Considering a partial old-age pension? How it impacts the general social security benefit paid by Kela
From 1 May 2026 onwards, the partial old-age pension will be considered income when calculating the general social security benefit paid by Kela. This may reduce the amount of the general social security benefit. It is worth finding out the effect before applying for a partial old-age pension.
The basic unemployment allowance and the labour market subsidy paid by Kela will be replaced by the new general social security benefit from 1 May 2026 onwards. In the future, the partial old-age pension will be considered income when calculating the means-tested general social security benefit. This means that the partial old-age pension may reduce the amount of the general social security benefit paid by Kela.
“You might want to keep this in mind before you apply for a partial old-age pension. If you were born in 1964, you will turn 62 this year and thus qualify for the partial old-age pension”, says Development Manager Marjukka Hietaniemi from the Finnish Centre for Pensions.
Until now, the partial old-age pension has only rarely affected the labour market subsidy and has not impacted the basic unemployment allowance.
The partial old-age pension does not and will not affect the earnings-related unemployment allowance. It is usually determined based on the individual’s employment history before becoming unemployed.
This is how the partial old-age pension affects the amount of the general social security benefit
The general social security benefit will be the same as the labour market subsidy and the basic unemployment allowance: 37.21 euros per day (or €800 per month on average) in 2026. However, the amount may be reduced through means-testing.
Means testing applies if the individual’s capital income and other income (excluding wage income but including the partial-old-age pension) exceed the means-testing income limit of 311 euros per month (gross).
In such cases, 50 per cent of any income above the means-testing income limit will be deducted from the general social security benefit.
Example:
- An individual receives a partial old-age pension of €411 per month.
- The amount exceeding the income limit is €100 (€411 − €311 = €100).
- Of this sum, 50% (or €50) is deducted from the general social security benefit.
- This means that the general social security benefit will be €750 (€800 − €50 = €750).
The new rules also apply to individuals who are already receiving a partial old-age pension
If an individual is already receiving a partial old-age pension and starts receiving the general social security benefit on or after 1 May 2026, their general social security benefit will be means-tested. This means that the benefit may be reduced, thereby reducing their overall income.
“We estimate that around two thousand individuals currently receive both a partial old-age pension and either the basic unemployment benefit or labour market support, which together exceed the income threshold for means testing. The estimate of the number of individuals is indicative as it is based on statistics from 2024”, says Hietaniemi.
The partial old-age pension continues until the recipient retires on a full old-age pension or is granted a disability pension. The partial old-age pension cannot be discontinued or suspended. However, it can be cancelled within three months of being granted.
The earnings-related partial old-age pension
- The earnings-related partial old-age pension allows an individual to take part of their old-age pension early.
- If they take it before reaching their retirement age, their full old-age pension will be permanently reduced.
- An individual can begin receiving the old-age pension once they reach the qualifying age for their age group, which is after turning 62 if they were born in 1964.
- The individual does not need to continue working to receive this benefit, but they may work as much as they like while taking it, and they will continue to accrue new pension for any work they do.
- This pension affects the amount of their full old-age pension, your taxation, and some other benefits, so it is advisable to check the impact before applying for a partial old-age pension.
- The partial old-age pension continues until the full old-age pension begins. The individual must apply separately for their full old-age pension.
The general social security benefit paid by Kela
- From May 2026, Kela’s general social security benefit will replace both the labour market subsidy and the basic unemployment allowance.
- An individual may be eligible for this benefit if they are an unemployed jobseeker and do not qualify for or have already used up their earnings-related unemployment allowance.
- When their general social security benefit is assessed, certain types of income are considered in the means testing and may reduce the amount they receive. For example, a partial old-age pension is considered as income for these purposes.
- The means-testing income limit is set at €311 per month (gross). If the individual’s capital income and other income – excluding wage income but including the partial old-age pension – are below this threshold, tthe general social security benefit will not be affected.
- If an individual’s means-testing income exceeds €311 per month, 50% of the amount above this limit will be deducted from their general social security benefit.
Kela provides more information about the general social security benefit.
More information:
- Information on the general social security benefit (Kela.fi)
- Questions and answers about the general social security benefit (Kela.fi)
- Flexible partial old-age pension (Tyoelake.fi)
- Customer service for individual customers (Kela.fi)
- Find your pension provider and go to its online service (Tyoelake.fi) (After logging in, you are directed to the service of your own pension provider)
