News 9.3.2023

YEL income reviews will start this summer

The YEL reform entered into force in the beginning of the year. Pension companies are now obligated to check entrepreneurs' YEL incomes at steady intervals. We will start the reviews this summer – here’s what you need to know about it.

When will my YEL income be reviewed and how much will it increase?

The review applies to an estimated one in five of our YEL customers this year. For all of them, the YEL payment may not increase.

–It’s difficult to estimate how many entrepreneurs' income will change in the review, because we don’t know in advance what kind of grounds entrepreneurs have for their YEL incomes. Many entrepreneurs, for example light entrepreneurs and part-time entrepreneurs, have a low YEL income for a justified reason. For some entrepreneurs, their YEL income will rise, for some it will remain unchanged and for some it may also decrease, says Insurance Director Minna Hakkarainen

This year, the reviews apply to entrepreneurs whose

• YEL income is less than 15,000 euros
• YEL income has not had a significant change (15%) in the last three years
• insurance has been valid for at least three years.

Whose YEL income won't be reviewed in 2023?

• If your YEL income is less than 15,000 euros per year, but your insurance policy has not yet been valid for three years, the review will happen later. We will review your YEL income during the year when three years have passed since your YEL income was last confirmed.
• Your YEL income will not be reviewed if it has changed substantially, i.e., at least 15% in the last three years, or if the amendment would result in a change of up to 5%.
• If your YEL income exceeds 15,000 euros per year, the review will happen in the coming years.

YEL incomes won't increase rapidly or unexpectedly

YEL incomes will rise for entrepreneurs whose YEL income is far from the value of their work input. However, the rise won’t be rapid or at once great. The pension company can change the YEL income up to 4,000 euros at a time and reviews are carried out every three years unless the entrepreneur wants to make a higher increase.

The maximum increase of the pension contribution in the first two reviews

For entrepreneurs who are underinsured, the pension contribution may increase during the first review, at the initiative of the pension company, a maximum of about 85 euros per month. In the next review three years later, it may increase the same 85 euros per month. Thus, the contribution can increase during the first two reviews a maximum of approximately 170 euros per month. When YEL payments are deducted in taxation, the effect is even less. After the tax deduction, the effect of the increase will be no more than about 50 to 60 euros per month.

In many cases, the pension contribution will not increase to the above maximum. YEL income can be brought to the right level also with a smaller check. So, the increase in the monthly payment could be something between 10 and 80 euros. At the entrepreneur's own desire, the YEL income may be increased more during the review, which will result in the faster improvement of their pension and social security.

Increase limit applied for first two reviews

The maximum increase limit of 4 000 euros applies to the recommendation of the pension company in the first two reviews. When the review is done for the third time, there is no longer a restriction. In this case, however, the YEL income is already significantly higher than the original and the further amendments are therefore lower.

In addition, the restriction applies only to those entrepreneurs whose insurance has been valid on 1 January 2023. It does not apply to entrepreneurs whose insurance has begun since the law reform came into force. For new entrepreneurs, the YEL income will be set at the correct level at the start of insurance and checked at the initiative of the pension company after three years.

This is how we will review your YEL income – is your contact information up to date?

We will start reviewing YEL incomes at the turn of May-June this year. The reviews will continue in stages throughout the rest of the year. We want to make the review as smooth as possible for you. We will ensure that you are consulted in the process and that expert discretion is realized.

It is especially important that your contact details are up to date so we can reach you and everything runs smoothly. Checking and updating your phone number, email address and address can be done in a few minutes in our online service.

During the spring, we will send our customers advance information about the upcoming reviews. If your income is reviewed during this year, you will also receive a separate message from us regarding your income review.

What kind of YEL income recommendation will I get?

We will calculate a personal YEL income recommendation for you. We use a YEL income calculator shared by the whole pension insurance industry. It takes into account the median salary of full-time employees in your industry, your turnover for the past three years, and any earnings you have received from other work that indicate the part-time nature of your business. The median salary data used by the calculator comes from Statistics Finland, turnover and industry data from the tax authority, and earnings data from the Income Register.

The income recommendation includes a 30% margin up or down. Most entrepreneurs find a suitable YEL income for themselves within this range.

What to do if I disagree with the proposed income?

The YEL income recommendation is, as the name suggests, a recommendation which can be deviated from upwards or downwards for justified reasons. When confirming a YEL income, we will perform overall consideration, in which we take into account the additional information you provide, the requirements of the Self-employed Persons’ Pension Act, and the current guidelines.

If you reject our income recommendation, we will ask you additional questions and instruct you how to provide us with additional information. Remember to answer these questions carefully.

Finally, we will confirm a new YEL income for you or state that your current YEL income will continue in force. Most often we reach an agreement with entrepreneurs on the level of their YEL income. If the additional information you provide is insufficient to justify your proposed YEL income, and you are not satisfied with our YEL income decision, we will instruct you on how to make an appeal.

What to do when the reviews begin

1. Keep an eye out for messages from us.
2. When you get a personal YEL income recommendation, stop, and think about what your own view of the level of your YEL income is.
3. Keep in mind that there is a +/- 30% margin around the YEL income recommendation, where most entrepreneurs find a suitable YEL income.
4. If your own perception differs from the recommendation, reject the suggestion, and answer our additional questions.
5. Remember: We will listen to you in determining your YEL income. We usually reach an agreement on the level of YEL income.

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