How does being laid off affect earnings-related daily allowance?

If you have been laid off, you can still apply for earnings-related daily allowance. In the Unemployment Security Act, a person who has been laid off is considered unemployed, meaning that almost all regulations on unemployment can also be directly applied to laid off employees. However, there are a few exceptions.

Different types of lay-offs

You can be laid off on a full-time basis or by having your weekly or daily working hours reduced. In practice, these different forms of lay-offs can be combined.

If you are laid off on a full-time basis, we can pay your daily allowance in full for the duration of the lay-off.

If you are laid off by having your weekly working hours reduced, it means that during the calendar week, you have days when you work full hours and one or more days when you are laid off. In these cases, we will pay the full amount of daily allowance for the days of lay-off, but no daily allowance will be paid for working days.

A lay-off can also mean that you work shorter days. You may still be working, even on all business days, but you have at least one day per week when your working time is shorter. In these cases, we can pay you an adjusted daily allowance. This means that your income is taken into account when determining the amount of your daily allowance. We can still pay you a daily allowance, but since you still earn a salary, it will be less than if you were completely laid off. You can estimate the amount of your adjusted daily allowance using our daily allowance calculator.

We will also pay you an adjusted daily allowance if you have both days when you are laid off on a full-time basis and days when your working day is shorter. In this case, your income for both shortened and full working days are taken into account.

Effect of lay-offs on the working time limit of adjusted daily allowance

Adjusted daily allowance can only be paid if your working time does not exceed 80% of the working time of a full-time employee. Usually the review period for this working time limit is the entire adjustment period. Situations in which the lay-off is carried out by reducing the number of weekly or daily working hours are an exception to this. In these cases, the working hours are reviewed by calendar weeks.

If you have been laid off for a shortened working week, the exceeding of your working hours will be reviewed by calendar week based on earnings. This means that your working hours will be taken into account in the week in which you actually worked them. If you have been laid off for a shortened working day and your daily allowance is paid in an adjusted way, the working time limit will be reviewed based on payment.  The working hours you work in a payment based review are not taken into account until the calendar week in which you have been paid for them.

example 1: lay-off by reducing weekly working hours

Person A has been laid off by reducing their weekly working hours. Person A works in such a way that they work four full working days a week and are laid off for one entire day.

First, it is reviewed if the working time limit is exceeded. As A works four full eight-hour working days a week, their working hours are 4 days * 8h = 32 working hours per week. This number is compared with the maximum weekly working time. A has been laid off for a shortened working week, so the working hours are taken into account in the week when they have actually conducted them.

The maximum working time is 80% of the working time of a full-time employee. In A's field of work, full-time working hours are 40 hours per week, i.e. the working time limit for daily allowance is 40h/week * 80% = 32 working hours per week.

A's working hours per week 32h = maximum number of hours allowed 32h. The permissible 80% working time is therefore not exceeded, i.e. daily allowance can be paid.

A has been laid off for a shortened working week, i.e. their daily allowance is paid in full for the lay-off days. No daily allowance is paid for working days.

example 2: lay-off by reducing daily working hours

Person B has been laid by reducing their daily working hours. Their lay-off has been carried out in such a way that they work a six-hour working day once a week. Because the working day worked by B is undersized, it is considered a lay-off for a shortened working day and their daily allowance is paid adjusted.

B applies for daily allowance from 1 June to 28 June. They have been paid a salary for 24 working hours on 10 June.

First, it is reviewed if the limit for daily allowance is exceeded. For laid-off persons, working hours are always reviewed on a calendar week basis.

B has been laid off for a shortened working day, i.e. the work done is taken into account according to the time of salary payment. In B's workplace, normal full-time working hours are 37,5 hours per week. The maximum working time calculated for the payment of the daily allowance is therefore:

37,5h * 80% = 30 working hours per week.

During the application period, the salary for 24 hours paid on 10 June wage is below the calculated working time limit, i.e. daily allowance can be paid for the entire application period.

Daily allowance can be paid for the entire application period of 1 June – 28 June, adjusted with the earned income paid on 10 June.

example 3: lay-off by reducing daily working hours, working time limit is exceeded

Person C has been laid by reducing their daily working hours. During the lay-off, C works four hours a day five days a week. B's working hours during the lay-off are therefore 4h * 5 days = 20 hours per week.

C applies for daily allowance for the time period of four calendar weeks between 1 June and 28 June 2020. C was paid salary in 15 June for a total of 80 hours of work.

Because person C has been laid off by reducing their daily working hours, ​​​​​​their daily allowance shall be paid adjusted by their earned income. Salaries always have a reducing effect on the daily allowance for the application period during which they were paid. Working hours worked are also not taken into account in the review of working hours until the week in which they have been paid for in the form of salary.

Before the daily allowance can be paid, it is checked whether C's working hours are exceeded. In other words, the working hours paid on the day of salary payment are compared with the weekly working time limit.

In C's field of work, full-time working hours are 40 hours per week, i.e. the working time limit for daily allowance is
40h/week * 80% = 32 working hours per week.

C has been paid salary for 80 working hours on 15 June, i.e. the working time limit per calendar week is exceeded.
80h > 32h

For the week of salary payment 15 – 21 June, a negative decision is given and the daily allowance cannot be paid.

However, daily allowance may be paid for the other weeks of the application, when the working hours are not exceeded. However, the daily allowance paid for these weeks takes into account the salary paid during the application period.

Daily allowance is paid for the periods 1– 14 June and 22 – 28. June, adjusted with the salaries paid on 15 June. For the week of salary payment 15 – 21 June, a negative decision is given for exceeding the working time limit and no daily allowance shall be paid for the week in question.


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