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Largest unemployment fund warns of claims flood

The expected backlog of cases could lead to benefit payments being delayed until the end of the year.

Nainen ja mies kauppakeskuksen rullaportaissa.
More than 300,000 employees were involved in co-determination negotiations at the end of March, according to figures provided by the Ministry of Employment and the Economy. Image: Henrietta Hassinen / Yle

Finland's largest unemployment fund the YTK has warned of serious congestion in the processing of unemployment benefits as potentially hundreds of thousands of claims could be received within the next few weeks.

Based on the results of a recent membership survey, the fund expects to receive up to 100,000 applications for daily allowance cover in the near future, and it said that nearly 270,000 members are at risk of unemployment.

The YTK, which is also known as the Loimaa Fund and has a membership of about 445,000, typically processes around 40,000 to 50,000 applications per year.

"So now we are facing two years of work in one month" the fund’s CEO Sanna Alamäki wrote in a blog post (in Finnish).

The potential backlog for the YTK will not be due to insufficient funds, but rather congestion in the processing of applications. Using current systems and staffing arrangements, the total number of expected applications wouldn't be processed until the beginning of next year.

Alamäki emphasised in her blog post that the processing of applications requires expertise, and although the YTK has recruited new staff, the number of applications processed will not rise to the required level immediately.

"The Chancellor of Justice pointed out at the Government Plenary Session last week that the current situation jeopardises people’s constitutional right to social security without undue delay," Alamäki wrote.

New measures needed to alleviate situation

The government is working to ensure that people who lose their jobs during the current crisis will have faster access to unemployment benefits. However YTK argued that while the changes to the Unemployment Security Act prepared by the government are good, they will also increase the manual work involved in the paying of benefits and thus exacerbate congestion.

The YTK is therefore proposing a system used in a number of other countries whereby the employer would continue to pay part of the employee’s salary and the state would reimburse the employer.

Another YTK proposal is to provide for a special temporary layoff allowance, data for which could be sought directly from the Income Register.

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