We calculated how the cuts proposed in the Government Programme would affect the amounts of earnings-related unemployment allowances.
Graduation of the earnings-related unemployment allowance
According to the Government Programme, the amount of the earnings-related unemployment allowance would fall to 80% of the full amount after 2 months of unemployment. After 8 months, it would fall to 75%.
In 2022, A-kassa paid earnings-related allowances to just under 40 000 members. Temporarily laid-off persons accounted for about 20 per cent of benefit recipients that year; the majority of these were laid off for a short period of time.
We calculated how the cuts would affect our beneficiaries. About a third of the recipients of A-kassa earnings-related unemployment allowances were unemployed for a maximum of two months. Therefore, one third – about 13,000 beneficiaries – would avoid the first 20% cut. About two thirds of the recipients of A-kassa earnings-related unemployment allowances were unemployed for a maximum of 8 months. This means that the second cut of 25% would apply to about one third of the beneficiaries.
In our examples, we used a monthly wage of EUR 2 500, which would entitle the recipient to about EUR 70 per day, or EUR 1 500 per month before tax and any increases.
The 80% daily allowance would be EUR 56 per day, so the average earnings-related allowance paid per month would be EUR 1,200. This would be EUR 300 per month less than the full rate.
The 75% daily allowance would be €53 per day, or an average of €1,125 per month, €375 less per month than the full allowance.
| Graduated allowances | Following the cuts (Average earnings-related unemployment allowance paid in 2022) |
2022 Recipients of earnings-related allowance |
| 100% for the first 8 weeks | 1,500 per month | Around 40,000 members |
| 80% for the next 9-34 weeks | -300 € per month = 1.200 € per month | 26 000 members |
| 75% from week 35 | -375 per month = EUR 1,125 per month | 13,000 members |
Abolition of the child increment
Under the current situation, if an unemployed person has children, they receive a child increment in addition to the earnings-related daily allowance. The amounts above do not include the child increment as it would be abolished.
The number of recipients of the child increment in 2023:
for one child: EUR 147.21 per month
for two children: EUR 216.09 per month
for three children: EUR 278.46 per month
Accrual of holiday compensation and extension of waiting period
In future, annual holidays not taken before the end of the employment relationship will postpone the start of the earnings-related unemployment allowance by as many days as the holiday compensation corresponds to. For example, if an amount equivalent to seven days had been paid at the end of the employment relationship, the holiday compensation would reduce the allowance by a total of EUR 490 for those receiving EUR 70 per day. Similarly, if holiday compensation equal to one month’s salary had been accrued, the accrual would reduce the allowance paid by an average of one month’s daily allowance, i.e. EUR 1 500.
Unemployment security is paid only after a waiting period, which is currently five working days. In the future, the waiting period would be increased to seven days. Adding two days of the waiting period to the start of unemployment, when the daily allowance is EUR 70 per day, would reduce the benefit payable by EUR 140.
Other cuts have also been proposed. These cuts would affect part-time workers after the abolition of the protection component and the elderly, whose protection would be abolished. In the case of young and temporary workers, the employment condition will be extended to 12 months. The change from a time-based to a euro-based employment condition would mean a reduction in the level of allowances for part-time and intermittent workers.
All the planned changes are explained in our updated article.
