Staggering to Parliament

Topics

• Law change

The Government has submitted a proposal to Parliament that changes the amount of the earnings-related daily allowance, the accumulation of an employee’s working condition and the obligation of municipalities to organise rehabilitation, training or work opportunities for unemployed jobseekers.

Staggering

Under the proposal, the amount of the daily allowance would be staggered so that it would decrease as unemployment becomes longer. It would be reduced for the first time after 40 days of unemployment and for the second time after 170 days of unemployment. At the first step, the earnings-related daily allowance would be reduced by 20% and at the second step by 25% in relation to the earnings-related daily allowance based on the pay on which the earnings-related daily allowance is based during the period of unemployment. The cut in the earnings-related daily allowance would therefore not be repeated.

Duration of unemployment in payment days	-40	41-170	171-
Level of the daily allowance	100 %	80 %	75 %

The reduction in the daily allowance would be made by reducing the earnings component or the increased earnings component by an amount that would reduce the total daily allowance, consisting of the basic and earnings components, by the amount indicated above. However, the earnings-related daily allowance could not be less than the basic daily allowance or the basic daily allowance plus the increased component for employment services.

Pay subsidized work does not accumulate the working condition

Under the proposal, the working condition of an employee on which the earnings-related daily allowance is based would be amended so that, as a rule, pay subsidized work would no longer accumulate any working condition.

Notwithstanding the main rule, however, pay subsidized work for the employment of a disabled person and pay subsidized work for the employment of a long-term unemployed person over 60 years of age would accumulate the working condition. In this case, however, the first 10 months of pay subsidized work would not be counted towards the working condition. In these situations, in line with the current situation, 75% of the months of the working condition would be taken into account.

Instead of accumulation of the working condition, employment in pay subsidized work would be the basis for extending the reference period of the worker’s working condition to the extent that it would not accumulate the working condition under the proposed derogation. This corresponds to the current situation in so far as pay subsidized work does not currently accumulate a working condition. It is also proposed that pay subsidized work could be taken into account in full for the purposes of meeting certain unemployment benefit sanctions or for the purposes of accumulating the waiting period for labour market subsidies. Currently, in these situations, only the part of the pay subsidized work that contributes to the working condition is taken into account.

Abolition of age-related derogations

The draft also proposes to abolish certain age-related exceptions to unemployment benefit.

Under the proposal, the working condition for an employed person would not be met by a rehabilitation, training or employment opportunity which a municipality is obliged to provide to an unemployed jobseeker who meets the age conditions and whose entitlement to unemployment benefit for an employed person is about to expire. Since the provision of pay subsidized work or services on the basis of such an obligation could no longer constitute working condition, the provisions on municipal obligations are proposed to be repealed. Similarly, the protective provisions on the amount of the earnings-related allowance linked to these age-related derogations would be repealed.

In addition, it is proposed to repeal the safeguard provision for persons aged 58 or over, under which the level of the daily allowance for an employed or self-employed person may not be reduced if the person satisfies the working condition after reaching that age.