YEL income reviews are underway at Veritas. All policies with a YEL income of less than 15,000 euro will be reviewed this year.
Pension insurance companies can increase YEL income amounts by a maximum of 4,000 euro in connection with this review round, in which case, the YEL insurance contribution would approximately increase by 85 euro per month.
According to Staffan Åberg, Director of Pension and Insurance Services at Veritas, the reviews have proceeded as expected. However, some entrepreneurs remain concerned about the possible increase to their YEL income.
‘Not everyone’s YEL income will increase, since a low YEL income is not the same as an incorrect YEL income. You can have a low YEL income amount that is still precisely at the correct level’, Åberg clarifies.
Liisa Hanén, Managing Director of the Association for micro and solo entrepreneurs (MYRY), recognises these concerns. Over the past weeks, she has been busy responding to phone calls and messages from entrepreneurs.
‘There are thousands of entrepreneurs in Finland who have a very low income. For them, this maximum increase, which is intended to be reasonable, is already significant’, Hanén explains.
‘No one knows the entrepreneur’s situation better than the entrepreneur themselves’
The YEL income recommendation is calculated automatically using the shared YEL income recommendation service of the employment pension sector. The calculator is not able to consider the individual situation of each entrepreneur. Åberg hopes that every entrepreneur will carefully check the YEL income proposal they receive.
‘No one knows the entrepreneur’s situation better than they do themselves. It is worthwhile to submit a request for correction if the information on which the proposal is based does not correspond to your actual current situation’, Åberg states.
The 4,000 euro maximum increase for YEL income, as specified by law, will only affect the first two reviews carried out by the pension insurance company. Many entrepreneurs are wondering what the future will look like after the transition period.
‘Many entrepreneurs are ready to accept the 4,000 euro increase, but are unsettled by the concept of the ‘correct’ income recommendation on which such decisions are based. They are considering whether it will still be worthwhile to be an entrepreneur six years down the road or whether they should just pack it in’, says Hanén.
Åberg reassures entrepreneurs that there is no reason to overreact. The YEL income is always assessed for the review on the basis of current information, so it is premature to entertain that kind of thinking at this point. It is important, however, to make sure that the information concerning your own entrepreneurial activities is up to date, for example, in the YTJ business information system.
The YEL system needs reform
The Government Programme states that an assessment of the development needs of the YEL system will be initiated during the Government term. Åberg states that a reform would be welcomed.
‘The Self-Employed Persons’ Pensions Act is no longer entirely applicable to today’s entrepreneurial situation. Legislation is black and white and doesn’t always correspond to the current reality for many entrepreneurs’, he explains.
Hanén also hopes that the need for reforms will be assessed and will include the assessment of the potential impact of those reforms on entrepreneurs.
‘The different options should be discussed openly. Pre-funding, for example, should be more closely examined as a means of creating a stable foundation for the system’, says Hanén.
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