Your right to unemployment security is determined on the basis of the EU’s social security legislation. The most important EU regulations regarding your right to unemployment security are:
- Regulation (EC) no. 883/2004 on the coordination of social security systems, and
- Regulation 987/2009 laying down the procedure for its implementation.
In addition to the EU countries, those regulations are also complied with by Switzerland and the EEA countries Norway, Iceland, and Liechtenstein.
The principle of the country of employment
As a general rule, your working is always insured in case of unemployment in the country where you work. Most EU/EEA countries have a general unemployment insurance, so you are automatically insured in case of unemployment on the basis of working in the country in question. Sweden, Finland and Denmark have a voluntary unemployment insurance system managed by unemployment funds. In those countries the employee needs to seek for membership in an unemployment fund to be covered by earnings-related unemployment security. Please note that it is advisable to join a Swedish or Danish unemployment fund as soon as you start work.
Exceptions to the principle of the country of employment
In certain exceptional situations, working is not, however, insured in the country of employment. In the following cases your unemployment insurance is not transferred with you to the country of employment:
- If you work as an official under Finnish administration, you will be covered by Finnish unemployment security also while working abroad. That is because officials are always governed by the legislation of the country under whose administration they work.
- If you start work at the service of the EU, you may choose when making the employment contract whether you will transfer to be covered by the unemployment security of your new country of employment. This right of choice may only be used once. The Finnish Centre for Pensions shall be informed about such an agreement. A person who has used his/her right of choice in favour of Finland will be covered by Finnish unemployment security also during his/her working.
- If you are an employee posted from Finland, you will continue to be covered by the Finnish unemployment security and be a member of a Finnish unemployment fund.
- If you work on board a vessel under the flag of an EU/EEA country or Switzerland and live in the country where your employer has its domicile and from where your salary is paid, you are covered by the unemployment security of your country of residence.
- If you live in a country other than your last country of employment, you are only covered by the unemployment security of your country of employment in case you are only partly or occasionally unemployed (e.g. part-time employee or laid off). If you become completely unemployed after the termination of your employment relationship, you will be covered by the unemployment security of your country of residence. In such a case you can also register as an unemployed job-seeker in your country of employment, but your country of residence will nevertheless be responsible for paying your daily unemployment allowance. However, if you do not return to your country of residence, you can apply for unemployment allowance from your last country of employment. The country in which you live permanently is considered your country of residence.
- If you live in Finland and work in the territory of two or more countries, you are covered by Finnish unemployment security, if a considerable share of your work (25 per cent or more) takes place in Finland. That group includes e.g. the travelling personnel of a transport company (aviation personnel and truck drivers).
- Even if you do not perform a considerable share of your work in your country of residence Finland, you are covered by Finnish unemployment security, if you work at the service of several employers, at least two of which have their domicile or place of business in a different member state, and none of your employers has their domicile or place of business in your country of residence Finland.
- You are also covered by unemployment security of your country of residence Finland, if you practise gainful work in two or more EU/ETA countries or Switzerland for such an employer that is located outside the EU. It is not required in that case either that you should perform a considerable share of your work in your country of residence Finland.
- Aviation personnel is covered by the unemployment security of the country where their home airport is located.
The waiting period may already have lapsed in a different country. Hence any daily allowance paid and waiting period passed in another country shall be informed to the Finnish unemployment fund.
Work done in another EU/EEA country or Switzerland may in turn accumulate requirements on work history for additional days and increased earnings-related part.
The effect of work done in another EU/EEA country or Switzerland on the fulfilment of the condition regarding employment
When you return to Finland after a period of work, the insurance and employment periods accumulated in another EU/EEA country or Switzerland can on certain conditions be included in your condition regarding employment in Finland. Requirements for the working to have accumulated the condition regarding employment in Finland:
- For including a period of work in Finland’s earnings-related security system, it is required, first, that you have been a member of an unemployment fund in the other country, if that country has a voluntary unemployment fund system. Sweden and Denmark have a similar voluntary unemployment fund system to that in Finland. So as a general rule, working in Sweden and Denmark can only be taken into account in case you have been a member of a local voluntary unemployment fund and paid the voluntary membership fee of the unemployment fund during your working.
- Approval of the work requires four weeks of working in Finland in a job that fulfils the condition regarding employment immediately before your unemployment (condition regarding employment). The working need not be uninterrupted. The work included in the condition regarding employment and the four-week requirement on employment shall, however, be within the review period of 28 months.
- The inclusion of periods of work also requires that you have joined a Finnish unemployment fund within one month from the date on which your unemployment insurance in the country of employment has terminated (time limit set for the transfer of unemployment insurance). For those moving back to Finland from other Nordic countries the time limit is eight weeks.
- Furthermore, it is required that you submit the PD U1 form to the Finnish unemployment fund. You need to request the form from the authorities of the country of employment. Unfortunately we cannot consider another kind of proof of employment (letter of reference/salary certificate) to be sufficient.
The four-week period of employment is not required, however, if you are
- completely unemployed employee who has not lived in his/her last country of employment.
- returning from the Nordic countries and within the right of return.
- a posted employee.
Returning from the Nordic countries
When you return from the Nordic countries, you are within the right of return, if you have been covered by the Finnish unemployment security legislation during the five years preceding your return (you have worked in Finland or received unemployment benefit from Finland). In case of those returning from the Nordic countries, the working can be included in the condition regarding employment without the four-week requirement on employment. In addition, a longer time limit of eight weeks is applied to those returning from the Nordic countries when the unemployment insurance is transferred from one country to another.
Salary used as the basis for daily allowance
As a general rule, the salary is always determined on the basis of the earned income received from Finland, regardless of whether periods of employment have been possibly added from another EU/EEA country or Switzerland.
If you have lived in a country other than your last country of employment, the salary shall exceptionally be determined on the basis of the income earned in that last country of employment. However, if you have most recently worked in Finland, your salary shall be determined on the basis of that income earned in Finland.
The effect of social security benefits paid from another EU/EEA country or Switzerland
Benefits or income paid from another EU/EEA country or Switzerland have generally the same effect as corresponding benefits and income would have when they are paid in Finland. As a general rule, social security benefits are paralleled with similar benefits in Finland as benefits that prevent the payment of daily allowance or decrease its amount.
There is an exception to this general rule; disability pension paid on the basis of the legislation of another country is always a benefit that is deducted from the amount of the daily allowance. If paid from Finland, pension paid on the basis of full disability would be a hindrance for the payment of daily allowance.