Parliament has approved the remaining part of the law amendments planned for this year to affect unemployment security. Among other, the most recent law amendment package enables gradation for earnings-related unemployment allowances. Initially, gradation will affect all receivers of earnings-related unemployment allowance, entrepreneurs included.

Gradation for earnings-related unemployment allowances means that future unemployment security amounts will be reduced as follows

• to 80 % of the original amount, once unemployment benefits have been paid 40 days and further
• to 75 % of the original amount once, unemployment benefits have been paid 170 days.

Earnings-related daily allowance is paid for a maximum of five days per week, so 40 benefit days means about two months and 170 benefit days about eight months.

Earnings-related unemployment allowances will be gradated in case the work requirement, based on which earnings-related daily allowance is paid, can comprise work in accordance with the new eurorised model for September 2024 or later. For entrepreneurs, this means that business operations must have ended, and unemployment must have started as of September 2, 2024 or later.

The change does not affect daily allowance periods already started.

We will include gradation in our daily allowance calculator in autumn.

Wage-earners’ work requirements to be extended, work requirement to become income-based

In addition to gradation, wage-earners’ work requirement will be extended from present six months to 12 months starting September. Wage-earners’ work requirement will also be eurorised, i.e., based on income. In the future, wage-earners’ entitlement to daily allowance will be assessed based on salary earned before unemployment, not on actual work hours.

Parliament has approved a law amendment according to which provisions regarding extent of unemployment security will be cut and entitlement to benefits restricted. Changes will partly take force at the beginning of 2024, while some changes will start affecting benefit amounts and entitlement to benefits later in the course of 2024.

This is the first of a total of two law amendment entities to affect unemployment security. A second government proposal concerning changes to unemployment security is due to be presented in February 2024. This second law amendment entity comprises gradation for earnings-related daily allowances and discontinuation of age-related exceptions.

Self-risk periods to extend starting January

The law amendment will extend the self-risk period from five days to seven days. Self-risk period refers to a number of days at the start of unemployment, which do not qualify for earnings-related daily allowance.

Holiday allowances will also start affecting entitlement to earnings-related daily allowances starting January. If you have been employed full-time for a minimum duration of 2 weeks and this employment ends, your paid-out holiday allowances will be periodised.

Holiday allowance periodisation and self-risk periods do not elapse in parallel. Self-risk periods start after holiday allowances have been periodised, if applicable.

Child increases and exempt amounts to be discontinued starting April

Payment of child increases applied within unemployment security will be discontinued at the beginning of April. Accordingly, child increases will be paid for January to March only next year.

The current exempt amount € 300 applicable to work earnings will also be discontinued at the beginning of April. Exempt amount refers to the right of daily allowance receivers to earn € 300 before such work or business earnings start affect their daily allowances. Once this law amendment has taken force, work earnings will reduce unemployment security by 50 cents per each euro for the total work income.

No index increases on unemployment security

Parliament has also approved a law amendment, based on which index increases will be frozen for the years 2024 to 2027. In the case of earning-related unemployment security, this means that unemployment security basic components and turning points will remain at 2023 levels.

Law amendments will take force as follows:

Self-risk periods will be seven days for self-risk periods starting January 1, 2024 or later.

Holidays allowances paid based on employment contracts expiring on January 1, 2024, or later, will prevent payment of earnings-related daily allowance for a set period of time.

No child increases will be paid on unemployment days starting April 1, 2024, or later.

No exempt amounts will be considered when calculating daily allowances for daily allowance application periods starting April 1, 2024, or later.

Reduced child increase starting January 1, 2024

This year, an extraordinary raise in unemployment security child increases was made. This extraordinary raise will be discontinued at the beginning of 2024.

Parliament has approved a proposal to freeze index increases for the years 2024-2027. As a result of this, no customary index increases will be made to child increases at the turn of the year. No child increases will be paid after April 1, 2024.

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