The abolition of the exempt amount has reduced the number of part-time workers

Topics

• Income security
• Law change
• Part-time job

A change in the law that came into force in April, removing the exempt amount of unemployment benefit, has started to have an impact. The number of part-time workers in the YTK Unemployment Fund has decreased, but the number of part-time jobs has increased.

Since April, unemployment benefit claimants have no longer been able to benefit from the exempt amount. The exempt amount was the amount an unemployed person could earn without affecting the amount of unemployment benefit.  

The amount of the exempt amount for a one-month conciliation period was 300 €, meaning that an unemployed person could earn up to 300 € during the month without this affecting the amount of unemployment benefit. Since April, each euro earned has reduced the unemployment benefit payable by 50 cents.

“By abolishing the exempt amount, the government aimed to encourage part-time workers to move into full-time work. The abolition of the exempt amount may also have had the effect of reducing part-time work, for example, by reducing the number of hours worked on a zero-hour contract,” says Auli Hänninen, Managing Director of the YTK Unemployment Fund.

Number of part-time workers has decreased

According to statistics from the YTK Unemployment Fund, the number of daily allowance claims by part-time members has decreased in May. At the same time last year, the number of applications for part-time work started to rise.

Although overall unemployment is higher than last year, there were fewer applications for part-time work in May than last year.  

The findings point to a change in the number of people working part-time. However, the observation cannot yet be directly linked to the change in the law, as the situation in the labour market has changed year-on-year anyway.

On average, around 8.5% reduction in daily allowance

The number of euros paid per application has fallen by almost 19% between April and May. In addition, compared to the previous year, the amount of adjusted daily allowance paid per application in May was almost 12% lower.

On average, the removal of the exempt amount itself reduces the benefit payable by around 8.5%. As the amount of adjusted earnings-related daily allowance paid per claim has decreased more than the effect of the removal of the exempt amount, it seems that at least some of those working part-time have earned slightly more than before.

“One possibility is that claimants have tried to compensate for the impact of the abolition of the exempt amount by working more,” says Auli Hänninen.

Based on preliminary findings, it seems that the number of part-time workers has decreased with the abolition of the exempt amount, while the number of part-time jobs has increased.