Contribution category model reform

The reform does not automatically raise or lower an employer's contribution category.

The employer's contribution category is determined by comparing the pension expenses incurred by the company's employees' pensions that have an impact on the contribution category with the average level.

The inclusion of cash rehabilitation benefits will increase the number of pensions affecting the contribution category at the average level. The employer's contribution category depends on how it relates to the average change.

Going forward, individual pensions will have less weight in determining the contribution category.

Permanent disability pensions will continue to have an impact on the contribution category. Taking cash rehabilitation benefits into account in the contribution category expands the range of pensions to be taken into account.

Younger people are now also more prominent in the contribution categories than before. Previously, the contribution categories were only affected by permanent disability pensions, which are concentrated among older employees. Long-term cash rehabilitation benefits are also becoming increasingly common among younger employees.

Pay attention to proactive measures in work ability management. Varma provides information and courses to support work ability management.

Read more about proactive measures in work ability management

Prevent prolonged cash rehabilitation benefits. The longer sick leave or cash rehabilitation benefits last, the more difficult it becomes to return to work and the greater is the risk of ending up on disability pension.

Learn about ways to prevent prolonged cash rehabilitation benefits

Help your employee continue working both during their rehabilitation and after they return to work.

Read more about how you can help your employee continue working

A new employee over the age of 55 can now be hired without the risk of it impacting the contribution category. This requires that the employer pays a salary for the first time no earlier than in the month in which the person turns 55 and that the first salary payment has been made no earlier than 1 January 2024.

An employee is considered a new employee if

• they have not been paid a salary by any employer belonging to the same group earlier in the same year or during the previous three calendar years,
• and they have not been in a work trial or apprenticeship training with any employer belonging to the same group earlier in the same year or during the previous three calendar years,
• and they have not transferred to the employer in a corporate restructuring.

A new employee hired after the age of 55 can never impact the employer's contribution category. The protection is permanent for the employer. 

When you offer a training position to a new employee who is undergoing rehabilitation a work trial or apprenticeship, you can pay them a salary during their rehabilitation period or hire them after their rehabilitation without any immediate risk of a contribution category impact. There will be no contribution category impact if the period between the start of rehabilitation measures under your company's employment and the pension contingency is no more than five years. This requires that the employee starts a work trial or apprenticeship training implemented as vocational rehabilitation with the employer after 1 January 2024.

An employee is considered a new employee if

• they have not been paid a salary by any employer belonging to the same group earlier in the same year or during the previous three calendar years,
• and they have not been in a work trial or apprenticeship training with any employer belonging to the same group earlier in the same year or during the previous three calendar years,
• and they have not transferred to the employer in a corporate restructuring.

In this context, vocational rehabilitation refers to apprenticeship training or a work trial organised by an earnings-related pension institution, Kela or a traffic or accident insurance institution that is carried out as vocational rehabilitation under an employer's service.

The employer has the obligation to prove that they have hired a new employee over the age of 55 or a person undergoing vocational rehabilitation for a work trial or apprenticeship training.

If an employee who meets these criteria experiences a decline in their work ability and is granted a cash rehabilitation benefit or disability pension, the earnings-related pension insurance company will require evidence from the employer that the criteria have been met to remove the contribution category impact.

For the employer to provide evidence, it is important to maintain information in HR systems about the employee's situation at the time of hiring.

When a disability pension or cash rehabilitation benefit causes a contribution category impact (risk ratio year), the evidence must be provided by 15 November of the following year. For example, if an employee is granted a permanent disability pension in 2025, the evidence must be provided by 15 November 2026.

You can provide evidence or apply for contribution category exemption using the form available in Varma Online Service: Work ability > Decisions.

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There will be no impact on the employer's contribution category if the employee has been paid a salary of no more than EUR 11,145.91 (at the 2025 level) during the two years preceding the pension contingency.

This requires that the employee's pension contingency occurs in 2024 or later. A pension contingency means falling ill and the beginning of disability.

The earning-related pension insurance company receives the information it needs to take the earnings limit into account directly from the register data. As an employer, you do not need to resubmit the earnings data.

A cash rehabilitation benefit that is valid on the last day of the year has a contribution category impact if more than two years have passed since the start of the first cash rehabilitation benefit (the start year and two calendar years). Prolonged cash rehabilitation benefits will be taken into account as causing a contribution category impact for the first time on 31 December 2026, and they will impact on the contribution categories for 2028–2029.

For example, if a person's first cash rehabilitation benefit begins in 2025 and the person still has a valid cash rehabilitation benefit on 31 December 2027, the cash rehabilitation benefit will cause a contribution category impact. In this case, the cash rehabilitation benefit will be taken into account in the contribution categories for 2029–2030.

There will be no contribution category impact if, at the time of reviewing the contribution category impact, more than five calendar years have passed since the pension contingency. This will be taken into account for the first time in 2026 and will apply not only to cash rehabilitation benefits but also to permanent disability pensions.

The contribution category impact may be postponed or not arise at all if vocational rehabilitation is simultaneously in effect on the last day of the year.

The contribution category impact may occur later if vocational rehabilitation is ongoing at the time of review but a cash rehabilitation benefit continues later.

The two-year monitoring period for cash rehabilitation benefits starting before 2024 began on 1 January 2024. They will affect the contribution category if the cash rehabilitation benefit is still in effect on 31 December 2026. The monitoring does not apply to pension contingencies occurring in 2020 and earlier, which will fall within the five-year limit in 2026.

There will be no contribution category impact if, at the time of reviewing the contribution category impact, more than five calendar years have passed since the beginning of disability or illness (pension contingency).

Only one contribution category impact can result from the same pension contingency. A pension contingency refers to falling ill and the beginning of disability.

If, for example, a cash rehabilitation benefit with a contribution category impact later becomes a permanent disability pension, this will not result in a new contribution category impact.

Proactive work ability management helps

•    improve employees' work ability,
•    reduce sick leaves, cash rehabilitation benefits and permanent disability, and
•    reduce the costs of disability.

Varma provides information and courses to support work ability management.

Successful work ability management results in well-being and work ability among employees, as well as controlled disability costs.

You may be interested in the following content on our website, for example:

• Fact sheet: Future work ability management is strategic, proactive and inclusive
• Identifying disability risks

You can monitor new decisions and their impact on your contribution category in Varma Online Service. If necessary, Varma's experts can help you understand how to utilise the decision data.

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It is worth investing in support for returning to work as early as during the sick leave period. During a cash rehabilitation benefit, it is important to closely assess the possibilities for returning to work and discuss support measures. Clear action plans should be created for monitoring employees on long-term sick leave so that they receive support at the right time.

Agree with your workplace and occupational health care provider on responsibilities and roles during sick leave. You can find help for this discussion in the Roles and responsibilities when work ability wavers table available in Varma Academy. The longer the sick leave or cash rehabilitation benefit lasts, the more difficult it becomes to return to work and the greater the risk of ending up on disability pension.

Varma's vocational rehabilitation can be an opportunity to support an employee's return to work. In order to determine the possibility of vocational rehabilitation, a statement B issued by the occupational health care provider is required. Before that, it is advisable to hold a joint occupational health negotiation. Varma's experts offer support and advice in helping employees return to work.

It is important to maintain regular contact with the employee to keep them connected to working life and lower the barrier to returning to work. Planning for a return to work can begin even if the employee's recovery from illness is still ongoing.

Support and monitor the employee's work performance and retention of work ability.

Respond quickly to any problems that arise after the employee returns to work. It is worth noting that even if the cash rehabilitation benefit ends, it may still affect the contribution category if the pension contingency has occurred less than five calendar years ago. It is therefore important to actively support and monitor the work ability of employees who have previously received from cash rehabilitation benefit.

You can get support and advice on work ability matters from Varma's experts by calling +358 10 192 065 (Mon–Fri 9:00–15:00).