Barriers to qualifying for an earnings-related allowance

Age limits

You cannot be paid an earnings-related allowance if

• you are under 18 years of age, or
• you are 65 years old or older. You can, however, continue to receive an earnings-related allowance until the end of the month in which you reach the age of 65.

Persons under the age of 18 have been ineligible for an earnings-related allowance since 1 August 2021. This legislative amendment relates to the raising of the statutory minimum school-leaving age. Persons aged 17 years can nevertheless still qualify for an earnings-related allowance if

• they have completed compulsory education, or
• they have been exempted from finishing compulsory education under the Compulsory Education Act.

In some circumstances, an earnings-related allowance can also be paid to a person over 65 years of age. Such circumstances include

• lay-off
• circumstances comparable to a lay-off
• adverse weather conditions and
• industrial action that does not affect the terms of employment of the person in question

Postponing effect of holiday compensation 

Holiday compensation for any unused annual leave postpones the start of eligibility to earnings-related unemployment allowance. Holiday compensation postpones the start of unemployment allowance payments if your employer pays you holiday compensation for unused annual leave upon the end of a full-time employment relationship that lasted for more than two weeks.

Any holiday compensation paid on the basis of an employment relationship ending on or after 1 January 2024 has such a postponing effect.

The period that the payment is deemed to cover begins from the end of your employment. The postponing effect of any paid holiday compensation is calculated on the basis of your notional daily wage. In this context, your daily wage is calculated in the same way as the daily wage on which your earnings-related allowance is based, except that your pension, unemployment insurance and sickness allowance contributions are not deducted from it. The number of days with which the payment of unemployment allowance is postponed is calculated by dividing the total amount of the holiday compensation by your daily wage. Days from Monday to Friday are taken into account when calculating the postponing effect of holiday compensation, that is, weekends are excluded from the calculation.

The postponement due to paid holiday compensation and the personal liability period will not overlap. The personal liability period can thus begin only after the postponement corresponding to the holiday compensation you received (if any). Any mandatory waiting period and the postponement due to paid holiday compensation, on the other hand, will overlap.

Holiday compensation postpones the start of unemployment allowance payments, even if you renounce your right to holiday compensation.

Mandatory waiting period

‘Mandatory waiting period’ means a period imposed by the employment authority during which you are not entitled to an earnings-related allowance. The employment authority can impose a mandatory waiting period in, for example, the following circumstances:

• You have caused the termination of your employment yourself
• You turn down work or fail to secure a job due to your own actions
• You turn down a place on a training course
• You refuse to agree on an employment plan with the employment authority

You cannot usually receive an earnings-related allowance during your mandatory waiting period. You can, however, be paid an earnings-related allowance during your mandatory waiting period if you participate in a service that promotes employment based on an agreement with the employment authority.

Behaviours such as repeatedly turning down work or training opportunities can disqualify you from receiving an earnings-related allowance indefinitely. If this happens, you will need to work or attend training for a certain period of time before you can requalify for an earnings-related allowance.

For more information about mandatory waiting periods and the grounds on which mandatory waiting periods are imposed, see the employment authority’s website.

Barriers to being available for work

You cannot receive an earnings-related allowance if you are unavailable for work. Barriers to being available for work include

• hospitalisation or other similar institutional care
• military service or alternative service
• imprisonment
• other similar circumstances.

Restrictions arising from your employment contract

You cannot be paid an earnings-related allowance if, for example,

• you are entitled to pay for the period of notice
• you are entitled to compensation equivalent to your pay for the period of notice
• you are entitled to annual holiday pay based on full-time work
• you receive a financial benefit based on the termination of your employment, such as a severance package, or
• you have been put on reduced working hours for a reason other than a lay-off or a part-time contract
• have agreed on reducing working hours with your employer.

Period-based accounting of financial benefits

If your employer gives you a financial benefit based on the termination of your employment, such as a severance package, the benefit will be accounted for on a periodic basis. The period that the benefit is deemed to cover begins from the end of your employment.

The portion of the financial benefit that you are deemed to receive during each period is calculated based on your daily wage. In this context, your daily wage is calculated in the same way as the daily wage on which your earnings-related allowance is based, except that your pension contributions, unemployment insurance premiums and daily sickness allowances are not deducted. The number of days that the benefit is deemed to cover is calculated by dividing the total amount of the financial benefit that you receive by your daily wage. You will not be paid an earnings-related allowance for the period that the benefit is deemed to cover.

Full-time entrepreneurship

Under the Unemployment Allowances Act, ‘entrepreneur’ means a person who earns a living through work that is not based on an employment contract. If you run a business full-time or are self-employed on a full-time basis for a period of more than two weeks, you cannot receive an earnings-related allowance. You can read more about the effect of running a business on earnings-related allowances on our website under Entrepreneurship.

The employment authority makes an assessment as to whether yours is a full-time or a part-time business based on, for example, your workload in your business. You can learn more about the differences between full-time and part-time entrepreneurship on the employment authority’s website.

Full-time education

You cannot usually receive an earnings-related allowance while you study full-time. The restriction also applies to periods of full-time study during which classes are not run due to holidays. The employment authority makes an assessment as to whether you are deemed to be studying full-time or part-time. The assessment takes into account, for example, the nature of the qualification and the length of your studies.

Full-time students are primarily subsidised by means of student grants. More information on student grants is available from the Social Insurance Institution (SII).

For more information about the differences between full-time and part-time study, see the employment authority’s website.  You can also learn more on our website under Studying with unemployment benefits.

Social benefits that prevent the payment of an earnings-related allowance

You cannot be paid an earnings-related allowance if, for example,

• you are receiving sickness or partial sickness benefits
• you are entitled to a maternity, paternity, pregnancy, parental or special care allowance
• you are receiving a rehabilitation allowance, a full disability pension or cash rehabilitation benefits
• you are receiving an unemployment pension or a farm closure subsidy, or
• you are receiving an old-age pension, an early old-age pension or a years-of-service pension.

Disability

Sickness benefits are the primary form of assistance in the event of illness. Sickness benefits are paid by the Social Insurance Institution (SII). If your sick leave lasts for more than 10 days, you can apply for sickness benefits from the Social Insurance Institution (SII). You cannot receive an earnings-related allowance and sickness benefits at the same time.

If you received an earnings-related allowance for the day before you fell ill, we can continue to pay you an earnings-related allowance during the personal liability period for your sickness benefits. Please mention in your earnings-related allowance application if you have applied or intend to apply for sickness benefits from the Social Insurance Institution (SII).

You cannot be paid an earnings-related allowance if you are receiving a disability pension or cash rehabilitation benefits. Please mention in your earnings-related allowance application if you are applying for a disability pension or cash rehabilitation benefits. We can pay you an earnings-related allowance while you wait for a decision on your pension application. Once your pension application has been approved, your pension provider will reimburse us for your earnings-related allowance.

We can also pay you an earnings-related allowance while you are receiving a partial disability pension, but the amount of your pension will be deducted from your allowance.

Prolonged incapacity for work

You may be entitled to an earnings-related allowance during your sick leave if you have already received sickness benefits for the maximum period. The following conditions must also be satisfied, however:

• Your application for a disability pension is still pending
• You have signed up as a job-seeker with the employment authority

If you are employed, the following conditions must also be satisfied:

• Your employer is unable to find you work that matches your level of fitness
• You are not receiving full sick pay or partial pay based on full-time work from your employer