Determination of allowance
The daily allowance for an entrepreneur is determined on the basis of the earned income selected for AYT. The selected annual earned income may not exceed the annual earned income for your statutory pension insurance under YEL, TyEL or MYEL. The months during which the confirmed income on which your pension insurance is based has been at least the statutory minimum are included when determining the amount of unemployment allowance.The minimum amount is
- EUR 12,576 in 2018
- EUR 12,564 in 2017
- EUR 12,420 in 2016
- EUR 12,325.55 in 2015
If the earned income level chosen has varied, daily allowance is determined on the basis of the monthly average of income over the 15 months preceding unemployment.
The income on which your pension insurance is based and the income notified to AYT are notified as annual income. The annual earned income is divided by 12 into a monthly income when calculating daily allowance. Daily pay is obtained from the monthly income by dividing it by 21.5 working days. The daily allowance is calculated on the basis of this monthly pay.
If, after having become unemployed, you have not been able to meet the employment condition for entrepreneurs while a member of AYT and you have requalification security from an employee' fund, the unemployment allowance is based on the salary prior to becoming self-employed.
Amount of entrepreneur's allowance
The earnings-related allowance comprises
- a basic component
- an earnings-related component
- a potential child increment and
- a potential increment component (from a period of potential employment promotion measures)
In 2018, the amount of the basic component is EUR 32.40 per day. The earnings-related element is 45% of the difference between your daily pay and the basic component. If your annual earned income is higher than EUR 36,936, the earnings-related component is 20% of the exceeding amount.
You are entitled to a child increase for children who are under 18 years of age and in your care. You can also claim the child increase for the children of your partner if they are living with you in the same household. In 2018, child increments are
- EUR 5.23 per day for 1 child
- EUR 7.68 per day for 2 children
- EUR 9.90 per day for 3 or more children
The allowance with child increments can be no more than 90% of the earned income on which the allowance is based.
Example of daily allowance calculation
You have insured yourself in AYT for an annual income of EUR 20,000 and you have 2 children.
Your monthly income
EUR 20,000 / 12 months = EUR 1,666.67 per month
EUR 1.666.67 / 21.5 = EUR 77.52
(45/100) * (EUR 77.52 per day - EUR 32.40 per day) = EUR 20.30
Earnings-related allowance =
basic component + earnings-related component + child increment
Your earnings-related allowance
EUR 32.40 per day + EUR 20.30 per day + EUR 7.68 per day = EUR 60.38 per day
The daily allowance including the child increment can be no more than 90% of the daily pay.
The 20% rule
The monthly average of insurance levels over a 15 month period preceding unemployment is taken into account when determining the amount of the daily allowance. An increase not exceeding 20% can be taken into account in your chosen level of income during that period. If the income level for AYT fund increases by more than 20%, the increased level must be maintained for at least 15 months in order for the share exceeding 20% to be taken as the basis for unemployment allowance.
An example of the 20% rule
You joined AYT on 1 January 2016. During the period 1 January - 31 December 2016, your chosen earned income has been EUR 20,000 per year. You have increased the income level to EUR 30,000 per year, effective as of 1 January 2017.
a) If you become unemployed within 15 months of the increase, for example as from 1 April 2017, and the earned income has been at the level of EUR 30,000 over 3 months and at the level of EUR 20,000 over the preceding 12 months which, increased by 20%, is EUR 24,000 per year.
The monthly income on which the daily allowance is based is
[12 x (EUR 20,000/12) + 3 x (EUR 24,000/12)] / 15 = 1 733,33 €
b) If you become unemployed at the earliest 15 months from the date of the earned income increment, for example, as from 1 April 2018, and your income has been at the level of EUR 30,000 over the entire 15 months preceding unemployment. The monthly income on which the daily allowance is based is then EUR 30,000 / 12 = EUR 2,500.
Becoming unemployed while receiving a partial disability or part-time pension
If you have received a partial disability or part-time pension before becoming unemployed, your allowance is determined in accordance with the situation prevailing prior to the pension (full earned income level), provided that you met the employment condition for entrepreneurs in AYT before the pension.
Payment of part-time pension will cease if you become unemployed.
If payment of the partial disability pension continues during the period of unemployment, the partial disability pension will be deducted from the daily allowance.
Increased earnings-related component of entrepreneur's daily allowance
If you receive entrepreneur's daily allowance, you may be entitled to an increased earnings-related component only for the period of employment promotion measures. Increased unemployment allowance is paid for up to 200 days regardless of whether the full or adjusted benefit is paid to you.
This increased earnings-related component consists of 55 % of the difference between the daily income and the basic component. If your annual income exceeds EUR 36,936.00, the increased earnings-related component is 25 % of the daily income exceeding that.
Maximum payment period of entrepreneur's daily allowance
You are entitled to unemployment allowance after a personal liability period of 5 working days (Mon-Fri). You can claim daily allowance for 5 days per week.
Earnings-related allowance is paid for a maximum of
- 300 days of unemployment, if you have had employment history at most 3 years
- 400 days of unemployment, if you have had employment history over 3 years
- 500 days of unemployment, if you have turned 58 years before meeting the employment condition and have had at least 5 years of employment history during the last 20 years
As an entrepreneur, you are not entitled to extended unemployment allowance. If you reach your maximum payment period and remain unemployed, then you can claim labour market subsidy (EUR 32.40 per day) from Kela.
Daily allowance based on salary
If you have not been able to meet the employment condition for an entrepreneur before becoming unemployed and you have joined AYT from an employee fund, you may be eligible for daily allowance based on salary. The right is called requalification security.
The prerequisite for requalification security is that you have met the employment condition for an employee while a member of an employee fund, and you have joined AYT within one month of leaving the employee fund. If you have received daily allowance from an employee fund immediately before self-employment, the remaining days of the maximum payment period will be paid on the basis of requalification security.
Requalification security is in effect until the employment condition for an entrepreneur is met, up to a maximum of 18 months from commencement of full-time entrepreneurial activities.
Further information on employee-based allowance is available on the website of the Federation of Unemployment Funds in Finland (TYJ).