While the Government intends to implement all of these cuts during 2024, it currently appears that they will take effect gradually. The first Government proposal on this subject will be completed by 9 October 2023.
Wages of EUR 2,500 per month
Earnings-related unemployment benefit of EUR 1,515 per month
+ child increase of approximately EUR 150 per month
12 months of work before unemployment
(previously 6 months)
Earnings-related unemployment benefit cut after 2 months
- EUR 303 per month
Earnings-related unemployment benefit cut after 8 months
- EUR 379 per month
- EUR 141 for 2 days
- EUR 150 per month
The prior employment requirement for earnings-related unemployment benefit will be prolonged to 12 months and based on prior earnings instead of working time.
A worker qualifies for earnings-related unemployment benefit if he or she has been a member of an unemployment fund and has satisfied the employment condition by working for a period of about six months before unemployment begins. The Government is now seeking to double this period to one year. The employment condition would also be based on prior earnings instead of working time. This means that the employment condition would no longer be reckoned according to the number of working hours weekly, but the monthly wages paid.
SAK has proposed easing access to earnings-related unemployment benefits for casual employees, but the Government has adopted a diametrically opposing policy that will hamper access to unemployment benefit for a growing number of employees. This is coupled with measures that make it harder to secure permanent employment and easier to dismiss employees on individual grounds.
The level of unemployment benefit will be graduated, with an increase in the waiting period from 5 to 7 days, the abolition of child increases and the EUR 300 portion that is protected when working part-time, and a return to phasing of any outstanding holiday compensation payable when employment ends.
Earnings-related unemployment benefit is generally higher than the basic unemployment allowance or labour market support.
Earnings-related unemployment benefit currently remains the same for the entire duration of unemployment. This benefit would in future be cut by 20 per cent after some two months of unemployment and by nearly a further 5 per cent after eight months. The Government would simultaneously reduce the unemployment benefit of every claimant by increasing the waiting period from 5 to 7 days. This refers to the initial claiming period at the start of unemployment or temporary layoff for which no benefit is paid at all.
Unemployment benefit is adjusted in line with any earnings of a claimant for casual or part-time work. The first EUR 300 of these earnings is currently a protected portion that does not affect the unemployment benefit payable. This adjustment is made for about 40 per cent of all recipients of earnings-related unemployment benefit, and the proportion is even higher in many industries organised by SAK affiliates. A similar adjustment may be made in basic daily allowance and labour market support. Adjusted unemployment benefit helps people in part-time work to make ends meet when no full-time work is available. Since taking effect in 2014, the protected portion rule has also encouraged the unemployed to take up part-time and casual employment.
Unemployed claimants with children under 18 years of age are eligible for a child supplement in earnings-related benefit, basic unemployment allowance and labour market support. These child supplements vary between about EUR 150 and 285 per month, depending on the number of children.
Though previously applied in unemployment benefit, phasing of outstanding holiday compensation was abolished in 2013 as part of a national framework agreement. Phasing of outstanding holiday compensation means that any holiday compensation paid in lieu of outstanding annual leave at the end of full-time employment prevents the payment of unemployment benefit for the duration of the phasing period.
Age-related exceptions will be abolished and wage-subsidised employment will no longer count towards the employment condition.
Wage subsidies are paid to an employer for a period of 5–10 months in order to hire unemployed workers who are otherwise difficult to place in employment. While the wages of a worker in subsidised employment comply with the collective agreement, only 75 per cent of the work done counts towards the employment condition of eligibility for earnings-related unemployment benefit. The notion of age-related exceptions refers to the right of unemployed workers over the age of 58 years to work arranged by a local authority or an employment promotion service, and maintaining the previous level of earnings-related unemployment benefit.
The job alternation leave system will be abolished.
Job alternation leave refers to a period of leave from regular employment lasting for no longer than six months. Job alternation compensation amounting to 70 per cent of earnings-related unemployment benefit is payable for this leave. An unemployed jobseeker is hired as a substitute. The conditions of eligibility for job alternation leave have been tightened and the compensation has been reduced over the years. These cuts have led to a fall in uptake of job alternation leave from about 20,000 to 5,000 employees.
SAK has frequently proposed improvements in the job alternation leave system, especially in order to help the elderly cope at work. SAK has also submitted its own proposal that would enable employees over 60 years of age to move on a temporary basis from full-time work to 80 per cent working time under a new part-time allowance.
While the abolition of adult education benefit is not explicitly stated in the main body of the Government Programme, it nevertheless remains evident from an appended table. This benefit will be discontinued as of 1 August 2024.
Adult education benefit is a form of financial support granted to employees or the self-employed for studies that support vocational development. Employees and the self-employed may rely on adult education benefit for one or more periods of study totalling no more than 15 months over a working career. This benefit also enables studies for entire degrees or shorter periods of in-service or student training. The benefit payable depends on income.