The Government seeks savings from unemployment benefits with the activity model

The Government has submitted a budget proposal for next year to the Parliament. Unemployment security expenditure is expected to decline on the whole as the unemployment rate decreases, so the appropriations for unemployment security are falling. In connection with the budget proposal, the Government is proposing changes to the Unemployment Security Act, but the savings from these changes remain rather small.

Activity model for unemployment security

The activity model aims to increase employment and reduce the duration of unemployment. In the activity model, the personal liability period at the start of unemployment would be reduced back to five days from the current seven days. During unemployment, activity would be reviewed in periods of three months, or 65 benefit payment days. Unemployment benefit would be cut by 4.65%, amounting to about one monthly payment day, in the next period if the applicant has not been active.

According to the model, activity would consists of employment of one week meeting the employment condition, or 18 hours, during the review period. Business activities or employment promotion measures would also count towards the activity requirement.

The Government estimates that the model will save EUR 9.5 million in unemployment security expenditure in 2018.

Additional funding for entrepreneurship, education and wage subsidies

There is a desire to facilitate the starting of business activities and the completion of short-term studies during unemployment. The Government intends to invest EUR 13.5 million for this purpose in 2018. In addition, the appropriation for wage subsidies would be increased by EUR 14.1 million.

Ministry of Social Affairs and Health bulletin on the activity model

Government bulletin on the budget proposal

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