Transition security expanded as re-employment support for people of at least 55 years of age and pay subsidy reform for recruiting unemployed people over 55

Transition security consists of a transition allowance and quickly offered transition security training

The transition security allowance equals the discharged person’s one-month wages and is paid by the Social Insurance Institution of Finland (Kela) or the unemployment fund of which the discharged person is a member. The allowance does not reduce the daily unemployment allowance or postpone its start date.  The value of transition security training corresponds to a maximum of two months’ wages of the discharged person.  The training is provided by TE Services.

The reform also presents obligations to employers

The most significant part of the reform is the obligation to provide information about transition security, and this applies to all situations where an employee of at least 55 years of age is discharged on production-related or financial grounds. The obligations will also apply to small employers from the beginning of next year. TE Services provide employers with guidance and advice in all discharge situations.

Pay subsidy helps jobseekers enter the job market and employers find the best employees

The employment subsidy for people of at least 55 years of age, currently being discussed by the relevant committee, is to enter into force at the beginning of 2023.  As a result, employers can receive a subsidy to cover 70% of eligible salary costs throughout the employment relationship and over a maximum of ten months. It will be granted without discretion if the statutory requirements are met. 

The subsidy will be granted if:

• the person to be employed has turned 55 and has been unemployed for at least 24 months during the last 28 months;
• the person employed based on the subsidy works for the beneficiary for at least 25 hours a week or at least 65% of the maximum working hours defined in the sector in accordance with their employment contract; and
•  other conditions for granting the subsidy are met.

If the bill passes, amounts of pay subsidies granted on other grounds will also be changed. The reform will also simplify regulations so that employers can more easily estimate how to receive subsidies to support employment and how much subsidies they can receive, and subsidies will also be granted more quickly than at present. A comprehensive shift to electronic services will also be made at the same time.

Pay subsidy decisions will be handled by TE Services and local government pilots on employment. The goal is that electronic applications can be submitted before the end of this year, and that the processing of applications will start directly in January 2023.

Digitalisation of TE Services making progress

The digitalisation project for TE Services modernises Finland’s employment and business services, and converts them into digital format. The project is proceeding so that current electronic services provided through “Oma asiointi” (My services) are being produced in the system environment under construction in Job Market Finland. The first part will be deployed this December for the processing of statements and clarifications related to unemployment security.

The goal is that electronic employment and business services and the customer management system will mostly be in use by the end of 2023.