Article 26.9.2022

Five ways YEL insurance affects social security

Are you self-employed? Do you want to understand your social security better? You've probably heard that YEL income is the foundation of your basic security – but what does that mean? Below you will find five situations in which YEL insurance offers your security.

Keep in mind: It all starts with YEL income

YEL insurance affects your social security through YEL income, which refers to the monetary value of your work input. Your insurance payment as well as the level of your social security are calculated based on it. Roughly put: the higher your YEL income, the better your social security. Read more about YEL income »

 

1. You fall ill

If you get sick, you can apply for a sickness benefit from Kela. You will start receiving it after only one day of sickness. The amount of your daily sickness allowance depends on your YEL income.

Example: How much sickness allowance would I get?

YEL income Sickness allowance / month
€8,262 €742
€20,000 €1,167

 

Read more about the entrepreneur's sickness allowance on Kela's website (kela.fi) »

Read more about YEL income and falling ill »

 

2. A new family member arrives

As an entrepreneur, you can take family leave just like employees. The amount of parental allowance you receive from Kela depends on your YEL income. Parental allowances were renewed on 1 August 2022 (kela.fi) and Kela now offers the following allowances during the family leave period:

  • pregnancy allowance
  • special pregnancy allowance
  • parental allowance
  • partial parental allowance.

These allowances will also increase your future pension. After family leave, it is possible to receive other childcare subsidies from Kela.

Example: How much parental allowance would I get?

YEL income Parental allowance / month
€8,262 €742
€20,000 €1,167

 

Read more about entrepreneur's parental allowances on Kela's website (kela.fi) »

Read more about childcare support on Kela's website (kela.fi) »

Read more about entrepreneur’s family leave »

 

3. You become unemployed

You can receive an unemployment benefit if your business activities end, or you no longer work for your company for some other reason.

If you are a member of Entrepreneur Fund

In this case, you are entitled to an earnings-related daily allowance paid by the Entrepreneur Fund (yrittajakassa.fi) as long as you fulfil the work requirement (kela.fi). You can become a member of the fund if your YEL income is at least €13,573 in 2022.

If you are not a member of Entrepreneur Fund

You can apply for a basic daily allowance from Kela. You can get it if you meet the work requirement and your YEL income is at least as much as the lower limit of unemployment, in 2022 €13,573. If you don’t meet the conditions of basic daily allowance, you can apply for a labour market subsidy from Kela. It is a means-tested benefit.

Example: How much would I receive in earnings-related or basic daily allowance?

YEL income Earnings-related allowance / month Basic daily allowance / month
€8,262 €0 €0
€20,000 €1,158 €742

 

Read more about the end of entrepreneurship on Kela's website (kela.fi) »

Read more about entrepreneur unemployment »

 

4. You can no longer do your work

YEL insurance also brings you cover for disability. If your health deteriorates to the point that it hinders your work, you can apply for vocational rehabilitation. It aims to shape your business so that it fits your health – thus allowing you to continue your work as an entrepreneur.

For an entrepreneur, vocational rehabilitation is most often a work experiment that you do in your company. However, it can also be training or if you can no longer continue as an entrepreneur due to your health condition, it can be studying or training for a new profession.

You will receive rehabilitation allowance or a cash rehabilitation benefit and increment during your rehabilitation.

Read more about the vocational rehabilitation of an entrepreneur »

 

5. You are ready to retire

YEL insurance brings you a pension, of course. Your pension is based on all your earnings during your career in paid employment and as an entrepreneur. As an entrepreneur, your pension accrues based on your YEL income – 1.5% of your annual YEL income. (The exception is those aged 53 to 62, for whom 1.7% of YEL income will be accrued in pension between 2017 and 2025.)

In addition to old-age pension, you have the option to go on partial early old-age pension. If your ability to work is reduced, you can apply for a disability pension or a career pension. Your family is safeguarded by YEL in the form of a survivor's pension.

Read more about pension for entrepreneurs »

 

Keep in mind: accidents

Accident insurance is voluntary for an entrepreneur, but if you have one, the compensation paid by the non-life insurance company will be based on your YEL income. 

Try the YEL calculator

Maybe you're wondering what the level of your own social security is. For a convenient estimate of it, try the YEL calculator. It allows you to study the impact of YEL income on your social security.

Try the YEL calculator »

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Article 23.11.2022

Most frequently asked questions on the YEL reform

What questions are self-employed persons asking about the Self-Employed Persons’ Pensions Act (YEL) reform currently being deliberated in Parliament? We assembled all of the questions most frequently asked by self-employed persons. We will answer them under the assumption that the government’s legislative proposal will remain unchanged in Parliament. The expert for the article is Ilmarinen’s Director, Insurance Services, Minna Hakkarainen.

Most frequently asked questions on the YEL reform
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