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Questions and answers on entrepreneurs’ right to social security
As a temporary measure, self-employed persons are also entitled to labour market support on the grounds of sudden and unforeseen decline in the demand due to the coronavirus epidemic. Labour market support is one form of unemployment benefits.
What is required to be eligible for labour market support:
- full-time employment of the entrepreneur has ended or
- monthly income from entrepreneurial activities is less than EUR 1,089.67 per each person engaged in it 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.
The decision concerns all entrepreneurs regardless of whether they engage in business as self-employed persons or in the form of a company.
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:
- 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.
- The TE Office issues a labour policy statement to Kela.
- The person applies to Kela for labour market support.
- 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.
In most cases the termination of full-time employment will be verified on the basis of information provided by the job seeker. The job seeker must give an account to the Employment and Economic Development Office on the sector where the business operates and how a serious communicable disease and the consequent restrictions and recommendations have caused the termination of full-time employment. Another option is that the job seeker must give an account to the Employment and Economic Development Office on the income earned from the business activities, and that the decrease in income has been due to a serious communicable disease.
Closing down the business is not a condition for being entitled to labour market support.
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 a jobseeker no later than on 15 April 2020 will be entitled to labour market support for the period starting on 16 March, even if they were not registered as jobseekers at that time. However, the support will not be paid until the conditions are 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 can be paid to self-employed persons between 16 March and 30 June 2020. The Act will remain in force until 30 June 2020.
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.
A valid insurance policy under the Self-Employed Persons Pensions Act is not a condition for being entitled to labour market support.
The Act on the Right of Self-Employed Persons to Labour Market Support entered into force on 8 April 2020. This means that such persons may now apply for labour market support.
If self-employed persons register as jobseekers by 15 April 2020, they will be entitled to labour market support for the period starting on 16 March, even if they were not registered as jobseekers at that time. However, the support will not be paid until the conditions are met.
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.
Self-employed persons can apply for both the support to solo entrepreneurs and unemployment security. These will not be adjusted to each other; in other words, being eligible for one form of support will not affect the eligibility for or the amount of the other.
Yes, you can apply for labour market support even if you have received support for your business activities.
It depends on the TE Office. The law requires that a 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 sent to the self-employed person by post, and it is also 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 in the coronavirus situation
- TE Services: Information to self-employed persons registering as jobseekers (in Finnish)