Finland Agreement and foreign pension information 106-04014000

In Finland, the pension insurance legislation (Employees Pensions Act - TyEL) requires employers to pay social security contributions on behalf of employees, usually through deductions from paid employment. These contributions insure individuals against disability and unemployment and provides for income in the form of a pension once the person reaches retirement age. This compulsory insurance also applies to the self-employed.

The Finnish Centre for Pensions (Eläketurvakeskuks, or ETK) oversees this Earnings-related Pension Scheme on behalf of the private insurance companies and pension funds.

Finland also includes a residence-based social security scheme under the National Pension Act. These third tier payments are financed through tax and administered by the Social Insurance Institution of Finland (Kansaneläkelaitos, or KELA) for people with low income.

A person can receive a payment from ETK and KELA at the same time.

The Agreement with Finland started on 1 July 2009. There are no previous versions.

For Australia:

Department of Social Services (DSS)

For Finland:

Sosiaali- ja Terveysministeriö - Ministry of Social Affairs and Health

For Australia:

Services Australia

Note: the Australian Taxation Office (ATO) is responsible for double coverage provisions.

For Finland:

Earnings-related Pension Scheme:

Various affiliated funds including: Etera, Ilmarinen, Alandia, Fennia, Tapiola, Varma, Veritas.

National Pensions Act:

Kansaneläkelaitos (KELA) - The Social Insurance Institution

For Australia:

Centrelink International Services (CIS)

Note: the Australian Taxation Office (ATO) is responsible for double coverage provisions.

For Finland:

Earnings-related Pension Scheme:

Eläketurvakeskus (ETK) - Finnish Centre for Pensions

National Pensions Act:

Kansaneläkelaitos (KELA) - The Social Insurance Institution

Under the Agreement with Finland, information held about customers may be exchanged between the liaison agencies to determine entitlement to payments under the Agreement and under either country's domestic legislation (Article 19.1).

Due to the exemption of means-tested payments when residing in the other country (Article 14.3 and 15.4), Section 12 of the Administrative Arrangements provides that each Liaison Agency with notify the other if a decision is made that a mutual customer moves between Australia and Finland.

While Australian working life residence is normally used and sent to Finland, the Agreement allows Finland to use periods of employment in Australia in some circumstances.

Note: unlike other agreements, this is employment periods only regardless of whether the customer was an Australian resident at the time.

For more information on bulk data exchange, see International Data Exchange Program and auto-indexation of foreign pensions.

The following liaison form is completed by Centrelink International Services (CIS) and sent to Finland:

• AUS187FI - Australia/Finland Agreement on Social Security

For help with creating and completing the liaison forms, see Agreement liaisons, NZ CICs and exchange of information.

The following liaison forms are completed by Finland and are sent to Centrelink International Services (CIS):

• Yhteydenpitolomake/Liaison form - FI/AUS2

This form is used in all communication from Finland.

Section 1 - VAKUUTETTU/INSURED PERSON: this section provides details of the insured person. Include details for the deceased person for SUR claims.

• Section 2 - HAKIJA(T)/APPLICANT(S): this section provides details of the person claiming
• Section 3 - Information provided by Finland
• Section 4 - Information requested by Finland
• Section 5 - MUITA TIETOJA/OTHER INFORMATION
• Section 6 - LOMAKKEEN TÄYTTÄNYT YHTEYSELIN/LIAISON AGENCY

Yhteydenpitolomakkeen liite/Additional page to liaison form - FI/AUS2A:

This form provides details for periods of residence (Asumiskaudet Suomessa) in Finland (KELA).

For Australia, the Agreement only covers Age Pension so medical information is not needed.

However, the Agreement covers Finnish Disability Pensions under the Earnings-related Pension Scheme and the Administrative Arrangements include provisions for existing Australian information to be provided to Finland on request. There is no provision for reimbursement of costs to either country.

The customer should contact Services Australia if they receive a direct request from the liaison agency to undertake a medical examination. Advise the customer to go through Services Australia’s foreign pension medical assessment process. Where the customer has already undertaken a medical examination based on a direct request from the Agreement partner without consulting Services Australia, the customer should contact the liaison agency to discuss any possible reimbursement options.

If a customer is claiming reimbursement of costs based on undertaking a medical examination requested by Services Australia for foreign pension purpose, consider all evidence provided. For example, if incorrect advice was provided to the customer by Services Australia that caused them to seek an independent medical examination which caused the customer to be out of pocket.

See Customer compensation and Act of Grace.

Samples of forms, foreign documents and translations are available through the Residence and International program homepage.

The Agreement with Finland includes double coverage provisions. Certificates of coverage are used to confirm exceptions.

Any enquiries about double coverage or certificates of coverage should be directed to the Australian Taxation Office (ATO) website.

Any queries about taxation of pensions or the requirement to lodge a tax return should be directed to:

• In the other country - the tax authority in the other country
• In Australia - the Australian Taxation Office (ATO) website

For general information on taxation, including issuing Australian payment summaries.

Tax treaty

Australia has a double tax agreement with Finland, which avoids the need for the customer to pay tax in both countries.

A person who is 'resident' in one country (according to the definition in the tax agreement) generally only pays tax on pensions in that country.

Tax deductions from income by one country may be allowed as a credit against tax payable in the other country.

Tax deduction

Finnish pensions are not generally taxed (verso) at the source.

The gross rate of Finnish pension, before any deduction, is maintained.

Finnish tax year

Finland uses the calendar year (1 January - 31 December) as the tax year.

Australia has a Reciprocal Health Care Agreement (RHCA) with Finland.

See general information on health insurance and Medicare coverage

Any queries about:

• Health insurance coverage in the other country – tell the customer to contact the health insurance authority in the other country
• Medicare coverage - direct them to Medicare

Finnish pensioners do not usually have a health insurance deduction taken out of their payments.

The official languages of Finland are Finnish and Swedish.

See Finnish and Swedish naming conventions and pronunciations.

Telephone country code is +358.

Street address

Title FirstName Surname [Addressee]

Mäkelänkatu 25 B 13 [Street + premise number + extension]

FI-00550 HELSINKI [Country code + postcode and locality]

FINLAND

Post Office Box address

Title FirstName Surname [Addressee]

PL 900 [P.O. Box + number]

FI-00101 HELSINKI [Country code + postcode and locality]

FINLAND

Note: postal code example 00550 = 00 is the zone and sorting office, 55 is the region/village or suburb and 0 is the delivery point.

Same-sex marriage has been legal in Finland since 1 March 2017. Previously, from 2002 until 2017, registered partnerships have been available for same-sex couples, which provided most of the same rights and responsibilities as marriage.

For Australia, the Agreement with Finland (Article 2.1) covers:

• Age Pension

Claims for Australian payments under International Agreements use the same methods and processes as domestic claims.

Forms to claim an Australian payment in Finland can be obtained by:

• downloading the relevant form from the Services Australia website. See Resources
• contacting Centrelink International Services (CIS)
• contacting the Finnish authorities

Australian forms needed

The customer is to complete and provide the following:

All claims:

• AUS140FI - Australian Pension Claim – Social Security Agreement between Australia and Finland
• Mod(iA)FI - Income and Assets - Finland

Forms can be lodged at any Finnish social security office.

Under Sections 8 and 9 of the Administrative Arrangements, the Finnish institutions will:

• accept and date stamp the AUS140 form
• verify the customer’s identity and personal details
• when necessary, arrange medical forms to be completed, and
• send the form(s) and any supporting documentation to Services Australia with a liaison form specifying periods of coverage in Finland and information regarding Finnish pensions

See Exchange of information and liaison forms.

If a person is not an Australian resident and in Australia on the date the claim is made, they may use the Agreement to meet the residence rules for claims if, on that date, they are:

• an Australian resident or a resident of Finland (Article 12(a)), and
• physically present in Australia or Finland (Article 12(b))

Claims under the Finnish Agreement

Claims for Australian payment under the Finnish Agreement may not be lodged in other Australian Agreement country.

See the Claim lodgement matrix.

Accepting other Agreement claims

Finland will not accept claims for Australian benefits under other Australian social security agreements.

Claim lodgement consideration

There are no specific considerations under the Finnish Agreement.

The normal rules for working out the date a claim is 'made' and the start day apply to claims under the Agreement with Finland. However, the Agreement also allows:

• the date of lodgement of a claim for an Australian payment in Finland to be used as the date of lodgement in Australia (Article 17.2), or
• the date of lodgement of a claim for Finnish Old Age Pension (either scheme) as the date of lodgement of Australian Age Pension (FP claim = AU claim) provided that the customer declared an affiliation with the Australian legislation and the claim for Australian pension is received within 12 months of the lodgement of the Finnish claim (Article 17.4)

For coding help, see:

• Claims for Australian payments under International Agreements) and
• Start Day (CLK)

The Agreement allows:

• totalisation of periods of qualifying Australian residence and periods of coverage in Finland to meet any minimum periods to qualify for an Australian pension, for example, 10 years for Age Pension (Article 13.1)
• the total of any non-continuous periods of coverage in Finland to be considered to be continuous to meet any continuous residence requirements (Article 13.2)

Note:

• Overlapping Australian residence and Finnish periods of coverage are only counted once (Article 13.3)
• Adjoining periods of Australian qualifying residence and Finnish periods of coverage, with a break of up to 3 months in between, can also be considered to be continuous (Policy)

See Resources in International Social Security Agreements for examples of totalisation.

Finnish period of coverage:

• means a period of insurance In Finland. That is:
• a period of employment, under the Finnish Earnings-related Pension Scheme (ETK)
• an ‘equivalent period’ under the ETK scheme, or
• a period of residence under the Finnish National Pensions Act (KELA)
• where equivalent periods may include deemed periods such as for child rearing or military service
• where both actual and deemed periods may be used when totalising for Australian qualification purposes, as long as they are certified, and don’t overlap
• must be certified by the Finnish Competent Institution

To be able to use the totalisation provisions, a person who is not an Australian resident at the date of lodgement must have at least 12 months Australian Working Life Residence (WLR) in Australia of which 6 months must be continuous (Article 13.4(a)).

Note: unlike WLR for rate, this period cannot be rounded.

No minimum WLR is needed if the person is an Australian resident at the date of lodgement (Article 13.4(b)).

Customers residing in Finland do not meet the ongoing residence requirement for DSP.

For customers outside Australia, the Agreement with Finland refers to the overall rate calculation contained in Section 12(1) the Social Security (International Agreements) Act 1999 but specifically excludes additional child amounts (Article 14.1).

This means customers paid under the Agreement have:

• a proportional rate paid according to their Australian Working Life Residence (WLR)
• the Rate Limiter/Limited Rate applied
• their Finnish pension proportionalised (Randisi concession) for use in the income test using denominator of 300 (Article 14.2)

Note:

• autonomous customers who are paid a proportional rate and receiving a Finnish pension will also have the Randisi concession applied to their Finnish pension (Article 14.2)

Non-proportional rate extension

Customers paid under the Agreement and temporarily outside Australia, cannot have their non-proportional portability rate extended if they are unable to return to Australia.

Returns to Australia

The proportional rate continues to apply for the first 26 weeks of a temporary return to Australia (Article 14.4).

• For returns to Australia before 9 June 2018, manually code Temporary Return to Aust Ind on the Residence Savings (RSS) screen

Customers in Australia under the Agreement are generally paid a direct deduction rate (Article 14.5).

The Agreement does not include a comparison rate in Australia.

Departures from Australia:

The inside Australia rate continues to be paid for the first 26 weeks of a temporary departure from Australia (Article 14.6).

Portability under the Agreement

Under the Agreement, provided the customer remains qualified, Australian payments are payable indefinitely in any country provided the person remains a resident of either Australia or Finland (Article 5.1).

Third country portability under the Agreement

There is no portability for a permanent departure to a third country for a customer paid under the Agreement. See Portability of payments.

If necessary, a customer who receives an autonomous payment that stops being payable due to portability reasons can transfer to the Agreement to continue payment if:

• the payment is covered by the Agreement, and
• the customer is able to meet the lodgement provisions of the Agreement

If transferred to the Agreement, all Agreement rules apply to the customer, including portability and rate of payment.

See Transfers to international social security agreements.

A person who would be autonomously qualified but is paid under the Agreement can transfer from the Agreement to autonomous only if they are an Australian resident and in Australia.

On return to Australia, system processing will automatically transfer from the Agreement to autonomous if the person is an Australian resident who has only used the Agreement to extend their portability while outside Australia,

Former resident provisions may affect customers who transfer to autonomous if they leave Australia again within 2 years of becoming an Australian resident.

Australian payments may be issued to customers outside of Australia. If the customer intends to be outside of Australia:

• long-term (12 months or longer), their Australian payment may be issued to an overseas bank account. See Overseas Bank Account Details (OBAD) for payment requirements by country
• for less than 12 months, payment will generally continue to their normal Australian bank account every 2 weeks.

See Delivery of payments to Centrelink customers outside Australia.

For Finland, the Agreement covers:

• payments under the Earnings-related Pension Scheme:
• are coordinated by the Finnish Centre for Pensions (Eläketurvakeskuks or ETK) and made by various affiliated funds including: Etera, Ilmarinen, Alandia, Fennia, Tapiola, Varma and Veritas
• Old Age Pension under the National Pensions Act

Main payments

Under the Earnings-related Pension Scheme (ETK):

• Työeläke Vanhuuseläke - Old Age Pension (ETK)
• Osa-aikaeläke - Part-time Age Pension
• Työkyvyttömyyseläke - Disability Pension (INV)
• Osatyökyvyttömyyseläke – Partial Disability Pension
• Perhe-eläke - Survivor Pension (SUR)
• Leskeneläke (Widow)
• Lapseneläke (Orphan)
• Työttömyyseläke - Unemployment Pension (UMB)

Under the National Pension Act (KELA)

• Takuueläke/Kansaneläke Vanhuuseläke - Guaranteed Pension/Age Pension (AGE)

Supplementary payments/Allowances

• Erityiskustannukset (Allowance for special expenses)

The following known payments are paid by the Finnish authorities but are not covered under the Agreement:

KELA Disability and Survivor benefits:

• Vammaistuet/Vammaistuki (Disability)
• Omaisen kuolema (Survivor)
• Eläkettä saavan hoitotuki (Care allowance for pensioners)
• Kertasuorituksen (Lump sum payment)

For help with:

• Assessment of Finnish pensions, see Assessment
• Coding of Finnish pensions, see Eligibility and Coding

The requirement to claim applies to Finnish ETK, AGE and INV.

• Customers may voluntarily claim SUR
• Customers may voluntarily claim Orphans pension using the SUR claim pack

See Foreign pension claims.

Eligibility and coding of foreign pensions tab contains detailed information on Finnish payments that are subject to CFP legislation.

Claim packs are available for AGE/ETK, INV and SUR.

Claim packs are issued through the Foreign Pension System (FPS). See Assisting customers to claim a foreign pension.

Specific requirements for Finnish claims

The customer is to complete and provide the following:

AGE/ETK and INV only:

• Eläkehakemus - Claim for pension (FI-AUS3)

SUR only:

• Perhe-eläkehakemus - Claim for survivors' pension (FI-AUS4)
• Proof of death - Death Certificate
• Child/ren details - birth certificates (if needed)

Note: a customer voluntarily claiming an Orphans Pension must also complete the form Perhe-eläkehakemuksen FI/AUS4 liite - Additional page to FI/AUS4 (FI/AUS4A).

Requests for additional information

If information provided with the claim for Finnish pension is incomplete, Finland will send requests for information in Finnish direct to customers.

Under the Administrative Arrangements, Finnish forms can be lodged in Australia at any service centre. See Processing a foreign pension claim.

• All foreign pension claims and supporting documents must be scanned, and
• The original foreign claim form and copies of supporting documents must be sent in paper form to Centrelink International Services (CIS). See Processing a foreign pension claim

Centrelink International Services (CIS) only:

CIS will complete the following or arrange for the following to be completed as necessary and attach the document to the foreign pension claim to send to the agreement country. See Agreement Liaison Detail (ALD) for method of transmission.

CIS staff are required to sign the relevant section of the claim form.

All claims:

• AUS187FI - Australia/Finland Agreement on Social Security

For help with creating and completing the liaison form, see Agreement liaisons, NZ CICs and exchange of information.

Note: Finnish Population Register/Personal Identity Number (Henkilötunnus) is important and must be provided in the AUS187FI.

INV only:

• E213 - Detailed Medical Report. See Foreign pension medical assessments
• Copy of existing Australian medical information.

Enquiries about claims for Finnish payments in Finland should be directed to the Finnish social security authorities.

Finnish payments may be paid in Australia by direct deposit.

Any queries about the non-payment of Finnish pension should be directed to the Finnish pension authorities.

Agreement pensions are paid as 12 regular monthly payments. There are no bonus payments.

Other benefits or private pensions are paid monthly or annually.

Finnish pensions must be recorded in the source currency - Euro (EUR). Official statements provide the foreign currency amounts.

Amounts recorded in source currency on the Foreign Pensions Details (FPD) screen must not be changed to the Australian dollar amount.

Note: payments into Australia are paid in Australian dollars.

Finnish pensions are generally increased for Consumer Price index (CPI, or cost of living) from 1 January each year.

For information on bulk data exchanges and auto adjusted CPI increases, see International Data Exchange Program and auto-indexation of foreign pensions.

• directly deducted (Article 14.4) and ignored in the income test (Section 8(8)(c) Social Security Act) for customers under the Finnish Agreement who are in Australia
• proportionalised and assessed as ordinary income (Article 14.2) for customers paid:
• under the Finnish Agreement who are outside Australia
• autonomously who are on a long-term outside Australia rate
• ordinary income (not proportionalised) for:
• autonomous customers who are inside Australia (Article 14.5)
• customers under another agreement other than Finland or New Zealand who are inside or outside Australia

See Rate Calculation for when a direct deduction or proportional rate is applied.

Note: each member of a couple is deemed to receive half of the total amount received by the couple (Article 14.7).

• not proportionalised according to the customer's WLR (no Randisi concession) (Article 14.1)
• directly deducted (Article 14.5) for customers under the Finnish Agreement who are in Australia
• exempt from the income test when residing in Finland (Article 14.3)
• ordinary income (not proportional) for customers:
• residing in a third country
• paid autonomously who are inside Australia (Article 14.5)
• under another agreement other than Finland or New Zealand who are inside Australia

See Rate Calculation for when a direct deduction or proportional rate is applied.

Note:

• In some cases, customers may receive a lump sum in lieu of a pension (Kertasuorituksen). Lump sums in lieu of pensions are assessable for 12 months from the date of receipt. See Treatment of lump sums
• Each member of a couple is deemed to receive half of the total amount received by the couple (Article 14.7)

• Eläkettä saavan hoitotuki - Care allowance for pensioners

Eläkettä saavan hoitotuki can be awarded to person aged 16 years and over who resides in Finland and receives an old-age, disability, or similar payment.

• Assessable lump sum payments

Finland may pay lump sums (Kertasuorituksen) in lieu of pension.

Foreign non-remunerative lump sums are assessed as ordinary income for 12 months from date of receipt (s1073 Social Security Act 1991). See Treatment of lump sums.

Where a customer is granted a lump sum payment in lieu of an on-going pension payment: If the customer has a claim in progress on the FGS screen, FGD screen must be updated to FIN-NOM when FID coding is completed.

These payments are exempt income for customers paid under the Agreement and autonomously:

• Erityiskustannukset - Allowance for special expenses

Erityiskustannukset is a monthly allowance to cover extra medical costs under KELA. It is generally paid as part of Care allowance for pensioners (Eläkettä saavan hoitotuki). It is exempt from the income test in all circumstances (Article 14.8).

• KELA means-tested payments
  Means-tested payments under the National Pension Act (KELA) are exempt for customers residing in Finland (Article 14.3). These include:
• KELA Disability and Survivor benefits

For ETK scheme disability (Työkyvyttömyyseläke) and survivor (Perhe-eläke) benefits, see Payments covered under the Agreement.

KELA disability (Vammaistuet/Vammaistuki) and survivor (Omaisen kuolema) benefits are not covered under the Agreement. Policy is they are assessed as exempt income for customers residing in Finland (Article 14.3). Otherwise, it is assessed as ordinary income.

Care must be taken to ensure the correct assessment and coding is applied.

The Agreement includes embargo provisions (Article 18.2) but they are not used.

Arrears debts for customers and their partners are raised under s1228A Social Security Act 1991 and recovered via normal methods under the Act. See Comparable foreign payment lump sum arrears.

When an arrears period is not provided, the arrears period end date may be assumed to be the end of the month before the date on the notice or liaison form.

A contravention debt may also occur if the customer does not advise of the grant of their Finnish payment within their notification period. See Foreign Pension coding.

Finnish life certificates may be issued to customers in Australia.

Finnish Life Certificates can be certified by an officer of Services Australia.

For information on helping customers with life certificates, see Assisting customers to maintain an existing foreign pension.

Customers in Australia are sent notices at grant and for changes of rate for example, indexation.