At the beginning of April, two legislative changes that affect the amount of earnings-related allowance will come into effect. One of the changes affects recipients of the daily allowance who have children, and the other affects recipients of the daily allowance who also receive earned income alongside the allowance.
Read about whether the changes affect you as a recipient of the daily allowance and how they may potentially impact in the future. Neither of the changes requires any action from the daily allowance recipient.
1. The payment of child increases will end
As of 1 April 2024, child increases will no longer be included in earnings-related unemployment allowance. For those receiving child increases, the daily allowance will decrease significantly with the removal of the child increase, or by €130–240 per month depending on the number of children.
Who is affected?
Child increases have been previously paid to recipients of daily allowance whose family includes children. Child increases have been paid for children under the age of 18 who live in the same household with the daily allowance applicant or who are the applicant’s biological children living elsewhere.
When will the change come into effect?
Child increases will no longer be paid as a part of daily allowances for April 2024 and beyond. The daily allowance earned until 31 March 24 will be paid normally with child increases even after April. In other words, it does not matter when the child increases are paid, but what period of time the daily allowance covers.
Will the change require any actions from me?
No, it will not. The payment of child increases will stop automatically.
2. In the future, even those on low incomes will be paid adjusted daily allowance
Those who receive unemployment allowance and earn an income during a period of unemployment or temporary lay-off (e.g. wages from part-time work, earnings from entrepreneurship, attendance fees) will be entitled to adjusted daily allowance. This means that any income you earn will affect the amount of daily allowance you receive. Your daily allowance will be reduced by an amount equal to 50% of your earned income.
The standard entitlement of €300 will be abolished starting 1 April 2024
Until now, the payment of daily allowance has been paid with the so-called €300 standard entitlement of earnings, which will be abolished due to a legislative change on 1 April 2024. The standard entitlement meant that recipients of the unemployment allowance were allowed to earn €300 per month of wages or business income while unemployed or laid off without the income affecting the daily allowance, meaning that the recipients were paid the full daily allowance. It also meant that the first €300 of income a person earned was not included in daily allowance adjustment, thus also benefitting those earning over €300.
Who is affected?
Those who receive earnings-related unemployment allowance and income taken into account in taxation, such as wages from part-time work, income from business activities (including agricultural and forestry income), or attendance fees.
For those who have been temporarily laid off: If you are temporarily laid off and your shortened working week consists of full days of lay-off and you have no income other than what the employer that laid you off pays you, you will continue to receive full daily allowance. In other words, the wages you receive from the employer that laid you off do not affect your daily allowance.
What does this change mean in practice?
If you earn a small income, such as low wages, income from entrepreneurship or attendance fees, the €300 standard entitlement may have meant that you still received the full amount of daily allowance. With the abolition of the standard entitlement, your daily allowance will now be adjusted. The adjusted daily allowance takes into account 50% of the income that you have earned, which is mainly shown in the Incomes Register or in the tax decision. The adjusted daily allowance may be less than the full daily allowance you previously received.
If you already receive adjusted daily allowance, please note that in the future the amount of your daily allowance may be lower even when your income is the same. Previously, only the part of your income that exceeded €300 per month was considered to be your income.
Please note: In adjusted daily allowance, ONLY HALF of the income you have earned will reduce your daily allowance.
Example of the impact of income on earnings-related unemployment allowance:
The tax decision of the recipient of the daily allowance shows a business income of €1,500. €1,500 / 12 months = €125/month. Previously, this recipient would have been paid the full daily allowance due to the €300 standard entitlement, but in the future this sum of €125/month will be included in the calculation of the daily allowance. The percentage that reduces this daily allowance is only half, or €62.5/month.
When will the change come into effect?
The standard entitlement will no longer be in force if your application period starts on 1 April or later. If you are already a recipient of adjusted daily allowance and your application period starts in March and extends into April, you will still be entitled to the standard entitlement from the month of April (e.g. if your application period is 15 March to 14 April 2024). Please note that you cannot change your application period and that it will remain the same, being either a period of one month or four weeks.
What you need to know about adjusted daily allowance:
- The income counted as earned income in taxation, is taken into account when paying the adjusted allowance.
- In your daily allowance application, remember to enter the hours you work under the correct days. You do not need to report the hours you worked as an entrepreneur (including through an invoicing service).
- Your income is usually adjusted based on the payment period. Exceptions include if you are partially laid off with a shortened working week and you also have other adjusted income from part-time work or entrepreneurship.
- The fund determines whether your income is adjusted income and which period the adjustment will affect.
Will the change require any actions from me?
No, it will not. The unemployment fund will receive your income information directly from the Incomes Register. With regard to business income, the unemployment fund will ask you to submit the tax decision of the previous year after the tax information has been confirmed. The fund always ensures it obtains the necessary information and will request additional information if needed. There have been no changes to the process for clarifying income.
More information about adjusted daily allowance: Adjusted daily allowance
Further information about adjusted income:
Adjustment of attendance fees
Adjustment of income from business operations and your own work
Adjustment of forestry and agricultural income