Unemployment Security Reform in September

Significant changes will take effect from the beginning of September 2024 concerning the employment requirement and the amount of earnings-related allowance. These changes do not impact the process of applying for the earnings-related allowance.  

Staggering of Earnings-Related Allowance

The amount of earnings-related allowance will be staggered, meaning it will decrease as the period of unemployment lengthens. The allowance will remain at its full amount for the first 40 days, after which it will reduce to 80%. After 170 days of payment, the allowance will drop to 75% of the original amount. This staggering will only apply to those who meet the employment requirement on or after 2 September 2024, and whose employment requirement is 12 months. Therefore, these changes will not immediately affect those whose maximum period of earnings-related allowance (300, 400, or 500 days) began before 2 September 2024. For these individuals, the changes will only apply when the employment requirement is fulfilled again after 2 September 2024. For more information, please visit the page Amount of the Earnings-Related Allowance.  

Changes to Employment Requirement

To qualify for the earnings-related allowance, you must meet the employment requirement while being a member of an unemployment fund. As of 2 September 2024, the employment requirement will be significantly extended from around 6 months to 12 calendar months. The membership requirement will also be extended to 12 months. Simultaneously, the employment requirement will become income-based. In the future, the number of hours worked will no longer be decisive; instead, the employment requirement will accumulate based on salary. A calendar month will count towards the employment requirement if a minimum gross salary of €930 has been paid during that month. If the salary is below this but at least €465, the employment requirement will accumulate as half a month. Previously, a calendar week counted towards the employment requirement if the working time was at least 18 hours. The accumulation of the employment requirement will still be examined over a 28-month period, and the acceptable reasons for extending this period remain unchanged. These changes apply to those who have worked after 1 September 2024 and have accrued at least half a month of the employment requirement from this work. For more information, please visit the page Employment Requirement.  

Impact of Income-Based Requirement

The shift to an income-based employment requirement will not affect the amount of earnings-related allowance if the employment requirement is fulfilled by at least 12 months of full-time work. However, the shift to an income-based employment requirement means that very low salaries may no longer be sufficient to accumulate the employment requirement, even if the same work previously counted towards the requirement based on hours worked. On the other hand, if the salary is sufficiently high, it may be possible to accumulate the employment requirement in situations where it previously was not possible. With a sufficiently high salary, one can accumulate the employment requirement even if the number of hours worked is low or unevenly distributed throughout the month. Going forward, the employment requirement will generally include the calendar month in which the salary is paid. The timing of the work itself will no longer be decisive.  

Subsidised Employment and Obligatory Work

After 2 September 2024, subsidised employment will no longer count towards the employment requirement unless the employment commenced no later than 1 September 2024. However, in certain special circumstances, such as the employment of a person with reduced working capacity or a person over 60 who has been unemployed for a long period, part of the subsidised employment lasting more than 10 months may still count towards the employment requirement. The obligation to employ will be completely abolished. Consequently, the possibility of accumulating the employment requirement through an employment-promoting service, which has previously been available to those over 60, will also end. However, obligatory work or services can still accumulate the employment requirement after the change if the employment obligation was established no later than 1 September 2024. For more information, please visit the page Employment Requirement.  

Removal of Protection for the Level of Earnings-Related Allowance for Older Workers

The protection of the level of earnings-related allowance for unemployed persons over 58 years old will be removed on 2 September 2024. This protection previously ensured that when the employment requirement was fulfilled again, the salary used as the basis for the earnings-related allowance would not be recalculated unless the new salary was higher than the previous one. However, this protection will be removed, and the change will take effect at the same time as the other reforms. The level of earnings-related allowance will continue to be protected as before if the employment requirement is fulfilled by 1 September 2024 at the latest, and the change will only apply when the employment requirement is fulfilled again on or after 2 September 2024, and the length of the employment requirement is 12 months. This change will not affect situations where the employment requirement is fulfilled through work organised under an employment obligation or an employment-promoting service. In such cases, the salary used as the basis for the earnings-related allowance will not be recalculated unless the new salary is higher. For more information, please visit the page Exceptions for Persons Aged 55 and Over.