Legislative Changes 2024

The waiting period for unemployment benefit has been extended from five days to seven days. The waiting period refers to the initial period at the start of unemployment or layoff during which unemployment benefit is not paid.

The waiting period is seven days if the waiting period begins on 1 January 2024 or later.

Periodization of holiday compensation has been. This means that if a person has unused vacation days at the end of their full-time employment (thas has lasted for at least two weeks), the holiday compensation paid for those days will postpone the start of eligibility for unemployment benefit. Holiday compensation equivalent to one month's salary will delay the start of unemployment benefit by approximately one month.

Holiday compensation is periodized if it is paid based on an employment relationship that ends on or after 1 January 2024.

The National Pensions Index has been suspended for the duration of the government term from 2024 to 2027. This means that benefits tied to the National Pension Index will not increase at the turn of the year. The suspension on index increases also affects earnings-related allowance as stipulated in the Unemployment Security Act. Earnings-related allowance consists of a basic daily allowance (tied to the National Pensions Index) and an earnings-related component.

The change affects benefits starting from 1 January 2024.

Child increases to unemployment allowances have been removed starting from 1 April 2024.

Child increases continue to be paid until 31 March 2024, even if the application is submitted to the Unemployment Fund after 1 April 2024.

The so-called "protected amount" for wage income has been removied from application periods starting on or after 1 April 2024.

The protected amount refers to the amount of wage income (279-300 €) that, for example, a part-time worker has been able to earn before 50 % of their earnings has reduced their unemployment allowance.

With the removal of the protected amount, half of all earnings during the application period affect the benefit. In practice, this means that every euro earned will reduce the amount of unemployment allowance by 50 cents.

Job alternation leave will be discontinued starting from 1 August 2024. Job alternation leave refers to a situation where a person takes a leave from work for up to six months, and during this time, the employer hires an unemployed individual. No salary is paid during the leave period but the person is entitled to job alternation compensation.

It is possible to commence job alternation leave until 31 July 2024.

Earnings-related allowance will be staggered starting from 2 September 2024. This means that, after 40 benefit days (approximately 8 weeks), the amount of earnings-related allowance will decrease to 80 % of the full allowance. Additionally, after 170 benefit days (approximately 34 weeks), the amount will decrease to 75 % of the full allowance.

The new legislation will be applied if the amount of the earnings-related allowance is calculated on or after 2 September 2024. The allowance will not be staggered if payment of the allowance’s maximum period has started on or before 1 September 2024.

EXAMPLES

Starting from 2 September 2024, certain age-related exceptions to unemployment benefits will be abolished. This means that:

• the obligation of municipalities to employ individuals aged 57 years or older to employment that meets the work requirement will end

• the level of earnings-related allowance for individuals aged 58 years or older will no longer be protected in a situation where the amount of the earnings-related allowance decreases when recalculated.

• individuals aged 60 years or older will no longer be able to fulfill their work requirement by participating in employment-promoting services. At the same time, the right to earnings-related allowance during employment-promoting services ceases after the maximum payment period has expired.

Starting from 2 September 2024, working with pay subsidies will no longer accumulate the work requirement necessary for earnings-related allowance eligibility. However, pay-subsidized work fully extends the 28-month review period, i.e. the period within which the work requirement must be met.

If the pay subsidy has been granted because of reduced working capacity or for the employment of a long-term unemployed person over the age of 60, part of the work can be accepted for the employee's work requirement. 

The work condition (or work requirement) that entitles to earnings-related allowance will be extended from 6 months to 12 months starting from 2 September 2024.

After the implementation of the amendment, you must work for 12 months during a 28 month review period (currently: 26 weeks) before being eligible for earnings-related allowance. The work condition must be accumulated while you are a member of an unemployment fund.

The 12-month work condition will be applied if your work condition is fulfilled on or after September 2, 2024.

The work condition (or work requirement) for earnings-related allowance will be reformed so that eligibility for the allowance no longer depends on the number of work hours prior to unemployment but is assessed based on earned income (hence the term "euroization").

Currently, the work condition is met when you have been in paid employment for at least 26 calendar weeks while being a member of an unemployment fund. The work condition takes into account calendar weeks during which there has been at least 18 hours of paid work.

After the legislative change, the work condition becomes income based. This means that the work condition will be accumulated for months when you have earned at least 930 euros while being a member of an unemployment fund. The work condition can also be accumulated in periods lasting half a month. In this case, your monthly income must have been 465-929 euros.

If you have accumulated your work condition in hour-based weeks before the legislative change, the weeks will be converted into wage-based months automatically. The new income-based / "euroized" work condition will be applied if your work condition is fulfilled on or after 2 September 2024.