First review period of the active model coming to an end – service sector processing times will not be much longer

The fund’s manager, Markku Virtanen, expects that processing times will lengthen by a matter of days at most.

The active model for unemployment security, which came into effect at the start of the year, threatens to cut 4.65% from the allowances of unemployed persons who have not proved that they have been active in the way required by the law. How many persons receiving allowances from PAM’s Unemployment Fund are being affected by this?

We don’t know yet, even though the first 65-day review period is now over, says the fund’s manager Markku Virtanen.

"We will only know the exact figure after decisions have been made for some time after the first period. Applications will come in gradually through April, not all at once. We will know for sure what the outcome of the first period was after May 1 ", Virtanen says.

A fairly large, and ever-growing, share of the recipients of allowances from PAM’s Unemployment Fund work part-time and receive adjusted earnings-related allowances. Just about all of them can be expected to meet the condition of the active model of working at least 18 days in a 65-day review period. Currently they represent around 35% of recipients, and thus the majority of them will not be affected by the cut, Virtanen states.

You could even imagine that the conditions of the active model would actually increase the number of recipients of adjusted allowances, but that may not be the case, since their share of the fund’s recipients has been increasing for years anyway.

It has also been feared that the active model will lengthen processing times for unemployment fund applications, because it will create more work for the funds. Whilst the workload will go up, Virtanen says that it will extend processing times by days rather than weeks.

PAM’s Unemployment Fund has installed a new version of its payments software which semi-automatically selects for checking those applications where there is a change due to the conditions of the active model. At first, therefore, it will monitor those cases where the fund has to make a decision on cutting allowances. In future the payments software will also select those cases where the cut continues or allowances return to their previous level once the activity condition has been met. This automation means less additional work for the fund’s processing staff. The situation is also helped by the fact that unemployment is generally going down in service sectors.

"Despite this there could of course be a longer delay in isolated cases", Virtanen says.

The fund will send recipients messages on their decisions as normal. These are sent out as the decisions are made. Based on the latest data for February, around 16,600 people were receiving allowances from PAM’s Unemployment Fund, 5,700 of whom were receiving adjusted allowances.

For unemployed persons receiving labour market support or basic allowances, their activity is monitored by Kela. Last week the Aamulehti newspaper reported that, based on information to date, only 46 per cent of these unemployed persons met the activity condition at the start of the year. The remainder therefore face cuts.

Since, according to data released by Kela, almost the same share of unemployed persons would have met the condition last year too, the active model does not appear to have been very successful in activating the unemployed.

The activity condition can be met either by working for 18 hours over a 65-day, or roughly three-month period, by entrepreneurial activity or by participating in employment-promoting services organised by the TE offices. The cut lasts for the following review period, but reduced benefits return to their previous level if the activity condition is met during the period.

Trade unions, like PAM, have opposed the active model because it cuts unemployment security, and in many cases for reasons that unemployed persons cannot really influence themselves. This is because in many regions there aren’t the job vacancies available and TE offices’ services are limited.

Many demonstrations and work stoppages were organised in February to oppose the law, and a citizens’ initiative to overturn the law that has also gathered over 140,000 signatures will be considered by the Finnish Parliament later on. PAM’s confederation, SAK, has proposed replacing the active model with a more motivating employment model.