from the Finnish Centre for Pensions (ETK) show that 207,000 self-employed
persons in Finland were insured under the Self-employed Persons’ Pensions Act
(YEL) in 2018.
to the ETK, two out of five of these self-employed persons are underinsured
based on their 'confirmed income' which constitutes the tax base for their
pension calculation and social security. In addition, one in four of them only puts
their confirmed income at, or close to, the statutory minimum requirement of
€7,656 per year.
income, as stipulated by the YEL, is not only the basis for income-related
pensions and social security for self-employed persons but is also used for
various other social security benefits to which they are entitled, such as
sickness benefits, unemployment benefits and family benefits. The legislation states
that each self-employed person must declare their confirmed income in a way
that corresponds to the respective value of their employment; it is
nevertheless often lower than the self-employed person’s taxable income.
Social security only at the level it was at start of the millennium
ETK points out that the real-term average confirmed income of the newly
self-employed in 2018 was at the same level it was in the early 2000s. In
addition, the average value of the currently insured confirmed income decreased
last year across all age groups of insured self-employed persons. The confirmed
income of younger age groups fell more than that of older age groups.
earnings-related pension insurance of self-employed persons serves as income
insurance if self-employment ends due to disability or age. It also provides a
survivor’s pension if the self-employed person dies. However, the level of confirmed
income used to determine the amount of benefits is likely to be widely
insufficient in the event of a benefit being claimed.
The statistics can be viewed on a case-by-case basis by specifying appropriate parameters.