The entrepreneurs pension law changed from 1.1.2023. The goal is to improve entrepreneur’s pension and social security. In practice, the law change specifies how the income from work, which is the basis of the entrepreneur's pension insurance, is calculated and how the pension insurance company checks it.
The law change concerns the assessment and verification of YEL work income. As a result, the employment pension companies have the responsibility to check the earnings regularly every three years. In this way, the entrepreneur's pension insurance tracks the entrepreneur's real income over the years.
Before the year 2023 entrepreneur’s work income has been checked by the employment pension company in two cases:
- When the entrepreneur makes changes to their work income.
- At the beginning of the year, when the annual index increase according to the salary coefficient is made to the work income (in 2023 the salary coefficient is 1,558).
In the future, the employment pension companies will also check the work income every three years. In this case, the pension company makes a proposal to the entrepreneur about new work income, which is still based on the value of the entrepreneur's work input. The evaluation uses the median salary of the industry, which is related to the entrepreneur's working hours and professional skills. The work income of a light entrepreneur will still be estimated based on the gross salary. If for some reason the proposal given by the employment pension company does not correspond to the entrepreneur's situation, the entrepreneur always can provide an explanation.
When is work income checked?
- The change will be enforced in such a way that the employment pension companies will start checks in 2023 for those entrepreneurs with an income of less than 15 000 euros. In 2024, work income of less than 25 000 euros will be reviewed, and in 2025, work income of more than 25 000 euros will be reviewed.
- If a substantial change has been made to your work income in the last three years, they will check it next time only three years after the change.
- If your work income was last confirmed before January 1, 2023, it can be increased in the first two review times by a maximum of 4000 euros/review time, unless you give your consent to a larger increase. This means that your YEL insurance premium can increase by a maximum of 85,33 euros per month with these review times.
Do you want to know more about YEL insurance?
You can ask for more detailed advice regarding your own YEL insurance primarily from your own occupational pension company. If you don't know if you need YEL insurance, you can also contact UKKO customer service. We are happy to advise!
- If you have taken out your YEL insurance from Varma (for example via UKKO service), you can log in directly to Varma Asiointi to get more information about your insurance.
- To estimate your own YEL income, you can use Varma's work income calculator.