The payment period of the unemployment insurance benefit will depend on the number of unemployed

On June 30, amendments to the Unemployment Insurance Act will enter into force, according to which the payment period of the unemployment insurance benefit will depend on the number of registered employees, in addition to the length of the person’s period of insurance. If the unemployment rate is high, the payment period of the unemployment insurance benefit will be longer, and if unemployment is low, the benefit’s payment period will be shorter.

The main purpose of the changes is to increase the flexibility of the unemployment insurance benefit system and to offer greater social protection to the unemployed in a more difficult labour market situation, as well as to promote faster return of the unemployed to the labour market in better economic times.

Currently, the payment period of unemployment insurance benefits depends only on the length of the person’s period of insurance. If the length of a person’s period of insurance is less than five years, the payment period of the benefit is up to 180 days. If the length of the period of insurance is between five and ten years, the payment period of the benefit is up to 270 days, and in the case of a period of insurance of more than ten years of service, the unemployed person is entitled to a benefit of up to 360 days.

As of June 30, the length of the payment period of unemployment insurance benefits will also depend on the labour market situation. According to the new system, when applying for unemployment insurance benefits, the Unemployment Insurance Fund will determine the payment period of the benefit according to the length of the applicant’s period of insurance, and depending on the labour market situation, the payment period of the benefit may be extended upon expiring.

If the period of insurance is shorter than five years
If the length of a person’s period of insurance is less than five years then from June 30 the payment period of unemployment insurance benefits will initially be 180 calendar days (Section 8(1)(1) of the Unemployment Insurance Act). This is the same period as applied today.

However, in the future, when the payment period of the benefit expires, it will be automatically extended by 60 days if unemployment is at a high level and the person is still unemployed (Section 8(13) of the Unemployment Insurance Act). According to the Unemployment Insurance Act, unemployment is high if, as of the last day of the previous calendar month preceding the end of the period of receiving the benefit, the number of registered unemployed persons is equal to or greater than the average number of registered unemployed persons of the 36 months prior to the aforementioned calendar month, multiplied by 1.2.

Therefore, in the future, the period of receiving unemployment insurance benefits for a person with less than 5 years of insurance period will be 180 days as a general rule, but it will be automatically extended to 240 calendar days in case of high unemployment.

If the period of insurance is five to ten years
If the length of a person’s period of insurance is five to ten years then from June 30, the period of receiving unemployment insurance benefits will initially be shortened from the current 270 calendar days to 210 calendar days (Section 8(1)(2) of the Unemployment Insurance Act).

However, in the future, the period of receiving the benefits will be automatically extended by 60 days upon expiring (to 270 days in total) if the person continues to be unemployed and the number of unemployed is at the usual level (Section 8(11) of the Unemployment Insurance Act). The number of unemployed is considered normal if, as of the last day of the calendar month before the last calendar month preceding the end of the period of receiving the benefit, the number of registered unemployed persons is equal to or greater than the average of the number of registered unemployed persons in the 120 months preceding the aforementioned calendar month as multiplied by 0.8, or is equal to or greater than the average number of registered unemployed persons in the 36 months preceding the aforementioned calendar month.

If, at the end of the payment period of the benefit, unemployment is at a high level then the period of receiving the benefit will be automatically extended by 120 days, i.e. the person has the right to receive unemployment insurance benefit for a maximum of 330 days (Section 8(12) of the Unemployment Insurance Act).

Therefore, if a person’s period of insurance is five to ten years, the period of receiving the benefit will be 210, 270 or 330 calendar days, depending on the level of unemployment.

If the period of insurance is ten years or more
If the length of a person’s insurance period is ten years or more then the initial period of receiving unemployment insurance benefits will be 300 calendar days instead of the current 360 calendar days (Section 8(1)(3) of the Unemployment Insurance Act).

At the same time, the law amendment stipulates that the period of receiving the benefit will be automatically extended by 60 days (to 360 days in total) if the person continues to be unemployed and the number of unemployed is at the usual level (Section 8(11) of the Unemployment Insurance Act).

If, at the end of the payment period of the benefit, unemployment is at a high level then the payment period of the benefit will be automatically extended by 120 days i.e. the person has the right to receive unemployment insurance benefits for a maximum of 420 days (Section 8(12) of the Unemployment Insurance Act).

Therefore, if the length of a person’s period of insurance is ten years or more, the period of receiving the benefit will be 300, 360 or 420 calendar days, depending on the number of unemployed.

A comparison between the current and the new system is presented in the following table:

Period of insurance	Current system	New system
		When first assigned	Extension if unemployment is at the so-called normal level	Extension if unemployment is high
Less than 5 years	180 calendar days	180 calendar days	180 calendar days	240 calendar days
5 to 10 years	270 calendar days	210 calendar days	270 calendar days	330 calendar days
10+ years	360 calendar days	300 calendar days	360 calendar days	420 calendar days

 

If you have any questions about the soon-to-be-applied amendments to the Unemployment Insurance Act, please contact the Chamber’s lawyers at the e-mail address of juristid@koda.ee.

See also: Unemployment Insurance Act