Adjusted daily allowance – what is it in practice?

If you earn an income in addition to unemployment allowance, your daily allowance will be adjusted. Adjusted earned income includes wages for part-time work, income from self-employment and attendance fees. When your daily allowance is adjusted, it is reduced by an amount equal to 50% of your earned income.

The €300 standard entitlement has been abolished

With the legislative amendments that came into effect on 1 April 2024, the amount of adjusted daily allowance you can receive has changed. Previously, you could earn up to €300 per month without affecting the amount of daily allowance you received. Now, all earned income is considered adjusted income.

With the exception of the abolition of the standard entitlement, no other changes have been made concerning adjusted daily allowance.

Adjusted income

Any income you earn will generally affect the amount of daily allowance you receive. Capital income, however, is not considered adjusted income. In addition to wages, income and fees from sources such as self-employment, agriculture and forestry are considered adjusted income, along with any income and fees received through a billing cooperative. You may be entitled to adjusted daily allowance if you work part-time, work full-time for less than two weeks or are self-employed part-time.

Adjusted daily allowance amount

Your adjusted daily allowance is calculated by deducting an amount equal to half of your income from the full daily allowance amount.

Example: You earn €1,000 from part-time work in a month. Only half of that amount, €500, affects the amount of daily allowance you receive. To get the per-day deduction from your full daily allowance, you would divide €500 by 21.5. Therefore, the per-day deduction from your full daily allowance would be €23.26.

Estimate your adjusted daily allowance with KOKO’s allowance calculator.

Adjustment period

Calculation of adjusted income is payment-based, meaning the adjustment period is determined by the calendar month in which your wages are paid. When the actual work takes place is generally irrelevant.

Example: You worked part-time in April, and your wages are paid in May. You will receive the full daily allowance for April and adjusted daily allowance for May.

Because your income is calculated based on the date of payment, if your wages are not paid until after you leave part-time employment, you may receive the full daily allowance even after you leave.

Exceptions to the adjustment period

Though adjusted daily allowance is typically paid based on the date you are paid your income, there are a few exceptions to this rule.

  1. Adjustment of income from self-employment

Income from long-term self-employment is calculated based on your most recent completed tax year. This means that the self-employment income reported in your tax decision is divided by 12 months, and the monthly adjustment is calculated using the resulting 1/12 of your reported income. However, when it comes to new business activities, your income calculation is initially payment-based, meaning it is adjusted based on date of payment, before transitioning to adjustment based on your tax decision.

  1. Temporary lay-offs and adjusted daily allowance

The nature of your lay-off affects your adjustment period. If your daily working hours have been shortened, your income for the purposes of adjustment will be calculated based on date of payment. If you are off work entirely but have income as a result of part-time work, attendance fees or similar, your income is also calculated based on date of payment.

If your work week has been shortened and you have no other income, you will receive the full daily allowance for the lay-off days. If you have income as a result of part-time self-employment or other part-time work, your daily allowance will be adjusted, but your income will be calculated based on when the work is done. In this case, adjusted income includes the wages paid by the employer who laid you off and any other earned income.

If your temporary lay-off includes working shortened daily hours and a shortened work week, your income is calculated based on the date you are paid.

Example: You are working full days on Monday and Tuesday and are off work on Wednesday, Thursday and Friday. On Friday, you are working for another employer. You will receive adjusted daily allowance for five days (Mon-Fri), and your adjusted income includes your wages for Monday and Tuesday from the employer who laid you off, as well as your wages for Friday from your other employer.

Effect of working hours and wages on adjusted daily allowance

Adjusted daily allowance is also subject to restrictions related to working hours and daily allowance amount.

To be eligible for adjusted daily allowance, your working hours must be 80% or less of the working hours of a full-time employee. Your working hours are generally calculated based on the actual hours you worked during the adjustment period your income is calculated for. This can mean that your daily allowance application is rejected even if you did not work at all during the wage payment month.

Example: You are working part-time, and your last day of employment is 30 April. You apply for daily allowance for May, during which you have not worked at all. However, if you are not paid for the work you did in April until May, your wages and the hours derived from them for May will be based on the work you did the previous month. If you worked more than 80% of the hours of a full-time employee in April, your application for May will be rejected based on hours worked. If the hours you worked do not exceed the statutory maximum, your daily allowance will be adjusted based on what you were paid in April.

The second restriction concerns the amount of income you made. You are eligible for adjusted daily allowance if the amount of adjusted daily allowance does not exceed the statutory limit. The adjusted daily allowance and the adjustment period’s earned income combined may not exceed the wages the daily allowance is based on.