Unemployment: what changes in the payment of benefits and their calculation

The government is creating a new payment method and tiered benefits model for the unemployed. The changes will also affect unemployment benefits.

The first is direct, since the new insurance bill presented to the Council of Ministers yesterday stipulates that unemployment benefits and a number of other payments will be made only through a prepaid card.

Prepaid card
Unemployed people, as well as other benefit recipients, will receive a prepaid card from their bank on which benefits will be “credited.” The withdrawal limit on this card will be 50% of the total amount and the balance will need to be spent through electronic transactions. There will even be tax benefits for using the card in electronic transactions, for example, more active participation in the tax lottery.

Pilot projects

DYPA has long been working on two pilot schemes to increase unemployment benefits. These programs are expected to hit the market starting in 2024.

Link to previous salary

The following scenarios are considered for one of these programs. The first involves linking unemployment benefits to the previous salary of the unemployed before dismissal and will be graduated. The idea is that the amount of unemployment benefits will not be tied to the minimum wage, but to the previous earnings of the unemployed. The issue of starting the unemployment benefit at a higher level in the first months of payments and gradually decreasing is also being considered.

In particular, the possibility of its direct dependence on the wages of workers before dismissal, length of service, contributions and other characteristics of the unemployed is considered. According to this proposal, the unemployment benefit would be set at 55% of the average monthly salary of an unemployed person for the previous 3 years, with a maximum benefit limit of 1,200 euros, but the maximum duration of the increased benefit would be only six months and the total amount of payments should remain the same , as today (5748 euros per year).

average salary
The second option is to tie the amount of unemployment benefits to the average salary (1,190 euros) based on the latest data from the Ergani system. It is reported that in the first month of subsidized unemployment it can be 80% of the average salary and gradually reach 479 euros. In any case, the total amount that an unemployed person can count on per year, namely 5,748 euros, will remain the same.

“The reform providing for an increase in unemployment benefits will be a pilot at first, since such radical changes cannot be fully implemented,” sources in the Ministry of Labor commented to OT. After conducting the experiment and studying its results, a single new system for paying unemployment benefits can be introduced.

Long-term unemployed

The second scheme, which will concern the long-term unemployed, provides for a gradual increase in benefits over 12 months from the current 200 to 325 euros. The €33.8 million pilot scheme is planned to affect 10,500 long-term unemployed people, while the possibility of extending long-term unemployment benefits is being explored, at least for those with many years of insurance coverage and a high salary before being laid off.

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