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Entrepreneur’s adult education allowance

If you are a full-time entrepreneur and you are required to reduce the amount of entrepreneurial work you do or discontinue it altogether in order to participate in education lasting at least two months, you can apply for an entrepreneur’s adult education allowance.

The entrepreneur’s adult education allowance is EUR 592.11 per month in 2018 and 2019.

Conditions for eligibility

To receive an adult education allowance, you must have accrued a total employment history of at least eight years before the start date of the allowance. Your employment history can include work subject to the Employees Pensions Act as well as entrepreneurial activity insured in accordance with the Self-Employed Persons’ Pensions Act (YEL) or the Farmers’ Pensions Act (MYEL). Your employment history will be counted according to the duration of employment and service relationships covered by pension insurance until the end of 2006. From the beginning of 2007, your employment history will be calculated based on your annual earnings for each calendar year. Work covered by the Self-Employed Persons' Pensions Act and the Farmers’ Pensions Act is counted on the basis of the earned income confirmed for the insurance as of 2007.

Insured work or entrepreneurial activity in the EU and EEA and in Switzerland will also be counted in your employment history. Work that you have done in countries in the EU and EEA and in Switzerland can be counted as of 1995 (the year when Finland joined the European Union), and no earlier than the date when the country where you worked joined the European Union. Work that you have done in countries in the EU and EEA and in Switzerland will be counted according to the duration of your employment.

Your employment relationships with employers obliged to take out employees’ pension insurance are counted in your employment history. If you would like to check your employment relationships covered by employee pension insurance, you can obtain your pension record from the Finnish Centre for Pensions. You can view your pension record at the Finnish Centre for Pensions by logging in to the online service.

The following are considered equivalent to employment history and therefore contribute to your employment history for a maximum of two years:

  • Periods of maternity, paternity and parental leave
  • Periods of child care leave during an employment or service relationship
  • Military service or civilian service
  • Periods for which you were paid a disability pension, rehabilitation allowance or an occupational injury pension

Any corresponding periods equivalent to working time in EU and EEA countries and in Switzerland can be included when calculating your employment history.

The calculator (in Finnish) enables you to calculate how much employment history you have on the basis of the income you have earned from paid work from 2007 onwards. The calculation is an illustrative estimate that is not binding on the Employment Fund. If the calculator shows that you have slightly more or slightly less than the required eight years, we recommend that you send us an application for a preliminary decision, which will contain a precise calculation of your accrued employment history.

A precondition for receiving an adult education allowance is that you are permanently resident in Finland and you are entitled to Finnish social security. If you move abroad for under a year while you are receiving an allowance, you will generally remain covered by Finnish social security. Even temporary moves abroad should be declared to Kela, which will decide whether you are covered by Finnish social security.

People registered in Åland cannot receive an adult education allowance. Residents of Åland are subject to the province’s own laws on study grants.

You have compulsory insurance under the Self-Employed Persons' Pensions Act or the Farmers’ Pensions Act. The earned income limit for insurance under the Self-Employed Persons' Pensions Act is EUR 7,656.26 and the income limit for insurance under the Farmers’ Pensions Act is EUR 3,828.13. Your insurance has been valid for at least one year immediately before the subsidised studies begin. You have also received the majority of your income from entrepreneurial activities.

You cannot receive an entrepreneur’s adult education allowance if you do not have compulsory insurance under the Self-Employed Persons' Pensions Act or the Farmers’ Pensions Act, or if you have insurance under the Farmers’ Pensions Act but you receive subsidies.

The adult education allowance compensates you for the loss of earnings due to full-time study. In order for you to receive an adult education allowance, your taxable earnings from business activities must decrease by at least one third due to studying during the allowance period. You may also temporarily suspend your entrepreneurial activities for the duration of your studies.
Your earnings from business activities during the allowance period will be compared with the most recent taxation records before the subsidised studies began, and we will examine the matter retrospectively on the basis of the taxation details we receive. Capital income is not included in the comparison. Read more here.

Even if your income from business activities was low before studying, your income must still decrease by at least one third. You will not be entitled to an allowance if you discontinue your business activities altogether.

If your earnings from business activities have not decreased by at least one third, your allowance application will be rejected and any adult education allowance paid without grounds for the year in question will be recovered in full.

In order to receive an entrepreneur’s adult education allowance, your income during the allowance period from sources other than business activities and statutory benefits may be no more than three quarters of the amount of allowance payable, which is a maximum of EUR 444.08 (gross) per month in 2019.

The additional income limit applies to the time when you are receiving an adult education allowance. Outside the allowance period, there is no additional income limit and you are free to earn income from your business activities as well as paid employment. You are obliged to inform us if you surpass or are likely to surpass the additional income limit. Entrepreneurs cannot receive an adjusted adult education allowance.

Some statutory benefits are also considered additional income, including home care allowance without municipal supplements, partial care allowance and partial disability pension. Family caregiving and child support do not affect the adult education allowance.

As a rule, earned income from sources other than your business activities is analysed according to the date when it was earned and not the date when it was paid. However, any holiday pay, holiday bonuses and holiday compensation that you receive from paid employment, as well as performance-related bonuses or equivalent, are considered additional earnings in accordance with the time when the payment was made. Tax refunds and capital income do not affect the adult education allowance.

A precondition for receiving an adult education allowance is that you do not receive other allowances for the same period, such as:

  • Job alternation compensation
  • A study grant from Kela or student housing allowance in accordance with the Act on Student Financial Aid
  • Daily allowances in accordance with the Health Insurance Act
  • Special, maternity, paternity or parental daily allowance or partial parental allowance
  • Special care allowance or special maternity allowance
  • Rehabilitation allowance for the same education
  • Daily unemployment allowance or labour market subsidy
  • Unemployment benefit for education
  • Full disability pension or rehabilitation allowance
  • Unemployment pension or old-age pension
  • Farmers' early retirement aid
  • Full rehabilitation allowance on the basis of the Workers’ Compensation Act or the Farmers’ Occupational Accident and Occupational Disease Act
  • Full compensation for loss of earnings on the basis of the Act on Rehabilitation Subject to Compensation on the Basis of the Motor Liability Insurance Act or the provisions of the Military Injuries Act concerning rehabilitation
  • Years-of-service pension
  • Guaranteed pension

You cannot receive an allowance while you are completing compulsory military service or civilian service.

You can receive an adult education allowance for studies at a Finnish educational institution that is subject to public supervision. The studies may include a full or partial degree or qualification from a university, a university of applied sciences or a vocational college, as well as supplementary or refresher vocational education. In addition, you can receive an adult education allowance for non-formal adult education that enhances your vocational skills and competence.

Your education must last at least two months or at least 43 days in total.

You must study full-time during the allowance period, so your studies must encompass at least three credits or competence points or two study weeks per month. If the scope of your studies is not defined in terms of credits or study weeks, the scope of the studies as defined by the educational institution must average at least 20 hours per week.

You are eligible for an allowance for the following studies:

  • Day or evening programmes
  • Remote studying or multiform learning or an internship included in the studies
  • A thesis, final project, dissertation or other extensive written work
  • Studying abroad if the studies are included in studies completed in Finland, such as going on exchange or completing an internship

Read the specifics on educations that meet the eligibility criteria.

While you are receiving an adult education allowance, you are required to complete at least 3 credits or competence points or 2 study weeks for each month of allowance. If the scope of your studies is not defined in terms of credits, competence points or study weeks, the scope of the studies as defined by the educational institution must average at least 20 hours per week.

Amount and taxation

The entrepreneur’s adult education allowance is EUR 592.11 per month in 2019.

Taxation

The adult education allowance is taxable income subject to a standard withholding tax rate of 20 %.

If you would like to increase or decrease the withholding tax, you can send a new tax card to the Employment Fund for the purpose of benefits, and tax will be withheld at the rate indicated on the tax card. You can order a new tax card on the Tax Administration’s website. When you apply for a new tax card, you will need to know your earnings, taxes and benefits granted to you for the current year. Refer to the payment notification for the adult education allowance for information about benefits. The Employment Fund’s name cannot be found in the list of selectable payers, so please choose ‘other Finnish payer’ and enter the name of The Employment Fund as the payer manually.

You can send the tax card to the Employment Fund by encrypted email.

Kela State guarantee for a student loan

As a beneficiary of the adult education allowance, you may be entitled to a State guarantee for a student loan. Kela processes applications for State guarantees and grants such guarantees. To receive a guarantee decision you can apply to a bank for a student loan and agree on the terms of the loan and the repayment schedule with the bank.

Send your guarantee application directly to Kela.

For more information about student loans, visit Kela website.

Duration

The maximum duration of the adult education allowance is 15 months (322.5 days of allowance). A full month of allowance is considered to include 21.5 days of allowance.

If you have received an allowance before 2017 and you are applying for an adult education allowance for studies that you began then, you may still be entitled to a longer period of allowance in accordance with your earlier allowance decision. The entitlement to the longer allowance period ends on 31 December 2020.

Periods of adult education allowance that were previously granted will be deducted from the maximum duration of the allowance.

When you have used all 15 allowance months, you cannot receive an allowance again. After this, you can apply for subsidies from Kela or other bodies.

Applying

Apply for an entrepreneur’s adult education allowance on our online service. You can monitor the status of applications sent electronically using our online service and you will also receive a payment notification once your application has been processed. Alternatively, you can apply for the allowance by printing the filled out application form, which you then send to us by mail.

If you are applying for an allowance for the first time or for a new educational programme, append a certificate of studies to your application.

You can apply for an adult education allowance in advance as soon as you have been admitted to study at an educational institution or you have begun studying. The allowance can be applied for retrospectively for no more than the six months preceding the month of application.

If the decrease in your income from business activities during the allowance period occurs for reasons other than education, you cannot receive an entrepreneur’s adult education allowance. For example, if your business activities are seasonal in nature and the decrease in income is due to this, you cannot receive an entrepreneur’s adult education allowance.

Entrepreneurs cannot receive an adjusted adult education allowance.

If your business activities have recently begun and your earned income from business activities is not yet visible on your confirmed taxation, append an income statement covering the preceding 12 months or, if you run a limited liability company, your salary details from the company for the preceding 12 months.

Notification of the payment of an allowance or rejection of the application

If the decline in your income from business activities is clear on your application and the other prerequisites for receiving the allowance are met, you will receive a notification of the payment of an allowance by post. The notification will show the maximum amount you can earn from business activities during the allowance period. The notification also includes information such as the allowance payment dates and the amount of the allowance. The allowance is always paid on the last working day of each month.

The notification of the adult education allowance will be shown on the online service where you submitted the application. The online service will automatically send you an email when the payment notification or rejection of the adult education allowance has arrived. You will also receive a letter by post. If you sent your application on paper, you will only receive a letter by post.

If the prerequisites for granting the allowance are not met, we will issue a rejection, which can be appealed.

Why is it important to retain the notification?

Keep the notification of payment of the adult education allowance in a safe place. The final page of the notification is a certificate of your income, and you may need this if you apply for other benefits, such as general housing allowance or day care for your children.
In addition, you can check the following on the payment notification if necessary:

  • The months for which the allowance will be paid and the payment dates
  • The additional income limit applying to earnings from sources other than business activities in each month Note that the additional income limit will be lower in incomplete allowance months than in complete allowance months, but it only applies to the days for which the allowance was granted.
  • The changes that affect the allowance and that you are obliged to report to the Employment Fund.
Estimated processing times


Full adult education allowance 10 days

Adjusted adult education allowance 6 days

Entrepreneur's adult education allowance 7 days

Preliminary decisions 6 days

Scholarship for qualified employee 6 days

Updated 18.3.2019.

Target processing times for applications

Target processing times for benefit applications are:

  • Preliminary decision for adult education allowance 10 calendar days
  • Adjusted adult education allowance 15 calendar days
  • Full adult education allowance and entrepreneur’s adult education allowance 25 calendar days

The processing times shown are averages that describe the target processing time for each type of benefit. In individual cases and in congestion situations, the processing time may differ from the above.

Appeals

Notification sent to an entrepreneur to communicate that payment has been approved cannot be appealed. For this reason, you cannot seek a revised decision. You will receive a decision on your entitlement to an allowance when the decrease in your earnings during the allowance period has been verified, and it is possible to appeal this decision. Rejections can be appealed.

We process appeals in the order we receive them. The processing time is approximately one month. If the decision contained an error that we can correct, you may receive a new payment notification within a few days.

Decisions concerning rejected adult education allowance applications include more detailed instructions for sending an appeal. Send your appeal by encrypted email to: koulutusetuudet@tyollisyysrahasto.fi.

Identifying the decrease in income from business activities

We will investigate the reduction in your taxable income from business activities retrospectively when the taxation is completed for the year in which the allowance was paid.

If the tax details received by the Employment Fund show directly that your income from business activities has decreased by at least one third, you will receive a decision confirming that the allowance was granted for the year in question.

If the decrease in earnings is not directly evident based on the tax details, you will be sent a hearing letter, which you can respond to with a rejoinder and the necessary clarifications. The hearing letter will contain information stating which clarifications we require.

If your earnings from business activities have not decreased by at least one third, your allowance application will be rejected and any adult education allowance paid without grounds for the year in question will be recovered in full.

Example

You have applied for an adult education allowance for the period from 1 September to 31 December 2018. In the most recent taxation information before your application, your income from business activities was EUR 36,000, which averages EUR 3,000 per month. During the allowance period, you may earn a maximum average of EUR 2,000 (gross) per month from business activities. Capital income is not taken into consideration.

Employment history calculator

Calculate whether you meet the work history condition.

Page updated: 18/3/2019