Controversial active model for unemployment security will come into force from 1 January 2018
The model cuts unemployment security, increases bureaucracy but does not genuinely encourage the unemployed. Photo: GettyImages
Today, 19 December 2017, the Parliament of Finland approved a bill on an active model for unemployment security, which will affect the lives of unemployed persons receiving unemployment benefit as of January. The model cuts unemployment security, increases bureaucracy but does not genuinely encourage the unemployed.
– The model in the bill treats unemployed jobseekers unequally based on their place of residence and occupation. It is unreasonable to cut unemployment security however much an unemployed person tries to find work, says PAM’s social policy expert Mari Kettunen.
Today the Parliament of Finland has approved a so-called active model for unemployment security by 103 votes to 90. The active model, which comes into force from the turn of the year, means in practice that the level of earnings-related allowances, basic allowances or labour market support will decrease unless the unemployed person meets the activation requirements prescribed in the law. When allowances start to be paid out, the activity of the unemployed person is assessed in periods of 65 payment days.
Activity in the previous assessment period affects benefits in the following 65 payment-day period. If a person does not meet the activity requirement, the level of their allowances decreases by 4.65 per cent over the next 65 payment day period. The level of benefits may only decrease from the full allowance once.
How can you prove that you have been active?
Sufficient activity is considered to mean that during a 65 payment-day period a person:
- has performed an aggregate amount of work as a wage earner, which if performed over one calendar week would fulfil the employment condition (generally 18 hours),
- has earned from business activity in total at least 23% of the monthly earnings required to fulfil the entrepreneur’s employment condition (€ 240.81 in 2017) or
- has spent 5 days in an employment-promoting service,
-has spent 5 days in another service or activity to improve employability organised by the labour force authorities or,
- has spent five days in activity in a workplace or employment-related activity to support recruitment, during which period the person is paid unemployment benefit.
These forms of activity are not cumulated. Also, the waiting period at the start of unemployment will decrease at the turn of the year form 7 days to 5 days.
The active model for unemployment security aims to prevent persistence of unemployment. The model may also affect the total duration of unemployment and could also undermine the quality of employment relationships.
– Even if an unemployment spell is interrupted by short periods of employment or participation in services, it is not clear what effect this will have on a jobseeker’s total duration of unemployment or how the model will affect the quality of employment relationships in future, Kettunen states.
Like other trade unions, PAM has not been party to the preparation of the model and is not in favour of its implementation.
The unemployment security model was fiercely resisted by the opposition. In their opinions, the Social Affairs and Health Committee and the Constitutional Law Committee also considered that there were general problems in the proposal associated with the differing regional availability of jobs and the employability of jobseekers. Even the Minister of Employment Jari Lindström (Blue Reform) said in the TV programme Huomenta Suomi that the government may yet have to modify the active model.