Determing and Paying the YEL-Fee
A person within the scope of YEL must pay an insurance fee. The YEL-insurance cannot be substituted by a voluntary insurance.
The basis for the insurance fee is the YEL income from work. The insurance fee and the amount of the pension are determined on the basis of the affirmed income from work. On the basis of the work income it is possible to determine the self-employed person’s health insurance’s daily allowance which can then lead to the possibility of unemployment security. Therefore it is important that the incomes are confirmed accurately.
The YEL fee may be adjusted in certain circumstances based on the self-employed person’s financial situation. A person starting a business for the first time will also receive a discount on the insurance fees.
The amount of the fee is a percentage of the income entered on the pension insurance policy and revised with an index. The percentage is annually determined by the Ministry of Social Affairs and Health ministry. In 2010 the percentages were 21.2 % for persons under the age of 53 and 22.4 % for persons aged 53 and more. The respective percentages were 15.9 % and 16.8 % for new businesses.
The parties can agree upon when the annual insurance fee provided by the general terms and conditions of the insurance is paid.
The general terms and conditions of the insurance provide that at least half of the payment installments shall expire before August.
Accrued fees for insurance policies enacted with retroactive effect are payable in one installment. It is possible to receive an extension of the payment time by agreement with the insurance company but interest for delay is nevertheless payable. Unpaid YEL-fees will reduce the self-employed person’s pension, for the unpaid installments reduce the pension accrual.