Pension Provision for Employees and the Self-employed

Transcription

1 2016 Pension Provision for Employees and the Self-employed When can I draw earnings-related? How does MY accrue? Finnish Centre for Pensions ELÄKETURVAKESKUS

2 Finnish Centre for Pensions Service centre for the Finnish statutory earnings-related scheme Customer service and visiting address: Kirjurinkatu 3, Itä-Pasila, Helsinki Postal address: FI ELÄKETURVAKESKUS, Finland Telephone: Pensions advice: International matters: Insurance for work abroad: Insurance for the self-employed: Fax: Booklets published by the Finnish Centre for Pensions Earnings-related Pensions for Employers and the Self-employed (in Finnish, Swedish and English) Pension Provision for Employees and the Self-employed (in Finnish, Swedish and English) Applying for Pension from Abroad (in Finnish, Swedish, English, Russian and Estonian) The booklets are free of charge and available from the Finnish Centre for Pensions, the Social Insurance Institution of Finland (Kela), Employment and Economic Development Offices and the Centre for Economic Development, Transport and the Environment.

3 Introduction 5 Private sector earnings-related acts 6 Pension from earnings 6 Pension from unsalaried periods 6 Life expectancy coefficient 7 Pensions based on age 7 Retire flexibly on an old-age 7 Early old-age 8 Old-age for the long-term unemployed at age 62 8 Deferred old-age 8 Converting other into old-age 9 Amount of old-age 9 Easing the load by retiring part-time 10 Right to part-time 10 From full-time work to part-time retirement 11 Requirements for part-time work 11 Amount of part-time 11 Becoming disabled or unemployed 12 Part-time in the event of a lay-off 12 Reapproval of part-time 13 Security when your working capacity weakens 13 Vocational rehabilitation 14 Income during rehabilitation 14 Rehabilitation allowance 14 Rehabilitation allowance paid to the employer 14 Rehabilitation assistance 15 Rehabilitation costs 15 Pensions based on disability 15 Disability 15 Partial disability 16 Assessment of disability 16 Amount of disability 16 Component for projected able service 17

4 Security if you become unemployed 18 Retire at age Survivors s security for surviving spouse and children 18 Surviving spouse s 19 Orphan s 19 Determining the survivors 19 Amount of surviving spouse s 20 Amount of orphan s 20 Payment of survivors 20 Other security for the family 20 Apply for your 21 Pension decision 22 Payment of 22 Lump-sum payment and increment for delays 22 Changes in and interruptions to payments 23 Pensions from abroad and Appendix U 23 Pensions are taxable income 24 Working while drawing a 25 National alongside small earnings-related 25 Guarantee 26 Kela s child increase 26 Check your record 26 Main features of the 2017 reform 27 SUPPLEMENT

5 Pension Provision for Employees and the Self-employed Introduction The Finnish system consists of employment-based earnings-related s, the residence-based national and the guarantee. Earnings-related s are managed by authorised providers, funds and, in the public sector, by Keva. The residence-based and the guarantee are managed by the Social Insurance Institution of Finland (Kela). Statutory earnings-related insurance offers security when you retire, if you become disabled or if the breadwinner in your family dies. Earnings-related accrues on the basis of your employment in an employment relationship or selfemployment. In addition, you accrue for periods of maternity and parental leaves and periods of sickness benefits. Finally, you also accrue for periods of the unemployment allowance as well as for studies that lead to a degree or a qualification, and for periods of home-care of your own children under the age of three. If your earnings-related is small, you may be entitled to a national and a guarantee. For further information on these benefits, please contact Kela. This booklet contains information on private-sector benefits and the preconditions for receiving them under currently valid legislation. The benefits are the same for employees and selfemployed persons. The benefits for farmers and seafarers contain special features which may deviate from other private sector s. For more information on farmers s, please contact Mela, and for seafarers s, the Seafarers Pensions Fund. There are some differences between private and public sector s. For more information, please contact Keva, which handles the provision of local government, state, Church and Kela employees. In 2017, the public sector acts will be combined into one Public Sector Pension Act. This booklet also provides information on how accrues and how you can apply for. The Supplement at the end contains information on insurance contributions, indexes and taxation in It also includes tables on the national, the reduced surviving spouse s, as well as social benefits for which accrues. All amounts in this booklet are in 2016 prices. The main features of the 2017 reform are presented in a section

6 6 Pension Provision for Employees and the Self-employed 2016 before the Supplement at the end of this booklet. This booklet presents the general features of the system. The text should not be considered a legal text. For personal advice, please turn primarily to your provider. For more information on the forthcoming reform that will take effect in 2017, please go to the reform website ( elakeuudistus.fi/briefly-in-english), maintained by the Finnish Centre for Pensions. Private sector earnings-related acts If you work for a private-sector employer, your work is to be insured under the Employees Pensions Act. If you are a seafarer working on a ship that sails abroad, your work is to be insured with the Seafarers Pensions Fund under the Seafarer s Pensions Act. If you are a farmer, fisherman, reindeer herder or a researcher or artist working on a grant, you must insure your work with Mela under the Farmers Pensions Act. If you are selfemployed, your work is to be insured under to the Self-employed Persons Pensions Act. If you are a freelance worker, your work is covered either by the Employees Pensions Act or the Self-employed Persons Pensions Act. Pension from earnings If you are an employee, your will be calculated per calendar year based on your annual earnings and an age-graduated accrual rate. If you are self-employed, your annual earnings are your total earnings for each calendar year. You will accrue for your work at the following age-specific rates: 1.5% between the ages of 18 and % between the ages of 53 and % between the ages of 63 and 67. You will also accrue for work or self-employment carried out while drawing a and for insured self-employment until the age of 68. For employment while drawing an old-age or a disability, you will accrue new at a rate of 1.5 per cent, regardless of your age. The accrual rate during part-time is based on your age. Pension from unsalaried periods You will accrue for certain benefits paid during unsalaried periods, for studies leading to a degree or qualification and for periods of home-care of your own child(ren) un-

7 Pension Provision for Employees and the Self-employed der the age of three. To accrue from the unpaid periods listed above, you must have been gainfully employed at some point before you retire. Your total earnings during your working life must amount to at least EUR 17, The Supplement at the end of this booklet includes a table of benefits paid during unsalaried periods for which you will accrue. The basis used when calculating your varies per type of benefit. The annual accrual rate is always 1.5 per cent. Life expectancy coefficient The life expectancy coefficient is used to adjust your amount according to changes in life expectancy. The coefficient is used to keep in check the expenditure that rises because people live longer. The life expectancy coefficient is determined separately for each birth year at the age of 62. It is determined based on the mortality statistics of the preceding five years. If the average length of life increases, the life expectancy coefficient will reduce your accrued monthly. You can compensate this reduction by working longer. Pensions based on age Retire flexibly on an old-age You can choose to retire on an old-age as of age 63. You can carry on working and accruing until the age of 68. When you want to retire, you have to agree with your employer about the termination of your employment. Before you can start drawing your old-age, your employment must be terminated. To receive your, you must fill in an application for old-age. Please submit your application approximately two months before you intend to retire. You may be granted the old-age in retrospect for three months before the month in which you applied for the. For legitimate reasons, your provider may grant you the in retrospect also for a longer period. If you are self-employed or a farmer, you do not have to close down your business in order to receive an old-age. If you decide to continue your self-employment alongside your old-age, you can take out voluntary insurance under 2017 Pension Reform One accrual rate Accelerated accrual rate replaced by an increment for deferred retirement

8 8 Pension Provision for Employees and the Self-employed 2016 the Self-employed Persons Pensions Act or the Farmers Pensions Act, in which case you will accrue new alongside your old-age until you reach the age of 68 years. If you work in the public sector, you may have an occupational or individual retirement age. In general, the occupational retirement age is less than 63 years, while the individual retirement age is between the ages of 63 and 65. However, you may retire on an old-age before your individual retirement age, in which case your will be reduced. The reduction does not apply if you were born in 1960 or later. The retirement age for public-sector contracts of employment that have ended is 65 years. If you retire before the age of 65, your accrued before 1995 will be reduced. For more information on publicsector s, please contact Keva. Early old-age If you are working in the private sector, you are no longer entitled to an early old-age. This rule does not apply, however, if you are an employee insured under the Seafarer s Pensions Act. In that case, you may be entitled to an old-age before reaching the reduced retirement age. For more information, please contact the Seafarers Pensions Fund. If you work in the public sector and were born before 1960, you may be entitled to an early old-age. For more information, please contact Keva. Old-age for the long-term unemployed at age 62 If you were born in 1957 or earlier and have received an unemployment allowance for 500 days as well as for additional days, you can apply for an old-age once you have turned 62 years. Please attach a certificate of your unemployment allowance for additional days, issued by the paying institution. No reduction for early retirement will be made to the that you have accrued up to the time of your retirement. However, if you work in the public sector, the that you have accrued before 1995 will be reduced. For more information on the reduction of your, please contact Keva. If you are self-employed, you are not entitled to additional days of the unemployment allowance, which means that you cannot receive a based on unemployment. For further information on unemployment security, please contact your unemployment fund, the Federation of Unemployment Funds in Finland or Kela. Deferred old-age You can defer your retirement on an old-age beyond the age of 68. Your will be increased by

9 Pension Provision for Employees and the Self-employed per cent for each month that you postpone your retirement. You do not have to end your employment in order to receive a deferred old-age. Converting other into old-age If you are on a disability, your will automatically be converted into an old-age at the age of 63, providing that your disability has begun in 2006 or later. If your disability began in 2005 or earlier, your will be converted into an old-age at the age of 65. If you have engaged in gainful employment or self-employment alongside your disability in 2005 or later, you will have accrued new for this work. The new component is not paid out automatically; you will have to apply for it separately. You can submit your application at the earliest when your disability is converted into an old-age, providing that your employment has terminated. If you are drawing a part-time, you may choose to retire on an old-age between the ages of 63 and 68. Once you have applied for the old-age, it will be paid when your part-time employment has ended. However, if you are self-employed or a farmer, you do not have to close down your business in order to receive the old-age. Amount of old-age The you have accrued during your working life will be paid out to you in the form of an old-age. When calculating how much you have accrued, both your earnings and income in the form of benefits during unsalaried periods will be taken into consideration to the end of the month before the month in which you will retire. The earnings-related unemployment allowance forms an exception since you will accrue based on it only until the end of the month in which you turn 63, even if you were paid the daily allowance beyond that age. Your accrued at the time of your retirement will be adjusted with the confirmed life expectancy coefficient of the year in which you turned 62. The Ministry of Social Affairs and Health has confirmed the life expectancy coefficient for 2016 to be This coefficient will be applied to your starting old-age if you were born in Pension Reform Rising retirement ages Retirement ages determined by year of birth

10 10 Pension Provision for Employees and the Self-employed 2016 Easing the load by retiring part-time The purpose of the part-time is to lighten your workload before you retire on an old-age. When you draw a part-time, you work part-time. Therefore you have to negotiate a possible move to part-time with your employer. Your employer is not under obligation to arrange part-time work for your, but you can also begin working part-time for another employer or as a self-employed person. If you are self-employed or a farmer and you consider part-time retirement, you have to halve your work input or, in practice, halve your income under the Self-employed Persons Pensions Act or the Farmers Pensions Act. You have to present a statement to your own provider of how you will do this in practice. If you are a seafarer, your part-time will include special features. For more information, please contact the Seafarers Pensions Fund. Public and private sector part-time s are somewhat different. For more information, please contact Keva. The national is not granted as a part-time. Right to part-time You can retire on a part-time if you have turned 61 years have worked full-time for 12 months during the last 18 months (the review period may be extended by a maximum of six months if, during this time, you have received a sickness allowance, a sick pay, income compensation or a daily allowance under the Workers Compensation Insurance Act or the Motor Liability Insurance Act). have accrued earnings-related for at least 5 years during the past 15 years (including employment in Finland and other EU/EEA countries, Switzerland or countries with which Finland has concluded a social security agreement) are not receiving any other type of earnings-related in your own right. Please note that if you receive a from abroad, you cannot be granted a part-time. Receiving a survivors and/ or a national does not prevent you from being granted a parttime. The same applies to receiving a paid as a lump sum. However, if you are a farmer and you receive a farmers early retirement aid, you are not eligible for a part-time.

11 Pension Provision for Employees and the Self-employed From full-time work to part-time retirement If you are an employee, the collective agreement of your field defines what full-time work is. You can also retire part-time from several concurrent part-time jobs, providing your combined working hours amount to at least 35 hours per week. If you are self-employed, your fulltime working hours are calculated on the basis of your earnings from work under the Self-employed Persons Pensions Act or the Farmers Pensions Act for which you pay your insurance contributions. Your annual earnings under the Self-employed Persons Pensions Act before you retire part-time must amount to at least EUR 15, and your annual earnings under the Farmers Pensions Act to at least EUR 7, You do not qualify for part-time if you work only occasionally or not at all. Requirements for part-time work When you transfer to part-time work, your earnings must decrease to per cent of your stabilised earnings when working full time. The decrease in your earnings must correspond to the reduction in your working hours. Your individual earnings limit will be set once your begins. Your monthly earnings limit may vary occasionally by no more than 15 per cent. If the variation in your earnings from part-time work exceeds 15 per cent in either direction, your will be recalculated. If you are self-employed, your halved earnings under the Selfemployed Persons Pensions Act or the Farmers Pensions Act should amount to at least the lower annual limits (EUR 7, under the Selfemployed Persons Pensions Act and EUR 3, under the Farmers Pensions Act). You may also terminate your self-employment altogether and take up other part-time work. You can work part-time in Finland or in another EU/EEA country, in Switzerland or in a country with which Finland has concluded a social security agreement. Other work abroad is also Accepted as parttime work if it is insured in line with the Finnish earnings-related acts. You may not take breaks that exceed 6 weeks in your part-time work. Annual leave or sick leave are not considered such breaks whereas, for example, lay-offs are. Amount of part-time The amount of your part-time is 50 per cent of the difference between your full-time and part-time earnings. Your stabilised earnings calculated for a longer period of time are used as your wage for full-time employment. In general, your stabilised earnings are determined on the basis of your earnings during five calen-

12 12 Pension Provision for Employees and the Self-employed 2016 dar years before your part-time retirement. If you are self-employed or a farmer, your part-time is 50 per cent of the difference between your full-time and part-time earnings from self-employment. Your stabilised earnings are calculated based on your earnings from the five calendar years before you retire part-time. Your part-time may amount to a maximum of 75 per cent of the that you have accrued up to the start of your part-time. You may have trouble reaching this limit if, for example, you have a short working life. The life expectancy coefficient will not affect the amount of your parttime. You can request an estimate of your part-time from your provider. Becoming disabled or unemployed If you fall ill while receiving a parttime, Kela will pay you an allowance for the duration of your sick leave. The allowance will be determined on the basis of your earnings from part-time work. Your sick leave will not interrupt the payment of your part-time. If your disability continues for at least one year, you may be granted a disability or a temporary cash rehabilitation benefit after the allowance period. In that case, your part-time will be discontinued. Your part-time will also be discontinued if you become unemployed. In that case, you must register as an unemployed jobseeker at an Employment and Economic Development Office. If you meet certain condition, you qualify for the unemployment allowance. In general, if you belong to an unemployment fund, your earnings-related unemployment allowance will be defined based on your earnings from full-time work. If you are not a member of a fund, you may be eligible for a basic allowance paid by Kela. Part-time in the event of a lay-off If you are laid off while receiving a part-time, you must notify your provider as soon as you have been informed of the layoff. Please also inform your provider of any changes to your layoff. As such, your part-time will not be discontinued if your layoff lasts for a maximum of six weeks. If, contrary to your original notification, your lay-off were to continue for more than six weeks, your parttime will be discontinued six weeks after your lay-off begun. Your lay-off can be partial or recurring, in which case your right to receive a part-time will be reviewed based on your overall situa-

13 Pension Provision for Employees and the Self-employed tion. Your provider will evaluate your right to receive the based on your lay-off notification or information requested from your employer. Your part-time will be discontinued if you do not meet the requirements. Reapproval of part-time If your part-time has been discontinued because you have exceeded your earnings limit or due to a lay-off or for some other reason, you may begin receiving it again once you meet the conditions for receiving a part-time. If your part-time has been discontinued for six months at the most and you once again meet the criteria for a part-time, your former part-time will continue unchanged. The basis for your is your stabilised earnings calculated the previous time you were granted a part-time. You do not have to submit a new application for a part-time, but you must request your provider to reapprove your parttime (within six months from the date on which your part-time was discontinued). If your is discontinued for more than six months, your former cannot be reapproved. In such cases, you may retire on a parttime only when you again meet all the requirements for receiving that. In practice, you will have to be in full-time employment for at least 12 months. The amount of your part-time will then be recalculated and you must submit a new application to receive your new part-time. Please note that your part-time cannot be reapproved after Security when your working capacity weakens If your working capacity has diminished, you can receive rehabilitation to help you cope at work. The aim of the rehabilitation is also to help your return to work after, for example, a long sick leave. The rehabilitation can be vocational, social or medical. The purpose of vocational rehabilitation arranged and paid for by providers is to improve the preconditions for continued working. Earnings-related providers also support preventive actions that aim to improve wellbeing at work Pension Reform Part-time abolished Introducing the partial early old-age

14 14 Pension Provision for Employees and the Self-employed 2016 Vocational rehabilitation If you are an employee or a self-employed person under the age of 63, you are eligible for vocational rehabilitation if disability is imminent within the next five years. You, your supervisor or the occupational healthcare at your workplace can take the initiative to rehabilitation. Vocational rehabilitation is used to improve your preconditions to work when you are no longer able to continue with your former tasks due to your state of health. The aim of vocational rehabilitation is to postpone or prevent the expected disability, as well as to help you continue your working life, despite your disability. You are entitled to rehabilitation arranged by providers if you have an established working life. To be eligible for rehabilitation, your earnings from work in the last five years must amount to EUR 34, Vocational rehabilitation is individual and carried out according to a rehabilitation plan that you draw up with your provider and/ or occupational health care. Your age, profession, working history and education are taken into account in the plan, which is based on your existing needs. In general, the first step is to find out whether new work arrangements can be made at your place of work so that you can continue in your former work or in other assignments. Vocational rehabilitation may include, for instance, work try-outs, work counselling or training leading to an occupation or profession. If you would like to start your own business or work as an entrepreneur, you can receive financial aid in the form of livelihood support. You may also be granted a discretionary rehabilitation assistance in the process of starting self-employment. Kela arranges vocational rehabilitation particularly for the young, the disabled and those outside working life. Kela is also responsible for medical rehabilitation. For more information on vocation rehabilitation, please contact a rehabilitation consultant at your own provider. Income during rehabilitation Rehabilitation allowance During vocational rehabilitation, you will receive a rehabilitation allowance. It amounts to the disability increased by 33 per cent. If you are working during your rehabilitation, your rehabilitation allowance may be turned into a partial rehabilitation allowance. It amounts to half of the full rehabilitation allowance. Rehabilitation allowance paid to the employer If your vocational rehabilitation is carried out in the form of a work trial and your employer pays you a salary

15 Pension Provision for Employees and the Self-employed for this period, the rehabilitation allowance will be paid to your employer to the extent that it corresponds to your salary. If your salary is smaller than the rehabilitation allowance, the difference will be paid to you. Rehabilitation assistance While your rehabilitation plan is being prepared and you wait for your rehabilitation to start, and if you have no other source of income, you may receive discretionary rehabilitation assistance. The rehabilitation assistance is of the same amount as the disability. Rehabilitation costs Costs arising from rehabilitation may be compensated separately. If you are a student, you may receive compensation, for example, for travel expenses, books and other study supplies. (The recommendations for compensation for rehabilitation costs are available in Finnish at Pensions based on disability If you are 18 to 62 years of age, fall ill and are unable to continue working despite rehabilitation, you may be entitled to a disability. Pensions granted due to disability include the cash rehabilitation benefit, the partial cash rehabilitation benefit, the disability and the partial disability. The first two benefits are granted on a temporary basis while the latter two are granted until further notice. The requirements for receiving disability s are basically the same in all lines of work. However, if you are working in the public sector, there may be some special requirements. For more information, please contact Keva. Disability You may be eligible for a disability if your working capacity has been reduced due to illness, handicap or injury by at least 60 per cent for one year. When handling your application, the earnings-related provider must establish your right to rehabilitation within the earnings-related system. Once your right has been established, your earnings-related provider will issue a preliminary decision without a separate application. The preliminary decision is valid for nine months. In general, you will have to receive a sickness allowance paid by Kela for approximately one year before you can qualify for a disability. The disability will continue until your retirement age, unless your working capacity changes. If there is a chance that your working capacity will be restored, your provider will grant you a

16 16 Pension Provision for Employees and the Self-employed 2016 temporary in the form of a cash rehabilitation benefit. If you receive a cash rehabilitation benefit, you and your provider will draw up a treatment and rehabilitation plan for you. Based on your education and your previous work experience, you will together agree on what type of work is suitable for you, taking into consideration your remaining working capacity. Partial disability You may be granted a partial disability if your working capacity has been reduced but you can cope with part-time work or lighter tasks. You can retire on a part-time disability straight from employment. While still working, you may apply for a preliminary ruling on your right to a partial disability. After receiving a favourable preliminary decision, you have to retire at some point within the next nine months. To receive a partial disability, your income level has to be reduced by at least 40 per cent compared to your stabilised average earnings. The reduction in earnings is generally carried out by reducing your working hours or changing your work tasks. If you are self-employed and want to retire on a partial disability, you must reduce your full-time business activities and related earnings by at least 40 per cent. However, you may also receive a partial disability even if you do not have a part-time job. If you are unemployed, you can register as a job seeker at an Employment and Economic Development Office and receive a reduced unemployment allowance in addition to your. The amount of your partial disability will be deducted from your unemployment allowance. A partial disability granted for a temporary period of time is called a partial cash rehabilitation benefit. Assessment of disability The assessment of your disability is based on a medical certificate (Certificate B) of your state of health. Your provider will conduct both medical and socio-economic assessments as part of the decision-making process. The socio-economic assessment is an evaluation of your remaining working and earnings capacity. Your age, education and previous work experience are also taken into account. If you have turned 60, the conditions for receiving a disability are more lenient. Amount of disability Your disability consists of the that you have accrued during your employment history and selfemployment activities. In addition, a component for your project-

17 Pension Provision for Employees and the Self-employed ed able service will be added to your disability. The projected able service is the time from the beginning of the year in which your disability began until you turn 63 years. Your will be increased with the wage coefficient to the level of the starting year of your disability and adjusted with the life expectancy coefficient confirmed for that year. The temporary rehabilitation benefit is of the same amount as the disability. However, for the active rehabilitation period, your will be increased by 33 per cent when you receive a rehabilitation benefit. This requires is that your return to work is supported through vocational rehabilitation. Your partial disability amounts to half of your full disability. If you are aged 24-55, your disability will be increased by a lump sum when your has continued without interruption for five full calendar years. The younger you are at the onset of disability, the bigger the increase will be. Component for projected able service You are entitled to a component for projected able service if you have earned at least EUR 17, during the ten calendar years before the year in whichhyour disability begins. If you have earned less, your will amount to the accrued up to the start of the disability, excluding the component for projected able service. The annual accrual rate is 1.5 per cent of the stabilised income you had before you retired. In general, your stabilized income is determined on the basis of your earnings during the five calendar years before you became disabled. When calculating your earnings for the projected able service, your earnings from work and the earnings that serve as the basis for your social security benefits are taken into consideration. Social security benefits include the sickness allowance, the unemployment allowance, the parenthood allowance and the compensation for job alternation leave. The life expectancy coefficient does not affect the component for projected able service. If you have questions concerning your disability, please turn primarily to your own provider Pension Reform Introducing the years-of-service

18 18 Pension Provision for Employees and the Self-employed 2016 Security if you become unemployed If you become unemployed, you must register as an unemployed jobseeker at an Employment and Economic Development Office. As an unemployed jobseeker, you may be granted either a basic unemployment allowance or an earnings-related daily allowance, depending on whether you are a member of an unemployment fund. The basic unemployment allowance and the earnings-related daily allowance are paid for a combined maximum total of 500 days. After that, you will qualify for additional days if you have had -entitling work for at least 5 years in the last 20 years. You can receive additional days if you were born between 1950 and 1954 and have turned 59 years before the maximum period of 500 days of unemployment ends. If you were born between 1955 and 1956, you may qualify for additional days of unemployment allowance when you have turned 60. If you were born in 1957 or later, you may qualify for this at age 61. Your right to the additional daily allowance will cease after the end of the month in which you turn 65. If you are self-employed, you are not entitled to the additional daily allowance. In issues relating to unemployment, please turn primarily to your own unemployment fund, the Federation of Unemployment Funds or Kela for advice. Retire at age 62 If you were born in 1957 or earlier and are receiving an unemployment allowance for additional days, you can apply for your old-age to start already at age 62. For more information, see section Pensions based on age above. Survivors security for surviving spouse and children The survivors is paid to the surviving spouse and the children in order to secure the family s income after the death of the family s breadwinner. A married spouse and minor children are entitled to the survivors. Parties to a registered partnership are eligible for a surviving spouse s under the same conditions as are married spouses. Under certain conditions, the surviving spouse s may also be granted to a former spouse. The survivors is paid as a surviving spouse s to the surviving spouse and as an orphan s to the children.

19 Pension Provision for Employees and the Self-employed Surviving spouse s If you have become a widow or a widower, you may have the right to a surviving spouse s if you and your spouse have or have had a child together. In addition, you must have been married to your spouse at his or her time of death. In addition, your marriage must have begun before your spouse turned 65 years. If you and your spouse do not have a child together, you are entitled to the surviving spouse s if you meet all of the following requirements: you were married before you turned 50 years and your spouse 65 years your marriage had continued for at least five years before your spouse died you were at least 50 years of age when your spouse died or you had received a disability under the earnings-related acts or the national act for at least three years. If you are a childless widow born before , you may be granted a surviving spouse s even if you had entered into marriage after turning 50 years, providing you were married before As a former spouse, you have the right to receive the surviving spouse s if your spouse was liable to pay a continuous alimony to you. The obligation to pay alimony must be based on a court decision or a decision issued by social services. If you were in a domestic partnership, you do not qualify for the surviving spouse s under the earnings-related acts. Orphan s A biological or adopted child under the age of 18 always qualifies for the orphan s after the death of a parent. The orphan s is also granted to the surviving spouse s child or adopted child who lived in the same household with his or her stepmother or stepfather at the time of the death. The same rules apply to a child of a parent who lived in a registered partnership. Foster children do not have the right to receive the orphan s. Determining the survivors The survivors is determined on the basis of your spouse s. If your spouse was not retired, the survivor s is determined according to the disability that he or she would have received on the day of his or her death. The life expectancy coefficient is not applied separately to the survivors, since the is calculated based on the deceased

20 20 Pension Provision for Employees and the Self-employed 2016 person s or calculated to which the life expectancy coefficient has already been applied. Amount of surviving spouse s You will receive half of your deceased spouse s at the most. The number of children and the size of your own affect the amount of the surviving spouse s that you will receive. If you are not retired, the amount will be determined based on your earnings-related calculated disability. However, your own and income will not affect the amount of your surviving spouse s as long as you have minor children who receive an orphan s. The amount of your surviving spouse s also depends on whether a former spouse receives a surviving spouse s. The surviving spouse s is paid on top of your own s and your earnings from work. The effect of your income on your surviving spouse s is presented in a table in the Supplement. Amount of orphan s The amount of the orphan s depends on the number of beneficiaries. If there are several children, each child will receive his or her own equal proportion of the survivors. Payment of survivors You will qualify for the survivors as of the beginning of the month following the death of your spouse. If you delay applying for the survivors, you can receive the retroactively for a maximum of six months. For valid reasons, the may be paid for a longer retroactive period. You may receive the surviving spouse s for the rest of your life. The amount of your surviving spouse s will be adjusted if your income changes. However, if you remarry before you turn 50, your surviving spouse s will be discontinued. In that case, you will receive the as a lump sum, equalling the amount of the for three years. If you remarry after the age of 50, your surviving spouse s is paid as usual. The orphan s will end when the child reaches the age of 18 or if he or she is given up for adoption. Other security for the family In addition to the survivors, you may receive other compensation. You may have the right to receive such compensation based on a supplementary arranged by your spouse s employer, your spouse s life

21 Pension Provision for Employees and the Self-employed insurance or individual insurance. If you are under 65 years, you may receive a survivor s paid by Kela. It also pays an orphan s to children who are under the age of 18, or between 18 and 20 if they study. For more information, please contact Kela. You may also be eligible for a survivors if your spouse has worked or lived abroad. You may be paid a from other EU/EEA countries, Switzerland or countries with which Finland has concluded a social security agreement. In addition, if your spouse was an employee at the time of his or her death, you may be eligible for compensation based on group life insurance. For more information, please contact the Finnish Workers Compensation Center. Family members of a self-employed person lack this right. If your spouse died as a result of an occupational accident or a traffic accident, you may be eligible for compensation based on his or her employer s insurance for occupational accidents and diseases or based on the motor liability insurance of the vehicle responsible for the traffic accident. Also common-law spouses may be entitled to such s. These compensations may reduce your surviving spouse s. Apply for your You have to apply for all s by filling in a application. One application is enough when you apply for an earnings-related and a national. You can apply for your by filling in a paper or a printable online form. Application forms and instructions are available at www. tyoelake.fi/en. By logging into the service on that same website, you can submit an online e-application. In addition, some of the providers have their own online application service. You can hand in your application to any private- or public-sector provider, the Finnish Centre for Pensions, an agent of Mela, or a Kela office. All of the above provide application forms as well as instructions and advice concerning application. You should apply for an old-age approximately two months before retiring. In your application, enter the date on which you wish your to begin. Before you apply for a part-time, contact your provider to find out if you qualify for a part-time and how much your part-time would amount to. Remember to negotiate with your employer what your part-time work-

22 22 Pension Provision for Employees and the Self-employed 2016 ing hours and earnings would be, as well as when you could retire parttime. Your applications for the disability and the cash rehabilitation benefit are linked to your sickness allowance. If you do not receive or apply for a sickness allowance based on your health insurance, you may apply directly for a or a cash rehabilitation benefit. Attach medical statement B, detailing your health status, to your disability application. To apply for vocational rehabilitation, fill in the application for rehabilitation within the earnings-related scheme. Attach medical statement B to your application. To apply for a survivors, fill in the survivors application form. If you apply for a survivors for a child, you must fill in an orphan s application form for each child separately. If you apply for from abroad, you must supplement your application with Appendix U, in which you list the information concerning your work or residence abroad. If you live abroad permanently, you must submit your application to the liaison body that handles matters in the country in which you live. It will forward your application to Finland. Pension decision You will receive a decision from the provider in which you were last insured. The surviving spouse s forms an exception to this rule as the provider is the one in which your deceased spouse was insured. In general, you will receive only one decision even if you have worked in both the private and the public sector. If you have also applied for a national, you will receive a separate decision from Kela. If you are displeased with your decision, you can appeal it. Appeal instructions come with the decision. Payment of The earnings-related is paid once a month to the bank account number that you have provided in your application. The date of payment varies per provider. Earnings-related s are also paid abroad, regardless of your nationality. Lump-sum payment and increment for delays If your is less than EUR per month, it will be paid as a lump sum. If your monthly is between EUR and it may, with your permission, be paid as a lump-sum.

23 Pension Provision for Employees and the Self-employed If you are a surviving spouse under the age of 50 and you remarry, you will be paid a lump sum equalling the amount of the surviving spouse s for three years. If your payment is delayed for reasons due to the provider, you will receive an increment on your payment. The increment is calculated for every day of delay. The delay time begins three months after the end of the calendar month during which your application or another statement needed for processing has been received. However, the delay time cannot start before the beginning of the month following the start of your. Changes in and interruptions to payments You or your provider can take the initiative to make changes to your payments. If your work or your working capacity changes once your has been granted, your provider may interrupt the payment of your disability for a fixed time or discontinue your disability altogether. Your disability may be left dormant for a minimum of three months and a maximum of two years at a time. If you receive a part-time and are laid off for more than six weeks, your part-time will be discontinued six weeks after the start of the lay-off period. As such, lay-offs that are shorter than six weeks will not discontinue your part-time. Your part-time may be discontinued, however, if your annual earnings drop below the minimum level. The orphan s paid to a child will end when the child turns 18 years. The surviving spouse s will end if the surviving spouse remarries before turning 50 years. Pensions from abroad and Appendix U If you have worked in EU/EEA countries, Switzerland or certain countries with which Finland has concluded a bilateral agreement on social security, you may be entitled to a from these countries. The following agreement countries pay s to Finland:Canada, Quebec, the U.S., Israel, Chile, Australia and India. The social security agreement between Finland and China is expected to come into force in Negotiations with South Korea and Japan are under way. All agreements include rules on s, but benefits are

24 24 Pension Provision for Employees and the Self-employed 2016 determined in accordance with the national legislation of each country. Countries that lack an agreement may not pay s to Finland. The national legislation of these countries may contain restrictions concerning the right to receive s from or pay s to another country. To apply for s from EU/EEA countries or Switzerland and social security agreement countries, use the same application form as when you apply for a from Finland. In addition to the application form, please fill in Appendix U. It contains questions on your living and work abroad. If you live in Finland, the Finnish Centre for Pensions will forward your application to these countries. You should start the application process for from abroad well ahead in time. Complete Appendix U carefully, as your right to receive a from abroad will be established based on the information you provide on that form. If possible, attach copies of documents relating to your work abroad, for example copies of work certificates, as well as foreign insurance numbers (equal to a social security number). If you live in another EU/EEA country than Finland or in a social security agreement country, you have to apply for your from Finland via the authority of the country in which you live. The foreign authority will forward your application to the relevant Finnish provider. For information on how to apply for a and for contact information for different countries, please contact the Finnish Centre for Pensions. Foreign s Tel Pensions are taxable income Your earnings-related, national and guarantee are taxable income. The taxation of income differs from that of income from work due to the income deduction. The income deduction applies to both state and municipal tax. The amount of the deduction depends on your combined taxable income. The tax authorities take into account the income deduction in your individual withholding rate. If you draw only a national, you will not pay tax at all due to the income deduction. In order for your advance tax to be correctly balanced with your final taxation from the start, please request a

25 Pension Provision for Employees and the Self-employed new withholding rate from your tax office as soon as you receive your decision. The tax office needs information on all your income in the ongoing year in order to calculate your tax rate. You need to deliver your taxation information to your own provider in the year in which your starts. After that, your earningsrelated provider will receive the information directly from the tax authorities. Working while drawing a While drawing a, you may begin a new employment or start a business. Working does not affect the payment of your. If you work as a self-employed while drawing a, you can take out voluntary insurance under the Self-employed Persons Pensions Act or the Farmers Pensions Act. You will accrue for work done in retirement at a rate of 1.5 per cent per year until you reach the age of 68. You can draw this new at the age of 68 at the earliest. If you work while drawing a disability, the payment of your may be affected. Based on your earnings, your may be interrupted or discontinued altogether, or your full may be changed into a partial disability. A temporary Act has been introduced to encourage people on a disability to return to work. The Act will be in force until 31 December Under the Act, you may earn at least EUR per month while receiving a disability. Check with your provider whether your individual earnings limit is higher. If the payment of your has been suspended or left dormant because of work, you have to notify your provider when your work stops so that the payment of your may start again. Your may be left dormant for a minimum of three months and a maximum of two years at a time. National alongside small earnings-related If your earnings-related is small, you may also receive a national. The general retirement age for the residence-based national is 65 years. You may retire on a national at the age of 63 at the earliest, in which case your will be permanently reduced.

26 26 Pension Provision for Employees and the Self-employed 2016 The amount of your national depends on the statutory earnings-related that you have accrued up to the age of 63. Your marital status also affects the amount of your national. You will not be granted a national if your other income exceeds the maximum limits listed in the Supplement at the end of this booklet. The National Pensions Act includes certain types of aids that may be paid to recipients of the earnings-related and the national. National benefits are adjusted annually with the national index in line with increases in the cost of living. For more information, please contact Kela. Guarantee Kela will pay a guarantee if you are a er living in Finland and your total monthly, before tax, amounts to less than the guarantee (EUR ). However, you will not receive the guarantee if you receive only a part-time, a partial disability or a survivors. You can apply for the guarantee from Kela. Kela s child increase Kela will pay a child increase if you receive an earnings-related and are caring for a child under the age of 16. The increase is EUR per month for each child. You may qualify for the child increase if you draw a full disability, an old-age or an early old-age. The amount of your earnings-related will not affect the child increase, which will be paid even if you receive only an earnings-related. Apply for the child increase from Kela with the form Eläkkeensaajan lapsikorotus (EV264 in Finnish and EV264r in Swedish). Check your record Your record includes data on your employment history, on social benefits that you have received and for which you have accrued and on your accrued earnings-related. In general, your record also includes an assessment of your old-age if you were born before If you were born in 1955 or later, the record will not include an assessment of your old-age since the earnings-related legislation is undergo-