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Government proposes several amendments to the Unemployment Security Act
The Government has submitted a proposal to Parliament containing several amendments to the Unemployment Security Act.
Please note that these legislative changes are not yet in force. We will provide more information on the matter as we receive new information on the progress of the proposed amendments.
Personal liability period to be extended to seven days
Payment of earnings-related unemployment allowance can begin after the unemployed jobseeker has waited the number of days of the personal liability period. The personal liability period is currently five days. The Government proposes that, in future, eligibility to unemployment security would begin after a personal liability period of seven days of unemployment.
The amendment concerning the extension of the liability period would enter into force as of 1 January 2024.
Holiday compensation to postpone the payment of allowance
According to the Government’s proposal, in the future, holiday compensation paid at the end of full-time work lasting more than two weeks would postpone the payment of unemployment allowance. This means that if you have holidays that have not been taken at the end of your employment relationship, the compensation paid for them will postpone the start of your entitlement to earnings-related daily allowance. Holiday compensation equal to one month’s pay postpones the start of your entitlement to earnings-related allowance by about one month. Currently, holiday compensation does not affect the start of entitlement to earnings-related allowance.
The postponement due to paid holiday compensation and the personal liability period will not overlap. The personal liability period begins after the postponement due to possible holiday compensation received.
The effect of the postponement depends on the number of unused days of holiday. At the average level of earnings-related unemployment allowance, one month of unused holidays would reduce gross income by about 1,600 euros.
The legislative amendment concerning the postponing of unemployment allowance by paid holiday compensations would enter into force as of 1 January 2024.
Child supplements to be abolished
The Government proposes that child supplements to unemployment allowance be abolished. The abolition of the supplements will also result in changes to the amount of mobility allowance.
Currently, a child support supplement is paid for children under the age of 18. The amount of child support supplement is €7.01 per day for one child, €10.29 per day for two children and €13.29 per day for three or more children.
According to the Government Programme, no child support supplements would be paid in the future. Monthly effect if child supplements are abolished:
- One child: €7.01/day, 21 x 7.01= €147.21/month
- Two children: €10.29/day, 21 x €10.29 = €216.09/month
- Three children: €13.26/day, 21 x 13.26 = €278.46/month
The abolition of the child supplement would enter into force as of 1 April 2024.
Exempt amount of earned income to be abolished
Exempt amount means the amount you can earn from part-time or gig work without it affecting your earnings-related allowance. Currently, the exempt amount is 300 euros for recipients whose application period is one month. Earnings-related allowance is adjusted by deducting 50% of the part of income that exceeds the exempt amount.
The Government proposes to remove the exempt amount of earned income. After removing the exempt amount, half of the earnings before taxes paid during the application period for earnings-related unemployment allowance would reduce the amount of allowance. For example, if the earnings from gig work is 500 euros, half of this amount, or 250 euros, would reduce the full earnings-related daily allowance paid for the whole month.
The legislative amendment concerning the removal of the exempt amount would enter into force as of 1 April 2024.
Employment requirement extended to 12 months
Currently, earnings-related allowance can be received after 26 calendar weeks, or approximately six months of employment. The Government proposes that the employment requirement be extended to 12 months of employment.
As previously, the employment requirement would not need to be accrued from continuous work, and the review period would remain at 28 months. Extension of the review period on acceptable grounds would also remain unchanged.
The amendment concerning the extension of the employment requirement would enter into force as of 2 September 2024.
Employment requirement to be based on pay instead of hours worked
Currently, the employment requirement is earned based on hours worked and calculated as calendar weeks. The main rule is that working at least 18 hours during a calendar week counts towards the employment requirement.
According to the Government’s proposal, in future the employment requirement would accrue on the basis of wages paid during a calendar month. The minimum gross pay for accruing the employment requirement would be 930 euros per month. The employment requirement could also be accrued as half-months if earned income during the calendar month is at least 465 euros but less than 930 euros.
The legislative amendment to change the basis of accrual of the employment requirement from hours to wages paid would enter into force on 2 September 2024.
More information
You can read more about the legislative reforms to unemployment security and their schedule in our past press releases: Impacts of new Government Programme on unemployment security and Timetable for legislative reforms.
More information on the legislative amendments can also be found on the website of the Ministry of Social Affairs and Health.
