The protected part of unemployment security refers to the income an unemployed person is allowed to earn without affecting their earnings-related allowances. A legislative amendment by the Government, entering into force on April 1, will fully remove the protected part of earnings.
The protected part of earnings was implemented in the beginning of 2014. For part-time work, it has since remained at the maximum of 300 euros for a one-month application period and 279 euros for an application period of four consecutive weeks. The protected part is deducted from earnings before tax, i.e. from gross income.
A legislative amendment by the Government, entering into force on April 1, will fully remove the protected part of earnings. The new legislation applies to adjusted daily allowance for application periods starting April 1, 2024 or later. From that date forward, the protected part of earnings will no longer be used when calculating adjusted earnings-related allowances. In other words, the removal of the protected part decreases the size of the adjusted earnings-related allowance.
Currently, 50% of income exceeding the protected part is deducted from earnings-related allowances.
An example salary of 800 euros for part-time work would exceed the 300-euro maximum by a total of 500 euros, 50% of which is 250 euros. This is deducted directly from the earnings-related allowances paid out for the entire month.
Following the legislative amendment, 50% of the full 800-euro salary, i.e. 400 euros, is directly deducted from the earnings-related allowances paid out for the entire month.
Calculation of adjusted earnings-related allowance
Adjusted earnings-related allowance is regulated by a maximum, tied to the salary on which the allowance is based. This means that the combined total of adjusted earnings-related allowances paid out by the fund and income received during the application period cannot exceed the base salary. You can determine the maximum amount with a calculation formula that uses the actual paid income with the protected part still included.
Monthly impact:
2023 calculations
For an applicant with a monthly salary of €2,500, the full daily allowance is €70.48/day
Monthly salary € 2,500/month Salary for part-time work € 1,400/month Protected part of earnings € 300/month Remaining salary € 1,100/month 50% of the remaining salary affects the daily allowance € 550/month The remaining 50% is divided by the number of days worked during the application period 21.5 days/month Sum deducted from applicant’s full daily allowance € 25.58/day
Full earnings-related allowance/day Adjusted earnings-related allowance/day Adjusted earnings-related allowance /month € 70.48/day € 44.90/day € 965.35/month
2024 calculations
For an applicant with a monthly salary of €2,500, the full daily allowance is €70.48/day
Monthly salary € 2,500/month Salary for part-time work € 1,400/month Protected part of earnings Remaining salary 50% of the remaining salary affects the daily allowance € 700/month The remaining 50% is divided by the number of days worked during the application period Sum deducted from applicant’s full daily allowance € 32.55/day
Full earnings-related allowance/day Adjusted earnings-related allowance/day Adjusted earnings-related allowance /month € 70.48/day € 37.93/day € 815.49/month
Decrease in adjusted daily allowance following the law reform € -149.86/month
