Tuesday. 25.06.2024

Countdown to repeal the penalty for the unemployed for not finding work

The activation model that allows Kela to cut the benefits of unemployed who do not find work will be abolished in January 2020. It was created by the Government of former Prime Minister Juha Sipilä. The current Minister of Social Affairs and Health, Aino-Kaisa Pekonen, has labeled it "unfair."


It only has one week to live. The activation model for unemployment security, which now allows Social Security (Kela) to cut unemployment benefits from thousands of unemployed people only because they are unable to find work, will be abolished as of January 1, 2020.

According to the Ministry of Social Affairs and Health, the benefit cuts involved in the activation model will no longer affect unemployment benefits paid after 1 January 2020.

Similarly, the Social Insurance Institution of Finland (Kela) and unemployment funds will no longer monitor jobseekers’ compliance with the activity requirements of the model from 1 January 2020 onward.

Any unemployment benefit cuts made on the basis of the activation model will be removed from the beginning of 2020. However, cuts made pursuant to the activation model will affect unemployment benefits accrued in 2019 and paid out in January.

A "humiliating penalty"

The so-called activation model was launched by the Government of former Prime Minister Juha Sipilä and it has been since criticized by social agents, who have questioned its usefulness.

Its most damaging aspect for workers is that it enables Social Security to cut jobseekers' unemployment subsidies by 4.65% if they are unable to find a work, earn money as entrepreneurs or provide proof of training during the previous three months.

At the beginning of 2019, a survey conducted by the Central Organisation of Finnish Trade Unions (SAK) concluded that this mechanism only served as a "humiliating penalty" for job seekers who did not succeed in their search for work.

The Government of Prime Minister Sanna Marin says discontinuation of the activation model will not affect the opportunities of the unemployed to study or participate in activities organised by various service providers to facilitate job seeking and access to employment.

Other conditions for receiving unemployment benefits will also remain unchanged. This means that jobseekers will be required to apply for work and be prepared to accept work offered in order to receive unemployment benefit.

New government considers it "unfair"

“The unfair activation model will be discontinued on 1 January 2020, and we will move forward with the social security reform,” says Aino-Kaisa Pekonen, Minister of Social Affairs and Health.

Aino-Kaisa-Pekonen-by--Tuomas-Sauliala-Ministry-of-Social-Affairs-and-HealthThe Minister of Social Affairs and Health Aino-Kaisa Pekonen. Photo: Tuomas Sauliala/Finnish Government.

Following the abolition of the activation model, amendments will be made to the Act on Financing Unemployment Benefits and to provisions of the Act on Unemployment Funds regarding central government contributions to earnings-related daily allowance. These amendments will not affect the benefits paid to unemployed jobseekers.

The Government submitted the acts for approval and the President of the Republic Sauli Niinistö approved the bills on Thursday, 19 December 2019.

Countdown to repeal the penalty for the unemployed for not finding work