Compensation for loss of earnings
Compensation for loss of earnings provides security against work disabilities caused by an occupational accident or disease. Compensation for loss of earnings comprises daily allowances, workers’ compensation pensions and rehabilitation allowances
If your ability to work has been reduced due to an accident at work or an occupational disease, you may receive a daily allowance for up to one year. If your disability lasts for more than a year, you may receive a workers’ compensation pension. During the period of vocational rehabilitation, you can receive a rehabilitation allowance.
A daily allowance is paid if you are incapacitated for at least three consecutive days after the day of the injury due to an accident at work or an occupational disease. No daily allowance is paid for the day of the injury. Daily allowances are paid retroactively.
In order to process the daily allowance, a medical certificate or medical records are required certifying your work disability due to an occupational accident or disease.
Daily allowances are paid
- starting from the day following the day of the injury
- for all days of the week, including public holidays
- for up to one year.
Daily allowances are a taxable benefit.
A daily allowance may be paid if your ability to work has been reduced by at least 10 percent due to an accident at work or occupational disease. The daily allowance may also be paid in the form of a partial allowance if your work disability is only partial. We assess the impairment of working capacity based on medical reports.
Amount of daily allowance
The daily allowance is based on the annual earnings at the time of the injury. If you are completely incapacitated for work, the daily allowance is 1/360 of your annual earnings. You can calculate your daily allowance by using Mela’s security calculator for grant and scholarship recipients.
The amount of your daily allowance depends on whether your insurance is compulsory or voluntary.
When you have compulsory insurance with Mela, when calculating your daily allowance we also take into account your employment income and other entrepreneurial income if you have insured your work with voluntary insurance for a self-employed person’s working hours in accordance with Section 188 of the Workers’ Compensation Act.
Daily allowance for students and pupils is regulated separately in the Occupational Accident and Disease Act for Farmers. There are also separate provisions for daily allowances for those on retirement or disability pensions.
Workers’ compensation pension
If your work disability continues for more than one year after the accident, your earnings-related compensation will become a workers’ compensation pension. The workers’ compensation pension continues for as long as your work disability persists.
Workers’ compensation pensions are payable on the first banking day of the month. Workers’ compensation pensions are a taxable benefit.
Who is eligible for a workers’ compensation pension?
Payment of the workers’ compensation pension is subject to the condition that your ability to work has been reduced by at least 10 percent due to an accident at work or occupational disease. The workers’ compensation pension may also be paid in the form of partial compensation if your work disability and loss of earnings are only partial.
A permanent workers’ compensation pension can only be granted if
- your income has been reduced after the injury and
- vocational rehabilitation assessments have been performed.
Notify Mela immediately if:
- there is a change in the condition of an injury or sickness caused by an occupational accident
- there is a change in the condition of your occupational disease
- there is a change in your functional ability
- you undertake new employment or self-employment.
If you take your old-age pension upon turning 63 and the injury occurred as a result of work performed when you were retired, your entitlement to workers’ compensation pension will cease at the age of 68 or at the latest three years after the date of the injury.
Amount of workers’ compensation pension
The amount of the workers’ compensation pension is determined on the basis of annual earnings. The full workers’ compensation pension is 85 percent of annual earnings for persons under the age of 65 and 70 percent for persons 65 or older.
The workers’ compensation pension is adjusted annually according to the earnings-related pension index.
The loss of earnings during occupational rehabilitation is compensated by a rehabilitation allowance instead of a daily allowance or workers’ compensation pension. The amount of the rehabilitation allowance usually corresponds to the amount of the daily allowance or workers’ compensation pension.
In principle, rehabilitation allowance paid during the period of occupational rehabilitation is equal to a full daily allowance or workers’ compensation pension. However, if rehabilitation does not prevent you from working, the amount of the rehabilitation allowance is determined according to the loss of earnings.
Rehabilitation allowance can also be paid after vocational rehabilitation for a maximum of 6 months to help you find work that corresponds to your education.
If your employer pays you sick pay for your sick leave due to an accident during leisure time, the portion of sick pay paid by your employer will be deducted from your rehabilitation allowance.
For occupational accidents or diseases that occurred or were manifested before 1 January 2016, compensation for loss of earnings is paid as a workers’ compensation pension instead of as a rehabilitation allowance in accordance with the Farmers’ Accident Insurance Act.