Unemployment benefit criteria tightened

The work requirement for unemployment benefits will be extended from 6 months to 12 months as of September, the Social Insurance Institution-Kela said on Thursday.

The extension will make it more difficult for unemployed persons to qualify for earnings-related daily allowance or for the basic unemployment allowance paid by Kela.

However, part-time workers may benefit, since the changes mean that work history will be accrued for the work requirement on the basis of wage or salary income, rather than working time per week.

The rules concerning the work requirement for paid employment, wage-subsidised employment or employment-promoting services will change on September 2, 2024.

The change is due to new legislation adopted by the Parliament on changes to the work requirement.

The work requirement is applied in assessing the right of unemployed persons to receive earnings-related daily allowance or basic unemployment allowance.

The change in the work requirement means that an unemployed person must have a longer work history in order to receive earnings-related daily allowance or the basic unemployment allowance paid by Kela.

Under the new legislation, it depends solely on the amount of monthly salary or wages earned by the employee whether a month counts towards fulfilment of the work requirement.

This change has commonly been referred to as a “conversion of the work requirement into euros”.

Previously, work history was accrued for the work requirement on the basis of working hours. Work history was accrued for any calendar weeks in which an employee worked for at least 18 hours a week. No work history was accrued for weeks with fewer working hours than that.

The conversion into euros may prove particularly helpful for employees with less than 18 hours of work per week, provided that their salary or wage is at least 465 euros per month.

In the past, an unemployed person was required to have worked for about 6 months before becoming unemployed in order to meet the work requirement. The work requirement will now be extended to 12 months.

A calendar month will count towards the new work requirement if the employee receives a minimum of EUR 930 in salary or wages during that month.

If the employee receives a salary of EUR 465–929 during the calendar month, half a month will count towards the requirement.

Under the new legislation, work history for the work requirement can be accrued from fewer working hours, provided the employee has a high enough income.

If an employee has a monthly income under EUR 465, the work they do does not count towards the new work requirement.

The new work requirement is fulfilled if a total of 12 months of work have accrued during the 28-month reference period.

As before, the work requirement does not have to be fulfilled during a single, consecutive period of employment. All work that meets the conditions and falls within a reference period of 28 months counts towards the work requirement.

In practice, the length of the work requirement changes to 12 months for everyone who is employed when the law enters into force on 2 September 2024 and who is subsequently paid a minimum of 465 euros per month.

As of September 2, there are also changes to the application of the work requirement to wage-subsidised work and participation in employment-promoting services.

Participation in employment-promoting services will no longer count towards the work requirement.

Periods of wage-subsidised work will count towards the work requirement only in certain cases.

The work requirement means that an unemployed person must have worked for a required length of time before becoming unemployed. In addition, the work must meet certain other conditions in order to count towards the work requirement.

If the work requirement is met, the unemployed person may receive earnings-related daily allowance or basic unemployment allowance. If the unemployed person does not meet the work requirement, they may receive labour market subsidy.