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I work on a grant

Many of our members wonder how a grant affects their daily allowance. The impact of a grant on entitlement to earnings-related unemployment allowance is assessed on a case-by-case basis by the employment authority. Therefore, any grant that has been awarded must be reported immediately to both the employment authority and to us at the unemployment fund.

Right to earnings‑related unemployment allowance during a grant period

The impact of a grant on earnings-related unemployment allowance is assessed on a case-by-case basis. Any grant that has been awarded must always be reported to both the employment authority and the unemployment fund, as during the grant period you may be considered to be working full-time in your own work. The employment authority examines whether the applicant for earnings-related unemployment allowance meets the labour policy requirements and forwards a statement on this to the fund.

However, if the grant period begins while you are unemployed, the employment authority will not assess whether the work carried out with the grant is full-time or part-time during the first four months. Despite this, the grant must still be mentioned in the labour policy statement that the employment authority submits to the fund. Before processing the application, the fund must be able to see from the statement that the employment authority has been informed of the grant.

If the work carried out with the grant is considered to prevent you from seeking full-time employment, you will not be entitled to earnings-related unemployment allowance. In such cases, the grant period is regarded as an acceptable reason for being outside the labour market, and it extends the reference period for the employment condition.

If the employment authority considers the grant-funded work to be part-time, earnings-related unemployment allowance may be paid despite the grant, provided that the other eligibility conditions for the allowance are met. The grant period may also constitute self-employment, for which earnings-related unemployment allowance may be payable under certain conditions. More detailed information on this assessment can be obtained from the employment authority in your municipality or employment area.

What are the acceptable reasons for extending the reference period?

According to the Unemployment Security Act, the following are acceptable reasons for extending the 28‑month reference period:

  • illness, institutional care, or rehabilitation;
  • military service or non-military (civilian) service;
  • full-time studies;
  • the birth of a child or care of a child under the age of three;
  • a grant period;
  • another comparable acceptable reason;
  • periods during which a person has worked while receiving partial sickness allowance;
  • time spent in employment-promoting services;
  • time during which a person has served as a Member of Parliament or as a minister.

The reference period may be extended for an accepted reason by a maximum of seven years.

If, based on the employment authority’s labour policy assessment, the grant does not constitute an obstacle to receiving earnings-related unemployment allowance, the effect of the grant on the amount of the allowance paid depends on whether the grant is taxable.

The impact of a grant on the amount of earnings-related unemployment allowance depends on whether the grant is taxable or tax-exempt. A taxable grant is considered so‑called adjusted income, meaning that the grant partially reduces the amount of the earnings-related unemployment allowance. In contrast, a tax‑exempt grant does not affect the amount of the earnings-related unemployment allowance in any way.

How to proceed?

Submit a copy of the grant decision to the fund if you accept the grant. At the same time, report the periods during which you work under the grant separately. Grant-funded work is considered self-employment and does not accrue your employment condition in an employee unemployment fund, meaning that the hours worked do not need to be reported in the application. Also inform the fund if you are awarded additional grant funding within the same year, even if you are no longer receiving earnings-related unemployment allowance at that time.