On Thursday 19 December 2019, the President of Finland ratified an act that affects issues such as determining the liability component for persons born in or after 1961. For persons born before 1961, the law that was valid until until 31 December 2019 is applied. The changes are based on the pension agreement made by key labour market organisations in 2014. The legislative amendments enter into force on 1 January 2020.
The amendments will affect the determination of the liability component starting from 2023, which is the earliest when persons born in 1961 can receive the continued unemployment allowance with an age requirement of 62 years.
The lower age limit of the right to a continued unemployment allowance required for the obligation to pay the liability component is raised to 62 years of age for persons born in or after 1961. This means that for these age groups, the liability component will be collected when the person receives the continued unemployment allowance at 62 years of age at the earliest.
The liability component is collected from the employer for persons born in 1961 or later, if the right of the employee to an unemployment allowance due to the termination of their employment that started after reaching the age of 61 years continues so that the person is entitled to an unemployment allowance after reaching the age of 64 years.
The liability component is also collected in case the abovementioned right to an unemployment allowance continues, so that the person starts to receive an old-age pension after reaching the age of 63 years and the unemployment allowance continues until the transition to old-age pension.
In these cases, the liability component is collected from the employer after the dismissed employee has reached the age of 64 or 63 years.
In addition, the ages when the employer’s liability ends are raised for persons born in or after 1961 as follows:
The Employment Fund collects a liability component from the employer, if an employee who was born in or after 1955 is entitled to continued unemployment allowance, as specified in the Act on Unemployment Security, as a result of dismissal or layoff, meaning that the person has not found a new job. We collect a liability component from the employer at the start of the entitlement to continued unemployment allowance, which is approximately two years from the end of the employment relationship if the person has received an unemployment allowance for the maximum period.
In addition, a liability component of the unemployment allowance costs is collected from the employer, if the conditions of payment liability are fulfilled for the persons who have not yet transitioned to continued unemployment allowance. In these cases, we will collect the liability component when the dismissed employee reaches the age when the liability ends.
More information about the liability component on our website.
