Information package: unemployment benefits

Kela is responsible for the securing of subsistence for unemployed persons through basic unemployment allowance and labour market subsidy. The following is a brief overview of the current state of Kela’s unemployment benefits and of recent developments. At the end, you will find links to more material on this topic from Kela, including statistics and studies on unemployment benefits.

Number of recipients of unemployment benefits paid by Kela on the rise

Unemployed persons are in Finland eligible for financial assistance in the form of unemployment benefits. Unemployment funds pay out earnings-related benefits to fund members, while Kela provides basic unemployment allowances and labour market subsidies to other unemployed persons. Basic unemployment allowance is paid to unemployed persons who are not members of an unemployment fund. Labour market subsidy is paid to unemployed persons who do not have a sufficiently extensive work history or who have received earnings-related unemployment allowance or basic unemployment allowance for the maximum period of time.

In 2024, Kela paid unemployment benefits to approximately 309,000 persons, which translates into a 5% increase compared to the year before. In 2023, there were about 295,000 benefit recipients, down from about 315,000 in 2022.

At the end of 2024, Kela paid unemployment benefits to about 210,000 persons. This is also slightly more than at the end of the previous year when the number of recipients was approximately 197,000.

The number of recipients of Kela-paid unemployment benefits reached its highest peak since the start of the 21st century in 2020 after the COVID-19 pandemic began. During 2020, Kela paid unemployment benefits to a total of 412,000 persons, 44,000 of whom received labour market subsidies for self-employed persons, available under a temporary provision. Including the labour market subsidy for self-employed persons, the number of recipients of unemployment benefits from Kela increased by 24 per cent from 2019 to 2020.

Labour market subsidy for the self-employed was paid to approximately 32,000 persons in 2021 and to approximately 15,000 persons in 2022. The temporary provision under which self-employed persons could qualify for labour market subsidies expired in February 2022.

Kela’s annual expenditure on unemployment benefits comes to about EUR 2 billion

Kela’s expenditure on unemployment benefits totalled EUR 1,912 million in 2024. This figure is lower than in the year before, when the benefit expenditure reached EUR 1,963 when adjusted for inflation. In 2024, Parliament made several cuts to unemployment benefits, which may explain the reduction in the benefit expenditure.

The number of unemployed persons and the expenditure on unemployment benefits increased in the early 2010s. The expenditure on earnings-related unemployment benefits started decreasing in 2016, but the expenditure on basic unemployment benefits not until a year later, in 2017. The expenditure on earnings-related unemployment benefits was affected by positive developments in the economy and in employment rates, which brought down unemployment rates. The effect could be seen in basic unemployment benefits with a delay.

In 2018, a significant change occurred in the expenditure on unemployment benefits: For the first time, Kela paid more in basic unemployment benefits than the unemployment funds paid in earnings-related unemployment benefits. In that year, the expenditure on basic unemployment benefits was a little less than 2% higher than the expenditure on earnings-related unemployment benefits. In 2010, more than twice the amount was paid out in earnings-related unemployment benefits than in basic unemployment benefits.

Expenditure on unemployment benefits decreased in 2018 and 2019, until unemployment rates starting rising rapidly due to COVID-19 in spring 2020. In 2020 and 2021, the expenditure on earnings-related unemployment benefits was again higher than the expenditure on basic unemployment benefits. However, the labour market recovered quickly from the COVID-19 pandemic. In 2024, expenditure on earnings-related benefits began growing once more while expenditure on basic benefits decreased compared to the previous year.

Fewer recipients of Kela-paid unemployment benefits earn income from work during their unemployment

Recipients of unemployment benefits can have a part-time job or work a full-time job that lasts for no more than two weeks. Their unemployment benefits will be adjusted to take the income they earn from their work into account. From 1 January 2014 to 31 March 2024, an exempt amount of EUR 300 was generally applied to unemployment benefits. If the income a recipient of unemployment benefits earned from work stayed below this amount, it did not affect the amount of unemployment benefits they could get.

During the height of the COVID-19 pandemic, i.e. between 1 June 2020 and 30 November 2021, the exempt amount was temporarily raised to EUR 500 per month. In April 2024, the exempt amount was removed completely.

The number of recipients of Kela-paid adjusted unemployment benefits has remained fairly stable between 2019 and 2024. At the end of each year, the number of recipients has usually varied between approximately 24,000 and 26,000.

In 2020, the number of people who earned no more than the exempt amount doubled compared to the previous year, climbing up to around 12,000. The exempt amount was higher in 2020, which explains why more unemployed people earned less than the maximum in that year. On the other hand, the higher exempt amount may have encouraged the unemployed to find part-time employment. The number of people who earned up to the exempt amount varied between about 3,200 and 4,100 in 2021–2023.

The percentage of people who received earned income of all recipients of unemployment benefits paid by Kela varied between 14.2% and 15.3% in 2019–2023. In 2024, the percentage was lower than before at approximately 12.3%. The drop in this figure may be explained by the removal of the exempt amount or by e.g. the fact that fewer job openings were available than before.