An enhanced unemployment benefits scheme offered to older employees could make it harder for Finland to achieve its employment target, Antti Palola, chairman of The Finnish Confederation of Professionals (STTK) said on Wednesday.
Palola was referring to the so-called 'pension pipeline' (eläkeputki in Finnish), a scheme through which older workers who become unemployed can claim enhanced jobless benefits through to early retirement, in theory removing employers' incentive to hire over-55s.
That arrangement is seen as a key reason for lower employment rates among older workers, and is now under threat as the government looks for ways to raise total employment rates.
Last month, the government asked labour market organisations to come up with measures to increase employment among the elderly. The measures must reach at least 10,000 older workers by the end of the decade, based on the Ministry of Finance’s calculations.
However Palola said it is difficult to find alternatives to the current benefits structure if the target is to be met.
Palola said he expects negotiations on getting large numbers of over-55s into jobs to intensify next month. If key organisations don't find a solution by November, the government said it will take action itself.
Union looking for balanced solution
According to Palola, employers are keen on getting rid of this scheme.
"This has been extremely difficult for us. I have been getting a record number of messages, especially from female low-income earners over the age of 55 worried about the issue," Palola told reporters on Wednesday.
Palola emphasised that negotiations will explore how to strengthen the position of older people in working life if the scheme is scrapped.
The trade union is looking for a balanced solution and is proposing, among other things, temporarily eliminating non-wage-related costs to incentivise employers to hire people over the age of 55.
Currently, an unemployed person born in 1961 or later is entitled to an additional daily unemployment benefit at the age of 62, up from 61 years.