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Employment Fund gives the Ministry of Social Affairs and Health an estimate of unemployment insurance contributions in 2020

Employment Fund          Stock exchange release          3 May 2019 at 1:00 pm

The Employment Fund has given the Ministry of Social Affairs and Health an estimate according to which unemployment insurance contributions in 2020 would not exceed 3.00% or, in any case, would not decrease by more than 0.6 percentage points. The total contributions would therefore amount to between 2.4% and 3.0% of workers’ wages. 

The total amount was lowered by 0.8 percentage points for the year 2019 and it currently stands at 3.00%.

The Employment Fund estimates that earnings-related benefit expenses and the government’s contribution would together amount to EUR 2,769 million in 2020, which would be approximately EUR 100 million more than in 2019.

The Employment Fund has a legal obligation to submit an estimate of the following year’s earnings-related benefit expenses, the government’s contribution and percentages of workers’ contributions to the Ministry of Social Affairs and Health each year. The Employment Fund’s Board of Directors has now adopted this year’s estimate and submitted it to the Ministry of Social Affairs and Health on 2 May 2019.

The actual proposal will be finalised over the summer on the basis of the latest forecasts on the economy and employment in 2020. The Employment Fund’s Supervisory Board will adopt the final proposal of the 2020 contribution percentages in its meeting on 29 August 2019.

Economic forecasts over the next few years come with more risks and a higher-than-average degree of uncertainty at the moment. The Employment Fund estimates that economic growth will remain relatively healthy over the next year but that the drop in unemployment figures will at least slow down and might in fact be reversed.

Another fact that makes estimating unemployment insurance contributions more difficult than normal at the moment is that the Employment Fund’s business cycle buffer is subject to temporary legislation until the end of 2019. The national Competitiveness Pact obligates social partners to draw up a proposal for the government during the spring on the maximum business cycle buffer as of the beginning of 2020.

The Employment Fund’s net position (business cycle buffer) was positive by EUR 969 million at the end of 2018. The surplus for the year is currently estimated to come in at approximately EUR 500 million.

Further information:

Janne Metsämäki, Managing Director, tel. +358 (0)40 522 3614
Tapio Oksanen, Chief Financial Officer, tel. +358 (0)40 539 4651

Helsinki, 3 May 2019

Employment Fund

Tapio Oksanen
Chief Financial Officer