Adjusted basic unemployment allowance

Adjusted basic unemployment allowance

A person who is employed full-time is not eligible for basic unemployment allowance. But a person employed part-time may have the right to receive an adjusted basic unemployment allowance.

An adjusted basic unemployment allowance is paid if the person accepts either a full-time job lasting no more than two weeks or a part-time job or receives income from part-time entrepreneurship or from his or her own artistic activities.

Part-time work is work performed under an employment relationship wherein the work involves no more than 80% of the total number of working hours specified for a full-time employee in the sector.

Entrepreneurial activities or the artist’s own artistic work is considered to be part-time if the amount of work required by it is so small that it does not prevent accepting full-time employment. The TE Office makes the determination of whether work is considered part-time.

An unemployed job-seeker can have monthly earned income in the amount of a so-called protected portion, without the earning decreasing the amount of the unemployment benefit. This protected portion is EUR 300 per month or EUR 279 for a period of four weeks. The earnings for an unemployment period must be declared to Kela / the unemployment fund even if they remain below the protected portion threshold.

A time period called an adjustment period is used in summing of the amounts of earned work wages for calculation of the amount of adjusted unemployment benefits. The length of the adjustment period depends on the salary-payment period and is either a month or four weeks.

In the adjustment, the income considered includes wages and other payment considered to be compensation for work performed. In addition to wages, also, for example, royalties and copyright remuneration, compensation comparable to wages, and earnings from entrepreneurial work are considered to be earnings included in earned income. In contrast, for example, tax-exempt scholarships and grants do not affect the amount of earned income.

The amount of the adjusted basic unemployment allowance is calculated such that half of the income in excess of the protected portion is deducted from the full allowance.

A one-month adjustment period:

full allowance – (0.5 × [wages – 300] / 21.5) = 1 day’s allowance

A four-week adjustment period:

full allowance – (0.5 × [wages – 279] / 20) = 1 day’s allowance

The allowance and the earned income when added together shall be no greater than the number of wages that forms the basis for the basic unemployment allowance. If, for example, a monthly earned income of EUR 2,000 has been used in the calculation of the allowance, the maximum adjusted allowance to be paid must be no more than the EUR 2,000 obtained as the sum of the earned income and the allowance.

The adjusted basic unemployment allowance is paid for each day of the adjustment period (five days per calendar week), provided that there are no other impediments to payment.

KELA – your own income
TYJ –effect of earned income

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