The Finnish government has announced plans to bring in a new form of unemployment benefit from 1 May 2026.
The new 'social security benefit for unemployed jobseekers' will replace the existing labour market subsidy and basic unemployment allowance, according to a press release from the Ministry of Social Affairs and Health.
The new benefit is quite similar to the two it will replace, in that it will be means-tested, of roughly the same monetary value, and will be provided to jobseekers who either do not qualify for or have used up their earnings-related unemployment allowance.
In addition, any income earned by the recipient outside of the new benefit will mean a reduction in benefits — as is also currently the case.
"In other words, the benefit will be adjusted to take the recipient’s earned income into account. This is also the case with unemployment benefits. Currently, each earned euro reduces the unemployment benefit to be paid by 50 cents," the ministry's release explained.
Long-term recipients of the new benefit will also be obligated to participate in an "activation period", which includes meetings at the office of their local employment authority.
"These meetings will focus on establishing the reasons for prolonged unemployment and referring jobseekers to the necessary services," the ministry said.
Streamlining the system
The move is an attempt by the government of Prime Minister Petteri Orpo (NCP) to streamline Finland's social security system benefits, as it grapples with the worst unemployment rate in the European Union.
The new system will be rolled out in two stages.
The first stage — the introduction of the social security benefit for jobseekers — comes into effect from May, while the second phase will merge other benefits, such as the housing allowance, into the catch-all social security benefit.
"The aim is to create a general social security benefit that will, in the future, include a basic allowance for living costs, an allowance for housing costs and a discretionary allowance as last-resort social security," the release said.
According to the ministry, Finland's social security agency Kela is preparing a single application model whereby people can apply for the newly-introduced general social security benefit as well as other benefits too, including the housing allowance.
"Clients would not need to know the benefit system in detail. Instead, they would be guided to apply for the right benefits, according to their life situations," the press release stated.
