Unemployment benefits to support work or entrepreneurship

Ministry of Economic Affairs and Employment 18.4.2016 10.30
Press release
In the future unemployment benefits should be used to promote employment, that is, to finance start-up grants, pay subsidies and mobility allowances. Certain amendments are also proposed to unemployment benefits with the aim to encourage active search for employment.   

These are now being prepared at the Ministry of Employment and the Economy. The amendments should enter into force on 1 January 2017. They are part of the employment package agreed in the Government budget discussion on 5 April 2016.

- I am very happy with the reforms we are going to make. In the future unemployment benefits will support finding employment and starting as an entrepreneur. The amendments encourage people to really look for employment, while making sure that we will have adequate funding to deal with employment also in the future. We have estimated that this should open up new employment opportunities to about 10 000 people who are now unemployed, says Minister of Justice and Employment Jari Lindström.

Start-up grants and pay subsidies used more widely

In the future employment benefits would be used for start-up grants, pay subsidies and mobility allowances targeted to the unemployed. The reform will bring more flexibility to the use of employment funds while securing that enough funding continues to be available.

Start-up grants equal to the basic unemployment allowance of EUR 700 a month could be granted for up to one year.  Pay subsidy could be the maximum of 30, 40 or 50 per cent of the wage costs, which would allow more flexibility in the way it can be used. In targeting pay subsidies more attention is given to preventing long-term unemployment.

Mobility allowances are a new type of support, combining the present travel allowance and compensations for moving costs. At the maximum this could be equal to two months' basic unemployment allowance, i.e. as much as EUR 1 400.  This should encourage to searching for employment in a larger area.

The amendments will first be applicable for two years, after which they will be assessed to decide on future actions.

Changes encourage to active search for employment

In the future an unemployed person may not refuse full-time employment on the grounds that the unemployment benefit is higher than the pay, also considering the expenses incurred by accepting the job.  If there are no jobs in one's own field, the Employment and Economic Development Offices may offer a job from another field already at the start of the unemployment.

The employment benefit rules concerning commuting will be harmonised. For example, if an employed person has a car, this should be used for travel to work outside the commuting area as well.

As a rule the unemployed should take advantage of all the services offered to them, which will be further developed at the Employment and Economic Development Offices. Employment offering will be improved and more training in seeking employment and search for jobs on one's own initiative will be provided.

The Ministry of Employment and the Economy sent the legislative proposal concerning accepting employment for comments for six weeks on 18 April. It is also available on the website of the Ministry of Employment and the Economy at www.tem.fi/lausuntopyynnot.

Inquiries:
Juha Halttunen, Special Adviser to the Minister of Justice and Employment, tel. +358 295 060 066
Päivi Kerminen, Government Counsellor, Ministry of Employment and the Economy, tel. +358 295 049 011
Heikki Räisänen, Research Director, Ministry of Employment and the Economy, tel. +358 295 047 118