The amended act clarifies the determination of earned income (YEL income)
Amendments to the Self-Employed Persons’ Pensions Act (YEL) entered into force on 1 January 2023. The purpose of the legislative amendments is to improve the pension and social security of the self-employed and to support the implementation of YEL. The objective is for YEL income to better reflect the value of a self-employed person’s work input throughout their career.
YEL income must correspond to the salary or compensation that would be paid if a person with similar skills and knowledge was hired to perform the self-employed activities. YEL income is basically considered to be the median salary paid within the self-employed person’s business sector. Other information describing the amount of the self-employed person’s work input, the scope of their self-employed activities, their skills and knowledge, and the value of their work input is also taken into account. Based on this information, we can confirm the person’s YEL income to be higher or lower than the median salary.
Going forward, we will review your YEL income regularly
Under the amended act, earnings-related pension companies are obligated to review the income of self-employed persons regularly, every three years. The objective of this change is for YEL income to better reflect the value of the self-employed person’s work input as their self-employed activities continue.
You will receive a proposal for an adjusted level of income
In the review of your YEL income, we will propose a new income level for you based on the information available. Before we issue a decision, you will have the opportunity to state your opinion of the amount of your YEL income and present an explanation of the factors affecting it.
We will not issue a proposal if your income is at the legally required level, or if the change from the previously confirmed level would be no more than five per cent. In that case, we will notify you that a review has been carried out and that there is no change in the amount of your YEL income.
Maximum increase to a YEL insurance policy that started before the act entered into force
The regular review of income levels also applies to YEL insurance policies that started before the amended act entered into force. If your insurance policy started before 1 January 2023 and your YEL income has not been changed at your request after the amended act took effect, there is a cap on the maximum amount that your income level can be adjusted. In this case, your YEL income in the first two review rounds may be increased by no more than EUR 4,000 per review. However, if you want to raise your income to the legal level right away, a deviation from the maximum amount is permitted with your consent.
You can also apply for a change in the amount of your YEL income in future if the factors affecting your income change substantially. Please note that in that case, your income will be confirmed at the legal level and the aforementioned maximum increase will not be applied.
Read more about the amended YEL act in our news Amendment to the Self-employed Persons’ Pension Act (YEL) approved by Parliament – the amendment will clarify the determination of confirmed income
When is YEL income reviewed?
We will review your income level during the calendar year in which three years have passed since the last time your YEL income was confirmed.
If your insurance started before 1 January 2023, we will review your income under the amended act according to the following schedule:
• in 2023, we will review incomes under EUR 15,000
• in 2024, we will review incomes between EUR 15,000–25,000
• in 2025, we will review incomes over EUR 25,000
The first review, however, will be carried out at the earliest during the year in which three years have passed since your YEL insurance started or since a significant (more than 15%) change was made to your income before the amended act took effect. For example, incomes for YEL insurance policies that started in 2022 will mainly be reviewed in 2025.
Information about income reviews in 2023
If your income falls in the income group to be reviewed this year, you will receive information about the upcoming review and further instructions in April.
The reviews will be conducted in June–December 2023. Unfortunately, we cannot give information ahead of time about the month when a specific self-employed person’s YEL income will be reviewed.
Use the Varma Online Service
In the Varma Online Service, you can conveniently take care of all matters related to your YEL insurance. For future reviews, you can also submit additional information quickly and securely via the online service.
Read the frequently asked questions about the YEL income review
Do you still have questions about the YEL income review? On our website, we have compiled a list of frequently asked questions. We will update the answers throughout the year.
Go to our page YEL income review
Watch our webinar recording YEL uudistuu – mikä muuttuu? (YEL reform – what will change?).
Read Customer Service Manager Arja Iisakkala’s blog entry, The Self-Employed Persons Pensions Act was reformed – what actually changed?
Useful information!
In spring, we will be sending our customers a letter in which we tell them about the amended YEL act and the review of YEL income. Please wait patiently for the letter and the instructions it contains. If your YEL income is scheduled to be reviewed this year, we will send you a clear proposal concerning the amount of your YEL income and further instructions.
Our customer service will answer messages and calls in the order they arrive in, so only one message to our services is sufficient. Be sure to also keep in mind that you can take care of many of your insurance matters in the Varma Online Service when it suits you best. In the service you can, for example, request a change to your YEL income, view your invoices, and request an extended term of payment and a YEL certificate. Log in to the service using your personal online banking codes.