When you work short-term or work part-time while you are unemployed, self-employed or laid off, you may be entitled to adjusted earnings-related daily allowance.
According to law, however, the right to adjusted earnings-related daily allowance is generally based on the income from part-time work and not the work as such. Because it is payment-based, it affects adjusted earnings-related daily allowance in ways that you may not think of in advance.
The date of the payment of wages is decisive
When your right to adjusted earnings-related daily allowance is based on your having income from part-time work, the date when your wages are paid is decisive.
In practice, this can lead to a situation where your earnings-related daily allowance is adjusted according to the payment date, even if you have not worked at all during the application period. Correspondingly, you might be working part-time, but this has no effect on the amount of earnings-related daily allowance you are paid.
Examples of payment-based adjustment
- You are working part-time in May. Your wages for the work in May is paid in June. In June, you apply for earnings-related daily allowance for May. We will pay you the full daily allowance for May in June, even though you worked in May, because you received no income from part-time work in May.
- You are working part-time in May but not in June. Your wages for the work in May is paid in June. In July, you apply for earnings-related daily allowance for June. We will pay you an adjusted daily allowance for June in July, because you received income from part-time work in June.
- You work part-time every month, and wages are paid every month for the previous month. We pay adjusted earnings-related daily allowance every month except for the first month.
- You are completely unemployed in August. You work part-time in September. In October, you have a full-time job. In September, you apply for daily allowance for August. We will pay you the full daily allowance for August, because you do not have any income from part-time work in August. In October, you apply for daily allowance for September. We will pay you the full daily allowance for September, because you received no income from part-time work in September, even though you worked part-time in September.
Why payment-based adjustment?
Before the current law, adjustment was based directly on working part-time. This sometimes led to an unreasonable delay in the payment of the adjusted daily allowance. For example, if you worked in January and submitted an earnings-related daily allowance application for January in February, we could not process your application until your wages were paid. We often had to wait for the payment of wages, which delayed the payment of the adjusted earnings-related daily allowance.
The purpose of payment-based adjustment is to eliminate this delay. Since earnings-related daily allowance is always applied for retroactively, we already have information on the wages paid during the period applied for through the Incomes Register when we receive the application. This means we can process your application immediately.
Previously, the payment of adjusted earnings-related daily allowance could be delayed depending on the payment of wages. However, the good thing was that, in practice, the adjusted earnings-related daily allowance and the income from part-time work were in the applicant's bank account at about the same time and the connection was easier to understand.
Payment-based adjustment reduces the risk of delay in the payment of adjusted earnings-related daily allowance, but leads to a situation where income from part-time work and the related adjusted daily allowance may be paid at very different times. This can lead to frontloaded fluctuation in your disposable income. For example, if you only work for a short period of time, you may first receive wages and full earnings-related daily allowance, but in the following month, you will not receive any wages and even the earnings-related allowance will be adjusted. In other words, you may receive a fairly high total income in the beginning, but in the following month, your total income may be low.
In unemployment security, part-time work means:
- Part-time work where the working hours do not exceed 80% of the maximum working hours in full-time work;
- Full-time work of up to two weeks;
- Part-time work as an entrepreneur or self-employed;
- Reduction of daily working hours due to lay-off or a similar reason;
- Reduction of weekly working hours due to lay-off or a similar reason.
Working time limit in payment-based adjustment
You are not entitled to unemployment benefit if the working hours based on which your wages are paid exceed 80% of the maximum working hours of full-time employees in the sector.
We compare the working hours on which your wages are based with the maximum working hours during the adjustment period. The adjustment period is typically four weeks or a month.
If your weekly working hours have been reduced due to a lay-off or similar reason, we compare the working hours on which your wages are based with the maximum working hours in a calendar week. In these situations, the 80% working time limit of the adjusted daily allowance may be exceeded in a way that does not seem obvious.
If you work part-time during an unpaid suspension period or during the general restrictions mentioned in the Unemployment Security Act, your income is taken into account based on the payment date.
On the other hand, if your payday for part-time work falls within an unpaid suspension period or the general restrictions mentioned in the Unemployment Security Act, we will not take into account the income from part-time work at all in the adjustment.