Transition security allowance

Transition security allowance is a one-time payment for people aged 55 and over. The allowance does not prevent or reduce earnings-related allowance. As a member of the PAM Unemployment Fund, you can apply for the allowance through our eService.

If you are not a member of an unemployment fund, apply for transition security allowance from Kela.

Transition security allowance is part of the extended transition security which also includes:

• Transition security training. Training is agreed with the employment authrority or ELY centres. Training can last up to six months and its value is up to two months' salary. Participation is voluntary, and you can decline it without losing your unemployment benefit.
• Re-employment leave. Re-employment leave is agreed with your employer. For those eligible for transition security, it is five days longer than usual. The length of the leave depends on the lengthof your notice period.

Employers are legally required to inform employees about transition security when giving notice of termination. 

The purpose of extended transition security, which came into effect at the beginning of 2023, is to help improve re-employment opportunities for people laid off for financial or production-related reasons.

You are entitled to transition security allowance, if

• your employment was terminated for financial and production-related reasons on or after 1 January 2023
• you have been employed by the same employer for at least five years
• you have reached the age of 55 before your employment was terminated
• you have registered as a full-time jobseeker at the employment authority within 60 days from the notice of termination

Notice! Remember to register with the employment authority within 60 days from the notice of termination of your employment. If your notice period is long, for example 6 months, you must register with the employment authority already during the notice period.

The Unemployment Fund will pay the transition security allowance even if your fund membership has started just before the termination of your employment. The transition security allowance does not require actual unemployment or meeting the membership condition or work requirement. The allowance is also paid even if you find new employment with another employer immediately after the notice period.

The employment authority evaluates your eligibility to transition security and gives the Unemployment Fund a statement of eligibility to transition security.

Register with the employment authority within 60 days from the notice of termination. If your notice period is long, for example 6 months, you must register with the employment authority already during the notice period.

Fill the application form in our eService and send it to the Unemployment Fund within 3 months after the end of your employment. The transition security allowance can be paid during the notice period before your employment ends.

You can also fill out the PDF application form and send it to us. 

The transition security allowance is equal to approximately one month’s salary and it is a nonrecurring compensation. It is based on the average monthly salary paid during the period of 12 calendar months preceding the termination of the employment. Only salaries that are subject to unemployment insurance and are paid by the employer terminating the employment are taken into account. Holiday bonuses and holiday compensation, as well as performance-based bonuses, are also considered as salary income, as long as they have been paid during the previous 12 calendar months.

The Unemployment Fund will receive the salary information from the Incomes Register.

Example: Person is laid off on 9 January 2023 and the previous salary period ended on 31 December 2022. The amount of transition security is based on the income from 1 January 2022 to 31 December 2022, divided by 12.

The transition security allowance is taxable income. We recommend that you send your revised tax card for benefits to the Unemployment Fund. You can order a revised tax card for benefits in the Tax Administration’s MyTax service. When you select “Palvelualojen työttömyyskassa” as the payer of the benefit, the Unemployment Fund receives the new tax card automatically and electronically.

You are not entitled to the transition security if

• your employer cancels the termination of your employment, and your employment continues
• your employment contract is terminated during the notice period
• you resign yourself during the notice period
• the employer goes bankrupt

You are still entitled to transition security even if you return to the same employer due to a readmission obligation.

The transition security can be recovered if your situation changes during the notice period.

Example #1

Kaisa, 57 years old, is laid off on 1 February and she has a 6 month notice period until 31 July. Kaisa immediately registers as a job seeker. The employment authority evaluates Kaisa’s eligibility to transition security and gives a favorable decision to the Unemployment Fund. Kaisa must now apply for transition security allowance from the Unemployment Fund within 3 months after the end of her employment, by 31 October at the latest.

Example #2

Antti, 58 years old, is laid off on 1 February. Antti registers as a job seeker on 25 April. However, Antti is not entitled to the transition security allowance because he did not register with the employment authority within the required 60 days.

Esimerkki #3

Satu, 53 years old, is laid off on 1 February. However, she is not entitled to the transition security allowance because she is under 55 years old.

Esimerkki #4

Juha, 56 years old, is laid off on 1 February 2023. Juha’s employment has started on 1 May 2020. Juha is not entitled to transition security allowance because his employment has not lasted 5 years.

Esimerkki #5

Linda's, 59 years old, employment ends because her employer has gone bankrupt on 1 February. Linda is not entitled to the transition security allowance because the employment has ended because of bankruptcy.