Government decided on employment measures to strengthen central government finances by at least EUR 110 million
As part of its commitment to raise the employment rate, the Government decided on new employment measures on 11 February 2022 that will boost its existing measures.
“The Government is committed to making decisions that will bring an estimated 80,000 new jobs and raise the employment rate to 75 per cent by the mid-2020s. Most of these decisions have already been made, and the employment measures announced today, seeking to strengthen general government finances by EUR 110 million, are part of a larger package to improve employment. We have previously decided on further measures that will strengthen employment by additional 80,000 people,” says Minister of Employment Tuula Haatainen.
The Government also made decisions that will raise the level of education and competence, strengthen employee and student wellbeing, and remove incentive traps for over-indebted individuals.
The Government policy aims to sustainably strengthen employment and the economy. In its budget session last autumn, the Government agreed that, in addition to the employment measures already taken, decisions on further employment measures to strengthen general government finances by EUR 110 million will be made by 15 February 2022.
Changes in unemployment security, student financial aid and wage subsidies will strengthen general government finances
The Government decided to link unemployment security to euros earned instead of hours worked. This means that the right of unemployed persons to daily allowance would be based on a monthly income limit instead of the number of hours worked before becoming unemployed. Periods of 0.5 months would also count towards the prior employment requirement. In addition, the temporary increase of 50 per cent in the income limit for student financial aid would be made permanent. This change was made to improve the availability of skilled labour and the financial position of students.
The system of engaging in self-motivated studies supported by unemployment benefit would be changed such that the exceptions to job search permitted by the Nordic labour market service model would be repealed from the beginning of 2023. Exceptions currently applicable to persons engaging in self-motivated studies will be limited to apply to persons lacking vocational skills or qualifications. Other students would, as a rule, be required to seek employment. This requirement could be reduced or waived as with other jobseekers. The opportunity of completing studies will be taken into consideration when deciding on a reduction.
The Government also decided on legislative amendments to wage subsidy. Amendments required by EU state aid regulation will be made, and the right of the largest economic entities to use 100% wage subsidy would be restricted. The amendment will also allow new, smaller employers to use wage subsidy. The amendment would come into force in connection with the reform of the wage subsidy legislation.
All of the changes listed above would take effect at the beginning of 2023. The measures would strengthen general government finances by at least EUR 110 million and increase the number of employed people by an estimated 5,100.
Investing in education, skills and wellbeing
In addition, the Government decided on a number of other development measures targeting working life and the labour market. The objectives include improving the match between labour supply and demand, increasing continuous learning, supporting employees’ ability to work and prolonging careers.
Decisions were made on issues such as amending the Enforcement Code with regard to payment-free months, and waiving the adjustment of copyright remuneration when determining entitlement to unemployment security. In addition, the reporting obligation of occupational safety and health authorities would be expanded to help eliminate underpayment, and the reform of the Occupational Safety and Health Act will be launched to account for psychosocial strain.
To promote youth employment, the Government decided to make Ohjaamo low-threshold services a permanent arrangement. A decision was also made to increase the funding of the Finnish Student Health Service by a million euro per year for four years to support the mental health of higher education students.
The package will strengthen general government finances by at least EUR 110 million.
* effect of the income limit for students corrected from 12,7 million euros to 12,2 million euros on 15 February
Inquiries:
Mikko Heinikoski, Special Adviser to the Minister of Employment, tel. +358 29 504 7175
Jukka Mattila, Senior Ministerial Adviser, Ministry of Finance, tel. +358 2955 30409, (Ministry of Finance calculations)