The Unemployment Security Act has undergone many changes this year. In this article, we will explain what changed on 2 September 2024 and who will be affected by these changes. You can find a full list of the 2024 amendments here.
Changes that entered into force on 2 September 2024:
- Earnings-related unemployment allowance is staggered: the amount of the allowance will decrease the longer the unemployment lasts
- The criteria for being entitled to earnings-related unemployment allowance become stricter: the work history requirement is extended into one year and the amount of pay affects the fulfilment of the employment condition
- Only persons aged 60 or over who have been unemployed long-term and persons with reduced work ability can use pay-subsidised work to meet the employment condition
- Some age-related exceptions no longer apply
A closer look at the changes
1. Earnings-related unemployment allowance is staggered: the amount of the allowance will decrease the longer the unemployment lasts
The longer you remain unemployed and receive earnings-related unemployment allowance, the more the amount of the allowance will decrease.
The amount of the daily allowance decreases:
- after 40 days of paid daily allowance (around two months) to 80% of the original level,
- after 170 days of paid daily allowance (around 8 months) to 75% of the original level.
In the past, the level of earnings-related unemployment allowance has been constant throughout the period of receiving the allowance.
Who will be affected by this change and when?
The staggering does not apply to daily allowance periods the payment of which started before 2 September 2024. Your daily allowance will also not be staggered if you met the employment condition by 1 September 2024 and the payment of your daily allowance starts later due to, for example, the periodisation of holiday compensation or the waiting period.
Your daily allowance will be staggered only if you earn at least €465 after 2 September 2024 and you start a new earnings-related unemployment allowance payment period based on this employment (maximum period of 300, 400 or 500 days). In this case, you will have met the employment condition again and will be paid earnings-related unemployment allowance on the basis of this work done after 2 September 2024.
Read more: Staggering of earnings-related allowance
Use KOKO’s allowance calculator to get an estimate of how the staggering affects your daily allowance.
2. The criteria for being entitled to earnings-related unemployment allowance become stricter: the work history requirement is extended into one year and the amount of pay affects the fulfilment of the employment condition
To be entitled to earnings-related unemployment allowance when unemployed or laid off, you must meet the employment condition. From 2 September 2024 onwards, you must have one year of work history to fulfil the employment condition instead of the previously required six months.
From now on, the employment condition will be met if you have worked at least 12 calendar months during your unemployment fund membership and have been paid at least €930 per month. Half months will also be counted towards the employment condition if you earn between €465 and €929 per month. Two half-months are equal to one full month of employment.
In the past, the requirement for meeting the employment condition has been that, during the unemployment fund membership, a person has worked at least 18 hours per calendar week for 26 calendar weeks.
Who will be affected by this change and when?
Your employment condition will be reviewed when:
- you are a new applicant (applying for a daily allowance for the first time or after a long break) or
- you are applying for the daily allowance, are working and meet the employment condition again and your daily allowance period starts from the beginning.
In these cases, what we need to determine is which employment condition applies to you, the old or the new one. For some time to come, some of the daily allowance applicants will still be subject to the old employment condition, others will be subject to the new employment condition, and the rest will be subject to a combination of the two. The new 12-calendar-month employment condition applies to you if you have earned at least €465 per month on or after 2 September 2024.
KOKO fund will check whether you meet your employment condition and will make the related calculations.
Read more: Conditions for earnings-related allowance
3. Only persons aged 60 or over who have been unemployed long-term and persons with reduced work ability can use pay-subsidised work to meet the employment condition
In the past, the employment condition could be fulfilled with pay-subsidised work at a rate of 75% of hours worked, regardless of the employee’s age or work ability. As of 2 September 2024, pay-subsidised work only counts towards the employment condition if the person’s work ability is reduced or if the person is aged 60 or over and has been unemployed long-term.
Things to note about pay-subsidised work and meeting the employment condition:
- Pay-subsidised work is counted towards the employment condition only once the pay-subsidised employment has lasted for more than 10 months.
- Only 75% of the months of employment count towards the employment condition in pay-subsidised work.
- When pay-subsidised work is not counted towards the employment condition, it will extend the period during which work can be counted towards the employment condition (the review period).
Who will be affected by this change and when?
The change will affect you if you have done pay-subsidised work and apply for earnings-related unemployment allowance. Pay-subsidised work no longer accrues the right to earnings-related unemployment allowance, i.e. the employment condition (with the exceptions described above), if the work started on or after 2 September 2024.
4. Some age-related exceptions no longer apply
Most of the age-related exceptions in the Unemployment Security Act no longer apply:
- Persons aged 57 or over will no longer be covered by an obligation to employ, which previously enabled them to secure employment.
- The level of daily allowance for persons aged 58 or over is no longer protected. The protection has been relevant when a person has been in a lower-paid job and has become unemployed again, with the amount of daily allowance being recalculated.
- Persons aged 60 or over can no longer meet the prior work requirement for earnings-related allowance in an employment promotion service.
Who will be affected by this change and when?
The change applies to persons of the age stated above. As of 2 September 2024, the obligation to employ and the protection of the level of earnings-related unemployment allowance will no longer be available.
Read more about the age-related exceptions on KOKO’s website: The following age-related exceptions to unemployment security continue to apply in the future
Legislative amendments to unemployment security in 2024
The unemployment security system was already modified in the spring. A list of all the legislative amendments to unemployment security in 2024 can be found here: Changes to the unemployment security system 2024