Article 16.2.2021

What every entrepreneur should know about sickness allowance

We all get sick sometimes – even entrepreneurs. Luckily, when you’ve taken care of your pension insurance, you can receive sickness allowance from Kela during your illness. Read on to find out what every entrepreneur needs to know about YEL insurance and sickness allowance.

As a self-employed person, you are entitled to many benefits if you fall ill or are unable to do your work. In this article, you will find the essential questions and answers regarding entrepreneurs’ sickness allowance.

Can an entrepreneur receive a sickness allowance?

If you have taken care of your pension insurance, you can receive sickness allowance from Kela when you fall ill.

The self-employed person's pension insurance – YEL insurance –  is taken out with a private pension institution, for example, Ilmarinen. It is the basis for an entrepreneur’s social security and pension and it is a mandatory insurance.

The insurance is based on something called YEL income which is also the basis for a self-employed persons’ mandatory social security contributions, i.e. pension contributions and health insurance contributions. Correspondingly, the social security benefits paid to entrepreneurs, such as sickness allowance, are also based on the YEL income. In addition, YEL income has a significant impact on a self-employed person's voluntary accident and unemployment cover.

What is the waiting period for entrepreneurs’ sickness allowance?

From the start of 2018, the waiting period for entrepreneurs’ sick leave was cut down from three days to just one. In practice, this means that you can receive sickness allowance starting from the very next day after you fall ill.

How much is the entrepreneurs’ sickness allowance? Try out our calculator

The amount of your sickness allowance is based on your YEL income.

For example: If your YEL income is €15,000, your sickness allowance will be €875 per month. With a YEL income of €35,000, you would get a sickness allowance of €1,900 per month.

You can test out the effect of the YEL income on the sickness allowance with our YEL calculator. It gives you an estimate of your sickness allowance – along with estimates of other allowances paid by Kela.

Try out the YEL calculator >

What is the YEL income and how does it affect the sickness allowance?

YEL income refers to the monetary value of a self-employed person’s annual work input. You can estimate your own YEL income by asking yourself how much another person should be paid for doing your work for a year.

New entrepreneurs may find it difficult to put a value on their work and many wish to minimise their pension costs by estimating their YEL income low. However, a low YEL income also means a low sickness allowance. A sufficient cover for pension and illness is achieved when the income is set at a minimum of €20,000–30,000.

Good to remember: The lower limit for mandatory insurance in 2021 is €8,063.57.

Is an entrepreneur allowed to work during a sick leave?

There is no law against working while ill, but if you wish to receive sickness allowance, you need to stay home and rest – the benefit is only granted when you are unable to work.

If your ability to work declines, it’s recommendable to take time off to be sick. Not taking care of your health can put your whole business and income at risk in the long run.

Can an entrepreneur receive a partial sickness allowance?

If you feel like you can work part-time despite your illness, you should discuss your situation with a doctor who is familiar with your work and working conditions. You may be eligible for partial sickness allowance.

If you receive a partial sickness allowance, you should keep your YEL insurance in force and apply to change your YEL income to correspond to your new, smaller work input.     

You can read more about partial sickness allowance on Kela’s website (kela.fi) >

Does the YEL insurance have to be in force during sick leave?

You shouldn’t terminate your YEL insurance due to a short period of sick leave. However, if your sick leave lasts several months, your insurance can be terminated from the day you fell ill. You can submit the termination notification in our online service.

Read more about terminating the YEL insurance here >

If you terminate your YEL insurance due to sick leave, you need to take out a new YEL insurance when you start working again.

How much is the YEL insurance payment during a sick leave?

When your YEL insurance is in force, you need to make the insurance payment in full, despite being ill or unable to work.

If you need to, you can request a payment extension. You can do it easily in our online service.

Read more about requesting a payment extension here >

How can I apply for sickness allowance?

If you fall ill, you can apply for a sickness allowance at Kela. The waiting period is one day, the day on which you fall ill.

Here’s what to do:

1. Visit a doctor as soon as you fall ill to receive a statement on your disability.

Who can make the statement on my disability?

• If you’re applying for a YEL allowance, you will need a statement of disability from at least a public health nurse or a Registered General Nurse.
• If you’re applying for a sickness allowance after the YEL allowance, you need a statement from a doctor.

Which medical statement do I need?

• If you are applying for an allowance for a maximum of 60 days, you should ask for a Medical Statement A.
• If you are applying for an allowance for more than 60 days, you should ask for the more extensive Medical Statement B.

2. Make the application within two months of falling ill. After the waiting period, you will receive a YEL allowance for 9 days and after that the regular sickness allowance. You will be automatically transferred from the YEL allowance to the sickness allowance. You can receive the sickness allowance for a maximum of 300 working days.

Info: self-employed person’s YEL income

• YEL income is the sum that the self-employed person could pay as an annual salary to someone doing the same work.
• The YEL income is used as the basis for determining not only pension insurance contributions, but also the self-employed person’s social security contributions and pension benefits. Also self-employed person’s social security benefits such as sickness allowance, parental allowance and unemployment security are determined based on YEL income.
• The sickness allowance is determined based on an annual income. The entrepreneur’s annual income is based on the YEL income. The annual income is calculated based on a reference period of 12 calendar months prior to the calendar month that precedes the start of work disability. If there have been changes in the YEL income during the reference period, Kela will consider an average of the income.

Read more about the annual income (kela.fi) >