Everything you did not know about the waiting period
Petja Eklund, Senior Expert
Waiting period is the time period at the beginning of unemployment and lay-off for the duration of which we cannot pay earnings-related daily allowance. If the waiting period comes as a surprise, it is probably confusing and exasperating, because you will receive less money for the first application period because of it.
Waiting period is not YTK’s fault
The waiting period was not invented by us. It comes directly from the Unemployment Security Act, as do the other regulations related to the payment of benefits. According to the law we cannot pay earnings-related daily allowance until you have been an unemployed job-seeker in the TE Office for a period that corresponds with five full working days. In practice it often means that we cannot pay you earnings-related daily allowance for the first week.
Period corresponding with five days
The wording of the law is “period that corresponds with five full working days”. It means that the required five days can also accumulate from shorter period and parts. For example, in case of part-time employment we calculate the waiting period as hours. If, for example, the working time of a full-time employee in your field is eight hours a day and you work part-time for four hours, we can include four hours i.e. half a day in your waiting period from that day. In order to accumulate a period that corresponds with five full working days for the waiting period, we need ten such days.
Similarly, in case of lay-off it is possible that there is e.g. one lay-off day per week. Then it would take five weeks to accumulate the full waiting period. There is a limitation according to which the waiting period can be accumulated during at most eight calendar weeks in a row. Sometime you come across cases in which lay-offs are so occasional that the five-day waiting period cannot be accumulated during eight consecutive weeks. After eight weeks the accumulation of the waiting starts again from the beginning. So it is possible that earnings-related daily allowance cannot be paid at all due to the waiting period, if the waiting period is never fulfilled.
Only approximately once a year
The setting of the waiting period is related to the maximum payment period of earnings-related daily allowance. According to the law, the waiting period is set only once for one maximum payment period of earnings-related daily allowance. The maximum payment period in turn relates to the fulfilling of the condition regarding employment. Whenever you fulfil the condition regarding employment, you will get a new maximum payment period. When you get a new maximum payment period, a new waiting period is also applied. As the condition regarding employment is fairly short, around six months, there is an exception in the Unemployment Security Act, according to which no waiting period is set, if the maximum payment period for the daily allowance period would start within one year from the beginning of the previous maximum payment period, and if the waiting period has been set at the beginning of the previous maximum payment period for the daily allowance period.
In practice, the above means that as a general rule the waiting period is set at most once a year. A partial exception to that rule is the aforementioned situation in which the waiting period is not fulfilled during eight consecutive calendar weeks. Then the waiting period may in practice be set more than once. In fact it only means that the one and same waiting period is set more than once as it is not fulfilled.
You often hear that the waiting period on the whole being questioned. Why does it exist and what is it needed for?
I cannot say for sure, but I have allowed myself to create a story. In the early days of the waiting period, when benefits were processed and paid using pen and paper, there was apparently a desire to reduce the applying for benefit in cases where the unemployment only lasts for a few days. It was considered that the employees can manage such a short period of unemployment between jobs without a benefit.
In practice, the goal was to relieve the administrative burden in the implementation, as it was not necessary to initiate the process for short periods of unemployment. Today, it no longer matters, because the processing of the benefits is electronic and partly automated. In fact the waiting period in itself causes a significant administrative burden. The implementation would be more efficient without checking and calculating the waiting periods. We have experience in that, too, as the waiting period was removed for some time during the coronavirus pandemic, and we did not need to check it. It was also a relief when the waiting period was for some time exceptionally five days and not a period that corresponds with five full working days.
It is not easy to get rid of the waiting period, however, because the waiting period has its role in the benefit expenditure. The savings of one day of waiting period amount to around 20 million euros. So if the current waiting period were given up completely, one hundred million euros should be found to cover that in the budgets of public administration. It is interesting as such that the waiting period does not decrease the total amount of the payable benefit, if the applicant uses the entire maximum payment period. In such a situation the waiting period does not reduce the amount received by the applicant, it just postpones the beginning of the maximum payment period.