One insurance for both employment and self-employment? Government proposes a new combination insurance
The Finnish Government is proposing a new combination insurance for unemployment security for people who have both employment income and self-employment income. If the proposal is approved, both sources of income could be taken into account more effectively than at present when determining earnings-related unemployment allowance. Unemployment funds could start offering the combination insurance from the beginning of 2028.
What does this mean for you?
If you receive income from both paid employment and self-employment, you may in the future have the opportunity to insure both sources of income under the same unemployment insurance scheme.
In practice, under the proposed combination insurance, both employment income and self-employment income could contribute to your entitlement to earnings-related unemployment allowance. The aim is to improve unemployment security, particularly for people whose livelihood is made up of multiple sources of income.
If Parliament approves the proposal, unemployment funds could begin offering combination insurance from 1 January 2028. Offering the insurance would be voluntary for unemployment funds, meaning that not all funds would necessarily make it available to their members. The first earnings-related unemployment allowances based on combination insurance could be paid from the beginning of 2029.
Reflecting changes in working life
The aim of the reform is to improve unemployment security for people who receive income from both paid employment and self-employment.
The proposal is particularly relevant for people with multiple forms of employment, such as freelancers, professionals in the creative industries, and individuals who combine entrepreneurship with paid work.
A third option for unemployment Insurance
Currently, members of an unemployment fund can insure themselves either as employees or as self-employed persons. Under the Government’s proposal, there would be three insurance options in the future:
- Employee unemployment insurance
- Self-employed unemployment insurance
- Combination unemployment insurance
The combination insurance would be intended for people who receive both employment income and self-employment income. These incomes could be earned simultaneously or during different periods of the year.
In the future, unemployment funds would decide themselves which types of insurance they offer to their members. Offering combination insurance would be voluntary for the funds, meaning that the new form of insurance might not be available through all unemployment funds.
Meeting the employment condition?
According to the proposal, eligibility for earnings-related unemployment allowance under the combination insurance scheme would be based on a 12-month employment condition.
One month of the employment condition would accrue for each calendar month during which a person has received at least €930 in wage income, entrepreneurial income, or a combination of both. The length of the employment condition would be the same as for employees and shorter than the current employment condition for entrepreneurs.
Working under a grant would also count towards the employment condition
At present, a working grant does not contribute to the employment condition at all. Under the proposal, an insured working grant could in the future count towards the employment condition for self-employed persons or those covered by combination insurance. It could also be insured as a person’s sole source of income, rather than only alongside employment income or self-employment income.
In addition, a family caregiver’s care allowance could be taken into account when accruing the employment condition.
What happens next?
The Government’s proposal will now be considered by Parliament. The final content of the reform and its entry into force will not be confirmed until the parliamentary process has been completed.
Unemployment Fund Ote will continue to follow the progress of the proposal and will inform its members of any potential impacts as further details of the reform become available.
Read more about the Government’s proposal here: