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Lay-offs and fringe benefits

It is possible to retain fringe benefits during lay-offs. Certain fringe benefits are taxable income and in certain situations, we will take them into account when paying earnings-related daily allowance during lay-offs.

Effect of fringe benefits on earnings-related daily allowance

In employment, examples of fringe benefits include company housing, access to electricity or a garage, meals, full board, company car and telephone.

In terms of unemployment security, such taxable fringe benefits are considered income. The income you receive when you are laid off may affect the amount of earnings-related daily allowance you are paid. This is called adjustment and you can read more about it in the section on part-time work.

The Unemployment Security Act carefully defines the situations in which we will calculate the effect of your income on the daily allowance. Because of these regulations, sometimes in lay-off situations, we will count the fringe benefits and sometimes we will not count them. It depends on whether adjustment is applied in your case or not. That, in turn, depends on the way you are laid off.

  • If you are laid off full-time, adjustment is not applied. Even if you keep your fringe benefit when you are laid off, it will not affect the amount of your earnings-related daily allowance.
  • If your lay off means you work a shorter working week, adjustment is not applied. Even if you keep your fringe benefit when you are laid off, it will not affect the amount of your earnings-related daily allowance.
  • If your lay off means you work a shorter working day, adjustment is applied. It means that we will consider the taxable value of your fringe benefit when we calculate the amount of your earnings-related daily allowance. In other words, the fringe benefit means that you will be paid less in your earnings-related daily allowance.
  • If you are laid off full-time or if your lay off means you work a shorter working week, but you work part-time for your employer or another employer, adjustment is applied. We will consider the taxable value of your fringe benefit when we calculate the amount of your earnings-related daily allowance. In other words, the fringe benefit means that you will be paid less in your earnings-related daily allowance.

Tax-free fringe benefits

Because certain fringe benefits are considered normal and reasonable staff benefits, they are tax free. We will not consider these benefits when we pay your earnings-related daily allowance. These benefits may include:

  • occupational health care
  • staff discount
  • birthday presents or other small presents
  • recreational benefits
  • shared transport to and from work organised by the employer

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