According to the Unemployment Security Act, any allowances paid on false grounds must be reclaimed to their full extent. This occurs if unemployment benefits have been granted without a valid reason, that is, if the claimant was not in fact entitled to the benefit or if the amount of the benefit paid was greater than the amount the claimant would have been entitled to. The reclaiming can be given up on completely or partly, if it is seen fair and the excess payments were not due to the beneficiary’s misconduct. The reclaiming can be given up on also when the excess benefit has been a small sum and the excess payments were not due to the beneficiary’s misconduct. To avoid these reclaims, you need to inform us about all the things that might affect your entitlement to daily allowance in your application. In uncertain situations, contact the fund’s customer service 02-760 7620 and ask for advice.
Claim for recovery
According to the Unemployment Security Act, any allowances paid on false grounds must be reclaimed. This occurs if unemployment benefits have been granted without a valid reason, that is, if the claimant was not in fact entitled to the benefit or if the amount of the benefit paid was greater than the amount the claimant would have been entitled to. Among the most common misunderstandings is the claimants' failure to notify the authorities of all earned income, social benefits received or annual holiday pay received during a period of lay-off. Reclamation occurs also in those situations, where the labour authorities give a negative labour political statement in retrospect, and thus the applicant has no right for daily allowance.
Before giving a decision on the recovery, the claimant must always be heard, i.e. the claimant is reserved an opportunity to make a clarification on the matter. The purpose of the hearing is to clarify the beneficiary's view on the grounds and amount of the claim for recovery, and their financial situation regarding possible waiver of the reclaim.
Waiver of reclamation in certain situations
As a rule, the full amount of allowances paid on false grounds must be reclaimed. Unemployment benefits are financed with public funds, and a reclaim cannot be waived without authorization under the act. A reclaim can be waived partially or as a whole, if it is considered reasonable and the payment on false grounds is not based on dishonest conduct by the beneficiary, or if the amount of the reclaimable benefit is minor. If a benefit has been paid due to misconduct of the beneficiary, the claim will not be waived, even if the amount is minor.
After giving a decision on the recovery, the recovery can be waived totally if, considering the beneficiary's financial status, it is no longer appropriate to continue reclaiming the benefits, or if continuing the reclaim would amount to unreasonable costs compared to the amount of the reclaimable benefit.
Retrospective pension or other social benefit
In addition to failure to notify the fund of all details, another common reason for reclaiming benefits is pension or other social benefit awarded retroactively for the same period as unemployment benefits. In this case, the fund is able to reclaim the unemployment benefit paid on false grounds from the payment made in arrears by a pension or insurance institution. These benefits paid in arrears include:
- national pension
- pension based on former employment or entrepreneurial activities
- generation transfer pension or farm closure pension
- farm closure compensation or farm closure subsidy
- daily allowance under the Sickness Insurance Act
- rehabilitation allowance under the Rehabilitation Allowance Act
- daily allowance or pension under the Employment Accidents Insurance Act.
A person may also be granted a disability pension retroactively for the same period as an unemployment benefit. Here also, the fund is able to collect the unemployment benefit paid on false grounds from the disability pension paid in arrears. In some cases, the reclaimed amount does not cover for the erroneously paid unemployment benefit. The remaining amount is not, however, reclaimed from the beneficiary but the recovery on that part is waived.
The provision concerns only those cases of recovery, where
- the person is granted a disability pension or a partial disability pension retroactively for the same period for which (s)he has received an unemployment benefit and
- the amount of the unemployment benefit paid on false grounds is higher than the amount the fund has reclaimed from the pension or insurance institution.
Under the current legislation, disability pensions include
- disability pension,
- habilitation subsidy (i.e. fixed-term disability pension),
- individual early retirement pension, as well as
- pensions under the accident insurance legislation, such as
- accident pension under the Employment Accident Insurance Act
- accident pension under military accident legislation, and
- disability pension under the Motor Liability Act.
Avoiding claims for recovery
In order to avoid claims for recovery, the claimant should inform the fund of all periods of work, sickness, holiday and foreign travel, or changes in social benefits as well as other matters with possible effects on the entitlement to unemployment allowance. In case you are uncertain of the situation, please contact our customer service (tel. 02-760 7620) for further advice. Benefits paid on false grounds are reclaimed under the Unemployment Security Act, and unawareness of the divisions of the legislation is not a grounds for waiving the reclaim. Dishonesty in applying for a benefit may lead to a notice or a warning, a suspension from the fund and a request for investigation by the police authorities.