You may start a company even if you are receiving basic social assistance for your necessary everyday expenses. However, Kela requires you to provide a statement of self-employment income. You cannot receive social assistance to protect your company against business risk or cover business expenses. Basic social assistance is the last option to secure your income. Therefore, before establishing a company, you should find out whether you are entitled to a start-up grant, for instance.
If you have already started a company and are seeking basic social assistance, Kela will determine your company’s profitability. From the perspective of social assistance, business activity is considered unprofitable if the entrepreneur does not earn a sufficient income from their full-time business activity over a longer period of time. If an entrepreneur can earn around the same amount from their business activities as they would receive when unemployed, this is regarded as a sufficient income.
If Kela finds that your company is unprofitable, you will typically receive basic social assistance, and you will be allowed a time period during which you must try to make your business profitable or wind it down. If you fail to get your affairs in order during this period, the amount of basic social assistance provided to you may be reduced and Kela will refer you to your social services.