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:

Ministry of Social Affairs and Health - Sosiaali- ja Terveysministeriö

For Australia:

Services Australia

For Finland:

Earnings-related Pension Scheme:

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

National Pensions Act:

The Social Insurance Institution - Kansaneläkelaitos (KELA)

For Australia:

International Services (CIS)

Note: the Australian Taxation Office (ATO) is responsible for anything about double coverage. See Double coverage/taxation and healthcare.

For Finland:

Earnings-related Pension Scheme:

Finnish Centre for Pensions - Eläketurvakeskus (ETK)

National Pensions Act:

The Social Insurance Institution - Kansaneläkelaitos (KELA).

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.

These forms are completed by International Services (CIS) and sent to Finland.

Australia/Finland Agreement on Social Security (AUS187FI)

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

These forms are completed by Finland or the customer and are returned to 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 FI/AUS2 liite/Additional page to liaison form FI/AUS2 (FI/AUS2a):

Provides details for periods of residence in Finland (KELA).

There are no third country lodgement provisions.

See Claim Lodgement Matrix (CLM).

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.

Medical examinations may also be undertaken upon request. Reimbursement of costs applies, including reasonable travel and accommodation.

Forms:

CIS arrange for the E213 variant to be completed and sent to Finland with INV claims. See Foreign pension medical assessments.

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

The Agreement with Finland includes Double coverage provisions. Certificates of coverage are used to confirm exemptions.

See Double coverage/certificates of coverage information in International Social Security Agreements.

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

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

For general information on taxation, including issuing Australian Payment Summaries, see the Taxation information in International Social Security Agreements.

Tax treaty

Australia has a double tax agreement with Finland. Tax deductions from pensions by one country are allowed as a credit against tax payable for residents of the other country.

Tax deductions

Finnish pensions are not generally taxed at source.

Finnish tax year

Finland uses the calendar year (1 Jan - 31 Dec) as the tax year.

Any queries about:

• Health insurance coverage in the other country - the customer should be directed to contact the health insurance authority in the other country.
• Medicare coverage - should be directed to Medicare, see Medicare phone numbers

For general information on health insurance and Medicare coverage, see Health Insurance/Medicare information in International Social Security Agreements.

Australia has a reciprocal health agreement with Finland.

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

The official languages of Finland are Finnish and Swedish.

Naming conventions and pronunciations for:

• Finnish
• Swedish

Telephone country code is +358.

Street address:

FirstName Surname [addressee]

Mäkelänkatu 25 B 13 [street + premise + extension]

FI-00550 HELSINKI [postcode + locality]

FINLAND [country]

Post Office Box address:

FirstName Surname [addressee]

Oy Finland Camex Ltd [organisation]

PL 900 [P.O. Box number]

FI-00101 HELSINKI [postcode + locality]

FINLAND [country]

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

Note: additional child amounts, also known as Overseas Child Component and Additional Child payment, are not included in the proportional rate calculation. See Rate Calculation.

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

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

• Contacting the Finnish authorities, see the Authorities, Institutions and Liaison Agencies on the General information tab or International Services (CIS).
• Downloading the relevant form from the Services Australia website. See the Resources page for a link.

Forms needed:

For all payments:

• AUS140FI – Australian pension claim - Agreement with Finland
• Mod(iA)FI - Income and Assets - Finnish

Forms can be lodged at any Finnish social security office.

Under the Administrative Arrangements, the Finnish institutions will:

• Receive and date stamp the form
• Verify identity and personal details
• Send the claim and Liaison Form to Services Australia, including periods of coverage in Finland and Finnish pension details. See the Exchange of information and liaison forms on the General information tab for the Finnish Liaison form

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))

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)

See Claims for Australian payments under International Agreements) and Start Day (CLK) for coding help.

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)

Notes:

• overlapping Australian residence and Finnish periods of coverage are only counted once (Article 13.3)
• policy advice is that adjoining periods of Australian qualifying residence and periods of coverage in Finland, with a break of up to 3 months in between, can also be considered to be continuous

Finnish periods of coverage is defined as a period of contributions, or any equivalent period, under the Finnish Earnings-related Pension Scheme (ETK) or a period of residence under the Finnish National Pensions Act (KELA), as certified by the Finnish authorities.

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)).

The Agreement with Finland (Article 14.1) refers to the overall rate calculation contained in the Social Security (International Agreements) Act 1999 (S12(1)) but specifically excludes additional child amounts.

This means:

• customers paid under the Agreement who are outside Australia are paid a proportional rate according to their Australian Working Life Residence WLR, and
• the Rate Limiter/Limited Rate applies

The proportional rate also includes the proportionalisation of the Finnish pension (Randisi concession) for use in the income test (Article 14.2). The rate of foreign pension used in the income test is the customer's Australian Working Life Residence WLR divided by 300. The Agreement decides the Randisi proportion (300 months). This is different to the domestic legislation used to decide the proportional rate (420 months in most cases).

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).

Although a person may be qualified for an Australian payment or portable outside Australia, if the customer has no WLR the rate of payment outside Australia will be nil.

When a person is paid a proportional rate under an agreement, Rent Assistance (RA) cannot be paid. Other add-ons such as Energy Supplement and Pension Supplement are payable under normal add-ons portability rules. See Portability of Add-ons.

Examples of when a customer is paid a proportional rate includes (but not limited to):

• permanently overseas
• temporarily overseas longer than 26 weeks for age pension
• former resident transferring to the agreement for portability

Returns to Australia

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

If there is no change to the country of residence, any movement is considered temporary and a review is set to automatically change the rate after a continuous period of 26 weeks. If a delegate determines that a person has changed their country of residence, coding the information on the Country of Residence (CRES) screen will automatically apply the correct rate calculation.

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 paid a direct deduction rate (Article 14.5). That is, all Finnish payments covered by the Agreement. This includes social welfare payments, as they are not assessed as income but will be deducted dollar-for-dollar from the maximum rate of the Australian payment before the application of the income or assets test.

The Agreement does not include a Comparison Rate in Australia.

Note: the rate paid from grant of a new claim is based on where the customer is present, even if resident in the other country and irrespective of the 26 week temporary departure provision.

For example, a person who is resident in Finland lodges a claim while temporarily in Australia:

• If granted from a date when they were or are still in Australia, they will be paid the direct deduction rate from grant. The rate will swap to the proportional rate from the date they leave Australia
• If granted from a date when they were again outside Australia, for example, early claim, they will be paid the proportional rate immediately

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).

The Agreement with Finland specifies the rate calculation that applies 'where an Australian pension is payable whether by virtue of this Agreement or otherwise to a person who is outside Australia' (Article 14.2). See Outside Australia in Rate Calculation.

Note: 'or otherwise' refers to autonomous customers.

Payment's exempt under the Agreement are generally exempt for autonomous customers (section 8(8)(zc) Social Security Act 1991).

See Assessment and exempt payments on the Finnish payments tab.

If necessary, a customer receiving an autonomous payment covered by the Agreement may be able to transfer to the Agreement if they are in Finland when their normal portability period expires. The portability under the Agreement then applies, see Portability.

Note: the customer must meet the transfer requirements. See Transfer to international social security agreements.

Once a customer transfers to the Agreement, they are then considered to be paid by virtue of the Agreement and all provisions of the agreement apply, including rate of payment. See Rate Calculation.

A person who would be autonomously qualified but is paid under the Agreement can only transfer from the Agreement to autonomous 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,

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

If a customer intends to be outside Australia 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 Australian payments made into bank accounts outside Australia, see Overseas Bank Account Details (OBAD).

Payments are coordinated by the Finnish Centre for Pensions (Eläketurvakeskuks or ETK) and made by various affiliated funds including: Etera, Ilmarinen, Alandia, Fennia, Tapiola, Varma, Veritas.

Main payment(s):

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

Payments are made by the Social Insurance Institution of Finland (Kansaneläkelaitos or KELA).

Main Payment(s):

• Takuueläke/Vanhuuseläke - Guarantee Pension/Age Pension (AGE)

Other social welfare payments under the National Pensions Act, generally only paid in Finland, are not covered by the Agreement but policy is that the exemption under Article 14.3 also applies to these payments. See the Assessment and exempt payment and Other known payments.

The requirement to claim applies to Finnish age pensions (both ETK and AGE) and INV.

Note: customers will be issued SUR claims on a voluntary basis. Customers may voluntarily claim Orphans pension using the SUR claim pack. See Claim forms and processes.

The Eligibility and coding tab has detailed information on Finnish payments that are subject to CFP legislation.

Claim packs containing all the necessary forms to claim a Finnish payment can be issued through the Foreign Pension System (FPS).

Claim packs are available for: AGE/ETK, INV or SUR

Specific requirements for Finnish claims:

The customer is to complete and provide the following:

AGE/ETK and INV:

• Eläkehakemus - Claim for pension (FI-AUS3)

SUR only:

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

Note: customers voluntarily claim 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.

Return of foreign pension claim:

Under the Administrative Arrangements, Finnish forms can be lodged in Australia at any service centre.

• 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 by internal mail to International Services (CIS). See Processing a foreign pension claim

International Services (CIS) only

CIS will complete the following and attach to the foreign pension claim to send to the agreement country. See Agreement Liaison Detail (ALD) for method of transmission.

All claims:

Australia/Finland Agreement on Social Security - Liaison Form (AUS187FI). For help with creating and completing the liaison form, see: Agreement liaisons, NZ CICs and exchange of information.

Note: for Finland, Population Register/Personal Identity Number (Henkilötunnus) is important.

INV claims:

• E213 variant and copies of Australian disability information

Enquiries about claims for Finnish payments in Finland should be directed to the Finnish social security authorities, see the Authorities, Institutions and Liaison Agencies on the General information tab.

Payments can be made in Australia by direct deposit.

Note: any queries about the non-payment of Finnish pension should be directed to the Finnish pension authorities, see the Authorities, Institutions and Liaison Agencies on the General information tab.

Customers receive 12 regular monthly payments Freq: 'MTH'. There are no bonus payments.

Note: small rates of pension may be paid less frequently, for example, annually or biannually. Amounts can also be coded as Freq: 'ANN'.

Payments into Australia are paid in AU dollars, however, all foreign pensions must be recorded in the source currency (Euro). Official statements provide the foreign currency amounts.

Note: amounts recorded in source currency on the FPD screen must not be changed to the AU dollar amount.

Finnish pensions are generally increased for cost of living (CPI) from 1 January each year.

Some foreign pensions recorded are automatically adjusted for CPI increases. See International Data Exchange Program and auto-indexation of foreign pensions.

Finnish ETK, INV, SUR or UMB are:

• proportionalised according to the customer's WLR before being included in the income test if the Australian rate is proportional, including Agreement and autonomous customers (Article 14.2), and
• ordinary income in Australia for autonomous customers and direct deduction if paid under the Agreement (Article 14.5)

Finnish AGE (KELA) is:

• exempt from the income test when residing in Finland (Article 14.3),
• ordinary income in a third country, and
• ordinary income in Australia for autonomous customers and direct deduction if paid under the Agreement (Article 14.5)

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).

Amounts coded in the Social Welfare: field (Finnish allowances for special expenses only) are exempt for customers in all circumstances including direct deduction (Article 14.8).

Note: the 26 week rule applies for temporary departures from and returns to Australia (Article 14.4 and 14.6).

See also Other known payments.

Amounts that are treated as a direct deduction under an agreement are exempt from the income test (s8(8)(zc) Social Security Act 1991).

Note: payments that are exempt from the income test are included in a direct deduction rate, for example, under an agreement rate calculation or for Special Benefit (SpB).

Under the Agreement, Finnish Old Age Pension and other means-tested payments under the National Pension Act are exempt for customers residing in Finland (Article 14.3).

Finnish allowances for special expenses are exempt from the income test in all circumstances (Article 14.8).

These exemptions also apply to autonomous customers.

The Eligibility and coding tab has detailed information on the coding of Finnish payments covered by the Agreement.

Note: Disability benefit and survivor benefit are payable under the National Pensions Act but are treated differently to the disability and survivor benefits payable under the Earnings-related Pension Scheme. See Other known payments. Care must be taken to ensure the correct coding is applied.

Lump sums in lieu of a pension (Kertasuorituksen) are coded on FID. See Treatment of lump sums.

Note: if the customer has a claim in progress on FGS, but is not granted a foreign pension, FGD must be updated to FIN-NOM when lump sum FID coding is completed.

The Agreement includes embargo provisions but they are not used.

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

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 the department.

For general information about 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.

Payments into Australia are paid in AU dollars, however, all foreign pensions must be recorded in the source currency (Euro). Official statements provide the foreign currency amounts.

Note: amounts recorded in source currency on the FPD screen must not be changed to the AU dollar amount.

Disability Benefits (INF) - Vammaistuet/Vammaistuki

Assessment: Exempt if residing in Finland otherwise ordinary income.

Coding: Code total amount received as Type: 'INF' on Foreign Pension Details (FPD) screen in Basic Amount: field.

Survivor Benefits (SUF) - Omaisen kuolema

Assessment: Exempt if residing in Finland otherwise ordinary income.

Coding: Code total amount received as Type: 'SUF' on Foreign Pension Details (FPD) screen in Basic Amount: field.

For help with coding other benefits paid by the Finnish Government, see Foreign pension coding.

For help with any other income received from Finland, see Foreign income and assets.