Changes to the Unemployment Security Act 2024

According to the Act, the amounts of the basic daily allowance, the increase in the basic daily allowance and the child increase affecting the amount of earnings-related daily allowance are revised with the National Pension Index. In practice, this means that the amount of earnings-related daily allowance has changed slightly each year as the cost of living has changed.

As a result of the legislative amendment, such a cost-of-living adjustment will not be made in 2024 – 2027. The change applies to all recipients of earnings-related daily allowance.

Thus, the level of earnings-related daily allowance does not change now, even if the cost of living changes. Without the freezing of the index, the level of earnings-related daily allowance would have risen by around 15–20 euros per month from the beginning of 2024 depending on the level of earnings-related daily allowance.

The effect of index freezing is multiplied over the years and therefore the freezing has an upper limit. If in subsequent years, due to index freeze, the real value of earnings-related daily allowance decreases by more than 10.2%, a normal index check is made to the earnings-related daily allowance.

According to the amendment, we can only start paying the earnings-related daily allowance after the effect of the holiday compensation has ended.

If you have unused holidays at the end of your employment, they will be paid to you in cash. Such holiday compensation prevents us from paying you an earnings-related daily allowance for the period for which the holiday compensation is paid. For example, if you are compensated for a month’s untaken leave, we cannot start paying you the daily allowance until about a month after you become unemployed.

In practice, therefore, the periodisation of the holiday allowance postpones the start of the payment of the earnings-related daily allowance. In principle, you will not lose anything, because the periodicity does not shorten the maximum payment period for earnings-related daily allowance. In practice, for example, during the first month of unemployment, we may not be able to pay you earnings-related daily allowance.

We apply a change to holiday compensation paid on or after 1.1.2024 based on an employment relationship lasting at least two weeks.

The change applies to all applicants for earnings-related daily allowance, but only if you receive holiday compensation based on employment that ended on or after 1.1.2024. The effect is therefore not evenly distributed, as it will affect those who cannot or do not have time to take their holidays during their employment. In practice, this is most typically the case for fixed-term contracts.

There is a waiting period at the beginning of unemployment, during which we cannot, as a rule, pay you earnings-related daily allowance. In other words, we can only pay earnings-related daily allowance after the waiting period. Prior to the amendment, the waiting period was equal to five full working days.

With the amendment, the waiting period has been increased to seven days. After the amendment, we can pay you earnings-related daily allowance only after you have been unemployed as a job seeker for seven full working days. We apply the amendment to the waiting period, which begins on or after 1.1.2024.

Extending the waiting period postpones the start of the payment of earnings-related daily allowance by two days. The maximum payment period is not affected by the extension of the waiting period, so in principle you will not lose anything. In practice, there are two more days at the beginning of unemployment from which we do not pay you earnings-related daily allowance.

The change applies to all applicants. In practice, only new unemployed people and those who meet the employment condition again and therefore get a new waiting period.

As a result of the amendment, we will no longer pay child increases to the earnings-related daily allowance as of 1.4.2024.

In 2024, we will only pay child increases to the earnings-related daily allowance from January to March.

Eliminating child increases reduces the earnings-related daily allowance payable by 130-240 euros per month, depending on the number of children.

The amendment only applies to applicants with dependent children. This is the case for about 30 % of applicants.

We no longer take the exempt amount into account when calculating the amount of adjusted earnings-related daily allowance. We apply this change when the application period starts on or after 1.4.2024. In practice, this change reduces the amount of adjusted earnings-related daily allowance.

When you apply for earnings-related daily allowance, you can earn 300 € at the same time without your earnings affecting your daily allowance. For any part of your salary above this amount, your unemployment benefit will be reduced by 50 cents per euro.

The change applies to all applicants, but in practice only applies to those who have an income from working part-time during the application period beginning on or after 1.4.2024. Typically, about 30-40% of applicants have an income from working part-time.

The euro impact of the change will vary according to the situation, because the removal of the exempt amount will affect the calculation of the adjusted earnings-related daily allowance. In practice, the change reduces the benefit payable by a maximum of 150 € per month.

Job alternation leave has made it possible for you to remain off work for a maximum of six months and your employer has at the same time hired an unemployed person as a substitute for the same period. Wages are not paid for the duration of the alternation leave, but the alternation allowance.

Job alternation leave has been abolished as of 1.8.2024. The amendment enters into force so that the alternation leave may have been started on 31.7.2024. The alternation leave that started in July can continue normally for the entire 180 calendar days maximum. On or after 1.8.2024, no new alternation leave has been available.

Around 5,000 people have taken alternation leave each year. Over the years, the conditions for alternation leave have been tightened so that its use has already decreased significantly in the past.

The job of unemployment funds is to arrange income security for their members. After the amendment, unemployment funds will also have the opportunity to support the employment of their members in various ways.

The amendment has been written quite broadly so that the funds have a wide freedom of choice as to what kind of services it is worth offering to its members.

Support for employment is therefore voluntary for the funds. Therefore, the law can enter into force on a fast schedule. In practice, this means that the funds will not be able to provide new services at the same pace. Thus, the practical effect of the law can only be seen over a slightly longer period of time.

The amendment will introduce a staggered amount of earnings-related daily allowance. This means that your earnings-related allowance will decrease as your unemployment becomes longer. The staggering will take place in such a way that the earnings-related allowance will decrease

• to 80% of the original after 40 days, i.e. about two months, and
• to 75% of the original after 170 days, i.e. eight months

We will apply the staggering on or after 2.9.2024, when you meet the working condition and the working condition requirement is 12 months of working condition.

Staggering applies to everyone and reduces earnings-related daily allowance by 20 per cent and then by 25 per cent. With the average earnings-related daily allowance, the first staging reduces the earnings-related daily allowance by about 350 euros per month and the second staging further by about 85 euros, so that the total effect after the second staging is on average about 435 euros per month.

After the amendment, paid-subsidised work no longer accumulate the working condition.

Paid-subsidised work no longer accumulate the working condition if the paid-subsidised work begins on or after 2.9.2024.

Even after the amendment to the law, paid-subsidised work could exceptionally accumulate the working condition when the pay subsidy is paid for hiring people with reduced ability to work. However, the exception is quite strict, as the working condition would only accumulate in such a situation after 10 months of pay subsidy. Even after that, only 75% of the working time would accumulate the working condition.

However, when paid-subsidised work is no longer taken into account in the working condition, it extends the review period, i.e. the period for which we can take the work into account in the working condition at all.

In the past, pay subsidies have been used extensively to support the long-term unemployed and the unemployed who are approaching retirement age.

With the amendment, exceptions based on age will be removed from unemployment security.

After the amendment of the law

• Persons aged 57 or older are no longer eligible for the employment obligation
• The level of daily allowance for persons that has reached the age of 58 is no longer protected in a situation where a person is in a low-paid job and becomes unemployed again so that the level of daily allowance is recalculated
• Persons aged 60 or older can no longer fulfil the working condition in a service promoting employment.

We apply changes when your working condition can be recounted in accordance with the new euroised model for the period September 2024 or later.

The employment obligation may arise until 1.9.2024.

The amendment requires you to have accumulated twelve months of work during the 28 months preceding the month in which you have been a member of the unemployment fund in order to qualify for the working condition. Before the law change, the requirement was 26 calendar weeks, or about six months.

We will apply the longer working condition when we can count your work under the new euro-standardised model for September 2024 or later.

We will not apply the longer working condition if the working condition has been met in a job or service provided under an employment obligation if the employment obligation arose before 2.9.2024. This applies even if the job or service provided under the obligation starts or continues on or after 2.9.2024.

The change will particularly affect people at the beginning of their careers and those whose careers are intermittent and permanent employment is difficult to find. In practice, access to the earnings-related daily allowance will be slightly more difficult and slower than before.

With the change in the law, you will collect the working condition in euros instead of in calendar weeks as before the change in the law.

With the change in the law, we can count as a month of working time a calendar month during which you have been paid at least 930 € (at 2023 levels). Months of employment can also be counted as half months if your earnings in a calendar month are at least 465 € but less than 930 €. The euro amounts are adjusted annually by the national pension index.

The law sets a lower limit in euros for the accumulation of the working condition. However, we can continue to count only wages that are at least in line with the minimum wage under the collective agreement or, in the absence of such an agreement, the minimum wage under the Unemployment Insurance Act. It is therefore possible that your salary exceeds 930 € per month, but is below the minimum wage agreed in the collective agreement, in which case the working condition will not be accumulated despite exceeding the euro threshold.

The changes to the working condition will apply from 2.9.2024. If your working condition is met before 2 September 2024, we will apply the current provisions for the purposes of meeting the working condition and calculating the daily allowance.

In the spring budget debate, the government decided to abolish the active-time increase components of the unemployment benefit.

When you participate in the TE service, you will be able to receive increased unemployment benefits for 200 days. If implemented, the government’s proposal would change the situation so that you would receive the same amount of benefit as you would be entitled to without participating in the TE service.

The change will affect those receiving unemployment benefit who participate in TE services next year. Compared to before, the impact on the earnings-related daily allowance will be around 60-210 € per month, depending on the level of the earnings-related daily allowance and the duration of participation in TE services.

We will provide more information as the legislative project progresses.