for benefits (taking into account the income ceiling).
You can order a revised tax card for benefits through the Finnish Tax Administration’s MyTax service. If you select The Unemployment Fund for Higher Educated Employees Erko as the payor of your benefit, the Tax Administration can electronically send your revised tax card directly to the Fund.
The effect of transition security allowance on other benefits
Receiving transition security allowance does not affect your unemployment allowance or other benefits, except for social assistance.
Transition security training
Transition security training lasts for up to 6 months and is worth up to the equivalent of 2 months’ salary. The training is commissioned by the TE Office or ELY Center. Participation in transition security training is voluntary and you can decline from participating without losing your right to unemployment benefits. Transition security training is not an employment-promoting service for unemployed people, rather it is part of the transition security model for people that have turned 55 years old.
You can get more information about transition security training from the TE Office.
Paid employment leave
If your employment contract has been terminated on financial or production-related grounds, you can make an agreement with your employer about paid employment leave. Paid employment leave is meant to be used for things such as independent job searching and handling matters with the TE Office. The number of paid employment leave days is determined by the length of your notice period. If you are eligible for transition security, you are entitled to paid employment leave for 5 days longer than normally. For more information contact the TE Office.