Transition security allowance
Conditions for receiving transition security allowance
You are entitled to a transition security allowance included in the transition security package if:
- you have been dismissed for production-related or financial reasons on or after 1 January 2023, and
- you have been employed by the same employer for at least five years before the dismissal, and
- you have reached the age of 55 no later than on the date of dismissal, and
- you have registered as a jobseeker with the TE Office within 60 days of the date of dismissal. In practice, this means that if the notice period for terminating your employment is six months, for example, you must register as a jobseeker with the TE Office already during the notice period.
Applying for transition security allowance
The TE Office investigates your right to a transition security allowance. If you meet the conditions for transition security allowance, the TE Office will issue its approval on the matter to the payer of the allowance. The transition security allowance is paid by the unemployment fund if you were a member of the fund on the day you were dismissed. If you have only joined the fund after this, you can apply for transition security allowance from Kela. If you were a member of the fund on the date of dismissal but did not meet the 26-week employment condition by the end of your employment relationship, you need to apply for the transition security allowance from the fund and unemployment benefit from Kela.
Transition security allowance must be applied for within three months of the end of the employment relationship. You can apply for the allowance already during the notice period. Applying for transition security allowance is done using a separate application form. The form will be available in the fund’s online service. Please note that if you have already applied for transition security allowance during the notice period but you are immediately re-employed by the employer who dismissed you, you may be required to pay back the allowance. On the other hand, if you find employment with another employer immediately after your dismissal, you retain your right to the transition security allowance.
Amount of transition security allowance
Transition security allowance is a one-time payment equal to about one month’s wages. The amount of transition security allowance is calculated based on paid wages and salaries in the 12 calendar months before the date of dismissal. For example, if you are dismissed in April 2023, the amount of transition security allowance is calculated based on your wages from April 2022 to March 2023. Earnings such as holiday bonuses and production or performance bonuses are also included. The total wage income is divided by 12 to calculate the amount equal to one month's wages. Earnings data is received from the Incomes Register. Only wages paid by the dismissing employer are taken into account in the calculation. The amount is calculated by the payer of the allowance, in other words either the unemployment fund or Kela.
Transition security allowance is taxable income. Tax is withheld according to the additional tax rate specified in your wage income tax card, so you should consider requesting a revised tax card for the allowance. If you submit or ask the tax authorities to submit a revised tax card to the unemployment fund for the allowance, tax is withheld according to the basic rate specified in the revised tax card.
Transition security allowance does not affect the payment of unemployment benefits or any other benefits, with the exception of income support.