When you apply for pension insurance based on a grant or scholarship, the awarded funds are converted into annual earnings (MYEL earnings) in order to calculate your social security. Your MYEL earnings remain valid for the entire insurance period stated in the insurance decision. MYEL earnings are always calculated on an annual basis, even if your grant or scholarship period is shorter than one year.
The amount of your annual earnings determines the amount of pension and accident compensation paid by Mela. Your annual earnings also affect the amount of benefits paid by Kela, such as maternity, parental and sickness allowances.
How are your annual earnings calculated?
Since your insurance cover is valid only for grant or scholarship work, your annual earnings that are used to determine your insurance cover are calculated according to the amount of the grant or scholarship you have been awarded for your work.
Calculation formula for annual earnings (MYEL earnings):
(gross amount of grant or scholarship – expenses) x 360 / number of working days = annual earnings
Your annual earnings are used to calculate the amount of your insurance premiums.
In accordance with the Employees Pensions Act, earnings calculated on the basis of a grant are treated as paid employment. As a result, your MYEL earnings are subject to an annual index adjustment (increase) even if the actual amount of your grant has not increased.