Transition security allowance

Conditions for receiving transition security allowance

You are entitled to a transition security allowance included in the transition security package if:

your employment contract has been terminated for production-related or financial reasons, and
you have been employed by the terminating employer for at least five years (it may include interruptions of up to 30 days) 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 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 already during the notice period.

The employment relationship has not been terminated for production-related or financial reasons, and therefore the conditions for the payment of transition security money are not met if your employment has ended due to an agreement made with the employer, you have resigned yourself, for example, due to a 200-day layoff, or the employment relationship has ended due to the employer's bankruptcy, corporate restructuring, or death.

The right to transition security money is determined by the employment authority

The employment official investigates your right to a transition security allowance. If you meet the conditions for transition security allowance, the employment official 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 12-month 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.

Applying for transition security allowance

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. Notify the employment authority and the unemployment fund if the end date or reason for the termination of the employment changes after you have already received the notice of termination.

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 2025, the amount of transition security allowance is calculated based on your wages from April 2024 to March 2025. 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.

The change security allowance does not affect the payment of additional days either. The right to additional days remains if the conditions for their payment are met. See the detailed conditions for additional days here.

Read more about it on the Työmarkkinatori website.