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Unemployment Fund - 07.11.2019 klo 11.14

PAM’s unemployment fund is clearing the backlog

The unemployment fund would prefer part-time workers to make their applications for adjusted allowances online rather than by post. Image: Gettyimages

PAM’s unemployment fund normally processes applications quickly, but payout times have got longer. Part-time workers are now getting adjusted allowances paid into their accounts within two and a half or three weeks of the fund receiving the application. The reason for the backlog is a change in the law on unemployment security at the start of April which brought in contributions-based adjustment.

PAM’s unemployment fund has a backlog. According to PAM’s fund manager Ilkka Nissilä, the change in the law in the spring and the introduction of contributions-based adjustment is slowing down the processing of claims for allowances.

Wages earned by part-time and gig workers reduce the earnings-related benefits they receive. Contributions-based adjustment means that wages earned affect the amount of allowances in the application period when the wages are paid. It no longer matters when the work was done.

The change in the law was supposed to speed up payment of allowances because applicants no longer have to wait for their pay certificates. The problem used to be that part-time workers could be waiting a long time for their wages to be paid, and without their pay certificate the unemployment fund couldn’t make its decision.

According to the head of PAM’s unemployment fund, Ilkka Nissilä, the main reason for the backlog in processing applications is that processing now takes more work. Contributions-based adjustment did not entirely remove the need to check working hours. This is why processing applications is more time-consuming. Searching for missing details is another bottleneck.

“The working hours that applicants put in their applications and the details on the pay certificate don’t always match”, says Nissilä, describing a typical situation requiring further inquiries.

”We would really like applicants to complete their applications carefully and make sure that all the information is included”, Nissilä says.

Contributions-based adjustment has basically been seen as a good thing from the member’s perspective. It encourages unemployed persons to accept short-term work. The unemployment funds will get the information that employers enter into the incomes register from the start of next year. For PAM’s fund, recipients of adjustment allowances mostly do ongoing part-time work rather than gig work. They would benefit from further improvements to the system.

“We would get most benefit from the incomes register if the details we get from it were always enough to process an application. That’s not always the case, at least in the start”, Nissilä says.

The unemployment fund is trialling reduced phone hours for its unemployment security advice service. The phone advice lines are open Monday to Friday from 10 am to 2 pm. The idea is to free up resources for processing applications. According to Nissilä, the aim is to get allowances paid quicker.

Around 40 per cent of recipients of earnings-related benefits from PAM’s fund get adjusted allowances. There are now around 5000 of them a month. The number has increased in recent years up to this year. The total number of recipients of unemployment allowance, however, has being going down since February 2016.

Read more: How earned income affects earnings-related benefits.