Over the course of this year, the Ministry of Social Affairs and Health has worked with central labour market organisations to prepare proposals for changes in the adult education allowance on the basis of development suggestions from the organisations. The Employment Fund, being the body responsible for the practical administration of the adult education allowance, has also been involved. On 30.9.2019, the Ministry of Social Affairs and Health circulated a proposal on the proposed changes for comment to stakeholders. The deadline for comments is 1.11.2019.
The purpose of the proposed changes is to improve the potential for employees to study alongside work on the adult education allowance. The harmonisation of work and study is to be encouraged by reforming the current adjusted adult education allowance so that it would be more attractive to undertake studies alongside work. The reform is intended to be cost-neutral; in other words, the changes would affect the way in which the full adult education allowance is calculated, to offset any increase in allowance expenditure caused by the changes. The proposal states that the amount of the full adult education allowance would be reduced from what it is now. This would result in an average reduction of EUR 78 per month in the adult education allowance for current recipients. In 2018, the average adult education allowance was EUR 1,419 per month. Usage of the adult education allowance has increased in recent years, and in 2018 some 25,000 employees and entrepreneurs utilised the adult education allowance to improve their competence.
Employees must complete a certain amount of studies within a given time in order to qualify for the adult education allowance. The proposal now circulated for comment proposes changes to the study performance requirements. In the future, to qualify for the allowance students would have to complete 4 or 2 credits per month while on the allowance.
Currently, the adult education allowance may be granted for a maximum of 15 months. Changes are also proposed to how this 15-month maximum is calculated. According to the current Act, a person studying alongside work is required to complete as many credits as allowance recipients on full-time study leave, and every month on the allowance is counted as a full month. In the future, it is intended that the maximum allowance period would still be 15 months, but calculated in either one-month or half-month increments. The required study performances and the accumulation of months towards the maximum would be bound to the student’s income during the allowance period. If the student’s income decreased by no more than 50% of the average income used as the basis for calculating the allowance, the student would be required to complete at least 2 credits on average per month, and this would count as half a month towards the maximum allowance period. This change would facilitate a more flexible harmonisation of work and study according to each person’s life situation.
Under this proposal, an employee would always apply for the adult education allowance after the fact, enabling the recipient to decide more flexibly on how to use the allowance; also, Incomes Register data can then be used as input in the delivery process. Currently, it is possible to apply for an advance ruling on the adult education allowance, and it is also possible to apply for the allowance in advance. With the proposed reform, applicants could still be given an advance ruling as to whether they fulfil the criteria for being granted the allowance.
The proposal is based on the assumption that the changes would enter into force on 1 Aug 2020. This means that the Government proposal on the matter might be submitted to Parliament in autumn 2019. The Employment Fund will inform our benefit clients and stakeholders of the progress of this legislation and of the impact of the proposed changes, besides publishing information on our website.
Merli Vanala, Director, Customer Relations, email@example.com tel. 040 841 8201
Bonds are EUR 600 million each.
The biggest changes relate to the application process, the amount of the allowance and study performance requirements. The Parliament of Finland passed the new law on 29 May 2020.