Unemployment and retirement - yhteiskuntaorientaatio.fi
What to do if you are unemployed
Anybody can become unemployed at some stage in their life. During this time, it is possible to receive support for finding a job and income from different authorities, trade unions and organisations.
If a person is unemployed, they must first register as a jobseeker with their municipality’s employment services. The registration can be done before the first day of unemployment either online, by phone or by visiting a local employment authority.
The employment services invite the jobseeker to an initial interview. The purpose of this is to assess the jobseeker’s situation and make a plan to find employment. During this interview, plans will be made for how to keep in touch with the employment services and the obligations of a jobseeker are explained. Unemployed jobseekers are expected to seek employment actively and mainly independently.
When a person registers as a jobseeker, the employment services give the payer of the unemployment benefit a verdict on whether or not the person has the right to receive unemployment benefits. Unemployment benefits are financial benefits paid by Kela or an unemployment fund.
The employment services must always be notified of changes to the jobseeker’s situation. The job seeker must submit a notification if they start a job or studies, or if their address or phone number changes. The jobseeker must also give notice if their situation changes in a way that makes them unable to accept or apply for full-time work or education.
More information about employment services: Job Market Finland (tyomarkkinatori.fi) (Finnish, Swedish, English)
Unemployment benefit secures income during unemployment
When a person is an unemployed jobseeker, they normally have the right to receive unemployment benefits. This means unemployment allowance or labour market subsidy. An immigrant with a temporary residence permit can register as a jobseeker. They may however not have the right to unemployment security if they have not worked in Finland.
Unemployment benefit can only be received when job seeking is active. Unemployment allowance can be granted to an unemployed person who has registered as a jobseeker and is ready to accept full-time work or education. An unemployed jobseeker has the obligation to seek employment during the whole duration of their job seeking and they must be prepared to accept a new job if it is offered.
Unemployment benefits are taxed. You can check your own tax percentage for benefits from the Tax Administration. You must apply for unemployment benefit from an unemployment fund or Kela with a separate application
Unemployment funds pay earnings-related allowance
Unemployment funds pay earnings-related unemployment allowance to people who have the right to unemployment benefits, are members of the fund, and have worked long enough while a member of the fund.
The unemployment fund is an organisation with the purpose of paying its members a legally determined earnings-related allowance. Joining an unemployment fund is a sort of insurance in case of unemployment. Membership fees are paid annually to the fund, and if you become unemployed, the fund provides income during unemployment.
Members of trade unions are usually also members of unemployment funds. It is also possible to join an unemployment fund without being a member of a trade union.
More information about earnings-related unemployment security: How the daily allowance is calculated (tyj.fi) suomi, ruotsi, englanti
Basic unemployment allowance and labour market subsidy is granted by Kela
For those who are not a member of an unemployment fund, the unemployment benefit is granted and paid by Kela. An unemployed person can receive basic unemployment allowance if they have worked for 12 months before becoming unemployed.
If the person has not worked for long enough or has already received the maximum duration of basic unemployment allowance or earnings-related allowance, Kela can pay labour market subsidy. The labour market subsidy and basic unemployment allowance are the same size.
The purpose of unemployment security is that every unemployed person would have reasonable income during the time that they are actively seeking full-time employment. This security is meagre for those who do not receive earnings-related unemployment allowance. Unemployed jobseekers who receive labour market subsidy or basic unemployment allowance often also receive other benefits, such as housing allowance or social assistance.
More information about unemployment security: Unemployment benefits (kela.fi)
You can apply for social assistance in Kela or your wellbeing services county’s social welfare
An unemployed jobseeker can also apply for social assistance if income is otherwise not sufficient for necessary expenses. Basic social assistance is granted by Kela and this can be received typically for one month at a time.
Social assistance is meant for a temporary need. In some cases it may be possible to receive preventive or supplementary social assistance from your own wellbeing services county.
More information about social assistance :
Employment services for jobseekers
When a person is seeking employment, the most important thing is to be active. Employment services provide direction and advice for job seeking and developing one’s own competencies. Employment services may direct you to attend recruitment events and to find advertised vacancies online and make job applications.
Employment services also assess education opportunities with the client, such as labour market trainings (työvoimakoulutus) or voluntary studies. Especially to those who have been unemployed for a long period, the unemployment services may send job advertisements which the client must apply for. If you do not apply to these, you may lose your unemployment benefit for a certain period.
A work try-out is similar to an internship
In a work try-out (työkokeilu), the jobseeker works at a workplace normally but they do not receive a salary – instead they receive unemployment allowance. You need to find the work try-out place yourself. After this, you also need to receive a decision from the employment services stating that you can start the work try-out.
A work try-out can last a maximum of six months with the same employer. During this period, the participant in the work try-out can show the employer what they know and how good their motivation is for the job. Sometimes after the work try-out, the participant can continue as a real, salaried worker or in pay-subsidised work (palkkatukityö).
An employer alone cannot offer an unpaid internship
It is important to remember that in Finland, only employment services or a school can accept unpaid internships or work try-outs. Sometimes an employer directly takes on an employee for an unpaid internship and promises to take them on as hired work once the internship is over. An employer does not have the right to commission free labour if the employment services or an educational institution has not first approved the internship or work try-out.
It is cheaper for an employer to hire employees with pay-subsidy
Pay-subsidy is a financial aid paid by the state to help unemployed jobseekers find work. The pay-subsidy is paid to the employer for the employee’s salary expenses. The employee has a regular employment relationship with the employer. You can ask about the possibility to receive pay-subsidy from the employment services. Unemployed jobseekers can apply for pay-subsidy for apprenticeship training (oppisopimuskoulutus).
Rehabilitative work activities strengthen working abilities
If a jobseeker has been unemployed for a long time, they can start rehabilitative work activities (kuntouttava työtoiminta). The content of this is decided together with the employment services and wellbeing services county. The purpose of rehabilitative work activities is to strengthen the client’s abilities to work and perform, as well as improve their competencies. These activities can be similar to a work try-out.
Labour market trainings can improve a jobseeker’s chances of employment
You can also ask for support for education or changing careers from the employment services. One of the most important options is labour market trainings. Trainings are available in many different fields. You can apply for labour market trainings through the employment services. The employment services can also support the jobseeker in finding voluntary studies if this improves their opportunities for finding employment and there is no suitable training in the labour market trainings.
More information about labour market trainings: Adult education
Pension helps to get along after your career
When a person reaches retirement, they typically do not work regularly anymore. Pensioners receive financial support in the form of a pension each month. In Finland, a person can retire once they are 63–68 years old. It is possible to retire before this if you are ill or are otherwise unable to work.
Earnings-related pensions are paid based on salary
In Finland, the pension system is formed by three parts: earnings-related pension (työeläke), national pension (kansaneläke) and guarantee pension (takuueläke). Often a person’s pension is made up of multiple types of pensions, for example, earnings-related pension and partial national pension.
Most pensions are earnings-related pensions. The size of this pension is based on pension insurance paid from your salary. A part of the insurance is paid by the employee and part is paid by the employer. The size of the pension is affected by the size of the salary and the years you have worked. The pension is paid by your pension provider (työeläkelaitos). Entrepreneurs can also receive an earnings-related pension, but they have to pay for the pension insurance themselves.
If a person has not worked at all or has only worked little, they receive a national pension. The national pension guarantees a basic income to people who do not receive earnings-related pension or whose earnings-related pension is very small. The national pension is paid by Kela. The national pension is smaller than earnings-related pension. A pensioner with a small income can also apply for guarantee pension in Kela, which ensures a minimum pension.
You must apply for pension yourself. The application can be done online or on paper. Each type of pension has its own form. Pensions are also taxed.
More information on pensions: Retired (kela.fi) (Finnish, Swedish, English)
Disability pension can be paid full time or part time
If a person is unable to work due to illness or disability, they may receive disability pension from their pension provider. This can be granted before the official retirement age. Disability pension can be full time or part time. A part-time disability pension means that the person also works part time. Their income is then made up of their salary and their pension.
Work done abroad can contribute to pension
Pension can be accrued from all countries where a person has lived and worked. Usually pension is accrued based on work. It is possible to apply for pension from some countries with the same application used to apply for pension in Finland.
Pensions from some countries are applied for directly from that country’s pension administration. Pensions from abroad must also be included in the tax return.
More information about pension from work abroad: Pension from abroad (kela.fi) suomi, ruotsi, englanti
Pension from Finland to another country
If a pensioner moves abroad, they must always inform Kela. Under certain terms, it is possible to receive Finnish pension abroad. You should check beforehand if the terms apply. Similarly, a person can in some cases apply for pension from Finland when they retire in another country.
More information about pension to another country: Pension from Finland to another country (kela.fi) (Finnish, Swedish, English)
You can work when retired
A person can work even when they are retired. Work done during retirement increases the amount of earnings-related pension. It is possible to work part time or full time when retired. If a person receives disability pension, they are only allowed to do a limited amount of work. If income surpasses a certain limit, the payment of disability pension can be suspended.