Unemployment insurance

The Unemployment Insurance Division of the Financial Supervisory Authority (FIN-FSA) is part of the Department of Insurance Supervision. We supervise the activities of unemployment funds with respect to their finances and codes of conduct. The objective of supervision is to ensure that unemployment funds comply with the law in their codes of conduct and application of legal provisions, and that the funds pay the required benefits to their members.

We supervise unemployment funds’ processes for handling applications for benefits, and unemployment funds’ administration and financial condition. We annually confirm unemployment funds’ membership fees and handle applications relating to mergers and amendments to fund rules. We maintain a register of unemployment funds.

We also supervise the codes of conduct of the Unemployment Insurance Fund and the Education Fund (due to merge on 1 January 2019).

Amendments to rules

When confirming the rules of unemployment funds, we examine whether the rules presented for amendment are in accordance with legislation and binding regulations. From a practical standpoint, it is justified for a preliminary proposal for a rule amendment to be submitted to us for comment before it is considered by the competent body of the unemployment fund. In this way, we provide feedback on the proposed rule amendment before the issue is considered by the competent body of the unemployment fund.

The rule amendment enters into force once we have confirmed the amendment.

Merger permission

With the permission of the FIN-FSA, an unemployment fund can agree to merge with another unemployment fund. Applications for merger permission are made in writing and submitted to the FIN-FSA’s Registry. We recommend that funds contact us as soon as possible at the early stage of a merger project.

Register of unemployment funds

We maintain a register of unemployment funds, in which information on the administration of unemployment funds is entered. Entries in the register of unemployment funds have legal effects. The legal capacity of an unemployment fund, for example, requires that the fund is entered in the register of unemployment funds.

Statistics

We publish statistics on unemployment funds’ activities and finances, benefits paid, number of benefit days, membership fees, processing times and benefit expenditure.

The statistics are published only in Finnish.

Description of unemployment fund activities

Unemployment funds are entrusted with the task of organising statutory income security for their members: for example, an unemployment fund pays to its members earnings-related daily allowance, commuting and relocation allowance, and job alternation compensation.

An unemployment fund may not engage in any other type of activity or be connected with entities carrying out any other type of activity in a manner that would limit the independence of the fund.

In Finland, there are unemployment funds for wage earners and entrepreneurs. The FIN-FSA maintains a register of unemployment funds. Information on all unemployment funds can be found in the FIN-FSA’s list of supervised entities.

Unemployment funds perform public functions. Their activities and codes of conduct are governed by law (e.g. the Administrative Procedure Act and the Unemployment Funds Act) and the members of various funds thereby have the same rights and obligations. In the activities and administration of unemployment funds there are, however, differences arising from the rules of the funds, which means that their organisation, membership criteria and fees may differ. Processing times for benefit applications and the organisation of customer service, for example, may also be different.

The FIN-FSA supervises the activities of unemployment funds

The FIN-FSA supervises the activities of unemployment funds with respect to their finances and codes of conduct. For example, we confirm the funds’ rules and annual membership fees. With regard to benefit payments, the FIN-FSA monitors the funds’ compliance with legal provisions in codes of practice and processing practices.

The FIN-FSA cannot, however, change individual decisions given by unemployment funds; if you are dissatisfied with a decision of an unemployment fund, you may file an appeal with the Social Security Appeal Board, following the instructions enclosed with the decision. Decisions of the Social Security Appeal Board can be further appealed to the Insurance Court. Links: www.samu.fi and www.vakuutusoikeus.fi/en/.

Benefits granted by unemployment funds are defined in benefits legislation

In their activities, all unemployment funds are required to comply with the same legislation governing benefits. For example, provisions on the eligibility criteria for earnings-related daily allowance and its level are laid down in the Unemployment Security Act. The level of earnings-related daily allowance payable to fund members in similar situations must be the same in all unemployment funds.

Correspondingly, provisions on the eligibility criteria for job alternation compensation and its level are laid down in the Act on Job Alternation Leave, and the amount of compensation does not depend on the unemployment fund granting the compensation. Some of the eligibility criteria for benefits are decided by Employment and Economic Development Offices and are binding on the unemployment funds (for example, registration as a job seeker and job alternation agreement).

If a person does not meet the eligibility criteria for benefits paid by an unemployment fund, he or she may be entitled to the basic allowance or labour market subsidy granted by the Social Insurance Institution of Finland (Kela). The labour market subsidy is paid to job seekers who are not yet established in the labour market or who have exceeded the maximum period for payment of unemployment benefit.

The FIN-FSA supervises the activities of unemployment funds, but does not supervise Kela.

Unemployment fund membership

An application to become a member of an unemployment fund is made in writing or electronically. A person may be a member of only one unemployment fund at the same time. Membership of an unemployment fund commences, at the earliest, on the date of arrival of the application.

The right to income security does not, however, begin immediately upon joining the unemployment fund; the right to benefits always requires membership of the fund for a certain period of time and, in addition, working or entrepreneurship for a certain period of time. These time limits are laid down in the Unemployment Security Act.

Wage-earner unemployment funds operate in various sectors, and acceptance for membership of a certain fund often requires specific education or training or working in a certain occupational field. Even so, wage earners may have the option to choose between several unemployment funds.

An entrepreneur can only become a member of an entrepreneur unemployment fund and cannot insure themselves in a wage-earner unemployment fund. The definition of an entrepreneur for the purpose of unemployment insurance deviates, for example, from provisions relating to entrepreneurs in pensions legislation.

In unemployment insurance, persons who do not own an enterprise at all may also be deemed to be entrepreneurs if they work in an enterprise in which their spouse, co-habiting partner or another family member living in the same household has a sufficient level of ownership or control. For this reason, when applying for membership, it is important to provide the unemployment fund with information on, for example, the ownership or control of a spouse in the employer enterprise. Providing such information is also important when, during membership of an unemployment fund, a person transfers to work in an enterprise where a family member exercises control, or if ownership relations change in such an enterprise.

Financing of unemployment fund activities

Benefits paid by wage-earner unemployment funds and their administrative expenses are financed by a contribution paid by the government and the Unemployment Insurance Fund and by membership fees. In wage-earner unemployment funds, the contribution of membership fees to earnings-related daily allowances is 5.5%.

The Unemployment Insurance Fund is maintained by statutory unemployment insurance contributions collected from wage earners and employers.

As regards entrepreneur unemployment funds, their benefit payments and administrative expenses are financed by a contribution paid by the government and by membership fees.