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.

According to the government proposal, job alternation leave will be discontinued. 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.

Job alternation leave is planned to be discontinued on 1 August 2024. According to the government proposal, it is possible to commence job alternation leave until 31 July 2024.

Currently, the amount of earnings-related allowance remains constant throughout its maximum period. According to the government proposal, earnings-related allowance will be staggered. This means that, after eight weeks of unemployment, the amount of earnings-related allowance will decrease to 80 % of the full allowance. Later, after 34 weeks of unemployment, the amount will decrease to 75 % of the full allowance.

The staggering of earnings-related allowance is intended to be implemented on benefits starting from 1 September 2024.

EXAMPLES

According to the government proposal, the following age-related exceptions to unemployment benefits will be abolished:

• Individuals aged 57 years or older may be included in the employment obligation, which secures employment for them.

• Daily allowance levels are protected for individuals aged 58 years or older. This protection is applicable when a person is in low-paying employment and becomes unemployed again, resulting in a recalculation of the amount of the daily allowance.

• Individuals aged 60 years or older can fulfill the work condition required for earnings-related allowance while participating in employment-promoting services

According to the government proposal, working with pay subsidies will no longer accumulate the work requirement necessary for earnings-related allowance eligibility. Currently, working with pay subsidies accumulates the work requirement at a rate of 75 % (every fourth week is not counted).

The change is intended to be implemented from 1 September 2024 onwards.

The work requirement that entitles to earnings-related allowance will be extended from 6 months to 12 months. Work requirement means that a member of the unemployment fund must work a certain number of weeks (currently: 26 calendar weeks) before they are eligible for earnings-related allowance. The work must be done during unemployment fund membership.

The legislative change will be implemented from September 2024 onwards.

The 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 the earned income (hence the term "euroization").

Currently, the work requirement is met when an unenmployment fund member has been employed in paid work for at least 26 calendar weeks during their membership. The work requirement takes into account calendar weeks during which there has been at least 18 hours of paid work.

With an income based work requirement, the weekly hour limit will be abandoned. Instead, the work requirement will be met if a fund member has earned a certain minimum monthly income for approximately one year. The minimum income is about 930 euros.

The income-based work requirement will be applied to income earned and paid from 2 September 2024 onwards.