Questions and answers regarding the coronavirus and labour market support for entrepreneurs and self-employed persons

Entrepreneurs are temporarily entitled to labour market support to deal with the sudden and unforeseen decline in demand due to the coronavirus epidemic. Labour market support is one form of unemployment benefits.

To be eligible for labour market support, an entrepreneur must meet the following conditions:

• full-time employment of the entrepreneur has ended or
• the monthly income from the entrepreneurial activities is less than EUR 1,089.67 per each person engaged in these activities as an entrepreneur.

The termination of full-time employment or decrease in income must be due to an extensive outbreak of an infectious disease, i.e. the coronavirus epidemic.

An entrepreneur may also be entitled to unemployment benefit on the basis of other provisions of the Unemployment Security Act.

• For more information, please visit the Job Market website

All entrepreneurs are eligible for labour market support regardless of whether they engage in business as self-employed persons or in the form of a company.

Freelancers can work in an employment relationship or as entrepreneurs. Under the Emergency Powers Act, freelancers working as entrepreneurs are entitled to labour market support similarly to other entrepreneurs. Entrepreneurs do not have to cease their business activities completely in order to receive labour market support.

In order to receive labour market support, a person must register as a jobseeker with the Employment and Economic Development Office (TE Office) and the TE Office must issue a labour policy statement on their entitlement to labour market support to the Social Insurance Institution of Finland (Kela).

In practice, the procedure is the following:

1. The person registers with the TE Office as a jobseeker and provides an account of the termination of full-time employment or decrease in income due to the coronavirus epidemic.
2. The TE Office issues a labour policy statement to Kela.
3. The person applies to Kela for labour market support.
4. Kela pays the labour market support to the person.

Studies are no obstacle to being eligible for labour market support.

If you are self-employed and apply for labour market support due to reduced income, you must submit a statement of income from your business activity to the TE Office when you register as a jobseeker. Based on this statement, the TE Office will determine if you meet the eligibility criteria for labour market support.

In practice, you will personally assess your income before and during the epidemic. For example, you can report as your estimated income the difference between cash-based income and expenses, and add any wages or salaries you have paid yourself. Report the gross amount of your income.

You are also required to report you monthly income to Kela. This income will be taken into account in the calculation of your adjusted unemployment security. Any income a self-employed person earns from their business activities while receiving labour market support will reduce the amount of labour market support. However, you may earn EUR 300 a month without this income affecting your labour market support. As a general rule, each euro earned exceeding EUR 300 reduces labour market support by 50 cents. The amount you have reported as monthly income from your business activity in your application will be counted as income.

Due to the COVID-19 pandemic, the amount that you can earn without it affecting your labour market support has been temporarily increased. For periods of adjusted unemployment security that start 1 June– 31 December 2020, the amount is:

• EUR 465 if the support is paid every 4 weeks
• EUR 500 if the support is paid monthly

As usual and for periods of adjusted unemployment security that start on or after 1 January 2021, the amount is:

• EUR 279 if the support is paid every 4 weeks
• EUR 300 if the support is paid monthly

In most cases the termination of full-time employment will be verified on the basis of information provided by the jobseeker. The jobseeker must provide an account to the TE Office indicating the sector in which the business operates, and the impact of the COVID-19 pandemic and consequent restrictions and recommendations, which led to the termination of full-time employment. Another option is that the job seeker must give an account to the TE Office on the income earned from the business activities, and that the decrease in income has been due to the COVID-19 pandemic.

Entrepreneurs and self-employed persons do not need to close down their business to be eligible for labour market support under the temporary amendment of the Unemployment Security Act. When entrepreneurs or self-employed persons close down their business, they became eligible to unemployment benefit under other provisions of the Unemployment Security Act.

The maximum limit is the same as the monthly income used for the fulfilment of the employment condition relating the entrepreneurs’ unemployment allowance.

Entrepreneurs registered as jobseekers no later than on 15 April 2020 have been entitled to labour market support for the period starting on 16 March, even if they had not been registered as jobseekers at that time. However, the support has not been paid until the conditions have been met.

Starting from 16 April 2020, those registered as jobseekers will be entitled to labour market support from the date of registration or, if the other eligibility conditions for labour market support are met later, from that date onwards.

Any self-employed person meeting the eligibility criteria for labour market support can apply. Eligibility for labour market support requires that the person’s full-time employment has ended or the monthly income from business activities is less than EUR 1,089.67 per each self-employed person engaged in these activities. Another requirement is that the person’s full-time work ended or their income was reduced due to the coronavirus epidemic.

Labour market support may be paid for the period of 16 March 2020–30 September 2021 on the basis of a temporary provision due to the COVID-19 pandemic. After the end of that period, an entrepreneur must meet the usual conditions to be entitled to the unemployment security of entrepreneurs. For example, a decline in the workload or income of a full-time entrepreneur alone does not normally entitle the entrepreneur to unemployment benefit.

Self-employed persons have been entitled to labour market support when they have engaged in the business part-time, business activities have been terminated or the employment of a full-time entrepreneur ends (e.g. due to decreased ability to work). The legislative amendment extends unemployment security to self-employed persons who according to the provisions currently in force have not been entitled to unemployment benefits because economic downturns are normally considered a risk to be taken in doing business.

• For more information, please visit the Job Market website

A valid insurance policy under the Self-Employed Persons Pensions Act is not a condition for being entitled to labour market support.

A job seeker who has terminated his or her employment in a business has the obligation mentioned in the Unemployment Security Act to accept employment offered by an employer on an individual basis.

The provisions of the Unemployment Security Act concerning a refusal to accept work offered by the TE Office or any negligence related to an employment plan or another similar plan or service do not apply to the right of a self-employed person to receive labour market support.

Yes, you can apply for labour market support even if you have received support for your business activities.

The law requires that a labour policy statement must be given without delay, but no later than within 30 days of the applicant’s submission of the documents required for the statement, or from the expiry of the submission deadline. The statement of the TE Office is available in the TE Office’s online service.

Updates of the coronavirus situation can be found on the websites of the Employment and Economic Development Offices and Social Insurance Institution of Finland Kela.

• TE services for entrepreneurs and employers during the coronavirus epidemic

• Kela (Social Insurance Institution): Temporary unemployment benefits for self-employed persons 

• Federation of Unemployment Funds in Finland (TYJ): FAQs about lay-offs and corona (in Finnish) / Self-employment and unemployment benefits