The Parliament of Finland has approved the Government’s proposal for the reform of the Self-Employed Persons’ Pensions Act (YEL). The legislative amendments shall enter into force on 1 January 2023.
The aim of the reform is to improve the pension and social security of entrepreneurs. The definition of YEL income will not change, but the reform introduces more tools for the determination and adjustment of YEL income.
When confirming the YEL income, pension insurance companies are required to make an overall assessment of the entrepreneur’s situation. The overall assessment takes into account, among other aspects, the median salary/wages for the field in question, the work input of the entrepreneur, the extent of the entrepreneurial activities, the professional competence of the entrepreneur and the actual value of their work input.
The YEL income calculator used by all pension insurance companies can be used to help assess the correct YEL income level.
“The calculator only issues a recommendation and is not able to take the entrepreneur’s overall situation into account. If the determination of YEL income feels difficult, do not hesitate to get in touch with your own contact person. After all, we are here to help and advise you,” assures Staffan Åberg, Chief Customer Officer at Veritas.
YEL income will now be adjusted every three years
The legislative reform obligates pension insurance companies to review and adjust YEL income levels regularly every three years.
Veritas will begin with adjustments this spring. The 2023 adjustments will concern YEL insurance policies in which the stated YEL income is less than 15,000 euro. The increase of the YEL income amount can be a maximum of EUR 4,000, which means an increase of the insurance contribution by approximately EUR 80 per month.
YEL income levels will not be increased automatically without an overall assessment. Entrepreneurs have the possibility to be heard and to provide additional information on issues that affect the YEL income.
“We will contact those entrepreneurs whose YEL income is scheduled for review in 2023. Our aim is to explain the process in advance so that the review and adjustment will not come as a surprise to anyone.”