Benefits: recovery and recourse
- Date of issue
- 11/27/2024
- Record no.
- VH/7557/05.00.00/2024
- Validity
- 1/1/2025 - Until further notice
The instructions have been updated as follows:
- Example 11 has been corrected so that the unjust enrichment paid to a substitute recipient and its recovery are not reported to the Incomes Register.
1 Introduction
Both pensions and benefits income are reported using the benefits payment report submitted to the Incomes Register. In these instructions, the term “benefit” refers to both pensions and benefits, unless otherwise stated.
In certain situations, pensions and benefits can be recovered from the benefit recipient, for whom the term income earner is mostly used in these instructions. The income earner may have incorrectly received an overpayment, the benefit could have been paid on incorrect grounds, or the income earner has retroactively received another benefit for the same period for which they have already received some other pension or benefit. When the income earner pays back unjust enrichment or another groundless payment made, this must be reported to the Incomes Register.
The recovered amount is not corrected on the original benefits payment report; the recovered amount is reported on a new report and allocated to the payment date on which the income was returned to the payer. Recovery is reported by specifying the "Recovery – Yes" entry linked to the income type and providing the related additional details. The date on which the income earner pays back the overpayment or the overpayment is offset from a later benefit is entered as the payment date. The set-off of income is reported using additional repayment details, and it must not be confused with recourse or other deductions.
The original payment date is voluntarily reported data. However, it is necessary in certain situations so that the Finnish Tax Administration can correctly allocate the income earner's taxation. The payment date is necessary when, for example, recovered withholding needs to be allocated to the tax year during which it was withheld from a payment.
The following mandatory data is submitted on the recovered payment:
- Income type
- Recovery – Yes
- Amount
- Repayment date
- Start date and end date of the original payment period.
Information about the recovery must be submitted to the Incomes Register no later than on the fifth day after the date on which the benefit payer was informed of the payment of the recovered amount, the payer and the payment or remuneration the payment is related to. This information is required for the allocation of the recovery. The actual repayment date is reported in the ‘Additional repayment details’ data group.
In addition to the recovery, these instructions also depict recourse situations. ‘Recourse’ means situations where an income earner is retroactively granted a benefit for the same period for which the income earner has already been granted another benefit. The payer of the earlier benefit may have a right of recourse to the retroactive benefit granted later. In other words, two overlapping benefits have been granted for an income earner for the same period, and the recourse compensates the overpayment of the other benefit to the payer of the earlier benefit so that the payer does not have to recover the overpayment from the income earner. In recourse situations, the payer of the benefit paid later does not pay the benefit to an income earner but to the payer of the earlier benefit in full or in part.
Situations where the provision of section 112 a of the act on income tax (tuloverolaki 1535/1992), "Adjustment of certain recovered benefit income", applies to the reporting have been compiled in these instructions. Because the act on income tax provision in question is only applied to pensions, study grants and other statutory benefits, the term "non-statutory benefit" used in these instructions refers to those benefits to which section 112 a of the act on income tax is not applied. Neither is section 112 a of the act on income tax applied to payments taxed as capital income.
The instructions provide examples of situations in which benefits are paid, unjust enrichment is reported, a benefit is recovered, or the recovery is abandoned. In addition, these instructions use examples to present possible problems associated with the turn of the year and withholding from the recovered amount. The Tax Administration must be able to allocate the recovered withholding to the tax year, during which it was collected from the payment (examples 2, 3 and 12).
These instructions do not cover situations where providers of overlapping benefits divide costs evenly between them in the background so that the income earner is not aware of the transfer of funds. This is not a question of a recourse procedure. Furthermore, these instructions do not cover any recourse payments between insurance providers. Such payments between insurance institutions are, for example, recourse payments paid
- between accident and occupational disease insurers and motor insurers
- between pension providers and parties liable to pay damages when compensation is paid under the rail transport liability act (Raideliikennevastuulaki 113/1999) or the patient insurance act (Potilasvakuutuslaki 948/2019).
Section 4.4 ‘Right of recourse situations excluded from reporting to the Incomes Register’ discusses situations excluded from reporting to the Incomes Register in more detail.
These instructions only discuss the recovery and recourse of an income earner’s benefits income on a general basis. Benefits returned unprompted are discussed in more detail in the instructions ‘Benefits: Reporting data to the Incomes Register’.
These instructions use examples to describe the most common Incomes Register reporting situations. The examples do not take all data to be submitted into consideration, only data that is relevant to resolving the matter in question.
Stating an unjust enrichment is an independent occurrence. Reporting an unjust enrichment is not influenced by whether the benefit is cancelled for some part or whether it can ever be recovered. Forgiving or modifying an unjust enrichment is not reported to the Incomes Register. This can only be seen in the Incomes Register indirectly when a recovery report is not submitted or the recovered amounts cover only part of the unjust enrichment.
1.1 Section 112 a of the act on income tax
The adjustment of recovered benefit income is laid down in section 112 a of the act on income tax. These instructions take into account the amendment to section 112 a, subsection 1, of the act on income tax, which will be applied for the first time in the taxation for the 2020 tax year.
According to previous subsection 1, a repayment could have been taken into consideration in the original payment year’s taxation if the repayment year was the year following the original payment year and the payer had already taken the recovery into consideration on their original annual information return submitted in January or on a replacement annual information return submitted later. As a result, no recovery deduction was established in the payment year’s taxation. If the recovery took place so late that the payment could not have been taken into consideration in the benefit payer’s annual information return, the recovered amount was deducted as a recovery deduction during the repayment year.
According to amended subsection 1, the recovered amount is deducted as a tax adjustment during the repayment year (as a recovery deduction) if the repayment was made so late that the payment cannot be taken into consideration in the income earner’s taxation during the payment year of the original payment. However, the repayment can be taken into consideration in the income earner’s taxation during the payment year if the payment is repaid until the due date which is confirmed in the Tax Administration’s decision on the repayment due date of recovered benefits income in the income earner’s taxation. In these instructions, this Tax Administration’s decision is referred to as the benefit recipient’s due date decision.
Subsections 1 and 2 of section 112 a of the act on income tax particularly concern the recovery of a benefit from an income earner. Subsection 3 of the section lays down provisions on offsetting between different payers.
Section 112 a of the act on income tax only applies to pensions, study grants and other statutory benefits. It does not apply to non-statutory benefits, such as payments based on insurance terms and payments paid by a municipality that are based on the municipality’s decision. If non-statutory benefits are recovered from an income earner, the recovery will be taken into consideration by adjusting the original payment year’s taxation within the scope of adjustment times. For more details on situations between different payers, see Section 4 ‘Recourse situations’.
1.2 Section 51(5) of the act on assessment procedure for self-assessed taxes
The act on assessment procedure for self-assessed taxes (laki oma-aloitteisten verojen verotusmenettelystä 768/2016) lays down provisions on the adjustment of the payer's obligations. These instructions take into account the new subsection 5 of section 51 of the act that came into effect on 1 January 2020.
According to subsection 5 of section 51 of the act, the taxation of the payer's tax period is not adjusted if the payment recipient repays income received in a previous year to the payer so late that that the withholding or tax at source collected from the income has been taken into consideration in the payment recipient's taxation. In practice, the Finnish Tax Administration's decision on the deadline for the repayment of recovered income issued under subsection 5 of the section determines the date until which the payer can carry out net recovery of the payment. The decision will be applied for the first time to withholding and tax at source collected from payments repaid on or after the date the act came into force. In these instructions, the Finnish Tax Administration's decision in question is referred to as the payer's deadline decision.
1.3 The income earner refunds a benefit voluntarily
An income earner can refund a benefit voluntarily even though the benefit is not an unjust enrichment for the income earner and does not become an unjust enrichment later. In this case, the benefit payer does not submit a report on an unjust enrichment. The Incomes Register’s unjust enrichment situations should not be confused with unprompted refund situations.
The returned amount is reported to the Incomes Register by specifying the ‘Unprompted refund – Yes’ data. The ‘Unprompted refund – Yes’ data cannot be used simultaneously with the ‘Unjust enrichment – Yes’, ‘Recourse – Yes’ or ‘Recovery – Yes’ data. The date on which the income was returned to the payer is entered as the payment date on the report. The payer also reports the ‘Additional repayment details’ data group, allowing the Finnish Tax Administration to correctly tax the income earner. The principles of reporting gross and net recovery also apply to unprompted refunds.
For more details on reporting, see the instructions ‘Benefits: Reporting data to the Incomes Register’.
2 The income earner repays a payment
Section 112 a, paragraph 1 of the act on income tax lays down provisions on a procedure in which the income earner repays a payment to the benefits payer. The payment date determines whether the recovery can be taken into consideration in taxation as a net recovery. The payer can always recover the payment as a gross amount. Net recovery is discussed in Section 2.2.1 and gross recovery in Section 2.2.2.
The recovery is reported by entering the ‘Recovery – Yes’ data related to the income type, as well as related additional information. The recovery data must be submitted no later than on the fifth day after the date on which the benefit payer was informed of the payment of the recovered amount, the payer and the payment or remuneration the payment is related to, and the recovery has been allocated in the benefit payer’s own system.
If the income is recovered as net recovery, the benefit payer reports the withholding to which the amount recovered from the income earner is subject using the “Withholding from the repayment” data item. If the income is recovered from the income earner as a gross amount, the benefit payer does not report the previous tax withheld from the recovered payment. In this case, the income earner is given credit for the withholding from the recovered amount in the taxation for the payment year.
The income can be recovered from the income earner as a net amount, if the income is paid back in the same year or at the beginning of the next year before the previous year’s taxation has been completed. The Finnish Tax Administration will determine in the benefit recipient’s deadline decision by what calendar date of the year following the payment year of the original payment the repayment must be made in order for it to be possible for the payment to be taken into account in the taxation for the payment year of the income earner’s original payment. The Tax Administration also determines the date by which the payment must be repaid so that the payer’s taxation for the tax period can be adjusted in the payer’s due date decision. If the payment is repaid after the due date confirmed in the Tax Administration’s decision, the payer must use gross recovery.
The original payment period must be specified at least to the nearest full calendar year. The original payment period means the month or other period during which the income subject to recovery was originally paid. The benefit payer can also report a more detailed earnings period (see example 1). When the Finnish Tax Administration receives data on withholding from a repayment, it adjusts the withholding obligation for the month of the original payment date reported by the benefit payer. If the benefit payer does not report the original payment date, the Finnish Tax Administration will allocate the payment to the tax period pertaining to the end date of the original payment period reported. In such a situation, the benefit payer may lose credit interest, which is calculated on the basis of the recovered withholding amount.
Examples 2, 3 and 12 of these instructions depict problematic situations related to the turn of the year and the withholding collected from the recovered amount. It must be possible to allocate the recovered withholding to the same tax year in which it was withheld from the payment.
Payments received through enforcement proceedings are considered comparable to payments made by the benefit payer from its own funds.
The Benefit unit data group is mandatory when unemployment benefits are reported in order that the days qualifying for unemployment benefits can be determined. Unemployment benefits include the unemployment allowance and the labour market subsidy. Entering the Benefit unit data group is also mandatory for family leave income types when the income payment date is 1 January 2023 or later. Family leave income types include the parental and pregnancy allowances. Benefit payers must report to the Tax Administration the number of days in the tax year for which the taxpayer has been paid the unemployment benefits or family leave benefits referred to in section 93(4) of the act on income tax (Tuloverolaki 1535/1992) (decision of the Tax Administration on information reporting requirements).
The benefit unit can also be reported for other types of benefits, and this is also recommended. When the benefit unit and benefit amount have been specified, the Incomes Register’s data users can, for example, determine the daily amount of the benefit during the earnings period. An adjusted unemployment benefit is an exception. When reporting an adjusted unemployment benefit, the unemployment benefit payment days must be converted into full days. As a result, data users cannot, in these situations, irrefutably determine the daily benefit amount.
The unemployment benefit and family benefit income types for which it is mandatory to specify the Benefit unit data group and on the basis of which the number of qualifying days is determined are listed in the Incomes Register’s document Benefits – Income types – Codes. For these benefits, the day is used as the benefit unit. The number of units realised during the income type’s earnings period is indicated as the number of units.
2.1 The payer recovers a payment made before the year 2021
Payments recovered in 2021 or later are reported to the Incomes Register, even if the original income had been paid prior to 2021. Although the information about the recovery is reported to the Incomes Register, the report submitted for the original benefit cannot be corrected in the Incomes Register if the benefit was paid prior to 2021. Such corrections must be made in accordance with each data user’s instructions.
2.2 The payer recovers a payment during the original payment year
2.2.1 Net recovery
If the income earner (or some other party on their behalf, such as a spouse) pays back an overpayment in the payment year of the original payment, the income earner can return the net amount of the payment, i.e. the amount from which withholding has been deducted.Net recovery can also be used at the start of the following year before the taxation for the previous year is completed. The Finnish Tax Administration determines the date until which a repayment can be taken into account in an income earner’s taxation during the payment year of the original payment When recovering a net amount, the benefit payer must report both the recovered payment as a gross amount and the amount of tax withheld from it in the Incomes Register. The withholding from the recovered amount is not credited to the income earner in the taxation for the payment year; instead, it is taken into consideration in the payer’s withholding obligations based on the additional repayment details.
Example 1: A basic unemployment allowance of EUR 648 per month was paid to an unemployed jobseeker from 1 January to 31 March 2023. 20% tax was withheld from the basic unemployment allowance (EUR 129.60 per month). The benefit payer has reported the payment monthly according to the payment date. The Benefit unit data group is mandatory when unemployment benefits are reported in order that the days qualifying for unemployment benefits can be determined.
The example of a report (Table 1) features the report submitted for the basic unemployment allowance for January, and corresponding reports have been submitted for February and March:
Record data | Values |
---|---|
Payment date or other reporting date |
05.02.2023 |
Report details | |
Service data | |
Type of action |
New report |
Payer's report reference |
20YY00020120 |
Income earner details | |
General income type details | |
Income type code |
Basic unemployment allowance |
Amount |
648.00 |
Earnings period | |
Start date |
01.01.2023 |
End date |
31.01.2023 |
Benefit unit | |
Unit |
Day |
Number of units |
21 |
General income type details | |
Income type code |
Withholding tax |
Amount |
129.60 |
Earnings period | |
Start date |
05.02.2023 |
End date |
05.02.2023 |
In April, the benefit payer notices that the basic unemployment benefit has been mistakenly paid for January and February, so the payer recovers the payments from the income earner. The benefit payer submits replacement reports for January and February, reporting the unjust enrichment paid. The Benefit unit is mandatory information when reporting unemployment benefit income types. In the case of unjust enrichment, zero (0) days is reported as the benefit unit on the replacement report. The data must not be removed from the replacement report, as it is required by the data users.
The example of a report (Table 2) features the replacement report submitted for the basic unemployment allowance indicating the unjust enrichment. A corresponding report has been submitted for February, with 3 March 2023 specified as the payment date.
Record data | Values |
---|---|
Payment date or other reporting date |
05.02.2023 |
Report details | |
Service data | |
Type of action |
Replacement report |
Incomes Register or payer's report reference |
20YY00020120 |
Report version number |
n |
Income earner details | |
General income type details | |
Income type code |
Basic unemployment allowance |
Amount |
648.00 |
Unjust enrichment |
Yes |
Earnings period | |
Start date |
01.01.2023 |
End date |
31.01.2023 |
Benefit unit | |
Unit |
Day |
Number of units |
0 |
General income type details | |
Income type code |
Withholding tax |
Amount |
129.60 |
The income earner pays the recovered amounts on 5 July 2023. The benefit payer then allocates the repayments in its payment system on 09/07/2023.
As the original income payment periods fall on the same calendar year, the recovery can be reported in three different ways. Table 3a describes the minimum level for report (only one original payment period is reported). The payer may report the data in more detail (Table 3b) and it that case, the payer will also receive the credit interest. Table 3c describes a second way to report the data as one payment period.
If the payer reports one original payment period (Table 3a), the Finnish Tax Administration adjusts the withholding obligation (EUR 259.20) for the tax period in accordance with the end date of the original payment period (March). In that case, the payer is not entitled to any credit interest.
The example (Table 3 a) presents a new report on recovery to be submitted in July:
Record data | Values |
---|---|
Payment date or other reporting date |
09.07.2023 |
Report details | |
Service data | |
Type of action |
New report |
Payer's report reference |
20YY00090720 |
Income earner details | |
General income type details | |
Income type code |
Basic unemployment allowance |
Amount |
1296.00 |
Recovery |
Yes |
Additional repayment details | |
Repayment date |
05.07.2023 |
Withholding from the repayment |
259.20 |
Original payment period | |
Start date |
01.02.2023 |
End date |
31.03.2023 |
Benefit unit | |
Unit |
Day |
Number of units |
0 |
If the benefit payer wants the withholding obligations to be allocated correctly to the original tax periods, the report on recovery must be itemised. The benefit payer must itemise the payments in accordance with the original payment dates. The payer must report each original payment period in accordance with the date on which the income in question was originally paid. The payer must also report the original payment date of each payment and the tax withheld from the repayment. As a result, the benefit payer receives any credit interest that may have accrued on the adjusted withholding obligation. On the recovery report, the benefit unit is entered as zero (0) days.
The example (Table 3 b) presents the same new report on recovery to be submitted in July, with the recovery amount being itemised in more detail:
Record data | Values |
---|---|
Payment date or other reporting date |
09.07.2023 |
Report details | |
Service data | |
Type of action |
New report |
Payer's report reference |
20YY00090720 |
Income earner details | |
General income type details | |
Income type code |
Basic unemployment allowance |
Amount |
648.00 |
Recovery |
Yes |
Additional repayment details | |
Repayment date |
05.07.2023 |
Withholding from the repayment |
129.60 |
Original payment period | |
Payment date or other reporting date |
05.02.2023 |
Start date |
01.02.2023 |
End date |
28.02.2023 |
Benefit unit | |
Unit |
Day |
Number of units |
0 |
General income type details | |
Income type code |
Basic unemployment allowance |
Amount |
648.00 |
Recovery |
Yes |
Additional repayment details | |
Repayment date |
05.07.2023 |
Withholding from the repayment |
129.60 |
Original payment period | |
Payment date or other reporting date |
03.03.2023 |
Start date |
01.03.2023 |
End date |
31.03.2023 |
Benefit unit | |
Unit |
Day |
Number of units |
0 |
The payer may also use a third way to report the data. The payer may report the data for a single period and enter the repayment date or any other day falling on the repayment month as the end date of the original payment period (Table 3c). This method can be used if the overpayment and the recovery take place during the same payment year (as is the case in this example). When using this reporting method, the payer is not entitled to any credit interest. If the payer wants to receive the credit interest, it must be itemised in accordance with the instructions described in Table 3b.
The same new report on recovery submitted in July can be found in Table 3c. In that report, the repayment date is given as the end date of the original payment period. Any other date falling on the repayment month could also have been given as the end date (for example, 31 July 2023).
Record data | Values |
---|---|
Payment date or other reporting date |
09.07.2023 |
Report details | |
Service data | |
Type of action |
New report |
Payer's report reference |
20YY00090720 |
Income earner details | |
General income type details | |
Income type code |
Basic unemployment allowance |
Amount |
1296.00 |
Recovery |
Yes |
Additional repayment details | |
Repayment date |
05.07.2023 |
Withholding from the repayment |
259.20 |
Original payment period | |
Start date |
01.02.2023 |
End date |
05.07.2023 |
Benefit unit | |
Unit |
Day |
Number of units |
0 |
Example 2: The income earner has been paid benefit A as follows:
- payment date 27 December 2023, earnings period 17–23 December 2023, total amount of benefit paid EUR 323.21
- payment date 3 January 2024, earnings period 24–30 December 2023, total amount of benefit paid EUR 242.00
- payment date 10 January 2024, earnings period 31 December 2023–6 January 2024, total amount of benefit paid EUR 314.52.
A tax of 20% has been withheld from the payments.
The benefit payer has submitted reports on the payments to the Incomes Register. The example (Table 1) presents the report submitted for the payment made on 27 December 2023. Corresponding reports have been submitted in January.
Record data | Values |
---|---|
Payment date or other reporting date |
27.12.2023 |
Report details | |
Service data | |
Type of action |
New report |
Payer's report reference |
yyyxxxzzz1 |
Income earner details | |
General income type details | |
Income type code |
(Benefit A) |
Amount |
323.21 |
Earnings period | |
Start date |
17.12.2023 |
End date |
23.12.2023 |
General income type details | |
Income type code |
Withholding tax |
Amount |
64.64 |
In March 2024, the benefit payer was informed of the income earner not being entitled to the benefit. The benefit payer submits replacement reports and reports the payments as unjust enrichment.
The example of a report (Table 2) features the replacement report submitted for the 27 December 2023 payment, indicating the unjust enrichment:
Record data | Values |
---|---|
Payment date or other reporting date |
27.12.2023 |
Report details | |
Service data | |
Type of action |
Replacement report |
Incomes Register or payer's report reference |
yyyxxxzzz1 |
Report version number |
n |
Income earner details | |
General income type details | |
Income type code |
(Benefit A) |
Amount |
323.21 |
Unjust enrichment |
Yes |
Earnings period | |
Start date |
17.12.2023 |
End date |
23.12.2023 |
General income type details | |
Income type code |
Withholding tax |
Amount |
64.64 |
The benefit payer recovers the benefit for the period 17 December 2023 – 6 January 2024, totalling EUR 879.73 (EUR 323.21 + EUR 242 + EUR 314.52). The benefit payer applies the net recovery method and invoices EUR 703.79 from the income earner. The withholding of EUR 175.94 is taken into consideration in the payer’s withholding obligations for the tax period.
The income earner repays the benefit on 11/04/2024, and the payment is registered in the benefit payer’s systems on 15/04/2024.
Because the original payments were paid during two different calendar years, data about the recovered benefits must be reported to the Incomes Register itemised according to the payment year. This means that the payments paid in 2023 must be reported for the payment period ending in 2023, and the payments paid in 2024 must be reported for the payment period ending in 2024. As a result, the Tax Administration can allocate the recovered withholding amount to the correct tax years.
The example (Table 3) features a report submitted on net recovery with the amounts itemised for payment periods according to the payment years:
Record data | Values |
---|---|
Payment date or other reporting date |
15.04.2024 |
Report details | |
Service data | |
Type of action |
New report |
Payer's report reference |
yyyxxxzzz2 |
Income earner details | |
General income type details | |
Income type code |
(Benefit A) |
Amount |
323.21 |
Recovery |
Yes |
Additional repayment details | |
Repayment date |
11.04.2024 |
Withholding from the repayment |
64.64 |
Original payment period | |
Start date |
01.12.2023 |
End date |
31.12.2023 |
General income type details | |
Income type code |
(Benefit A) |
Amount |
556.52 |
Recovery |
Yes |
Additional repayment details | |
Repayment date |
11.04.2024 |
Withholding from the repayment |
111.30 |
Original payment period | |
Start date |
01.01.2024 |
End date |
31.01.2024 |
Alternatively, the benefit payer can submit a report as in Table 3 b of Example 1, or also report the original Payment date or other reporting date in the Additional repayment details data group.
Example 3: The income earner has been paid the basic component of the earnings-related allowance as follows:
- payment date 5 December 2023, earnings period 29 October–25 November 2023, benefit paid for 20 days, totalling EUR 876 (20 × 43.80)
- payment date 3 January 2024, earnings period 26 November–23 December 2023, benefit paid for 19 days, totalling EUR 832.20 (19 × 43.80)
- payment date 4 February 2024, earnings period 24 December 2023–11 January 2024, benefit aid for 10 days, totalling EUR 438 (10 × 43.80).
A tax of 20% has been withheld from the payments.
The Benefit unit data group must always be used when reporting unemployment benefits. The data is needed to determine the unemployment benefits payment days. The income types for which it is mandatory to specify the Benefit unit data group and on the basis of which the number of qualifying days is determined are listed in the Incomes Register’s document Benefits – Income types – Codes. In these benefits, the benefit unit is one day. The number of units is therefore the number of days allocated to the earnings period under the income type.
If the benefit payer pays the aforementioned benefits, and the income’s earnings period is allocated to several years, the benefit payer must report income data for each year separately.
The benefit payer has submitted reports on the payments to the Incomes Register. The example (Table 1) features the report submitted for the payment made in February, where the continuous earnings period 24 December 2023 – 11 January 2024 has been divided into two periods, because the number of qualifying days in different tax years must be reported separately:
Record data | Values |
---|---|
Payment date or other reporting date |
04.02.2024 |
Report details | |
Service data | |
Type of action |
New report |
Payer's report reference |
21VV0004022023 |
Income earner details | |
General income type details | |
Income type code |
Basic component of the earnings-related allowance |
Amount |
175.20 |
Earnings period | |
Start date |
24.12.2023 |
End date |
31.12.2023 |
Benefit unit | |
Unit |
Day |
Number of units |
4 |
General income type details | |
Income type code |
Basic component of the earnings-related allowance |
Amount |
262.80 |
Earnings period | |
Start date |
01.01.2024 |
End date |
11.01.2024 |
Benefit unit | |
Unit |
Day |
Number of units |
6 |
General income type details | |
Income type code |
Withholding tax |
Amount |
87.60 |
On 18 February 2024, the benefit payer was informed of the income earner not being entitled to daily unemployment benefits. The benefit payer submits replacement reports for the original payment date 4 February 2024 and reports the daily unemployment benefit as unjust enrichment. The Benefit unit must be reported in connection with the basic component of the earnings-related allowance. Because this is unjust enrichment, zero (0) is reported as the number of benefit units.
The example of a report (Table 2) features the replacement report for the February report, indicating the unjust enrichment:
Record data | Values |
---|---|
Payment date or other reporting date |
04.02.2024 |
Report details | |
Service data | |
Type of action |
Replacement report |
Incomes Register or payer's report reference |
iuatyilrgbqikw3579275eo0osuhd 21VV0004022023 |
Report version number |
n |
Income earner details | |
General income type details | |
Income type code |
Basic component of the earnings-related allowance |
Amount |
175.20 |
Unjust enrichment |
Yes |
Earnings period | |
Start date |
24.12.2023 |
End date |
31.12.2023 |
Benefit unit | |
Unit |
Day |
Number of units |
0 |
General income type details | |
Income type code |
Basic component of the earnings-related allowance |
Amount |
262.80 |
Unjust enrichment |
Yes |
Earnings period | |
Start date |
01.01.2024 |
End date |
11.01.2024 |
Benefit unit | |
Unit |
Day |
Number of units |
0 |
General income type details | |
Income type code |
Withholding tax |
Amount |
87.60 |
The benefit payer recovers the benefit for the period 29 October 2023–11 January 2024 totalling EUR 2,146.20 (EUR 876 + EUR 832.20 + EUR 438). The benefits payer uses net recovery and recovers EUR 1,716.96 from the income earner on an invoice. The share of withholding, EUR 429.24, is taken into consideration in the payer's withholding obligations for the tax period.
The income earner makes the payment on 28 April 2023, and the payment is entered into the benefit payer’s systems on 3 May 2024. Itshould be noted here, that net recovery can be used if the income earner has made the payment by the due date determined by the Finnish Tax Administration. This means the date the payment is entered in the system does not matter in this case.
When benefits are recovered as a net amount, it is important to report the data to the Incomes Register in such a manner that the tax withholding data is allocated to the correct tax years. At a minimum, the data must be reported at a calendar-year precision. However, if the benefit payer wants the withholding obligations to be correctly allocated to the original tax periods, the data must be itemised in more detail.
The example of a report (Table 3) features the recovery report for May. The payer has reported the recovery data at a payment month precision, allowing the withholding data to be allocated to the correct tax periods. The benefit unit is mandatory data in connection with the basic component of the earnings-related allowance. Zero (0) is reported as the number of benefit units on the recovery report.
Record data | Values |
---|---|
Payment date or other reporting date |
03.05.2024 |
Report details | |
Service data | |
Type of action |
New report |
Payer's report reference |
20YY00090720 |
Income earner details | |
General income type details | |
Income type code |
Basic component of the earnings-related allowance |
Amount |
876.00 |
Recovery |
Yes |
Additional repayment details | |
Repayment date |
28.04.2024 |
Withholding from the repayment |
175.20 |
Original payment period | |
Payment date or other reporting date |
05.12.2023 |
Start date |
01.12.2023 |
End date |
31.12.2023 |
Benefit unit | |
Unit |
Day |
Number of units |
0 |
General income type details | |
Income type code |
Basic component of the earnings-related allowance |
Amount |
832.20 |
Recovery |
Yes |
Additional repayment details | |
Repayment date |
28.04.2024 |
Withholding from the repayment |
166.44 |
Original payment period | |
Payment date or other reporting date |
03.01.2024 |
Start date |
01.01.2024 |
End date |
31.01.2024 |
Benefit unit | |
Unit |
Day |
Number of units |
0 |
General income type details | |
Income type code |
Basic component of the earnings-related allowance |
Amount |
438.00 |
Recovery |
Yes |
Additional repayment details | |
Repayment date |
28.04.2024 |
Withholding from the repayment |
87.60 |
Original payment period | |
Payment date or other reporting date |
04.02.2024 |
Start date |
01.02.2024 |
End date |
28.02.2024 |
Benefit unit | |
Unit |
Day |
Number of units |
0 |
2.2.2 Gross recovery
The benefit payer may choose to recover the payment made as a gross amount. In this case, the income earner pays the benefit and the tax withheld from it to the benefit payer. The income earner will be given credit in taxation for the tax withheld by the benefit payer from the payment on the payment date.
The data is reported to the Incomes Register as in Section 2.2.1, but the Withholding from the repayment’ data is not entered for gross recovery. In gross recovery, the original payment period can be reported at the accuracy of the tax year.
2.3 The payer recovers a payment after the original payment year
If the income earner repays a payment at the beginning of the year following the payment year by the due date confirmed in the Finnish Tax Administration’s decision, the same procedure applied to a recovery carried out during the payment year will apply.
If the income earner pays back the payment in the year following the original payment year after the due date confirmed in the Finnish Tax Administration’s decision (or in years after that), the amount repaid will be deducted in the taxation for the repayment year as a recovery deduction. The recovered benefit was taxed as the income earner’s income in the previous taxation, and the income earner was given credit for the withholding. The benefit payer cannot recover the payment as a net amount, as the payer must recover the payment from the income earner as a gross amount.
As the recovery is allocated to a payment made in a previous year, it is sufficient that the payer reports the original payment period to the Incomes Register at the accuracy of the calendar year. The original payment date or other reporting date does not need to be provided.
Example 4: The income earner has received a housing allowance of EUR 400 for the period 1 August–15 September 2023. At the same time, he has received an adjusted daily allowance. In May of the next year, it is discovered that excessive housing allowance has been paid, to the amount of EUR 128. The income earner is now employed, so no more daily allowance is paid. The overpayment has been recovered with an invoice. However, the income earner has not paid the invoice sent to them, and the invoice is now being recovered through enforcement. The employer has collected the enforcement fee from the employee's wages and paid it to the enforcement authorities. Enforcement has paid the amount to the benefit payer 2 December 2024. Although the payment was recovered by way of enforcement, the report on recovery is submitted in the same way as if the income earner had paid the payment back to the benefit payer himself. The benefit payer has reported the housing allowance to the Incomes Register, and also submitted an unjust enrichment report after noticing the overpayment.
The new report submitted for the recovery:
Record data | Values |
---|---|
Payment date or other reporting date |
02.12.2024 |
Report details | |
Service data | |
Type of action |
New report |
Payer's report reference |
21CF12345667 |
Income earner details | |
General income type details | |
Income type code |
Housing allowance |
Amount |
128.00 |
Recovery |
Yes |
Additional repayment details | |
Repayment date |
02.12.2024 |
Original payment period | |
Start date |
01.08.2023 |
End date |
15.09.2023 |
2.4 The payer recovers a payment in instalments and an error occurs during the recovery
In certain situations, a benefit paid to an income earner is recovered in several instalments, which means that the income earner needs to make several payments regarding a single recovery. Such a situation is described in Examples 5 and 6. When a recovery is carried out in instalments, the current recovery process may not necessarily be stopped on time after the final instalment. Example 5 represents a situation where the final recovery instalment should have been smaller than the previous instalments. Example 6 illustrates a situation where an additional instalment has been inadvertently recovered. In these situations, an error occurs during recovery. The income earner’s right to the benefit does not change. Section 2.5 discusses situations where a decision on an income earner’s benefit is cancelled by a court decision, for example, and submitted reports need to be corrected due to the changed conditions.
When the payer corrects such an error occurred during recovery, reporting depends on whether the income earner’s repayment and the refund of the incorrectly recovered amount to the income earner take place during the same tax year or only after the end of the current tax year. If they take place during the same tax year, the original report must be corrected by submitting a replacement report (Example 5, Table 2). The new payment is not reported to the Incomes Register. If the payer only refunds the recovered payment after the end of the tax year, the recovery report must be left unchanged and a new report must be submitted for the new payment, also including the ‘Payment reallocation: Yes’ data. Income is considered to be income for the tax year in which it was withdrawn, recorded in the taxpayer’s account or otherwise obtained (act on income tax, section 110). If, in conjunction with such a correction, the payer pays such a payment to the income earner that was originally taxable, tax must be withheld from the new payment.
The Benefit unit data group must be entered for unemployment benefits and family leave benefits. In unjust enrichment and recovery reports for these benefits, the day must be used as the benefit unit, and the number of units must be 0. Regarding other benefits, information about the unit is voluntary, but it is recommended that it be reported. When the benefit unit and benefit amount have been specified, the user of the Incomes Register data can, for example, determine the daily benefit amount during the earnings period.
2.4.1 The amount of the final recovery instalment is incorrect
A benefit paid to an income earner can be recovered in instalments. Example 5 represents a situation where the amount of the final recovery instalment is incorrectly too high.
Example 5: Recovery has been partly too high. The submitted report is corrected. On 28 March 2023, the income earner returned the benefit income overpaid in February 2022 to the benefit payer. The payer submits a report on the recovery to the Incomes Register on 31 March 2023. The amount of the recovery is EUR 50.00. The income earner’s tax rate for the original payment was 10%. The benefit unit (number of days) must be entered if a benefit for which this information is mandatory is paid. Table 1 includes the payer’s original report on the recovery.
Record data | Values |
---|---|
Payment date or other reporting date |
31.03.2023 |
Report details | |
Type of action |
New report |
Payer's report reference |
001 |
Income earner details | |
General income type details | |
Income type code |
(Benefit A) |
Amount |
50.00 |
Recovery |
Yes |
Additional repayment details | |
Repayment date |
28.03.2023 |
Withholding from the repayment |
5.00 |
Original payment period | |
Payment date |
28.02.2022 |
Start date |
01.02.2022 |
End date |
28.02.2022 |
The benefit payer later notices that the recovered amount was incorrect. The recovered amount was EUR 50, even though only EUR 33.60 should have been recovered. The payer refunds the unnecessarily recovered share to the income earner and submits a replacement report with correct information to the Incomes Register. In this example, the repayment and the refund of the recovered amount to the income earner take place during the same tax year. The benefit unit (number of days) must be entered if a benefit for which this information is mandatory is paid. Table 2 shows the replacement report.
Record data | Values |
---|---|
Payment date or other reporting date |
31.03.2023 |
Report details | |
Type of action |
Replacement report |
Payer's report reference |
001 |
Income earner details | |
General income type details | |
Income type code |
(Benefit A) |
Amount |
33.60 |
Recovery |
Yes |
Additional recourse details | |
Repayment date |
28.03.2023 |
Withholding from the repayment |
3.36 |
Original payment period | |
Payment date |
28.02.2022 |
Start date |
01.02.2022 |
End date |
28.02.2022 |
Because the repayment and the refund of the recovered amount to the income earner take place in the same tax year in the example, the new payment is not reported to the Incomes Register.
If the payer only refunds the recovered payment after the end of the tax year, the payer leaves the recovery report unchanged and submits a new report for the new payment, also including the ‘Payment reallocation: Yes’ entry. If the payment was originally taxable, tax must be withheld from the new payment.
2.4.2 The payer has recovered an additional instalment
If the payer incorrectly recovers a whole instalment from the income earner, the data must be cancelled as shown in Example 6.
Example 6: On 28 March 2023, the income earner returned the benefit income overpaid in February 2022 to the benefit payer. The payer submits a report on the recovery to the Incomes Register on 31 March 2023. The amount of the recovery is EUR 50.00. The benefit unit (number of days) must be entered if a benefit for which this information is mandatory is paid. Table 1 includes the payer’s original report on the recovery.
Record data | Values |
---|---|
Payment date or other reporting date |
31.03.2023 |
Report details | |
Type of action |
New report |
Payer's report reference |
003 |
Income earner details | |
General income type details | |
Income type code |
(Benefit A) |
Amount |
50.00 |
Recovery |
Yes |
Additional repayment details | |
Repayment date |
28.03.2023 |
Withholding from the repayment |
5.00 |
Original payment period | |
Payment date |
28.02.2022 |
Start date |
01.02.2022 |
End date |
28.02.2022 |
The benefit payer later notices that the amount should not have been recovered at all. The payer refunds the unnecessarily recovered amount to the income earner and cancels the submitted report. Table 2 shows information about the cancellation.
Cancellation data | |
---|---|
Record type |
Cancellation of benefits payment reports |
Record owner |
1234567-8 |
Payer's report reference |
003 |
Incomes Register report reference |
1agf6kr589ks452f75f8493r7695235 |
Because the repayment and the refund of the recovered amount to the income earner take place in the same tax year in the example, the new payment is not reported to the Incomes Register.
If the payer only refunds the recovered payment after the end of the tax year, the payer leaves the recovery report unchanged and submits a new report for the new payment, also including the ‘Payment reallocation: Yes’ entry. If the payment was originally taxable, tax must be withheld from the new payment.
2.5 The recovery of an unjust enrichment is cancelled because the income earner’s right to the benefit resumes
In certain situations, an unjust enrichment is cancelled and the income earner’s right to the benefit resumes. In this case, a benefit has been paid to the income earner and it is later stated as an unjust enrichment, and the payer recovers it. The conditions change again so that the income earner’s right to the benefit resumes. Such a situation may exist if the income earner’s case has been processed in an appeal procedure or in a court of law, for example, and the income earner’s right to the benefit changes based on a new decision. Examples 7, 8 and 9 in the following subsections describe reporting in these situations. Reporting is affected by whether the income earner has already returned part of the income to the payer.
In the situations presented in this section, reports are not corrected because of an error occurred during recovery, but because of changes in underlying conditions. Correcting errors occurred during recovery is discussed in Section 2.4.
2.5.1 The income earner has returned part of the recovered amount
If the income earner has returned part of the recovered amount, data is reported and corrected as shown in Example 7.
Example 7: The income earner was paid a benefit of EUR 1,000. A report on the income is submitted to the Incomes Register. In the example, a benefit is paid for which entering the benefit unit is mandatory. The example also applies to other benefits, in which case reporting the unit is voluntary. Table 1 shows the benefit payer’s report on the original payment:
Record data | Values |
---|---|
Payment date or other reporting date |
01.03.2023 |
Report details | |
Type of action |
New report |
Payer's report reference |
004 |
Income earner details | |
General income type details | |
Income type code |
(Benefit A) |
Amount |
1000.00 |
Benefit unit |
Day |
Number of units |
20 |
Earnings period | |
Start date |
01.02.2023 |
End date |
28.02.2023 |
General income type details | |
Income type code |
Withholding tax (20%) |
Amount |
200.00 |
Earnings period | |
Start date |
01.03.2023 |
End date |
01.03.2023 |
The entire benefit is later stated as an unjust enrichment, and the payer submits a replacement report for the full amount to the Incomes Register. The ‘Unjust enrichment: Yes’ data is entered on the report. Because the situation concerns an unjust enrichment, zero (0) days are reported as the benefit unit on the replacement report.
Table 2 shows a report on which the original benefit is changed to an unjust enrichment. The following data is entered on the report: ‘Unjust enrichment: Yes’, days 0.
Record data | Values |
---|---|
Payment date or other reporting date |
01.03.2023 |
Report details | |
Type of action |
Replacement report |
Payer's report reference |
004 |
Income earner details | |
General income type details | |
Income type code |
(Benefit A) |
Amount |
1000.00 |
Unjust enrichment |
Yes |
Benefit unit |
Day |
Number of units |
0 |
Earnings period | |
Start date |
01.02.2023 |
End date |
28.02.2023 |
General income type details | |
Income type code |
Withholding tax (20%) |
Amount |
200.00 |
Earnings period | |
Start date |
01.03.2023 |
End date |
01.03.2023 |
The income earner repays part of the benefit (EUR 300) in March. On the recovery report, 0 is entered as the benefit unit. Table 3 shows the recovery report submitted by the benefit payer.
Record data | Values |
---|---|
Payment date or other reporting date |
31.03.2023 |
Report details | |
Type of action |
New report |
Payer's report reference |
005 |
Income earner details | |
General income type details | |
Income type code |
(Benefit A) |
Amount |
300.00 |
Recovery |
Yes |
Benefit unit |
Day |
Number of units |
0 |
Additional repayment details | |
Repayment date |
28.03.2023 |
Withholding from the repayment |
60.00 |
Original payment period | |
Payment date |
01.03.2023 |
Start date |
01.03.2023 |
End date |
31.03.2023 |
As a result of a later decision issued at a court of law, the benefit payer’s decision is cancelled and the income earner’s right to the benefit resumes. Because the income is no longer an unjust enrichment, the submitted report has to be corrected so that the units (days) are given as original values.
Because the income earner has already returned part of the amount in this example, the income amount is divided into two parts on the report. Information about the unjust enrichment is removed from the part which the income earner has not returned, and the information is left unchanged regarding the part of the income which the income earner has returned to the payer. The number of days is indicated regarding the part of the income, from which the information about the unjust enrichment is removed on the replacement report.
Record data | Values |
---|---|
Payment date or other reporting date |
01.03.2023 |
Report details | |
Type of action |
Replacement report |
Payer's report reference |
004 |
Income earner details | |
General income type details | |
Income type code |
(Benefit A) |
Amount |
700.00 |
Benefit unit |
Day |
Number of units |
20 |
Earnings period | |
Start date |
01.02.2023 |
End date |
28.02.2023 |
General income type details | |
Income type code |
(Benefit A) |
Amount |
300.00 |
Unjust enrichment |
Yes |
Benefit unit |
Day |
Number of units |
0 |
Earnings period | |
Start date |
01.02.2023 |
End date |
28.02.2023 |
General income type details | |
Income type code |
Withholding tax |
Amount |
60.00 |
Earnings period | |
Start date |
01.03.2023 |
End date |
01.03.2023 |
The payer pays the unjustifiably collected EUR 300 to the income earner. The payer submits a new report on the new payment with a new payment date. The benefit unit is reported as 0, because the days were indicated on the replacement report. Table 5 shows the benefit payer’s report on the new payment:
Record data | Values |
---|---|
Payment date or other reporting date |
01.04.2023 |
Report details | |
Type of action |
New report |
Payer's report reference |
006 |
Income earner details | |
General income type details | |
Income type code |
(Benefit A) |
Amount |
300.00 |
Benefit unit |
Day |
Number of units |
0 |
Earnings period | |
Start date |
01.02.2023 |
End date |
28.02.2023 |
General income type details | |
Income type code |
Withholding tax |
Amount |
60.00 |
Earnings period | |
Start date |
01.04.2023 |
End date |
01.04.2023 |
Adjusted unemployment benefits are reported similarly. The number of days is corrected in the case of a partial recovery and the number of days decreases. More detailed instructions on how to report adjusted days are given in the instructions ‘Benefits – Reporting data to the Incomes Register’.
2.5.2 The income earner has returned the recovered amount in full
If the income earner has repaid the recovered amount in full, the data must be reported and corrected as shown in example 8 or 9. In example 8, the whole benefit is found to be unjust enrichment while in example 9, only part of the benefit is found to be unjust enrichment. Two different ways of reporting the benefit unit data are given in example 9.
Example 8: The income earner was paid a benefit of EUR 100. A report on the income is submitted to the Incomes Register. The entire benefit is later stated as an unjust enrichment, and the payer submits a replacement report for the full amount to the Incomes Register. The ‘Unjust enrichment: Yes’ data is entered on the report. In addition to the replacement report, the payer submits a new report on recovery. The benefit unit (number of days) must be entered if a benefit for which this information is mandatory is paid.
As a result of a later decision issued at a court of law, the benefit payer’s decision is cancelled and the income earner’s right to the benefit resumes. The income earner has returned the full overpayment to the payer. The payer submits a new report on the new payment with a new payment date. Any previously submitted reports do not need to be changed.
Table 1 shows the benefit payer’s report on the original payment:
Record data | Values |
---|---|
Payment date or other reporting date |
01.03.2023 |
Report details | |
Type of action |
New report |
Payer's report reference |
004 |
Income earner details | |
General income type details | |
Income type code |
(Benefit A) |
Amount |
100.00 |
Earnings period | |
Start date |
01.02.2023 |
End date |
28.02.2023 |
General income type details | |
Income type code |
Withholding tax |
Amount |
20.00 |
Earnings period | |
Start date |
01.03.2023 |
End date |
01.03.2023 |
Table 2 shows a report on which the original benefit is changed to an unjust enrichment. The following data is entered on the report: ‘Unjust enrichment: Yes’.
Record data | Values |
---|---|
Payment date or other reporting date |
01.03.2023 |
Report details | |
Type of action |
Replacement report |
Payer's report reference |
004 |
Income earner details | |
General income type details | |
Income type code |
(Benefit A) |
Amount |
100.00 |
Unjust enrichment |
Yes |
Earnings period | |
Start date |
01.02.2023 |
End date |
28.02.2023 |
General income type details | |
Income type code |
Withholding tax (20%) |
Amount |
20.00 |
Earnings period | |
Start date |
01.03.2023 |
End date |
01.03.2023 |
The income earner repays the benefit in March. Table 3 shows the recovery report submitted by the benefit payer.
Record data | Values |
---|---|
Payment date or other reporting date |
21.03.2023 |
Report details | |
Type of action |
New report |
Payer's report reference |
005 |
Income earner details | |
General income type details | |
Income type code |
(Benefit A) |
Amount |
100.00 |
Recovery |
Yes |
Additional repayment details | |
Repayment date |
28.03.2023 |
Withholding from the repayment |
20.00 |
Original payment period | |
Payment date |
01.03.2023 |
Start date |
01.03.2023 |
End date |
31.03.2023 |
When the conditions later change, the benefit payer pays the unjustifiably collected income to the income earner. Table 4 shows the benefit payer’s report on the new payment:
Record data | Values |
---|---|
Payment date or other reporting date |
01.04.2023 |
Report details | |
Type of action |
New report |
Payer's report reference |
006 |
Income earner details | |
General income type details | |
Income type code |
(Benefit A) |
Amount |
100.00 |
Earnings period | |
Start date |
01.02.2023 |
End date |
28.02.2023 |
General income type details | |
Income type code |
Withholding tax (20%) |
Amount |
20.00 |
Earnings period | |
Start date |
01.04.2023 |
End date |
01.04.2023 |
Example 9: The income earner was paid a benefit of EUR 2,500. The income is reported to the Incomes Register. The example shows a benefit for which reporting the benefit unit is mandatory. The example can also be applied to other benefits, in which case reporting the unit is voluntary. The report on the original payment submitted by the benefit payer is shown in Table 1:
Record data | Values |
---|---|
Payment date or other reporting date |
01.03.2023 |
Report details | |
Type of action |
New report |
Income earner details | |
General income type details | |
Income type code |
(Benefit A) |
Amount |
2500.00 |
Benefit unit |
Day |
Number of units |
20 |
Earnings period | |
Start date |
01.02.2023 |
End date |
28.02.2023 |
General income type details | |
Income type code |
Withholding tax (20 %) |
Amount |
500.00 |
Earnings period | |
Start date |
01.03.2023 |
End date |
01.03.2023 |
Part of the benefit (EUR 300) is later found to be unjust enrichment and the payer submits a replacement report to the Incomes Register. ‘Unjust enrichment: Yes’ must be entered on the report. In the replacement report, zero (0) days is given as the benefit unit of the unjust enrichment.
A report in which part of the benefit is changed to unjust enrichment is shown in Table 2. The following data must be entered on the report: ‘Unjust enrichment: Yes’, days 0.
Record data | Values |
---|---|
Payment date or other reporting date |
01.03.2023 |
Report details | |
Type of action |
Replacement report |
Income earner details | |
General income type details | |
Income type code |
(Benefit A) |
Amount |
2200.00 |
Benefit unit |
Day |
Number of units |
17 |
Earnings period | |
Start date |
01.02.2023 |
End date |
28.02.2023 |
General income type details | |
Income type code |
(Benefit A) |
Amount |
300.00 |
Unjust enrichment |
Yes |
Benefit unit |
Day |
Number of units |
0 |
Earnings period | |
Start date |
01.02.2023 |
End date |
28.02.2023 |
General income type details | |
Income type code |
Withholding tax (20%) |
Amount |
500.00 |
Earnings period | |
Start date |
01.03.2023 |
End date |
01.03.2023 |
The income earner repays the unjust enrichment in March. In the recovery report, 0 is given as the benefit unit. The recovery report submitted by the benefit payer is shown in Table 3.
Record data | Values |
---|---|
Payment date or other reporting date |
31.03.2023 |
Report details | |
Type of action |
New report |
Income earner details | |
General income type details | |
Income type code |
(Benefit A) |
Amount |
300.00 |
Recovery |
Yes |
Benefit unit |
Day |
Number of units |
0 |
Additional repayment details | |
Repayment date |
28.03.2023 |
Withholding from the repayment |
60.00 |
Original payment period | |
Payment date |
01.03.2023 |
Start date |
01.03.2023 |
End date |
31.03.2023 |
The decision made by the benefit payer is overturned by a court and the income earner is again entitled to the benefit. As the income earner has already repaid the unjust enrichment, a replacement report is not required and the unjustly recovered part is returned to the income earner and a new report on the payment is submitted to the Incomes Register. The payer may also submit a replacement report, in which case the benefit unit data is reported in accordance with Tables 5 and 6.
The payer submits a new report on a new payment with a new payment date. Three days is given as benefit unit data because the 17 days already reported are still valid. The report on the new payment submitted by the benefit payer is shown in Table 4:
Record data | Values |
---|---|
Payment date or other reporting date |
01.04.2023 |
Report details | |
Type of action |
New report |
Income earner details | |
General income type details | |
Income type code |
(Benefit A) |
Amount |
300.00 |
Benefit unit |
Day |
Number of units |
3 |
Earnings period | |
Start date |
01.02.2023 |
End date |
28.02.2023 |
General income type details | |
Income type code |
Withholding tax (20%) |
Amount |
60.00 |
Earnings period | |
Start date |
01.04.2023 |
End date |
01.04.2023 |
Alternative reporting method: The decision made by the benefit payer is overturned by a court and the income earner is again entitled to the benefit. As the income is no longer unjust enrichment, the report already submitted must be corrected and the original benefit unit dates must be given.
The income given in the report is divided in two parts: The unjust enrichment data is left in the part that the income earner has repaid to the payer. The number of days is given in the part that is not unjust enrichment.
Record data | Values |
---|---|
Payment date or other reporting date |
01.03.2023 |
Report details | |
Type of action |
Replacement report |
Income earner details | |
General income type details | |
Income type code |
(Benefit A) |
Amount |
2200.00 |
Benefit unit |
Day |
Number of units |
20 |
Earnings period | |
Start date |
01.02.2023 |
End date |
28.02.2023 |
General income type details | |
Income type code |
(Benefit A) |
Amount |
300.00 |
Unjust enrichment |
Yes |
Benefit unit |
Day |
Number of units |
0 |
Earnings period | |
Start date |
01.02.2023 |
End date |
28.02.2023 |
General income type details | |
Income type code |
Withholding tax (20%) |
Amount |
60.00 |
Earnings period | |
Start date |
01.03.2023 |
End date |
01.03.2023 |
The payer pays the unjustly recovered EUR 300 to the income earner. The payer submits a new report on a new payment with a new payment date. Zero (0) is given as benefit unit data because the dates have been submitted on a replacement report. The report on the new benefit submitted by the benefit payer is shown in Table 6:
Record data | Values |
---|---|
Payment date or other reporting date |
01.04.2023 |
Report details | |
Type of action |
New report |
Income earner details | |
General income type details | |
Income type code |
(Benefit A) |
Amount |
300.00 |
Benefit unit |
Day |
Number of units |
0 |
Earnings period | |
Start date |
01.02.2023 |
End date |
28.02.2023 |
General income type details | |
Income type code |
Withholding tax (20%) |
Amount |
60.00 |
Earnings period | |
Start date |
01.04.2023 |
End date |
01.04.2023 |
2.5.3 The income earner has not yet returned the recovered amount
If the income earner has not returned any part of the recovered amount, the data is corrected as shown in Example 10.
Example 10: The income earner was paid a benefit of EUR 100. A report on the income is submitted to the Incomes Register. The entire benefit is later stated as an unjust enrichment, and the payer submits a replacement report for the full amount to the Incomes Register. The ‘Unjust enrichment: Yes’ data is entered on the report. The benefit unit (number of days) must be entered if a benefit for which this information is mandatory is paid.
As a result of a later decision issued at a court of law, the benefit payer’s decision is cancelled and the income earner’s right to the benefit resumes. As the income earner has not yet returned the payment, the payer submits a new replacement report and removes the ‘Unjust enrichment’ entry given on the previous replacement report.
Table 1 shows the benefit payer’s report on the original payment:
Record data | Values |
---|---|
Payment date or other reporting date |
01.03.2023 |
Report details | |
Type of action |
New report |
Payer's report reference |
007 |
Income earner details | |
General income type details | |
Income type code |
(Benefit A) |
Amount |
100.00 |
Earnings period | |
Start date |
01.02.2023 |
End date |
28.02.2023 |
General income type details | |
Income type code |
Withholding tax (20%) |
Amount |
20.00 |
Earnings period | |
Start date |
01.03.2023 |
End date |
01.03.2023 |
The income is deemed unjustified, and the payer corrects the ‘Unjust enrichment’ entry on the report:
Record data | Values |
---|---|
Payment date or other reporting date |
01.03.2023 |
Report details | |
Type of action |
Replacement report |
Payer's report reference |
007 |
Income earner details | |
General income type details | |
Income type code |
(Benefit A) |
Amount |
100.00 |
Unjust enrichment |
Yes |
Earnings period | |
Start date |
01.02.2023 |
End date |
28.02.2023 |
General income type details | |
Income type code |
Withholding tax (20%) |
Amount |
20.00 |
Earnings period | |
Start date |
01.03.2023 |
End date |
01.03.2023 |
When the conditions change, the income earner is once again entitled to the benefit. As the income earner has not yet repaid the income, the payer replaces the previously submitted replacement report by submitting another replacement report. The ‘Unjust enrichment’ entry is removed from the report.
Record data | Values |
---|---|
Payment date or other reporting date |
01.03.2023 |
Report details | |
Type of action |
Replacement report |
Payer's report reference |
007 |
Income earner details | |
General income type details | |
Income type code |
(Benefit A) |
Amount |
100.00 |
Earnings period | |
Start date |
01.02.2023 |
End date |
28.02.2023 |
General income type details | |
Income type code |
Withholding tax (20%) |
Amount |
20.00 |
Earnings period | |
Start date |
01.03.2023 |
End date |
31.03.2023 |
2.6 Modifying the recovered benefit and other changes
In some situations, an unjust enrichment can be forgiven, or the recovered amount can be modified as a result of the decision of a court or appeal board, for example. Recovery can also be waived in full. However, stating an unjust enrichment is always an independent occurrence. Reporting an unjust enrichment is not influenced by whether the benefit is cancelled for some part or whether it can ever be recovered.
Forgiving or modifying an unjust enrichment is not reported to the Incomes Register. This can only be seen in the Incomes Register indirectly when a recovery report is not submitted or the recovered amounts cover only part of the unjust enrichment. The same reporting instructions apply, even if the recovered amount was modified or the collection was ended.
Information about an unjust enrichment is left in reports on individual payment transactions submitted to the Incomes Register, regardless of whether the income earner has already returned part of the modified amount. The payer does not need to correct the data in the Incomes Register if the income earner has not returned any part of the payment to the payer or the income earner has returned no more than the part that remains payable after the modification decision.
Instead, the payer must correct reports if the income earner has already returned a larger part than what remains payable after the modification decision. In that case, reporting instructions depend on whether the income earner’s repayment and the refund of the incorrectly recovered amount to the income earner take place during the same tax year or only after the end of the current tax year.
- If the income earner has only returned part of the modified payment and if the repayment and the refund of the recovered amount to the income earner take place during the same tax year, the payer will submit a replacement report for the recovery report to the Incomes Register with actual data adjusted after the modification decision. In such a situation, the payer refunds the unnecessarily recovered (modified) share to the income earner and submits a replacement report with correct information to the Incomes Register. This amount paid again to the income earner is not reported to the Incomes Register.
- If the income earner has returned the modified payment in full and the repayment and the refund of the recovered amount take place during the same tax year, the payer will cancel the recovery report it has submitted. The amount paid again to the income earner is not reported to the Incomes Register.
- If the payer only refunds the recovered payment to the income earner after the end of the tax year, the recovery report must be left unchanged and a new report must be submitted for the new payment, also including the ‘Payment reallocation: Yes’ data. If, in conjunction with such a correction, the payer pays such a payment to the income earner that was originally taxable, tax must be withheld from the new payment. On this payment report, the payment is reported under the original income type, and 0 is entered as the benefit unit.
The modification has no impact on reporting the Benefit unit data or the correction of this data. In the case of a benefit, in conjunction of which information about the benefit unit has been given, the number of days entered in conjunction with the original payment transaction remains in force as the Benefit unit data on reports submitted to the Incomes Register (which has later been changed to 0 when reporting the unjust enrichment data).
2.7 The payer recovers a payment due to misuse
A benefit may also have to be recovered because the income earner has provided the benefit provider with incorrect information, not disclosed the information required or, for example, not reported changes in their situation. Recovery may take place on the basis a recovery decision made by the benefit payer or a decision issued by a court of law.
Recovery in the event of misuse is reported to the Incomes Register in the same way as any other recovery. Reporting depends on when the payment is repaid and whether it is repaid by the income earner or whether it is offset from a later benefit.
If income is an unjust enrichment for the income earner, the income must always be reported to the Incomes Register as an unjust enrichment, even if it was not recovered. If the income is not recovered, and the income earner is demanded to pay damages to the benefit provider, the payment is not reported to the Incomes Register. Damages or penalties are not included in the income types reported to the Incomes Register, and a payment recovered the income earner by way of a judgment is not income repaid by the income earner; instead, it is income received by the payer.
2.8 Unjust enrichment paid to a substitute recipient
A substitute recipient refers to the payment recipient in a situation where the benefit is paid to some other party than the income earner themselves. The substitute recipient's details are reported in recourse situations, for example, or when the income earner’s income is paid fully or partially to another party. On a benefits payment report, the substitute recipient can be, for example, the employer or, in some cases, the payer personally.
The substitute recipient’s share deducted from the income earner’s income is reported using the ‘Deductions’ data group, which may include several data items for each income type. If a benefit originally paid to a substitute recipient or part thereof later changes into an unjust enrichment, this share or its recovery will not be reported to the Incomes Register. In such a situation, the payer issues a replacement report. On the report, the payer corrects the benefit amount to the amount to which the earner is entitled and corrects the amount of deduction to the amount that should be left to the substitute recipient. Only the excess amount paid to the income earner and any refund thereof shall be reported as an unjust enrichment and its potential recovery. The overpayment returned by the substitute recipient is not reported to the Incomes Register. Read more about situations in which an overpaid benefit to a substitute recipient changes into an unjust enrichment, either in full or in part, in chapter 5.4.5. Too much benefit has been paid to a substitute recipient of the guideline Benefits: Reporting data to the Incomes Register.
Example 11: The income earner has received a benefit retroactively for the period 1 February – 30 April 2023 (EUR 1,000 per month). The benefit for three months was paid as a lump sum on 5 May 2023. Of the amount of EUR 3,000, the employer received EUR 2,400 (EUR 800 per month). Since the deduction type is ‘Other deduction from taxable income’, the income earner received EUR 600 as taxable income.
It is later found that the share of the benefit for April paid retroactively on 5 May (EUR 1,000) was an unjust enrichment, and the payer submits a report on the unjust enrichment. The share paid to the income earner (EUR 200) is reported as an unjust enrichment. The share of the unjust enrichment paid to the substitute recipient (EUR 800) is not reported to the Incomes Register. The payer reports the recovery data to the Incomes Register when the income earner has returned the overpayment to the payer. The returned amount paid by the substitute recipient is not reported to the Incomes Register.
The example (Table 1) presents the report submitted for May, indicating the payment of EUR 2,400 to the substitute recipient. According to the tax card, 20% tax has been withheld from the income earner. The actual income type paid (benefit B) is used as the income type of the deduction, because the income type (wages) paid by the substitute recipient to the income earner is not available on a benefits payment report.
Record data | Values |
---|---|
Payment date or other reporting date |
05.05.2023 |
Report details | |
Service data | |
Type of action |
New report |
Income earner details | |
General income type details | |
Income type code |
(Benefit B) |
Amount |
3000.00 |
Earnings period | |
Start date |
01.02.2023 |
End date |
30.04.2023 |
Deductions | |
Deduction income type code |
(Benefit B) |
Type of deduction |
Other deduction from taxable income |
Amount of deduction |
2400.00 |
Earnings period of original benefit | |
Start date |
01.02.2023 |
End date |
30.04.2023 |
Substitute recipient details | |
Type of identifier |
Business ID |
Identifier |
1234123-4 |
Type of substitute recipient |
Employer |
Period of calculation | |
Start date |
01.02.2023 |
End date |
30.04.2023 |
General income type details | |
Income type code |
Withholding tax |
Amount (20% of EUR 600) |
120.00 |
The example (Table 2) presents a replacement report in which the income earner’s share of the overpayment is reported as an unjust enrichment. The amount of the benefit shall be corrected to EUR 2,000, and the amount reported as deduction is the amount that should be left to the substitute recipient.
Record data | Values |
---|---|
Payment date or other reporting date |
05.05.2023 |
Report details | |
Service data | |
Type of action |
Replacement report |
Report version number |
n |
Income earner details | |
General income type details | |
Income type code |
(Benefit B) |
Amount |
2000.00 |
Earnings period | |
Start date |
01.02.2023 |
End date |
31.03.2023 |
Deductions | |
Deduction income type code |
(Benefit B) |
Type of deduction |
Other deduction from taxable income |
Amount of deduction |
1600.00 |
Earnings period of original benefit | |
Start date |
01.02.2023 |
End date |
31.03.2023 |
Substitute recipient details | |
Type of identifier |
Business ID |
Identifier |
1234123-4 |
Type of substitute recipient |
Employer |
Period of calculation | |
Start date |
01.02.2023 |
End date |
31.03.2023 |
General income type details | |
Income type code |
(Benefit B) |
Amount |
200.00 |
Unjust enrichment |
Yes |
Earnings period | |
Start date |
01.04.2023 |
End date |
30.04.2023 |
General income type details | |
Income type code |
Withholding tax |
Amount (20% of EUR 600) |
120.00 |
When the income earner returns an unjust enrichment, the benefit payer must report recovery data to the Incomes Register (Table 3).
Record data | Values |
---|---|
Payment date or other reporting date |
25.06.2023 |
Report details | |
Service data | |
Type of action |
New report |
Income earner details | |
General income type details | |
Income type code |
(Benefit B) |
Amount |
200.00 |
Recovery |
Yes |
Additional repayment details | |
Repayment date |
23.06.2023 |
Withholding from the repayment |
40.00 |
Original payment period | |
Start date |
01.05.2023 |
End date |
31.05.2023 |
2.9 Recovery of non-statutory benefits
The recovery of non-statutory benefits is reported to the Incomes Register in the same way as the recovery of any other benefits. Section 112 a of the act on income tax is not applied to the recovery of non-statutory benefits. If such a benefit is recovered during the original payment year or during the next year before the deadline confirmed in the payer's deadline decision, the recovery can be carried out and reported as net recovery, as instructed in Section 2.2. The Finnish Tax Administration will take the recovered amount into account in the income earner's taxation in the original payment year.
The recovery deduction defined in section 112 a of the act on income tax will not be applied to the recovery of non-statutory benefits. If a payment is recovered after the original payment year, and after the deadline confirmed in the Finnish Tax Administration's decision, the payment must be recovered as a gross amount. Based on the recovery report submitted to the Incomes Register, the Finnish Tax Administration will adjust the taxation for the original payment year within the adjustment periods. The income earner themselves can also submit a claim for adjustment.
The recovery data is submitted as instructed in Section 2.3.
3 Offsetting
Offsetting refers to a situation where a single benefit payer recovers a benefit that they previously paid groundlessly from a benefit they have paid later. The payment being offset and subject to offsetting can be the same or different benefits. For example, a pension can be offset from a pension or another payment, such as a sickness allowance. In other words, a benefit paid later for the same period is not paid instead of an earlier benefit.
Section 112 a, subsection 2 of the act on income tax lays down provisions on a situation where offsetting concerns a payment made in an earlier year. In this case, the procedure defined in subsection 1 applies. However, subsection 2 does not define any situation where recovery concerns a payment paid during the same year. However, the preparatory work for the act on income tax (HE 57/2004) states that in a situation where the benefit payer is recovering a benefit from the same or another benefit in the same year in which it has also paid another benefit, the recovery can be carried out in the same way as in section 112 a, subsection 1 of the act on income tax.
Internal recourse refers to a situation where the same benefit payer recovers a previously paid benefit from a benefit paid later. The difference between internal recourse and offsetting is that, in internal recourse, a benefit paid later for the same period is paid in place of an earlier benefit. The above-mentioned preparatory work for the act on income tax makes it possible that in a situation where the same benefit payer pays another benefit to the income earner for the same period as the benefit paid first, the benefit payer can use the procedure laid down in section 112 a, subsection 3 of the act on income tax. Internal recourse may take place in the same year or in any later year. Internal recourse is reported in the same way as recourse between different payers, see Section 4. Recourse situations are always reported using the ‘Deductions’ data group.
Only the recovery of a taxable benefit is taken into consideration in taxation. If the income earner is paid a tax-exempt benefit (such as a housing allowance), its recovery will not affect taxation, because the original payment was also not taxed. This also applies to a situation where the original tax-exempt benefit is recovered by offsetting it from a later taxable benefit. In this case, the later benefit is completely taxable. In these situations, reporting does not, however, differ from the reporting of the offsetting of a taxable benefit.
3.1 Offsetting and the original payment in the same year
If the offsetting is carried out during the year in which the earlier payment was made, the benefit payer can deduct the gross amount of the payment (the amount from which withholding has not been deducted) from the gross amount of the payment paid later to the income earner. The benefit payer does not need to adjust the amount of the earlier withholding; it is sufficient that the benefit payer calculates the withholding from the gross amount of the benefit paid (amount of the benefit after the offsetting).
An exception to this is a situation in which the earlier payment was taxable and the excess amount paid is offset from the tax-exempt benefit paid later. In this case, the benefit payer is recommended to use the net recovery method.
3.1.1 An earlier payment and later payment are both taxable
If the payment made previously and the payment made later are both taxable, the report is submitted in accordance with Example 12.
Example 12: The income earner was paid national pension amounting to EUR 220 per month for the period 1 January–31 May 2023 (totalling EUR 1,100). However, only a pension of EUR 200 per month should have been paid (totalling EUR 1,000). A total of EUR 100 has been paid in excess pension over a period of 5 months. The income earner's withholding percentage is 5. The error is corrected in the August pension payment.
The example of a report (Table 1) features the report submitted to the Incomes Register in January, and corresponding reports are submitted for February–May:
Record data | Values |
---|---|
Payment date or other reporting date |
05.01.2023 |
Report details | |
Service data | |
Type of action |
New report |
Payer's report reference |
20YY00020120 |
Income earner details | |
General income type details | |
Income type code |
National pension |
Amount |
220.00 |
Earnings period | |
Start date |
01.01.2023 |
End date |
31.01.2023 |
General income type details | |
Income type code |
Withholding tax |
Amount |
11.00 |
When the benefit payer notices an error or a decision has been made regarding an unjust enrichment, the benefit payer submits the replacement reports for January–May. The example of a report (Table 2) features the replacement report for the January report, indicating the unjust enrichment:
Record data | Values |
---|---|
Payment date or other reporting date |
05.01.2023 |
Report details | |
Service data | |
Type of action |
Replacement report |
Incomes Register or payer's report reference |
99db0fb06b974ebea8d66ae02c3fe675 / 20YY00020120 |
Report version number |
n |
Income earner details | |
General income type details | |
Income type code |
National pension |
Amount |
200.00 |
Earnings period | |
Start date |
01.01.2023 |
End date |
31.01.2023 |
General income type details | |
Income type code |
National pension |
Amount |
20.00 |
Unjust enrichment |
Yes |
Earnings period | |
Start date |
01.01.2023 |
End date |
31.01.2023 |
General income type details | |
Income type code |
Withholding tax |
Amount |
11.00 |
Recovery is carried out in connection with the August payment of the national pension by offsetting the overpayment, i.e. EUR 100, from the EUR 200 pension paid. Tax is withheld from the gross amount paid, EUR 100 (200 – 100).
The example of a report (Table 3) features the report submitted in August, indicating the offsetting of the income:
Record data | Values |
---|---|
Payment date or other reporting date |
05.08.2023 |
Report details | |
Service data | |
Type of action |
New report |
Payer's report reference |
20YY0009050820 |
Income earner details | |
General income type details | |
Income type code |
National pension |
Amount |
200.00 |
Earnings period | |
Start date |
01.08.2023 |
End date |
31.08.2023 |
General income type details | |
Income type code |
National pension |
Amount |
100.00 |
Recovery |
Yes |
Additional repayment details | |
Repayment date |
05.08.2023 |
Original payment period | |
Start date |
01.01.2023 |
End date |
31.05.2023 |
General income type details | |
Income type code |
Withholding tax |
Amount |
5.00 |
3.1.2 An earlier payment is tax-exempt and a later payment is taxable
If the previous payment is tax-exempt and the later payment taxable, the withholding is calculated from the full amount of the taxable payment. The payer submits a report according to Example 13.
Example 13: The income earner has been paid EUR 310 of housing allowance in January. In March, it is found out that no housing allowance should have been paid at all. An agreement has been made with the income earner of the housing allowance being offset in four instalments from the parental allowance of EUR 400 per month paid in the same year (withholding rate 25%). The housing allowance is tax-exempt and the parental allowance is taxable. The payer carries out the first offset in April.
The example of a report (Table 1) features the report submitted in January:
Record data | Values |
---|---|
Payment date or other reporting date |
02.01.2023 |
Report details | |
Service data | |
Type of action |
New report |
Payer's report reference |
20YY00020120 |
Income earner details | |
General income type details | |
Income type code |
Housing allowance |
Amount |
310.00 |
Earnings period | |
Start date |
01.01.2023 |
End date |
31.01.2023 |
Once the error has been detected or a decision on unjust enrichment has been made, the benefits payer submits a replacement report for January. The example of a report (Table 2) features the replacement report indicating the unjust enrichment:
Record data | Values |
---|---|
Payment date or other reporting date |
02.01.2023 |
Report details | |
Service data | |
Type of action |
Replacement report |
Incomes Register or payer's report reference |
99db0fb06b974ebea8d66ae02c3fe675 / 20YY00020120 |
Report version number |
n |
Income earner details | |
General income type details | |
Income type code |
Housing allowance |
Amount |
310.00 |
Unjust enrichment |
Yes |
Earnings period | |
Start date |
01.01.2023 |
End date |
31.01.2023 |
The first recovery is carried out in April by offsetting EUR 77.50 (310 ÷ 4) of the housing allowance from the parental allowance. Because the parental allowance is taxable and the housing allowance is tax-exempt, withholding is calculated from the entire parental allowance amount. As a result, withholding is EUR 100 (400 × 0.25). For family leave income types, the Benefit unit data is mandatory regarding benefits paid after 1 January 2023, which means that the number of days must be reported to the Incomes Register.
The example (Table 3) presents a report submitted in April for offsetting tax-exempt income from taxable income:
Record data | Values |
---|---|
Payment date or other reporting date |
05.04.2023 |
Report details | |
Service data | |
Type of action |
New report |
Payer's report reference |
20YY0009050420 |
Income earner details | |
General income type details | |
Income type code |
Parental allowance |
Amount |
400.00 |
Earnings period | |
Start date |
01.04.2023 |
End date |
30.04.2023 |
Benefit unit |
Day |
Number of units |
25 |
General income type details | |
Income type code |
Housing allowance |
Amount |
77.50 |
Recovery |
Yes |
Additional repayment details | |
Repayment date |
05.04.2023 |
Original payment period | |
Payment date or other reporting date |
02.01.2023 |
Start date |
01.01.2023 |
End date |
31.01.2023 |
General income type details | |
Income type code |
Withholding tax |
Amount (25 % of EUR 400) |
100.00 |
3.1.3 An earlier payment is taxable and a later payment is tax-exempt
If the previous payment is taxable but the later payment is tax-exempt, the payer offsets the net amount from the payment made later. If the recovery had been made from the gross amount, too much tax would have been withheld from the income earner's income. The payer submits a report according to Example 14.
Example 14: On 4 March 2023, the income earner was paid a labour market subsidy for February. A total of EUR 648 of subsidy was paid for 20 days. 20% tax has been withheld from the labour market subsidy. In May, it is found out that the labour market subsidy should have been paid for only 15 days in February (EUR 486). The gross amount to be recovered is thus EUR 162. In June, the income earner is paid EUR 480 of housing allowance, and it has been agreed that the overpayment is offset from the housing allowance. The labour market subsidy is taxable and the housing allowance is tax-exempt.
The example of a report (Table 1) features the report submitted in March:
Record data | Values |
---|---|
Payment date or other reporting date |
04.03.2023 |
Report details | |
Service data | |
Type of action |
New report |
Payer's report reference |
20YY000040220 |
Income earner details | |
General income type details | |
Income type code |
Labour market subsidy |
Amount |
648.00 |
Earnings period | |
Start date |
01.02.2023 |
End date |
28.02.2023 |
Benefit unit | |
Unit |
Day |
Number of units |
20 |
General income type details | |
Income type code |
Withholding tax |
Amount |
129.60 |
The example of a report (Table 2) features the replacement report indicating the unjust enrichment. Because this is unjust enrichment, zero (0) is reported as the number of benefit units:
Record data | Values |
---|---|
Payment date or other reporting date |
04.03.2023 |
Report details | |
Service data | |
Type of action |
Replacement report |
Incomes Register or payer's report reference |
99db0fb06b974ebea8d66ae02c3fe675 / 20YY000040220 |
Report version number |
n |
Income earner details | |
General income type details | |
Income type code |
Labour market subsidy |
Amount |
486.00 |
Earnings period | |
Start date |
01.02.2023 |
End date |
28.02.2023 |
Benefit unit | |
Unit |
Day |
Number of units |
15 |
General income type details | |
Income type code |
Labour market subsidy |
Amount |
162.00 |
Unjust enrichment |
Yes |
Earnings period | |
Start date |
01.02.2023 |
End date |
28.02.2023 |
Benefit unit | |
Unit |
Day |
Number of units |
0 |
General income type details | |
Income type code |
Withholding tax |
Amount |
129.60 |
Because the later payment is tax-exempt, only the net amount paid is offset from the income earner, or EUR 129.60 (withholding EUR 32.40).
The example of a report (Table 3) features the report submitted in June, in which taxable income is offset from tax-exempt income:
Record data | Values |
---|---|
Payment date or other reporting date |
02.06.2023 |
Report details | |
Service data | |
Type of action |
New report |
Payer's report reference |
20YY0009050820 |
Income earner details | |
General income type details | |
Income type code |
Housing allowance |
Amount |
480.00 |
Earnings period | |
Start date |
01.06.2023 |
End date |
30.06.2023 |
General income type details | |
Income type code |
Labour market subsidy |
Amount |
162.00 |
Recovery |
Yes |
Additional repayment details | |
Repayment date |
02.06.2023 |
Withholding from the repayment |
32.40 |
Original payment period | |
Payment date or other reporting date |
04.03.2023 |
Start date |
01.03.2023 |
End date |
31.03.2023 |
Benefit unit | |
Unit |
Day |
Number of units |
0 |
3.1.4 The payment made previously and the payment made later are both tax-exempt
If the previous and later payment are both tax-exempt, the report is submitted according to Example 15.
Example 15: After the death of her spouse, the income earner has been paid EUR 450 per month in State artist pension as a survivors' pension. The artist pension was granted to the spouse prior to 1 January 1984, so the pension has been tax-exempt for its recipient. The income earner herself has retired, and the pension amounts have been revised. On 5 April 2023, the benefit payer has made a decision according to which only EUR 420 per month of survivors' pension should have been paid from January 2023 onwards. The recovery is carried out so that the benefit payer offsets EUR 30 in pension overpayment each month from the pensions it pays in May-August.
The example (Table 1) presents a report submitted to the Incomes Register in January, and corresponding reports have been submitted for February and March. When reporting the income type, it is mandatory to report the taxability of the benefit.
Record data | Values |
---|---|
Payment date or other reporting date |
04.01.2023 |
Report details | |
Service data | |
Type of action |
New report |
Payer's report reference |
33ZZxxYY00 |
Income earner details | |
General income type details | |
Income type code |
Survivors' pension (State artist pension) |
Amount |
450.00 |
Taxability of benefit |
Tax-exempt |
Earnings period | |
Start date |
01.01.2023 |
End date |
31.01.2023 |
The example of a report (Table 2) features the replacement report submitted for January, in which the unjust enrichment is indicated. Corresponding reports have been submitted for February–April.
Record data | Values |
---|---|
Payment date or other reporting date |
04.01.2023 |
Report details | |
Service data | |
Type of action |
Replacement report |
Incomes Register or payer's report reference |
33ZZxxYY00 |
Report version number |
n |
Income earner details | |
General income type details | |
Income type code |
Survivors' pension (State artist pension) |
Amount |
420.00 |
Taxability of benefit |
Tax-exempt |
Earnings period | |
Start date |
01.01.2023 |
End date |
31.01.2023 |
General income type details | |
Income type code |
Survivors' pension (State artist pension) |
Amount |
30.00 |
Taxability of benefit |
Tax-exempt |
Unjust enrichment |
Yes |
Earnings period | |
Start date |
01.01.2023 |
End date |
31.01.2023 |
The example of a report (Table 3) features the report submitted in May, in which the offsetting of the income is indicated. Corresponding reports have been submitted for June–August.
Record data | Values |
---|---|
Payment date or other reporting date |
02.05.2023 |
Report details | |
Service data | |
Type of action |
New report |
Payer's report reference |
33ZZxxYY01 |
Income earner details | |
General income type details | |
Income type code |
Survivors' pension (State artist pension) |
Amount |
420.00 |
Taxability of benefit |
Tax-exempt |
Earnings period | |
Start date |
01.05.2023 |
End date |
31.05.2023 |
General income type details | |
Income type code |
Survivors' pension (State artist pension) |
Amount |
30.00 |
Taxability of benefit |
Tax-exempt |
Recovery |
Yes |
Additional repayment details | |
Repayment date |
02.05.2023 |
Original payment period | |
Payment date or other reporting date |
04.01.2023 |
Start date |
01.01.2023 |
End date |
31.01.2023 |
3.2 Offsetting at the beginning of the year following the payment year by the due date confirmed by the Finnish Tax Administration
If the recovery is carried out by offsetting, the taxation takes place in the same way as when the income earner pays back the payment (section 112 a, subsection 2 of the act on income tax). The decisive factor with regard to reporting and taxation is when the offset is made.
The recovery is allocated to the original payment year if the offsetting takes place no later than on the deadline date confirmed in the Finnish Tax Administration's decision. The benefit payer may then recover the overpayment as a net amount (the amount from which withholding has been deducted). The share of withholding is taken into account in the payer's withholding obligations.
When the offset is made in the beginning of the year following the original benefit payment year and before the deadline confirmed in the Finnish Tax Administration's decision, the recovered amount must be included in the amount from which tax is withheld when calculating the withholding for the new benefit. The benefit payer deducts the recovered amount from the amount paid to the income earner.
Reporting the original payment date is not mandatory. However, in some cases it is needed so that the Tax Administration can correctly allocate the income earner’s taxation. The payment date is necessary when, for example, recovered withholding needs to be allocated to the tax year during which it was withheld from a payment.
Example 16: On 3 February 2023, the benefit payer has paid the income earner EUR 1,100 in pension for February (withholding rate 22%, i.e. EUR 242). In December 2023, it is noticed that EUR 100 was overpaid in February. The benefit payer submitted a replacement report to the Incomes Register in December, reporting EUR 1,000 as the amount of pension paid in February and EUR 100 as an unjust enrichment (EUR 1,100 in total).
In January 2024, the income earner receives a pension of EUR 1,000, from which EUR 200 are withheld in taxes (20%). The benefit payer and income earner have agreed that the benefit payer offsets the overpaid 2023 pension of EUR 100, from which EUR 22 were withheld in taxes.
The benefit payer withholds EUR 200 (20%) from the entire EUR 1,000, because the entire amount was taxable income in the repayment year. The payer deducts the net overpayment of EUR 78 (gross EUR 100, withholding EUR 22) from the remaining EUR 800, and pays EUR 722 to the income earner.
The example presents a report submitted in January:
Record data | Values |
---|---|
Payment date or other reporting date |
03.01.2024 |
Report details | |
Service data | |
Type of action |
New report |
Payer's report reference |
15XX1223333456 |
Income earner details | |
General income type details | |
Income type code |
Survivors' pension |
Amount |
1000.00 |
Earnings period | |
Start date |
01.01.2024 |
End date |
31.01.2024 |
General income type details | |
Income type code |
Survivors' pension |
Amount |
100.00 |
Recovery |
Yes |
Additional repayment details | |
Repayment date |
03.01.2024 |
Withholding from the repayment |
22.00 |
Original payment period | |
Payment date or other reporting date |
03.02.2023 |
Start date |
01.02.2023 |
End date |
28.02.2023 |
General income type details | |
Income type code |
Withholding tax |
Amount |
200.00 |
The previous example 16 can also be applied in situations, where there is no benefit left to pay to the income earner after the payer's offset.
3.3 Offsetting after the original payment year
When a payment is recovered in the year following the payment year after the deadline confirmed in the benefit recipient's deadline decision, or in some later year, the recovery can no longer be taken into account in the taxation for the original payment year. The recovered amount is then deducted in the taxation for the recovery year as a recovery deduction.
The benefit payer should not take into account the recovered amount when withholding tax from the payment from which the previous payment is offset. The offset is made as a gross amount.
Example 17: The benefit payer has paid the income earner an earnings-related allowance and a child increase to it (EUR 5.23 per day) during the period 1 March 2023–31 May 2024. In June 2024, it is discovered that there have been no grounds for payment of the child increase. The benefit payer has submitted reports on the payments to the Incomes Register. In June 2024, the benefit payer submits replacement reports in which the payer reports the child increases paid as unjust enrichment. An agreement is made with the income earner that the child increase is recovered in three instalments. The overpayment of child increase is recovered from the earnings-related allowances paid from July 2024 onwards.
The benefit payer has paid the child increase as follows:
- Year 2023: 1 March–15 December 2023 the benefit was paid for 211 days, totalling EUR 1,103.53
- Year 2024: 16 December 2023–31 May 2024 the benefit was paid for 116 days, totalling EUR 606.68.
The amount to be recovered totals EUR 1,710.21, and it is recovered as follows:
- 1st instalment: EUR 570.07 is offset from the earnings-related allowance paid on 11 July 2024 (109 days, earnings period 1 March–31 July 2023). The earlier payments were made during the period 31 March–31 July 2023.
- 2nd instalment: EUR 570.07 is offset from the earnings-related allowance paid on 12 August 2024:
- EUR 533.46 (102 days, earnings period 1 August–15 December 2023). The earlier payments were made during the period 31 August–21 December 2023.
- EUR 36.61 (7 days, earnings period 16 December–31 December 2023). The earlier payment was made on 15 January 2024.
- 3rd instalment: EUR 570.07 is offset from the earnings-related allowance paid on 11 September 2024 (109 days, earnings period 1 January–31 May 2024). The earlier payments were made during the period 14 February–5 June 2024.
Tax of 20% was withheld from the income earner’s income between 1 March2023 and 31 January 2024. Since the beginning of February 2024, the withholding rate has been 24%.
Because the recovery is only carried out from July 2024 onwards, the recovery can no longer be taken into consideration in the income earner’s 2023 taxation. The payments paid in 2023 are recovered as gross amounts. Instead, the payments paid in 2024 can be recovered as net amounts (see Section 2.2.1 for net recovery and Section 2.2.2 for gross recovery).
The example (Table 1) presents a report on the offsetting of income submitted in July:
Record data | Values |
---|---|
Payment date or other reporting date |
11.07.2024 |
Report details | |
Service data | |
Type of action |
New report |
Payer's report reference |
22ZZZZ22222333 |
Income earner details | |
General income type details | |
Income type code |
Basic component of the earnings-related allowance |
Amount |
2363.76 |
Earnings period | |
Start date |
08.06.2024 |
End date |
05.07.2024 |
Benefit unit | |
Unit |
Day |
Number of units |
21 |
General income type details | |
Income type code |
Child increase to earnings-related allowance |
Amount |
570.07 |
Recovery |
Yes |
Additional repayment details | |
Repayment date |
11.07.2024 |
Original payment period | |
Start date |
31.03.2023 |
End date |
31.07.2023 |
General income type details | |
Income type code |
Withholding tax |
Amount |
567.30 |
The benefit payer withholds 24% tax from the full amount of earnings-related allowance (2,363.76 × 0.24). EUR 570.07 of child increase is recovered from the amount remaining after the withholding, i.e. EUR 1,796.46. The income earner is paid EUR 1,226.39. The Finnish Tax Administration takes the recovered amount into account in 2024 as a recovery deduction.
Child increases paid in both 2023 and 2024 are offset from the earnings-related allowance for August. For the taxation to be correct, the recovery data must be submitted separately for each year. The 2023 child increase for the period 1 August–15 December 2023 (102 days, EUR 533.46) was paid in 2023, so it is recovered as a gross amount. This recovered payment is taken into account in the taxation for the payment year as a recovery deduction. The child increase for the period 16 December–31 December 2023 (7 days, EUR 36.61) was paid in 2024, so it is taken into account in the taxation by deducting the share from the amount of child increase for 2024.
The example of a report (Table 2) features the report of the offset submitted in August:
Record data | Values |
---|---|
Payment date or other reporting date |
12.08.2024 |
Report details | |
Service data | |
Type of action |
New report |
Payer's report reference |
22ZZZZ22233334 |
Income earner details | |
General income type details | |
Income type code |
Basic component of the earnings-related allowance |
Amount |
2476.32 |
Earnings period | |
Start date |
08.07.2024 |
End date |
06.08.2024 |
Benefit unit | |
Unit |
Day |
Number of units |
22 |
General income type details | |
Income type code |
Child increase to earnings-related allowance |
Amount |
533.46 |
Recovery |
Yes |
Additional repayment details | |
Repayment date |
12.08.2024 |
Original payment period | |
Start date |
31.08.2023 |
End date |
21.12.2023 |
General income type details | |
Income type code |
Child increase to earnings-related allowance |
Amount |
36.61 |
Recovery |
Yes |
Additional repayment details | |
Repayment date |
12.08.2024 |
Original payment period | |
Payment date or other reporting date |
15.01.2024 |
Start date |
01.01.2024 |
End date |
31.01.2024 |
General income type details | |
Income type code |
Withholding tax |
Amount ((2,476.32 – 36.61) × 0,24) |
585.53 |
The benefit payer withholds tax from EUR 2,439.71 (the overpayment EUR 36.61 paid in 2024 is deducted from the EUR 2,476.32), because this amount is taxable income for the repayment year. The benefit payer deducts the offset amount, EUR 570.07 (gross EUR 533.46 + 36.61), from the remaining EUR 1,890.79 and pays EUR 1,320.72 to the income earner. The Finnish Tax Administration takes EUR 533.46 into account as a recovery deduction and deducts EUR 36.61 from the income earner's taxable income for 2024.
The example of a report (Table 3) features the report of the offset submitted in September 2024:
Record data | Values |
---|---|
Payment date or other reporting date |
11.09.2024 |
Report details | |
Service data | |
Type of action |
New report |
Payer's report reference |
22ZZZZ23333444 |
Income earner details | |
General income type details | |
Income type code |
Basic component of the earnings-related allowance |
Amount |
2701.44 |
Earnings period | |
Start date |
07.08.2024 |
End date |
09.09.2024 |
Benefit unit | |
Unit |
Day |
Number of units |
24 |
General income type details | |
Income type code |
Child increase to earnings-related allowance |
Amount |
570.07 |
Recovery |
Yes |
Additional repayment details | |
Repayment date |
11.09.2024 |
Original payment period | |
Start date |
14.02.2024 |
End date |
05.06.2024 |
General income type details | |
Income type code |
Withholding tax |
Amount ((2,701.44 – 570.07) × 0.24) |
511.53 |
The recovery is carried out by offsetting the overpayment of EUR 570.07 from the earnings-related allowance, i.e. EUR 2,701.44. Withholding (24%) is done from the gross amount to be paid, i.e. EUR 2,131.37.
In 2021 or later, the benefit payer can offset income paid before the year 2021. In such a case, the income paid earlier has not been reported to the Incomes Register. Although the earlier payment has not been reported to the Incomes Register, the payer must submit a recovery report.
Example 18: On 5 July 2023, the benefit payer pays the income earner EUR 540 of labour market subsidy for the period 1 June –30 June 2023 (withholding 20%). The payer recovers EUR 25 of taxable study grant and EUR 30 of tax-exempt housing allowance paid in 2018 from the labour market subsidy.
The housing allowance and the study grant have not been reported to the Incomes Register, as they are income for the year 2018.
The example of a report features the report of the offset submitted in July:
Record data | Values |
---|---|
Payment date or other reporting date |
05.07.2023 |
Report details | |
Service data | |
Type of action |
New report |
Payer's report reference |
11WW12345678 |
Income earner details | |
General income type details | |
Income type code |
Labour market subsidy |
Amount |
540.00 |
Earnings period | |
Start date |
01.06.2023 |
End date |
30.06.2023 |
Benefit unit | |
Unit |
Day |
Number of units |
21 |
General income type details | |
Income type code |
Study grant |
Amount |
25.00 |
Recovery |
Yes |
Additional repayment details | |
Repayment date |
05.07.2023 |
Original payment period | |
Start date |
01.03.2018 |
End date |
31.03.2018 |
General income type details | |
Income type code |
Housing allowance |
Amount |
30.00 |
Recovery |
Yes |
Additional repayment details | |
Repayment date |
05.07.2023 |
Original payment period | |
Start date |
01.03.2018 |
End date |
31.03.2018 |
General income type details | |
Income type code |
Withholding tax |
Amount (20% of EUR 540) |
108.00 |
The entire amount of the labour market subsidy, or EUR 540, is taxed as income for the year 2023. The income earner gains a recovery deduction for the year 2023 from the recovered study grant. Because the housing allowance is tax-exempt income, its recovery has no effect on taxation.
3.4 Recovery of a non-statutory benefit by offsetting
The recovery deduction in section 112 a of the act on income tax is not applied to the recovery of non-statutory benefits. If a non-statutory benefit is recovered by offsetting it from a benefit paid later by the same benefits payer, the recovery data is reported in the same way as for other benefits. The benefit can be offset from the same or another benefit paid later.
If the benefit is recovered by offsetting from another benefit in the original payment year or in the beginning of the following year by the deadline confirmed in the payer's deadline decision, the recovery can be carried out and reported to the Incomes Register as instructed in Sections 3.1. and 3.2.
If the recovery is carried out after the original payment year and after the deadline confirmed in the Finnish Tax Administration's decision, the Finnish Tax Administration will adjust the income earner's taxation for the original payment year based on the Incomes Register reports submitted by the payer within the adjustment periods. The income earner can also submit a claim for adjustment. The recovery data is reported as instructed in Section 3.3.
4 Recourse situations
As a rule, the recovery of a benefit is allocated to the income earner. A recourse situation established on the basis of the right of recourse differs from other recovery situations in that the recovery is not allocated to the income earner. In recourse situations, the benefit payer may recover a groundlessly paid benefit as a recourse from another social security institution, in which case the payer does not need to recover the groundlessly paid benefit from the income earner. The right of recourse is regulated, for example, by the provision on the order of payment of substitute recipients laid down in section 123 of the Employees Pensions Act (395/2006). In recourse situations, the benefit can be offset or recovered without the consent of the income earner.
In recourse situations, different benefits are paid simultaneously, and the payer of the first (earlier) benefit is recovering a benefit that has been detected to have been secondary to the second (later) benefit. Instead of the income earner, the recovered amount is paid directly to the payer of the secondary benefit.
Recourse typically has to do with the distribution of liability between two instances paying benefits. However, the same procedure is also applied in internal recourse, or a situation in which the same benefit payer pays both the earlier and later benefits, and the later benefit is paid instead of the earlier benefit.
According the legislation on benefits, the payer of the secondary benefit must provide the provider of the primary benefit with an advance notification so that it can recover their overpayment from the payer of the primary benefit. As a rule, this advance notification initiates the recourse process. On the basis of the advance notification, the payer of the primary benefit withholds the benefit retroactively and notifies the sender of the advance notification of the matter and waits for the actual recourse claim, i.e. recovery notification. With the recourse claim, the payer of the secondary benefit indicates the amount of its overpayment.
So that all data users obtain the information required about recourse situations, the recourse must be reported to the Incomes Register using the ‘Deductions’ data group. The payer of the first benefit must submit a replacement report to the Incomes Register, on which it must enter ‘Recourse – Yes’ in addition to previously reported information. This indicates that the previously paid income has been received as a recourse from another payer on the basis of a recourse claim.
Section 112 a, subsection 3 of the act on income tax states: “If the payer of a pension, study grant or other statutory benefit makes a payment to the payer of an earlier pension or taxable benefit from a pension or other payment, which it has previously paid to a taxpayer over the same period, the payment will not be regarded as taxable income in the year during which it is paid to the payer of the earlier benefit. The earlier payment is taxable income in the year during which it was received.” The act on income tax thus decrees that a payment which the payer of a later benefit pays for the same period directly to the payer of an earlier taxable benefit is tax-exempt. Whether the recourse is allocated to the earlier payment in the payment year or in later years does not affect whether a payment is exempt from tax. Because the payment recovered as a recourse is not taxable income for the income earner, no taxes will be withheld from it.
To ensure that the Tax Administration obtains the information it needs from the Incomes Register, the payer of the later benefit must indicate ‘Recourse on taxable income’ or ‘Recourse on tax-exempt income’ as the type of deduction, depending on whether the previous payment was taxable or tax-exempt.
The procedure laid down in section 112 a, subsection 3 of the act on income tax is not applicable to non-statutory benefits, which means that the recourse procedure cannot apply to them.
Data about recourses regarding which the data users laid down in section 13 of the act on income tax have the right to obtain information is submitted to the Incomes Register. The data is only submitted insofar as the data user requires it for the purposes referred to in the Reporting obligation for benefits payment data section in the ‘Benefits: Reporting data to the Incomes Register’ instructions.
Recourse situations are presented below.
4.1 An earlier payment and later payment are both taxable
If, in a recourse situation, both the earlier (secondary) and the later (primary) payment are taxable, the latter payment is tax-exempt under the act on income tax. However, only the part of the payment that the payer of the later benefit pays directly to the payer of the earlier benefit for the same period is tax-exempt. This prevents double taxation of the same income, as the income earner has not received the later payment.
Example 19: The income earner has received an unemployment allowance of EUR 1,500 for the period 2 March – 1 April 2023. The payment date is 06/04/2023. A retroactive disability pension starting from 01/03/2023 is granted to the income earner on 05/07/2023. The amount of the disability pension is EUR 800 per month, and it is paid as a lump sum for the period 1 March – 31 July 2023 (totalling EUR 9,000). The unemployment allowance is recovered so that the payer of the disability pension pays an unemployment allowance of EUR 1,500 from the retroactive pension of EUR 1,800 for March and April to the payer, in which case the income earner receives a total of EUR 7,500 (gross) for the entire period.
The example (Table 1) presents the unemployment allowance payer’s report for April:
Record data | Values |
---|---|
Payment date or other reporting date |
06.04.2023 |
Report details | |
Service data | |
Type of action |
New report |
Payer's report reference |
EE12D5678901 |
Income earner details | |
General income type details | |
Income type code |
Basic component of the earnings-related allowance |
Amount |
1500.00 |
Earnings period | |
Start date |
02.03.2023 |
End date |
01.04.2023 |
Benefit unit | |
Unit |
Day |
Number of units |
22 |
General income type details | |
Income type code |
Withholding tax |
Amount |
420.00 |
The example (Table 2) presents the report submitted by the payer of the later benefit, i.e. the disability pension, in July:
Record data | Values |
---|---|
Payment date or other reporting date |
05.07.2023 |
Report details | |
Service data | |
Type of action |
New report |
Payer's report reference |
00XYZ33333333 |
Income earner details | |
General income type details | |
Income type code |
Disability pension |
Amount |
1800.00 |
Earnings period | |
Start date |
01.07.2023 |
End date |
31.07.2023 |
General income type details | |
Income type code |
Disability pension |
Amount |
7200.00 |
Earnings period | |
Start date |
01.03.2023 |
End date |
30.06.2023 |
Deductions | |
Deduction income type code |
Basic component of the earnings-related allowance |
Type of deduction |
Recourse on taxable income |
Amount of deduction |
1500.00 |
Earnings period of original benefit | |
Start date |
02.03.2023 |
End date |
01.04.2023 |
Substitute recipient details | |
Period of calculation | |
Start date |
02.03.2023 |
End date |
01.04.2023 |
General income type details | |
Income type code |
Withholding tax |
Amount (26% of EUR 7,500) |
1950.00 |
When the payer of the unemployment benefit has received the recourse payment, the payer submits a replacement report to the Incomes Register. The payer enters the information "Recourse – Yes” on the replacement report. When paying the basic component of the earnings-related allowance, the benefit unit must be specified. This data is also mandatory on the replacement report (Table 3):
Record data | Values |
---|---|
Payment date or other reporting date |
06.04.2023 |
Report details | |
Service data | |
Type of action |
Replacement report |
Incomes Register or payer's report reference |
12ab0fb06b004yyy789tyyr564433 / EE12D5678901 |
Report version number |
n |
Income earner details | |
General income type details | |
Income type code |
Basic component of the earnings-related allowance |
Amount |
1500.00 |
Recourse |
Yes |
Earnings period | |
Start date |
02.03.2023 |
End date |
01.04.2023 |
Benefit unit | |
Unit |
Day |
Number of units |
22 |
General income type details | |
Income type code |
Withholding tax |
Amount |
420.00 |
If the payment made earlier was larger than the payment made later for the same period, the difference creates an overpayment to the income earner for the period the benefits are paid simultaneously. The payer can recover the overpayment or abandon the recovery. Abandonments of recovery are not shown in the Incomes Register. However, overpayments and unjust enrichment must always be reported to the Incomes Register.
Example 20: The income earner has received a labour market subsidy of EUR 500.01 (gross) per month for the period 1 April 2023–1 March 2024. On 4 April 2024, the income earner is granted a retroactive disability pension of EUR 450 per month (gross) for the same period. The benefits are paid simultaneously to the income earner, so the earlier paid labour market subsidy creates an overpayment of EUR 50.01. However, this overpayment is not recovered from the income earner.
The example of a report (Table 1) features the May report submitted by the payer of the labour market subsidy. The payer submits a similar report for each month, specifying the labour market subsidy paid.
Record data | Values |
---|---|
Payment date or other reporting date |
05.05.2023 |
Report details | |
Service data | |
Type of action |
New report |
Payer's report reference |
11GG23457899 |
Income earner details | |
General income type details | |
Income type code |
Labour market subsidy |
Amount |
500.01 |
Earnings period | |
Start date |
01.04.2023 |
End date |
28.04.2023 |
Benefit unit | |
Unit |
Day |
Number of units |
19 |
General income type details | |
Income type code |
Withholding tax |
Amount |
100.00 |
The payer of the disability pension submits a report to the Incomes Register of the retroactive disability pension paid on 4 April 2024 for the period 1 April 2023–31 March 2024 (Table 2). The payer also reports the disability pension for April 2024 it paid on the same day. The amounts paid as recourse are shown in the Deductions data group. Although the disability pension is paid as a continuous income, "One-off remuneration – Yes" must be specified, as income is paid retroactively for a period of more than three months before the beginning of the tax year.
Record data | Values |
---|---|
Payment date or other reporting date |
04.04.2024 |
Report details | |
Service data | |
Type of action |
New report |
Payer's report reference |
FFTG2223334445 |
Income earner details | |
General income type details | |
Income type code |
Disability pension |
Amount |
4050.00 |
One-off remuneration |
Yes |
Earnings period | |
Start date |
01.04.2023 |
End date |
31.12.2023 |
Deductions | |
Deduction income type code |
Labour market subsidy |
Type of deduction |
Recourse on taxable income |
Amount of deduction |
4050.00 |
Earnings period of original benefit | |
Start date |
01.04.2023 |
End date |
31.12.2023 |
Substitute recipient details | |
Period of calculation | |
Start date |
01.04.2023 |
End date |
31.12.2023 |
General income type details | |
Income type code |
Disability pension |
Amount |
1350.00 |
One-off remuneration |
Yes |
Earnings period | |
Start date |
01.01.2024 |
End date |
31.03.2024 |
Deductions | |
Deduction income type code |
Labour market subsidy |
Type of deduction |
Recourse on taxable income |
Amount of deduction |
900.00 |
Earnings period of original benefit | |
Start date |
01.01.2024 |
End date |
01.03.2024 |
Substitute recipient details | |
Period of calculation | |
Start date |
01.01.2024 |
End date |
01.03.2024 |
General income type details | |
Income type code |
Disability pension |
Amount |
450.00 |
Earnings period | |
Start date |
01.04.2024 |
End date |
30.04.2024 |
General income type details | |
Income type code |
Withholding tax |
Amount (25% of EUR 900) |
225.00 |
When the payer of the labour market subsidy receives a recourse payment from the payer of the disability pension, the payer of the labour market subsidy submits a replacement report for May 2023 to the Incomes Register (Table 3). The recourse payment of EUR 450 received and the overpayment of EUR 50.01 that has changed into unjust enrichment are reported on the replacement report. The payer also submits a corresponding replacement report for the other months. Because unjust enrichment is in question, zero (0) is reported as the benefit unit. The data must not be removed from the replacement report, as it is required by the data users.
Record data | Values |
---|---|
Payment date or other reporting date |
05.05.2023 |
Report details | |
Service data | |
Type of action |
Replacement report |
Incomes Register or payer's report reference |
12ab0fb06b004yyy789tyyr564433 / 11GG23457899 |
Report version number |
n |
Income earner details | |
General income type details | |
Income type code |
Labour market subsidy |
Amount |
450.00 |
Recourse |
Yes |
Earnings period | |
Start date |
01.04.2023 |
End date |
28.04.2023 |
Benefit unit | |
Unit |
Day |
Number of units |
19 |
General income type details | |
Income type code |
Labour market subsidy |
Amount |
50.01 |
Unjust enrichment |
Yes |
Earnings period | |
Start date |
01.04.2023 |
End date |
28.04.2023 |
Benefit unit | |
Unit |
Day |
Number of units |
0 |
General income type details | |
Income type code |
Withholding tax |
Amount |
100.00 |
If the benefit paid earlier was smaller than the benefit paid later, the benefit payer pays the difference to the income earner.
Example 21: The income earner was paid EUR 1,500 of sickness daily allowance for the period 1 April–30 April 2023. In August 2023, the same benefit payer grants the income earner a retroactive disability pension of EUR 1,800 per month from 1 April 2023 onwards. The disability pension is paid instead of the sickness allowance. The benefit payer collects the sickness allowance it previously paid for the same period from the disability pension (internal recourse).
Because the earlier payment and the later payment are both taxable, section 112 a, subsection 3 of the act on income tax is applied. The payment made later (the disability pension) is therefore not taxable income to the extent it is paid to the payer of the earlier benefit (sickness allowance). The earlier payment remains taxable income.
The benefit payer deducts the gross amount of the earlier payment (amount from which tax has not been withheld) from the gross amount of the payment made to the income earner later. EUR 1,500 of sickness allowance recourse is thus deducted from the retroactive EUR 1,800 pension. In August, the benefit payer also pays the disability pension for April-August.
The example of a report (Table 1) features the benefit payer's May report of the sickness allowance:
Record data | Values |
---|---|
Payment date or other reporting date |
10.05.2023 |
Report details | |
Service data | |
Type of action |
New report |
Payer's report reference |
XX12134RR7890 |
Income earner details | |
General income type details | |
Income type code |
Sickness allowance |
Amount |
1500.00 |
Earnings period | |
Start date |
01.04.2023 |
End date |
30.04.2023 |
Benefit unit | |
Unit |
Day |
Number of units |
26 |
General income type details | |
Income type code |
Withholding tax |
Amount |
480.00 |
The benefit payer pays the disability pension retroactively for the period 1 April–31 August 2023. A new report must be submitted to the Incomes Register for this payment (Table 2). The recourse deductions are reported in the Deductions data group.
Record data | Values |
---|---|
Payment date or other reporting date |
28.08.2023 |
Report details | |
Service data | |
Type of action |
New report |
Payer's report reference |
KKK111123456 |
Income earner details | |
General income type details | |
Income type code |
Disability pension |
Amount |
9000.00 |
Earnings period | |
Start date |
01.04.2023 |
End date |
31.08.2023 |
Deductions | |
Deduction income type code |
Sickness allowance |
Type of deduction |
Recourse on taxable income |
Amount of deduction |
1500.00 |
Earnings period of original benefit | |
Start date |
01.04.2023 |
End date |
30.04.2023 |
Substitute recipient details | |
Period of calculation | |
Start date |
01.04.2023 |
End date |
30.04.2023 |
General income type details | |
Income type code |
Withholding tax |
Amount (30 % of EUR 7,500) |
2250.00 |
When the benefit payer receives the recourse payment, the payer submits a replacement report and specifies "Recourse – Yes" (Table 3).
Record data | Values |
---|---|
Payment date or other reporting date |
10.05.2023 |
Report details | |
Service data | |
Type of action |
Replacement report |
Incomes Register or payer's report reference |
12ab0fb06b004yyy789tyyr564433 / XX12134RR7890 |
Report version number |
n |
Income earner details | |
General income type details | |
Income type code |
Sickness allowance |
Amount |
1500.00 |
Recourse |
Yes |
Earnings period | |
Start date |
01.04.2023 |
End date |
30.04.2023 |
Benefit unit | |
Unit |
Day |
Number of units |
26 |
General income type details | |
Income type code |
Withholding tax |
Amount |
480.00 |
Example 22: A pension provider has granted an income earner a rehabilitation allowance for the duration of the income earner’s unpaid work try-out period from 1 September 2023 to 30 September 2023. The rehabilitation allowance was paid directly to the income earner. The payment of the rehabilitation allowance is based on the income earner’s work try-out. The pension provider has taken out accident insurance for the duration of the work try-out period. The income earner is an accident during the work try-out period on 25 September 2023.
A company paying compensation for traffic accidents and other accidents grants the income earner a benefit based on the accident. The company does not pay the benefit directly to the income earner; instead, it pays it to the earnings-related pension provider based on the insurance policy the pension provider has. The share of the rehabilitation allowance is paid to the pension provider.
The pension provider submitted a new report on the rehabilitation allowance before the accident.
In the example (Table 1), a report was submitted in September on the rehabilitation allowance paid directly to the income earner:
Record data | Values |
---|---|
Date of payment or other reporting date |
02.09.2023 |
Report details | |
Type of action |
New report |
Payer’s report reference |
11111 |
Income earner details | |
General income type details | |
Income type code |
Rehabilitation allowance |
Amount |
3000.00 |
Earnings period | |
Start date |
01.09.2023 |
End date |
30.09.2023 |
General income type details | |
Income type code |
Withholding tax |
Amount (20 % from EUR 3,000) |
600.00 |
Earnings period | |
Start date |
02.09.2023 |
End date |
02.09.2023 |
After the accident, the traffic accident and accident compensation company pays the granted benefit to the pension provider.
As an exception, the deduction type is reported as ‘Other deduction from taxable income’. Usually, the deduction type ‘Other deduction from taxable income’ is only used for payments made to employers or bankruptcy estates. The situation in this example forms an exception.
Table 2 shows the report issued by the traffic accident and accident compensation company on the benefit it granted:
Record data | Values |
---|---|
Date of payment or other reporting date |
05.10.2023 |
Record data | |
Type of action |
New report |
Payer’s report reference |
22222 |
Income earner details | |
General income type details | |
Income type code |
Benefit X |
Amount |
400.00 |
Deductions | |
Deduction income type code |
Rehabilitation allowance |
Type of deduction |
Other deduction from taxable income |
Amount of deduction |
400.00 |
Original payment period | |
Start date |
25.09.2023 |
End date |
30.09.2023 |
4.2 An earlier payment is tax-exempt and a later payment is taxable
If the earlier payment has been tax-exempt, and the benefit paid for the same period later is taxable, section 112 a, subsection 3 of the act on income tax cannot be applied. The income paid later is the income earner's taxable income from which tax must be withheld despite the payment being made to the payer of the first benefit.
Example 23: The income earner became unemployed on 1 December 2022. The benefit payer has paid EUR 2,228 of social assistance to the income earner during the period 1 January 2023–15 March 2023 against the upcoming earnings-related allowance. On 23 March 2023, the unemployment fund pays the income earner a total of EUR 4,800 of earnings-related allowances for the period 5 December 2022–15 March 2023, of which amount it pays EUR 2,228 to the earlier benefit payer.
The social assistance is not reported to the Incomes Register.
In March 2023, the unemployment fund submits a report to the Incomes Register:
Record data | Values |
---|---|
Payment date or other reporting date |
23.03.2023 |
Report details | |
Service data | |
Type of action |
New report |
Payer's report reference |
012222666TH |
Income earner details | |
General income type details | |
Income type code |
Basic component of the earnings-related allowance |
Amount |
1014.00 |
Earnings period | |
Start date |
05.12.2022 |
End date |
31.12.2022 |
Benefit unit | |
Unit |
Day |
Number of units |
15 |
General income type details | |
Income type code |
Basic component of the earnings-related allowance |
Amount |
3786.00 |
Earnings period | |
Start date |
01.01.2023 |
End date |
15.03.2023 |
Benefit unit | |
Unit |
Day |
Number of units |
56 |
Deductions | |
Deduction income type code |
Other benefit |
Type of deduction |
Recourse on tax-exempt income |
Amount of deduction |
2228.00 |
Earnings period of original benefit | |
Start date |
01.01.2023 |
End date |
15.03.2023 |
Substitute recipient details | |
Period of calculation | |
Start date |
01.01.2023 |
End date |
15.03.2023 |
General income type details | |
Income type code |
Withholding tax |
Amount (22% of EUR 4,800) |
1056.00 |
The unemployment fund must submit the data to the Incomes Register and also submit an annual information return to the Tax Administration regarding unemployment benefit days in 2022.
4.3 An earlier payment is taxable and a later payment is tax-exempt
Section 112 a, subsection 3 of the act on income tax only applies to situations in which the recovery is carried out as a recourse from a taxable benefit. In such a case, only the part exceeding the recourse is taxed of the payment made later, and the payment made earlier (recovered as a recourse) remains taxable income for the payment year.
The Finnish Tax Administration does not receive information on tax-exempt payments from the Incomes Register. The "Recourse on taxable income" entry is deduction data related to the income type. The Finnish Tax Administration will thus not receive information from the Incomes Register on a recovery carried out as a recourse if the payment made later is tax-exempt and the payment made earlier is taxable.
The benefit payer of the first payment (secondary payment) specifies the ‘Recourse – Yes’ data in the Incomes Register after receiving the recourse payment. On the basis of this data, the Tax Administration cannot deduct whether the recourse has already been taken into consideration as a deduction from the later payment (primary payment). This is why the payer of the secondary payment must submit a report on the recovery of the tax-exempt part of the payment which the payer has recovered as a recourse.
Example 24: In July 2023, the income earner is paid a tax-exempt benefit retroactively for the period 1 April – 30 April 2023. A taxable benefit has been paid earlier for the same period. The payer of the taxable benefit has made a recourse claim of EUR 200. The amount of the tax-exempt benefit paid is EUR 600. Of this amount, EUR 200 are paid to the payer of the earlier benefit as a recourse and EUR 400 are paid to the income earner. The example (Table 1) presents the payer’s report on the tax-exempt benefit, taking the recourse claim into consideration:
Record data | Values |
---|---|
Payment date or other reporting date |
01.07.2023 |
Report details | |
Service data | |
Type of action |
New report |
Payer's report reference |
qqWWEE12345 |
Income earner details | |
General income type details | |
Income type code |
(Tax-exempt benefit) |
Amount |
600.00 |
Earnings period | |
Start date |
01.04.2023 |
End date |
30.04.2023 |
Deductions | |
Deduction income type code |
(Taxable benefit) |
Type of deduction |
Recourse on taxable income |
Amount of deduction |
200.00 |
Earnings period of original benefit | |
Start date |
01.04.2023 |
End date |
12.04.2023 |
Substitute recipient details | |
Period of calculation | |
Start date |
01.04.2023 |
End date |
12.04.2023 |
In order for the Finnish Tax Administration to receive information on the taxable benefit having been recovered as a recourse on the tax-exempt income, the payer of the taxable benefit must include the "Recourse from tax-exempt income, payment date" entry in addition to the "Recourse – Yes" entry. Based on this data, the income earner is correctly taxed, and only the part of the taxable benefit that was not recovered as a recourse on tax-exempt income becomes taxable income.
The "Recourse from tax-exempt income, payment date" entry does not have to be reported on the replacement report if the recipient of the recourse payment has not received the information in question from the payer of the recourse payment. Information not available to the report submitter cannot be reported to the Incomes Register.
The example of a report (Table 2) features the replacement report submitted by the payer of the earlier benefit after the payer has received the recourse payment. The recourse payment was made to the payer of the earlier benefit on 1 July 2023. The payment shows on the recipient's account on 3 July 2023 and is allocated in the recipient's system on 5 July 2023:
Record data | Values |
---|---|
Payment date or other reporting date |
30.04.2023 |
Report details | |
Service data | |
Type of action |
Replacement report |
Incomes Register or payer's report reference |
EE12D5678901 |
Report version number |
n |
Income earner details | |
General income type details | |
Income type code |
(Taxable benefit) |
Amount |
200.00 |
Recourse |
Yes |
Additional recourse details | |
Recourse from tax-exempt income, payment date |
05.07.2023 |
Earnings period | |
Start date |
01.04.2023 |
End date |
12.04.2023 |
General income type details | |
Income type code |
Withholding tax |
Amount |
50.00 |
In certain recourse situations, a later benefit may be partly taxable and partly tax-exempt. Section 112 a, subsection 3 of the act on income tax only applies to recourse on a taxable benefit. So that the Tax Administration obtains information about a taxable income being recovered from tax-exempt income as a recourse, the payer of the earlier payment must itemise the recourse payments it has received.
Example 25: On 10 April 2023, the income earner has been paid EUR 1,200 of taxable benefit for the period 2 March–1 April 2023. EUR 300 has been withheld from the benefit. Later, a taxable pension of EUR 500 and a related tax-exempt supplement of EUR 30 are granted for the same period. The payer of the taxable benefit paid earlier has made a recourse claim of EUR 530.
The example of a report (Table 1) features the report submitted by the payer of the benefit paid later:
Record data | Values |
---|---|
Payment date or other reporting date |
05.07.2023 |
Report details | |
Service data | |
Type of action |
New report |
Payer's report reference |
KKK111123456 |
Income earner details | |
General income type details | |
Income type code |
(Taxable pension) |
Amount |
500.00 |
Earnings period | |
Start date |
01.03.2023 |
End date |
31.03.2023 |
Deductions | |
Deduction income type code |
(Taxable benefit) |
Type of deduction |
Recourse on taxable income |
Amount of deduction |
500.00 |
Earnings period of original benefit | |
Start date |
02.03.2023 |
End date |
01.04.2023 |
Substitute recipient details | |
Period of calculation | |
Start date |
02.03.2023 |
End date |
01.04.2023 |
General income type details | |
Income type code |
(Tax-exempt increase in taxable pension) |
Amount |
30.00 |
Earnings period | |
Start date |
01.03.2023 |
End date |
31.03.2023 |
Deductions | |
Deduction income type code |
(Taxable benefit) |
Type of deduction |
Recourse on taxable income |
Amount of deduction |
30.00 |
Earnings period of original benefit | |
Start date |
02.03.2023 |
End date |
01.04.2023 |
Substitute recipient details | |
Period of calculation | |
Start date |
02.03.2023 |
End date |
01.04.2023 |
The payer of the benefit paid earlier submits a replacement report, in which the payer includes the "Recourse – Yes" entry. Additionally, the payer reports the "Recourse – Yes" entry for the payment received from the tax-exempt income as well as the "Recourse from tax-exempt income, payment date" entry. Because the benefit payer has received recourse payments for both taxable and tax-exempt income, the recourse payments must be itemised as follows (Table 2):
Record data | Values |
---|---|
Payment date or other reporting date |
10.04.2023 |
Report details | |
Service data | |
Type of action |
Replacement report |
Incomes Register or payer's report reference |
EE12D5678901 |
Report version number |
n |
Income earner details | |
General income type details | |
Income type code |
(Taxable benefit) |
Amount |
500.00 |
Recourse |
Yes |
Earnings period | |
Start date |
02.03.2023 |
End date |
01.04.2023 |
General income type details | |
Income type code |
(Taxable benefit) |
Amount |
30.00 |
Recourse |
Yes |
Additional recourse details | |
Recourse from tax-exempt income, payment date |
12.07.2023 |
Earnings period | |
Start date |
02.03.2023 |
End date |
01.04.2023 |
General income type details | |
Income type code |
(Taxable benefit) |
Amount |
670.00 |
Earnings period | |
Start date |
02.03.2023 |
End date |
01.04.2023 |
General income type details | |
Income type code |
Withholding tax |
Amount |
300.00 |
4.4 Right of recourse situations excluded from reporting to the Incomes Register
Right of recourse situations are not reported to the Incomes Register if no decision is made for the income earner, i.e. the income earner is not a party in the decision (section 6 of the act on the incomes information system (Laki tulotietojärjestelmästä 53/2018)). According to legislation, data on recourse payments between insurance companies to which the income earner is not a party is not reported to the Incomes Register. Such payments between insurance institutions are, for example, recourse payments paid
- between accident and occupational disease insurers and motor insurers
- between pension providers and parties liable to pay damages when compensation is paid under the rail transport liability act (Raideliikennevastuulaki 113/1999) or the patient insurance act (Potilasvakuutuslaki 948/2019).
Being a party means that a decision is issued to the income earner for the full benefit and it is paid in full or in part to some other benefit payer. This is a case of recourse and is reported to the Incomes Register. If no decision is made for the income earner, and the payment is paid partially or in full to another benefit payer, the income earner is not a party, and this may be a right of recourse situation. In this case, the payment is not reported to the Incomes Register. If an additional payment is made to the income earner based on a separate decision, the additional payment must be reported to the Incomes Register as paid.
Example 26: Vehicles A and B collide. The driver of vehicle A is injured. The liability is divided equally between the vehicle insurance companies (A and B).
The insurance company for vehicle A grants and pays full compensation for personal injury to the driver of vehicle A.
As the liability is divided equally, the insurance company (A) obtains half of the compensation it paid from vehicle B’s insurance company (B) by way of recourse. Such recourse transactions between companies, where the income earner is not a party in the decision, are not reported to the Incomes Register.
Only the reports of insurance company (A) on the compensation paid are shown in the Incomes Register.
Example 27: A traffic accident takes place on the way to work. A cyclist on their way to work is hit by a car and is injured. The injury is compensated based on statutory accident insurance.
The accident insurance company makes the payments and reports them to the Incomes Register before the motor insurance company has made a decision on compensation for the income earner. The motor insurance company compensates the injured person for the difference between benefits pursuant to the motor liability insurance act (Liikennevakuutuslaki 460/2016) and the Employment Accidents Insurance Act. The accident insurance company obtains the compensation paid from the motor insurance company by way of recourse. The motor insurance company’s recourse payment to the accident insurance company does not affect the amount or nature of the benefit paid to the income earner in any way.
When the motor insurance company grants the compensation for the difference and makes a decision on it for the income earner, the recourse payments will not be shown in the Incomes Register. The Incomes Register includes payments reported by the accident insurance company regarding the full benefit and the payments paid by the motor insurance company from the difference. Instead, the Incomes Register does not include the payments paid by the motor insurance company to the accident insurance company based on right of recourse procedure, because the income earner is not a party to them.
For the income earner, the income consists of the accident insurance compensation and the motor insurance compensation.
4.5 Overlapping recourse claims
One benefit may be subject to several recourse claims by different parties. The recipient of claims must follow the statutory order of precedence and, for example, the enforcement authority’s injunction when it defines the parts of the benefit to be paid to different substitute recipients. In this situation, the ‘Deductions’ data group is repeated several times under the income type which itemises the payment of the later primary benefit.
Example 28: A person stopped working on 1 September 2023 due to an illness and started to receive a sickness allowance from benefit payer A from this date onwards. The payment of the sickness allowance ended on 31 December 2023. The person becomes unemployed and starts to receive an unemployment allowance from benefit payer B from 1 January 2024 onwards. In addition, the person received social assistance from benefit payer A due to a difficult financial situation (section 23 of the Act on Social Assistance) between 1 September 2023 and 15 February 2024.
A retroactive disability pension starting from 1 September 2023 is granted to the person on 19 February 2024. However, the pension is subject to recourse claims from benefit payer A (sickness allowance and social assistance) and benefit payer B (unemployment allowance). Due to the recourse claims, benefit payer C does not pay the pension retroactively and starts paying a recurring pension from 1 March 2024 onwards. Benefit payer C submits a new benefits payment report on this recurring payment to the Incomes Register for the payment date of 1 March 2024.
Benefit payer C pays the retroactive pension later on 8 March 2024 following the recourse claims of benefit payers A and B.
The amount of the person’s disability pension is EUR 1,000 per month (excluding the index increase). Therefore, the amount of the retroactive pension between 1 September 2023 and 28 February 2024 is EUR 6,000. As the person has not provided a valid tax card for the retroactive period, benefit payer C withholds 50% from the taxable part of the benefit.
Benefit payer C takes the following recourse data into consideration:
Pension payment between 1 and 30 September 2023
- The total pension income is EUR 1,000.
- Benefit payer A claims a total sickness allowance of EUR 900 between 1 and 30 September 2023.
- The part exceeding the sickness allowance claim of EUR 100 can be paid as compensation for the social assistance paid by benefit payer A for the same period (1–30 September 2023). After withholding, a total of EUR 50 is paid in compensation for the social assistance.
Pension payment between 1 and 31 October 2023
- The total pension income is EUR 1,000.
- Benefit payer A claims a total sickness allowance of EUR 900 between 1 and 31 October 2023.
- The part exceeding the sickness allowance claim of EUR 100 can be paid as compensation for the social assistance paid by benefit payer A for the same period (1–31 October 2023). After withholding, a total of EUR 50 is paid in compensation for the social assistance.
Pension payment between 1 and 30 November 2023
- The total pension income is EUR 1,000.
- Benefit payer A claims a total sickness allowance of EUR 900 between 1 and 30 November 2023.
- The part exceeding the sickness allowance claim of EUR 100 can be paid as compensation for the social assistance paid by benefit payer A for the same period (1–30 November 2023). After withholding, a total of EUR 50 is paid in compensation for the social assistance.
Pension payment between 1 and 31 December 2023
- The total pension income is EUR 1,000.
- Benefit payer A claims a total sickness allowance of EUR 900 between 1 and 31 December 2023.
- The part exceeding the sickness allowance claim of EUR 100 can be paid as compensation for the social assistance paid by benefit payer A for the same period (1–31 December 2023). After withholding, a total of EUR 50 is paid in compensation for the social assistance.
Pension payment between 1 and 31 January 2024
- The total pension income is EUR 1,000.
- Benefit payer B claims a total unemployment allowance of EUR 800 between 1–31 January 2024.
- The part exceeding the unemployment allowance claim of EUR 200 can be paid as compensation for the social assistance paid by benefit payer A for the same period (1–31 January 2024). After withholding, a total of EUR 100 is paid in compensation for the social assistance.
Pension payment between 1 and 28 February 2024
- The total pension income is EUR 1,000.
- Benefit payer B claims a total unemployment allowance of EUR 800 between 1–28 February 2024.
- The part exceeding the unemployment allowance claim of EUR 200 can be paid as compensation for the social assistance paid by benefit payer A for the same period (1–15 February 2024). After withholding, a total of EUR 100 is paid in compensation for the social assistance.
Benefit payer C submits the following report on its retroactive payment (Table 1):
Record data | Values |
---|---|
Date of payment or other report date |
08.03.2024 |
Report data | |
Income earner details | |
General income type details | |
Income type code |
Disability pension |
Amount |
4000.00 |
One-off remuneration |
Yes |
Earnings period | |
Start date |
01.09.2023 |
End date |
31.12.2023 |
Deductions | |
Deduction income type code |
Sickness allowance |
Deduction type |
Recourse on taxable income |
Amount of deduction |
3600.00 |
Earnings period of original benefit | |
Start date |
01.09.2023 |
End date |
31.12.2023 |
Substitute recipient’s details | |
Type of identifier |
Business ID |
Identifier |
1234567-8 |
Company name |
Benefit payer A |
Period of calculation | |
Start date |
01.09.2023 |
End date |
31.12.2023 |
Deductions | |
Deduction income type code |
Other benefit |
Deduction type |
Recourse from tax-exempt income |
Amount of deduction |
200.00 |
Earnings period of original benefit | |
Start date |
01.09.2023 |
End date |
31.12.2023 |
Substitute recipient’s details | |
Type of identifier |
Business ID |
Identifier |
1234567-8 |
Company name |
Benefit payer A |
Period of calculation | |
Start date |
01.09.2023 |
End date |
31.12.2023 |
General income type details | |
Income type code |
Disability pension |
Amount |
2000.00 |
One-off remuneration |
Yes |
Earnings period | |
Start date |
01.01.2024 |
End date |
28.02.2024 |
Deductions | |
Deduction income type code |
Earnings-related allowance |
Deduction type |
Recourse on taxable income |
Amount of deduction |
1600.00 |
Earnings period of original benefit | |
Start date |
01.01.2024 |
End date |
28.02.2024 |
Substitute recipient’s details | |
Type of identifier |
Business ID |
Identifier |
1234567-9 |
Company name |
Benefit payer B |
Period of calculation | |
Start date |
01.01.2024 |
End date |
28.02.2024 |
Deductions | |
Deduction income type code |
Other benefit |
Deduction type |
Recourse from tax-exempt income |
Amount of deduction |
200.00 |
Earnings period of original benefit | |
Start date |
01.01.2024 |
End date |
15.02.2024 |
Substitute recipient’s details | |
Type of identifier |
Business ID |
Identifier |
1234567-8 |
Company name |
Benefit payer A |
Period of calculation | |
Start date |
01.01.2024 |
End date |
15.02.2024 |
General income type details | |
Income type code |
Withholding tax |
Amount (800 x 50 %) |
400.00 |
Earnings period | |
Start date |
08.03.2024 |
End date |
08.03.2024 |
No part of benefit payer C’s payment remains payable to the income earner. After the recourses on the taxable sickness allowance and earnings-related allowance, the income earner’s taxable income is EUR 800, half of which have been withheld in taxes and half of which have been recovered as an overpaid social assistance.
If an amount payable in the income earner’s account remains after the instalments paid to substitute recipients and taxes, it is not indicated on the benefits payment report. Data users must calculate the part of the benefits payable to the income earner and the taxable amount using the Incomes Register data available to them.
Recourse payment recipients (as in Example 21) must submit replacement reports on their benefits reported to the Incomes Register, for which a payment is received from the payer of the primary benefit. All data on the earlier report, including the benefit unit and withholding, will remain unchanged. Only ‘Recourse – Yes’ will be added to general income type details as new data.
Example 28: (continued) B’s replacement report for February (Table 2):
Record data | Values |
---|---|
Date of payment or other report date |
01.03.2024 |
Report data | |
Type of action |
Replacement report |
Payer's report reference |
01032023AA2 |
Income earner details | |
General income type details | |
Income type code |
Earnings-related allowance |
Amount |
800.00 |
Recourse |
Yes |
Earnings period | |
Start date |
01.02.2024 |
End date |
28.02.2024 |
Benefit unit | |
Unit |
Day |
Number of units |
20 |
General income type details | |
Income type code |
Withholding tax |
Amount |
160.00 |
Earnings period | |
Start date |
01.03.2024 |
End date |
01.03.2024 |
4.6 Successive recourse claims
A single income earner may have overlapping benefits during a single period, while they are indicated in different periods. Successive recourse may overlap with other recourses, even if they take place at different times. However, the income earner is only entitled to a single benefit at any one time. The party receiving a recourse payment based on their recourse claim must always specify the ‘Recourse – Yes’ data to concern the payments it receives from another party based on their recourse claims. The later benefit payer must always submit the data using the ‘Deductions’ data group so that data users can use deduction data and take account of the recourse payment’s amount.
Example 29: Benefit payer A has granted benefit A of EUR 100 to the income earner between 1 and 31 March 2023. The benefit is available to the income earner on 10 March 2023, and it is reported to the Incomes Register. Benefit payer B later grants benefit B of EUR 100 to the same income earner for the same earnings period, and it is paid on 1 June 2023. In reality, no payment is made in the income earner’s account in June, because the full payment is paid to benefit payer A based on their recourse claim. Time passes and benefit payer C grants benefit C of EUR 100 to the same income earner for the same earnings period, and it is paid on 1 February 2024. In this case, no payment is made in the income earner’s account, because the full payment is paid to benefit payer B based on their recourse claim.
Benefit payer A’s report (Table 1):
Record data | Values |
---|---|
Date of payment or other report date |
10.03.2023 |
Report data | |
Type of action |
New report |
Payer's report reference |
A’s report A01 |
Income earner details | |
General income type details | |
Income type code |
(Benefit A) |
Amount |
100.00 |
Earnings period | |
Start date |
01.03.2023 |
End date |
31.03.2023 |
Benefit payer B’s report including the recourse deductions (Table 2) and benefit payer A’s replacement report on the received recourse payment (Table 3):
Record data | Values |
---|---|
Date of payment or other report date |
01.06.2023 |
Report data | |
Type of action |
New report |
Payer's report reference |
B's report B01 |
Income earner details | |
General income type details | |
Income type code |
(Benefit B) |
Amount |
100.00 |
Earnings period | |
Start date |
01.03.2023 |
End date |
31.03.2023 |
Deductions | |
Deduction income type code |
(Benefit A) |
Deduction type |
Recourse on taxable income |
Amount of deduction |
100.00 |
Earnings period of original benefit | |
Start date |
01.03.2023 |
End date |
31.03.2023 |
Substitute recipient’s details | |
Period of calculation | |
Start date |
01.03.2023 |
End date |
31.03.2023 |
Record data | Values |
---|---|
Date of payment or other report date |
10.03.2023 |
Report data | |
Type of action |
Replacement report |
Payer's report reference |
A’s report A01 |
Income earner details | |
General income type details | |
Income type code |
(Benefit A) |
Amount |
100.00 |
Recourse |
Yes |
Earnings period | |
Start date |
01.03.2023 |
End date |
31.03.2023 |
Benefit payer C’s report including the recourse deductions (Table 4) and benefit payer B’s replacement report on the received recourse payment (Table 5):
Record data | Values |
---|---|
Date of payment or other report date |
01.02.2024 |
Report data | |
Type of action |
New report |
Payer's report reference |
C's report C01 |
Income earner details | |
General income type details | |
Income type code |
(Benefit C) |
Amount |
100.00 |
Earnings period | |
Start date |
01.03.2023 |
End date |
31.03.2023 |
Deductions | |
Deduction income type code |
(Benefit B) |
Deduction type |
Recourse on taxable income |
Amount of deduction |
100.00 |
Earnings period of original benefit | |
Start date |
01.03.2023 |
End date |
31.03.2023 |
Substitute recipient’s details | |
Period of calculation | |
Start date |
01.03.2023 |
End date |
31.03.2023 |
Record data | Values |
---|---|
Date of payment or other report date |
01.06.2023 |
Report data | |
Type of action |
Replacement report |
Payer's report reference |
B's report B01 |
Income earner details | |
General income type details | |
Income type code |
(Benefit B) |
Amount |
100.00 |
Recourse |
Yes |
Earnings period | |
Start date |
01.03.2023 |
End date |
31.03.2023 |
Deductions | |
Deduction income type code |
(Benefit A) |
Deduction type |
Recourse on taxable income |
Amount of deduction |
100.00 |
Earnings period of original benefit | |
Start date |
01.03.2023 |
End date |
31.03.2023 |
Substitute recipient’s details | |
Period of calculation | |
Start date |
01.03.2023 |
End date |
31.03.2023 |
Example 30: In this example, the situation evolves to cause several consecutive recourse situations.
The income earner has been granted and paid EUR 2,000 in earnings-related allowances from 1 January to 31 January 2023.
Later, the circumstances change, and the income earner receives a decision granting a sickness allowance.
The income earner is granted EUR 1,500 in sickness allowance retroactively from 1 January to 31 January 2023. The sickness allowance granted later is the primary benefit and takes precedence over the earnings-related allowance, which is why the sickness allowance is paid to the party that paid the earnings-related allowance for the overlapping period of 1 January to 31 January 2023 based on the right of recourse. No benefit is left to be paid to the income earner.
Later, the circumstances change again, and the income earner is granted EUR 6,000 of disability pension from 1 January to 28 February 2023 (EUR 3,000 per month).
The disability pension takes precedence over the other two benefits, so based on the right of recourse, it is paid partly to the party that paid the sickness allowance and partly to the party that paid the earnings-related allowance. The rest is paid to the income earner.
The income earner has been granted the following benefits:
Earnings-related allowance: EUR 2,000 from 1 January to 31 January 2023
Sickness allowance: EUR 1,500 from 1 January to 31 January 2023
Disability pension: EUR 3,000 per month (EUR 6,000 in total) from 1 January to 28 February 2023.
In this situation, reports are submitted to the Incomes Register as follows: The income earner has been granted EUR 2,000 in earnings-related allowances from 1 January to 31 January 2023.
Table 1 outlines the report submitted on the earnings-related allowance for January.
Record date | Values |
---|---|
Date of payment or other reporting date |
05.02.2023 |
Report details | |
Type of action |
New report |
Payer’s report reference |
20YY00011111 |
Income earner details |
Income Earner A |
General income type details | |
Income type code |
Earnings-related allowance |
Amount |
2000.00 |
Earnings period | |
Start date |
01.01.2023 |
End date |
31.01.2023 |
Benefit unit | |
Unit |
Day |
Number of units |
21 |
General income type details | |
Income type code |
Withholding tax |
Amount (20 % from EUR 2,000) |
400.00 |
Earnings period | |
Start date |
05.02.2023 |
End date |
05.02.2023 |
The circumstances change and the income earner is granted EUR 1,500 in sickness allowance from 1 January to 31 January 2023. The sickness allowance is granted for the same period as the earnings-related allowance, which means that based on the right of recourse, the sickness allowance is paid in full to the party that paid the earnings-related allowance. No benefit is left to be paid to the income earner.
Table 2 outlines the report submitted in March by the payer of the later benefit, i.e. the sickness allowance.
Record data | Values |
---|---|
Date of payment or other reporting date |
01.03.2023 |
Report details | |
Type of action |
New report |
Payer’s report reference |
20YY00022222 |
Income earner details |
Income Earner A |
General income type details | |
Income type code |
Sickness allowance |
Amount |
1500.00 |
Earnings period | |
Start date |
01.01.2023 |
End date |
31.01.2023 |
Deductions | |
Deduction income type code |
Earnings-related allowance |
Type of deduction |
Recourse on taxable income |
Amount of deduction |
1500.00 |
Earnings period of original benefit | |
Start date |
01.01.2023 |
End date |
31.01.2023 |
Substitute recipient details | |
Period of calculation | |
Start date |
01.01.2023 |
End date |
31.01.2023 |
When the payer of the earnings-related allowance has received the recourse payment, it submits a replacement report to the Incomes Register. The payer enters ‘Recourse – Yes’ on the replacement report.
When paying the earnings-related allowance, the benefit unit must be specified.
This data is also mandatory on the replacement report. Table 3 outlines the replacement report submitted on the earnings-related allowance of January (see Table 1 for the original report):
Record date | Values |
---|---|
Date of payment or other reporting date |
05.02.2023 |
Report details | |
Type of action |
New report |
Payer’s report reference |
20YY00011111 |
Income earner details |
Income Earner A |
General income type details | |
Income type code |
Earnings-related allowance |
Amount |
500.00 |
Unjust enrichment |
Yes |
Earnings period | |
Start date |
01.01.2023 |
End date |
31.01.2023 |
Benefit unit | |
Unit |
Day |
Number of units |
0 |
General income type details | |
Income type code |
Earnings-related allowance |
Amount |
1500.00 |
Recourse |
Yes |
Earnings period | |
Start date |
01.01.2023 |
End date |
31.01.2023 |
Benefit unit | |
Unit |
Day |
Number of units |
21 |
General income type details | |
Income type code |
Withholding tax |
Amount (20 % from EUR 2,000) |
400.00 |
Earnings period | |
Start date |
05.02.2023 |
End date |
05.02.2023 |
The circumstances change again and on 20 May 2023 the earnings-related pension provider retroactively grants the income earner a disability pension from 1 January 2023 onwards. The amount of the disability pension is EUR 3,000 per month.
The retroactively paid disability pension is paid partly to the income earner and partly to the payers that submitted a recourse claim as follows:
- The payer of the sickness allowance receives EUR 1,500
- The payer of the earnings-related allowance receives EUR 500
- The income earner receives EUR 1,000 for January and EUR 3,000 for February 2023.
Table 4 outlines the report submitted on the disability pension:
Record data | Values |
---|---|
Date of payment or other reporting date |
27.05.2023 |
Report details | |
Payer’s report reference |
20YY00055555 |
Type of action |
New report |
Income earner details |
Income Earner A |
General income type details | |
Income type code |
Disability pension |
Amount |
6000.00 |
Earnings period | |
Start date |
01.01.2023 |
End date |
28.02.2023 |
Deductions | |
Deduction income type code |
Sickness allowance |
Type of deduction |
Recourse on taxable income |
Amount of deduction |
1500.00 |
Earnings period of original benefit | |
Start date |
01.01.2023 |
End date |
31.01.2023 |
Substitute recipient details | |
Period of calculation | |
Start date |
01.01.2023 |
End date |
31.01.2023 |
Deductions | |
Deduction income type code |
Earnings-related allowance |
Type of deduction |
Recourse on taxable income |
Amount |
500.00 |
Earnings period of original benefit | |
Start date |
01.01.2023 |
End date |
31.01.2023 |
Substitute recipient details | |
Period of calculation | |
Start date |
01.01.2023 |
End date |
31.01.2023 |
General income type details | |
Income type code |
Withholding tax |
Amount (50 % from EUR 4,000) |
2000.00 |
Earnings period | |
Start date |
27.05.2023 |
End date |
27.05.2023 |
The payer of the sickness allowance submits a replacement report in May, on which it enters ‘Recourse – Yes’. Table 5 outlines the replacement report (see Table 2 for the original report):
Record data | Values |
---|---|
Date of payment or other reporting date |
01.03.2023 |
Report details | |
Type of action |
Replacement report (2) |
Payer’s report reference |
20YY00022222 |
Income earner details |
Income Earner A |
General income type details | |
Income type code |
Sickness allowance |
Amount |
1500.00 |
Recourse |
Yes |
Earnings period | |
Start date |
01.01.2023 |
End date |
31.01.2023 |
Deductions | |
Deduction income type code |
Earnings-related allowance |
Type of deduction |
Recourse on taxable income |
Amount of deduction |
1500.00 |
Earnings period of original benefit | |
Start date |
01.01.2023 |
End date |
31.01.2023 |
Substitute recipient details | |
Period of calculation | |
Start date |
01.01.2023 |
End date |
31.01.2023 |
The payer of the earnings-related allowance submits a replacement report in May:
Record date | Values |
---|---|
Date of payment or other reporting date |
05.02.2023 |
Report details | |
Type of action |
Replacement report |
Report version number |
3 |
Payer’s report reference |
20YY00011111 |
Income earner details |
Income Earner A |
General income type details | |
Income type code |
Earnings-related allowance |
Amount |
500.00 |
Recourse |
Yes |
Earnings period | |
Start date |
01.01.2023 |
End date |
31.01.2023 |
Benefit unit | |
Unit |
Day |
Number of units |
5 |
General income type details | |
Income type code |
Earnings-related allowance |
Amount |
1500.00 |
Recourse |
Yes |
Benefit unit | |
Unit |
Day |
Number of units |
16 |
General income type details | |
Income type code |
Withholding tax |
Amount (20 % from EUR 2,000) |
400.00 |
Earnings period | |
Start date |
05.02.2023 |
End date |
05.02.2023 |
Example 31: In this example, the situation evolves to cause several consecutive recourse situations.
An income earner has been granted and paid EUR 2,000 in earnings-related allowances from 1 January to 31 January 2023.
Later, the circumstances change, and the income earner receives a decision granting a sickness allowance.
The income earner is granted EUR 1,500 in sickness allowance retroactively from 1 January to 31 January 2023. The sickness allowance granted later is the primary benefit and takes precedence over the earnings-related allowance, which is why the sickness allowance is paid to the party that paid the earnings-related allowance for the overlapping period of 1 January to 31 January 2023 based on the right of recourse. No benefit is left to be paid to the income earner.
Later, the circumstances change again, and the income earner is granted EUR 6,000 of disability pension from 1 January to 28 February 2023 (EUR 3,000 per month). The payers of the sickness allowance and the earnings-related allowance both submit a recourse claim to the earnings-related pension provider. However, the pension provider inadvertently fails to take the claims into account and pays the full amount to the income earner.
The income earner has been granted the following benefits:
- Earnings-related allowance: EUR 2,000 from 1 January to 31 January 2023
- Sickness allowance: EUR 1,500 from 1 January to 31 January 2023
- Disability pension: EUR 3,000 per month (EUR 6,000 in total) from 1 January to 28 February 2023.
In this situation, reports are submitted to the Incomes Register as follows: The income earner has been granted EUR 2,000 in earnings-related allowances from 1 January to 31 January 2023.
Table 1 outlines the report submitted on the earnings-related allowance of January:
Record date | Values |
---|---|
Date of payment or other reporting date |
05.02.2023 |
Report details | |
Type of action |
New report |
Payer’s report reference |
20YY00011111 |
Income earner details |
Income Earner A |
General income type details | |
Income type code |
Earnings-related allowance |
Amount |
2000.00 |
Earnings period | |
Start date |
01.01.2023 |
End date |
31.01.2023 |
Benefit unit | |
Unit |
Day |
Number of units |
21 |
General income type details | |
Income type code |
Withholding tax |
Amount (20 % from EUR 2,000) |
400.00 |
Earnings period | |
Start date |
05.02.2023 |
End date |
05.02.2023 |
The circumstances change and the income earner is granted EUR 1,500 in sickness allowance from 1 January to 31 January 2023. The sickness allowance is granted for the same period as the earnings-related allowance, which means that based on the right of recourse, the sickness allowance is paid in full to the party that paid the earnings-related allowance. No benefit is left to be paid to the income earner.
Table 2 outlines the report submitted in March by the payer of the later benefit, i.e. the sickness allowance.
Record data | Values |
---|---|
Date of payment or other reporting date |
01.03.2023 |
Report details | |
Type of action |
New report |
Payer’s report reference |
20YY00022222 |
Income earner details |
Income Earner A |
General income type details | |
Income type code |
Sickness allowance |
Amount |
1500.00 |
Earnings period | |
Start date |
01.01.2023 |
End date |
31.01.2023 |
Deductions | |
Deduction income type code |
Earnings-related allowance |
Type of deduction |
Recourse on taxable income |
Amount of deduction |
1500.00 |
Earnings period of original benefit | |
Start date |
01.01.2023 |
End date |
31.01.2023 |
Substitute recipient details | |
Period of calculation | |
Start date |
01.01.2023 |
End date |
31.01.2023 |
When the payer of the earnings-related allowance has received the recourse payment, it submits a replacement report to the Incomes Register. The payer enters ‘Recourse – Yes’ on the replacement report.
When paying the earnings-related allowance, the benefit unit must be specified.
This data is also mandatory on the replacement report. Table 3 outlines the replacement report submitted on the earnings-related allowance of January (see Table 1 for the original report):
Record date | Values |
---|---|
Date of payment or other reporting date |
05.02.2023 |
Report details | |
Type of action |
Replacement report |
Report version number |
2 |
Payer’s report reference |
20YY00011111 |
Income earner details |
Income Earner A |
General income type details | |
Income type code |
Earnings-related allowance |
Amount |
500.00 |
Unjust enrichment |
Yes |
Earnings period | |
Start date |
01.01.2023 |
End date |
31.01.2023 |
Benefit unit | |
Unit |
Day |
Number of units |
0 |
Income type code |
Earnings-related allowance |
Amount |
1500.00 |
Recourse |
Yes |
Earnings period | |
Start date |
01.01.2023 |
End date |
31.01.2023 |
Benefit unit | |
Unit |
Day |
Number of units |
21 |
General income type details | |
Income type code |
Withholding tax |
Amount (20 % from EUR 2,000) |
400.00 |
Earnings period | |
Start date |
05.02.2023 |
End date |
05.02.2023 |
The circumstances change again and on 20 May 2023 the earnings-related pension provider retroactively grants the income earner a disability pension from 1 January 2023 onwards. The amount of the disability pension is EUR 3,000 per month.
The disability pension granted retroactively is paid directly to the income earner. The payer inadvertently fails to take into account the recourse claims submitted by the payers of the sickness allowance and the earnings-related allowance.
Table 4 outlines the report submitted by the earnings-related pension provider where the payment is mistakenly allocated to the income earner:
Record data | Values |
---|---|
Date of payment or other reporting date |
27.05.2023 |
Report details | |
Payer’s report reference |
20YY00055555 |
Type of action |
New report |
Income earner details |
Income Earner A |
General income type details | |
Income type code |
Disability pension |
Amount |
6000.00 |
Earnings period | |
Start date |
01.01.2023 |
End date |
28.02.2023 |
Income type code |
Withholding tax |
Amount (50 % from EUR 6,000) |
3000.00 |
Earnings period | |
Start date |
27.05.2023 |
End date |
27.05.2023 |
The earnings-related pension provider notices the mistake in the allocation of its payments and corrects it. The pension provider pays the substitute recipients, i.e. the payers of the sickness allowance and earnings-related allowance, the amounts that were mistakenly left unallocated to them. Table 5 outlines the new report, in which the data item ‘Payment reallocation – Yes’ has been entered for the amount paid in excess to the income earner:
Record data | Values |
---|---|
Date of payment or other reporting date |
31.05.2023 |
Report details | |
Payer’s report reference |
20YY00055555 |
Type of action |
New report |
Income earner details |
Income Earner A |
General income type details | |
Income type code |
Disability pension |
Amount |
2000.00 |
Payment reallocation |
Yes |
Earnings period | |
Start date |
01.01.2023 |
End date |
31.01.2023 |
Deductions | |
Deduction income type code |
Sickness allowance |
Type of deduction |
Recourse on taxable income |
Amount of deduction |
1500.00 |
Earnings period of original benefit | |
Start date |
01.01.2023 |
End date |
31.01.2023 |
Substitute recipient details | |
Period of calculation | |
Start date |
01.01.2023 |
End date |
31.01.2023 |
Deduction income type code |
Earnings-related allowance |
Type of deduction |
Recourse on taxable income |
Amount |
500.00 |
Earnings period of original benefit | |
Start date |
01.01.2023 |
End date |
31.01.2023 |
Substitute recipient details | |
Period of calculation | |
Start date |
01.01.2023 |
End date |
31.01.2023 |
The payer of the sickness allowance submits a replacement report in June on which it enters ‘Recourse – Yes’. Table 6 outlines the replacement report (see Table 2 for the original report):
Record data | Values |
---|---|
Date of payment or other reporting date |
01.03.2023 |
Report details | |
Type of action |
Replacement report |
Report version number |
2 |
Payer’s report reference |
20YY0002222 |
Income earner details |
Income Earner A |
General income type details | |
Income type code |
Sickness allowance |
Amount |
1500.00 |
Recourse |
Yes |
Earnings period | |
Start date |
01.01.2023 |
End date |
31.01.2023 |
Deductions | |
Deduction income type code |
Earnings-related allowance |
Type of deduction |
Recourse on taxable income |
Amount of deduction |
1500.00 |
Earnings period of original benefit | |
Start date |
01.01.2023 |
End date |
31.01.2023 |
Substitute recipient details | |
Period of calculation | |
Start date |
01.01.2023 |
End date |
31.01.2023 |
The payer of the earnings-related allowance submits a replacement report in June:
Record date | Values |
---|---|
Date of payment or other reporting date |
05.02.2023 |
Report details | |
Type of action |
Replacement report |
Report version number |
3 |
Payer’s report reference |
20YY00011111 |
Income earner details |
Income Earner A |
General income type details | |
Income type code |
Earnings-related allowance |
Amount |
500.00 |
Recourse |
Yes |
Earnings period | |
Start date |
01.01.2023 |
End date |
31.01.2023 |
Benefit unit | |
Unit |
Day |
Number of units |
5 |
General income type details | |
Income type code |
Earnings-related allowance |
Amount |
1500.00 |
Recourse |
Yes |
Benefit unit | |
Unit |
Day |
Number of units |
16 |
General income type details | |
Income type code |
Withholding tax |
Amount (20 % from EUR 2,000) |
400.00 |
Earnings period | |
Start date |
05.02.2023 |
End date |
05.02.2023 |
The EUR 2,000 paid to the substitute recipients is recovered from the income earner and refunded in July. Table 8 outlines the recovery data reported on the recovery of the payment:
Record data | Values |
---|---|
Date of payment or other reporting date |
02.07.2023 |
Report details | |
Payer’s report reference |
20YY00055555 |
Type of action |
New report |
Income earner details |
Income Earner A |
General income type details | |
Income type code |
Disability pension |
Amount |
2000.00 |
Recovery |
Yes |
Additional repayment details | |
Repayment date |
01.07.2023 |
Earnings period of original benefit | |
Start date |
01.01.2023 |
End date |
31.01.2023 |
Example 32: In this example, the situation evolves to cause several consecutive recourse situations.
An income earner has been granted and paid EUR 2,000 in earnings-related allowances from 1 January to 31 January 2023.
Later, the circumstances change, and the income earner receives a decision granting a sickness allowance.
The income earner is granted EUR 1,500 in sickness allowance retroactively from 1 January to 31 January 2023. The sickness allowance granted later is the primary benefit and takes precedence over the earnings-related allowance, which is why the sickness allowance is paid to the party that paid the earnings-related allowance for the overlapping period of 1 January to 31 January 2023 based on the right of recourse. No benefit is left to be paid to the income earner.
Later, the circumstances change again, and the income earner is granted EUR 6,000 of disability pension from 1 January to 28 February 2023 (EUR 3,000 per month). The payers of the sickness allowance and the earnings-related allowance have not submitted a recourse claim to the earnings-related pension provider. Due to this, the pension provider pays the full amount to the income earner.
The income earner has been granted the following benefits:
- Earnings-related allowance: EUR 2,000 from 1 January to 31 January 2023
- Sickness allowance: EUR 1,500 from 1 January to 31 January 2023
- Disability pension: EUR 3,000 per month (EUR 6,000 in total) from 1 January to 28 February 2023.
In this situation, reports are submitted to the Incomes Register as follows: The income earner has been granted EUR 2,000 in earnings-related allowances from 1 January to 31 January 2023.
Table 1 outlines the report submitted on the earnings-related allowance of January:
Record date | Values |
---|---|
Date of payment or other reporting date |
05.02.2023 |
Report details | |
Type of action |
New report |
Payer’s report reference |
20YY00011111 |
Income earner details |
Income Earner A |
General income type details | |
Income type code |
Earnings-related allowance |
Amount |
2000.00 |
Earnings period | |
Start date |
01.01.2023 |
End date |
31.01.2023 |
Benefit unit | |
Unit |
Day |
Number of units |
21 |
General income type details | |
Income type code |
Withholding tax |
Amount (20 % from EUR 2,000) |
400.00 |
Earnings period | |
Start date |
05.02.2023 |
End date |
05.02.2023 |
The circumstances change and the income earner is granted EUR 1,500 in sickness allowance from 1 January to 31 January 2023. The sickness allowance is granted for the same period as the earnings-related allowance, which means that based on the right of recourse, the sickness allowance is paid in full to the party that paid the earnings-related allowance. No benefit is left to be paid to the income earner.
Table 2 outlines the report submitted in March by the payer of the later benefit, i.e. the sickness allowance.
Record data | Values |
---|---|
Date of payment or other reporting date |
01.03.2023 |
Report details | |
Type of action |
New report |
Payer’s report reference |
20YY00022222 |
Income earner details |
Income Earner A |
General income type details | |
Income type code |
Sickness allowance |
Amount |
1500.00 |
Earnings period | |
Start date |
01.01.2023 |
End date |
31.01.2023 |
Deductions | |
Deduction income type code |
Earnings-related allowance |
Type of deduction |
Recourse on taxable income |
Amount of deduction |
1500.00 |
Earnings period of original benefit | |
Start date |
01.01.2023 |
End date |
31.01.2023 |
Substitute recipient details | |
Period of calculation | |
Start date |
01.01.2023 |
End date |
31.01.2023 |
When the payer of the earnings-related allowance has received the recourse payment, it submits a replacement report to the Incomes Register. The payer enters ‘Recourse – Yes’ on the replacement report.
When paying the earnings-related allowance, the benefit unit must be specified.
This data is also mandatory on the replacement report. Table 3 outlines the replacement report submitted on the earnings-related allowance of January (see Table 1 for the original report):
Record date | Values |
---|---|
Date of payment or other reporting date |
05.02.2023 |
Report details | |
Type of action |
Replacement report |
Report version number |
2 |
Payer’s report reference |
20YY00011111 |
Income earner details |
Income Earner A |
General income type details | |
Income type code |
Earnings-related allowance |
Amount |
500.00 |
Unjust enrichment |
Yes |
Earnings period | |
Start date |
01.01.2023 |
End date |
31.01.2023 |
Benefit unit | |
Unit |
Day |
Number of units |
0 |
General income type details | |
Income type code |
Earnings-related allowance |
Amount |
1500.00 |
Recourse |
Yes |
Earnings period | |
Start date |
01.01.2023 |
End date |
31.01.2023 |
Benefit unit | |
Unit |
Day |
Number of units |
21 |
General income type details | |
Income type code |
Withholding tax |
Amount (20 % from EUR 2,000) |
400.00 |
Earnings period | |
Start date |
05.02.2023 |
End date |
05.02.2023 |
The circumstances change again and on 20 May 2023 the earnings-related pension provider retroactively grants the income earner a disability pension from 1 January 2023 onwards. The amount of the disability pension is EUR 3,000 per month.
The disability pension granted retroactively is paid directly to the income earner, because the earnings-related pension provider has not received recourse claims from the payers of the sickness allowance and the earnings-related allowance.
Table 4 outlines the report submitted by the earnings-related pension provided, where the payment is mistakenly allocated to the income earner:
Record data | Values |
---|---|
Date of payment or other reporting date |
27.05.2023 |
Report details | |
Payer’s report reference |
20YY00055555 |
Type of action |
New report |
Income earner details |
Income Earner A |
General income type details | |
Income type code |
Disability pension |
Amount |
6000.00 |
Earnings period | |
Start date |
01.01.2023 |
End date |
28.02.2023 |
General income type details | |
Income type code |
Withholding tax |
Amount (50 % from EUR 6,000) |
3000.00 |
Earnings period | |
Start date |
27.05.2023 |
End date |
27.05.2023 |
The payer of the earnings-related allowance notices that the income earner has been granted and paid overlapping benefits. The entire amount of the paid earnings-related allowance is now an unjust enrichment.
The payer of the allowance submits a replacement report in which it reports the unjust enrichment. If it so chooses, the payer can combine the amounts of unjust enrichment and report a total of EUR 2,000. To keep the example easy to understand, the two shares of the unjust enrichment – EUR 500 and EUR 1,500 – are kept separate. (In version 3 of the report, the payer replaces the ‘Recourse – Yes’ entry in version 2 of the report with an ‘Unjust enrichment – yes’ entry.)
Record data | Values |
---|---|
Date of payment or other reporting date |
05.02.2023 |
Report details | |
Payer’s report reference |
20YY00011111 |
Type of action |
Replacement report |
Report version number |
3 |
Income earner details |
Income Earner A |
General income type details | |
Income type code |
Earnings-related allowance |
Amount |
500.00 |
Unjust enrichment |
Yes |
Earnings period | |
Start date |
01.01.2023 |
End date |
31.01.2023 |
Benefit unit | |
Unit |
Day |
Number of units |
0 |
General income type details | |
Income type code |
Earnings-related allowance |
Amount |
1500.00 |
Unjust enrichment |
Yes |
Earnings period | |
Start date |
01.01.2023 |
End date |
31.01.2023 |
Benefit unit | |
Unit |
Day |
Number of units |
0 |
General income type details | |
Income type code |
Withholding tax |
Amount (20 % from EUR 2,000) |
400.00 |
Earnings period | |
Start date |
05.02.2023 |
End date |
05.02.2023 |
The payer of the sickness allowance notices that the income earner has been granted and paid overlapping benefits. The entire amount of the paid sickness allowance is now an unjust enrichment.
The payer of the allowance submits a replacement report in which it reports the unjust enrichment.
Record data | Values |
---|---|
Date of payment or other reporting date |
01.03.2023 |
Report details | |
Type of action |
Replacement report |
Report version number |
2 |
Payer’s report reference |
20YY0002222 |
Income earner details |
Income Earner A |
General income type details | |
Income type code |
Sickness allowance |
Amount |
1500.00 |
Unjust enrichment |
Yes |
Earnings period | |
Start date |
01.01.2023 |
End date |
31.01.2023 |
Deductions | |
Deduction income type code |
Earnings-related allowance |
Type of deduction |
Recourse on taxable income |
Amount of deduction |
1500.00 |
Earnings period of original benefit | |
Start date |
01.01.2023 |
End date |
31.01.2023 |
Substitute recipient details | |
Period of calculation | |
Start date |
01.01.2023 |
End date |
31.01.2023 |
The payer of the earnings-related allowance refunds the payment it received as a recourse to the payer of the sickness allowance, i.e. the recourse is cancelled. Reporting the refund of the payment is not necessary for data users, so no report is submitted to the Incomes Register on the refund.
When the payer of the sickness allowance receives the information that the payer of the earnings-related allowance has refunded a recourse payment that has become unjust, the payer of the sickness allowance submits a replacement report in which the type of deduction is changed to reflect the fact that the payment was misallocated (‘Payment reallocation from taxable income’).
The income earner returns the EUR 2,000 mistakenly paid to them to the payer of the earnings-related allowance. Net recovery was used for this example. The recovery could also be made with a net amount. In this case, the net amount of the benefit, EUR 1,600, and the amount withheld from the original benefit, EUR 400, would be reported.
Table 7 outlines the report submitted by the payer of the earnings-related allowance on the recovery:
Record date | Values |
---|---|
Date of payment or other reporting date |
01.06.2023 |
Report details | |
Type of action |
New report |
Payer’s report reference |
20YY00022222 |
Income earner details |
Income Earner A |
General income type details | |
Income type code |
Earnings-related allowance |
Amount (EUR 500 + EUR 1,500) |
2000.00 |
Recovery |
Yes |
Earnings period of original benefit | |
Start date |
01.01.2023 |
End date |
31.01.2023 |
4.7 Recourse on benefit outside the Incomes Register
The original report on which the recourse claim is based has not been submitted to the Incomes Register in all situations. Such a situation may exist, for example, when a payment was paid before the deployment of the Incomes Register or it is not part of the data to be reported to the Incomes Register due to its sensitivity. In these situations, the recourse is only indicated in the data specified by the payer of a later benefit in the ‘Deductions’ data group. If the original benefit does not have its own income type in the Incomes Register’s income type codes, ‘Other benefit’ or ‘Other pension’ must be used as the value of the deduction income type code in the data submitted for the original benefit.
4.8 Reporting the benefit unit in recourse situations
For some benefits, reporting unit data is mandatory so that the Finnish Tax Administration can determine the number of qualifying days. In recourse situations, any later benefit is not taxable income for the income earner if the income paid as a recourse has been accumulated over the same period as the original benefit. In recourse situations, the Finnish Tax Administration calculates the qualifying days of benefits paid over an overlapping period on the report submitted for the benefit paid first. The Finnish Tax Administration does not take the days reported by the payer of the later benefit into account. If the later benefit has been paid over a longer period than the first benefit, the payer of the later benefit must divide the benefit into two parts on the report: the overlapping period must be reported as a single period, and the benefit paid after that period must be reported as another amount.
Example 33: The income earner has received a labour market subsidy of EUR 1,000 for the period 1–31 August 2024. The payment was made on 1 September 2024. On 1 October 2024, the basic component of the earnings-related allowance, totalling EUR 2,000, for the period 1 August – 30 September 2024 is granted retroactively to the income earner. Reporting the benefit unit is mandatory regarding both benefits.
The example (Table 1) presents the report submitted by the payer of the labour market subsidy:
Record data | Values |
---|---|
Payment date or other reporting date |
01.09.2024 |
Report details | |
Type of action |
New report |
Payer's report reference |
EE679B12 |
Income earner details | |
General income type details | |
Income type code |
Labour market subsidy |
Amount |
1000.00 |
Earnings period | |
Start date |
01.08.2024 |
End date |
31.08.2024 |
Benefit unit | |
Unit |
Day |
Number of units |
20 |
General income type details | |
Income type code |
Withholding tax |
Amount (20% from EUR 1,000) |
200.00 |
At the beginning of October, it is found that the income earner is entitled to the basic component of the earnings-related allowance, which is partly paid over the same period as the labour market subsidy. The benefit is paid retroactively for August on 1 October 2024, in addition to which the amount for the September earnings period of EUR 2,000 is paid.
The example (Table 2) presents the report submitted by the payer of the later benefit, i.e. the basic component of the earnings-related allowance, in October:
Record data | Values |
---|---|
Payment date or other reporting date |
01.10.2024 |
Report details | |
Type of action |
New report |
Payer's report reference |
9924443 |
Income earner details | |
General income type details | |
Income type code |
Basic component of the earnings-related allowance |
Amount |
1000.00 |
Earnings period | |
Start date |
01.08.2024 |
End date |
31.08.2024 |
Benefit unit | |
Unit |
Day |
Number of units |
20 |
Deductions | |
Deduction income type code |
Labour market subsidy |
Type of deduction |
Recourse on taxable income |
Amount of deduction |
1000.00 |
Earnings period of original benefit | |
Start date |
01.08.2024 |
End date |
31.08.2024 |
Substitute recipient details | |
Period of calculation | |
Start date |
01.08.2024 |
End date |
31.08.2024 |
General income type details | |
Income type code |
Basic component of the earnings-related allowance |
Amount |
1000.00 |
Earnings period | |
Start date |
01.09.2024 |
End date |
30.09.2024 |
Benefit unit | |
Unit |
Day |
Number of units |
20 |
General income type details | |
Income type code |
Withholding tax |
Amount (20% from EUR 1,000) |
200.00 |
5 Recovery of a partial payment
In certain situations, income paid earlier can change retroactively. A decision is made for the income earner of a new benefit that is granted for at least partially the same period as the previously paid benefit. The previously paid income is taken into account as part payment of the benefit paid later. The income earner has been entitled to the previously paid income, so the income was correct at the time of payment. The reported income type is therefore not corrected, because the income is taxed according to the originally reported income type. A partial payment is not unjust enrichment or recourse discussed earlier in these instructions.
The retroactive change to the income is reported to the Incomes Register on a replacement report. The ‘Income type changed, new income type code’ data is entered for the original income type, and the new income type code is entered as its value. When income changes retroactively, the previously paid pension or benefit is not recovered; instead, it is taken into account as a partial payment of the benefit paid later. The reporting of partial payments is described in more detail in the ‘Benefits: Reporting data to the Incomes Register’ instructions (see Section 4.6 ‘Income changes retroactively, and a benefit paid earlier is taken into account as a partial payment’).
A partial payment may also be paid groundlessly, in which case the payer recovers it. Example 33 presents the recovery of a partial payment.
Example 34: The income earner has been paid EUR 1,100 per month of partial early old-age pension for the period 1 January –31 October 2023. The payer has made a retroactive decision on a disability pension on 15 October 2023. The same amount of disability pension has been paid as of 1 June 2023 as the partial early old-age pension, i.e. EUR 1,100 per month. The payer has taken the previously paid partial early old-age pension into account as a partial payment for the disability pension. The payer has reported the change in the pension type on a replacement report and specified the "Income type changed, new income type code" entry on the reports submitted from 1 June 2023 onwards.
The example of a report (Table 1) features the January 2023 report of the partial early old-age pension. Corresponding reports have been submitted until 31 May 2023.
Record data | Values |
---|---|
Payment date or other reporting date |
02.01.2023 |
Report details | |
Service data | |
Payer's report reference |
zzyy1 |
Type of action |
New report |
Income earner details | |
General income type details | |
Income type code |
Partial early old-age pension |
Amount |
1100.00 |
Earnings period | |
Start date |
01.01.2023 |
End date |
31.01.2023 |
General income type details | |
Income type code |
Withholding tax |
Amount |
220.00 |
The following example (Table 2) presents the benefit payer’s replacement report for June, indicating that the partial early old-age pension has changed into a disability pension. The payer also submits similar reports for all other months, for which the partial early old-age pension has been regarded as a partial payment of the disability pension.
Record data | Values |
---|---|
Payment date or other reporting date |
01.06.2023 |
Report details | |
Service data | |
Incomes Register or payer's report reference |
xxyz2 |
Report version number |
n |
Type of action |
Replacement report |
Income earner details | |
General income type details | |
Income type code |
Partial early old-age pension |
Income type changed, new income type code |
Disability pension |
Amount |
1100.00 |
Earnings period | |
Start date |
01.06.2023 |
End date |
30.06.2023 |
General income type details | |
Income type code |
Withholding tax |
Amount |
220.00 |
However, in August 2024, the payer has realised that the income earner has been paid a partial early old-age pension and disability pension on incorrect grounds in 2023. EUR 1,050 per month of pension should have been paid instead of EUR 1,100. The payer has made a recovery decision on 30 August 2024. It has been agreed with the income earner that the EUR 600 overpayment (EUR 50 per month for a period of 12 months) is recovered with an invoice in October.
The payer has submitted an unjust enrichment report after noticing the overpayment. The example of a report (Table 3) features the new replacement report for June, and corresponding replacement reports have also been submitted for the other months.
Record data | Values |
---|---|
Payment date or other reporting date |
01.06.2023 |
Report details | |
Service data | |
Incomes Register or payer's report reference |
xxyz2 |
Report version number |
n |
Type of action |
Replacement report |
Income earner details | |
General income type details | |
Income type code |
Partial early old-age pension |
Income type changed, new income type code |
Disability pension |
Amount |
1050.00 |
Earnings period | |
Start date |
01.06.2023 |
End date |
30.06.2023 |
General income type details | |
Income type code |
Partial early old-age pension |
Income type changed, new income type code |
Disability pension |
Amount |
50.00 |
Unjust enrichment |
Yes |
Earnings period | |
Start date |
01.06.2023 |
End date |
30.06.2023 |
General income type details | |
Income type code |
Withholding tax |
Amount |
220.00 |
The payer also submits similar reports for January–May 2023, i.e. the period when the partial early old-age pension was paid. These reports do not include the ‘Income type changed, new income type code’ data.
The payer recovers the overpayment from the income earner in October 2024. The example (Table 4) presents the payer’s recovery report (the share of the partial early old-age pension for 1 January – 31 May 2021, totalling EUR 250, and the share of the disability pension for 1 June – 31 December 2023, totalling EUR 350):
Record data | Values |
---|---|
Payment date or other reporting date |
20.10.2024 |
Report details | |
Service data | |
Type of action |
New report |
Payer's report reference |
yyzz2 |
Income earner details | |
General income type details | |
Income type code |
Partial early old-age pension |
Amount |
250.00 |
Recovery |
Yes |
Additional repayment details | |
Repayment date |
15.10.2024 |
Original payment period | |
Start date |
01.01.2023 |
End date |
31.05.2023 |
General income type details | |
Income type code |
Disability pension |
Amount |
350.00 |
Recovery |
Yes |
Additional repayment details | |
Repayment date |
15.10.2024 |
Original payment period | |
Start date |
01.06.2023 |
End date |
31.12.2023 |