Legislative changes for 2024
Last week, the government presented its proposal for changes to the unemployment benefit law. The bills include the following changes:
Freezing of indexes
Periodicity of holiday compensation
Increasing the waiting period days from five to seven
Abolition of child increases
Deletion of the exempt amount
Tying the working condition to your income and extending the working condition from 6 to 12 months
Impact of legislative changes
The proposed changes to the law will not immediately affect the earnings-related daily allowance currently paid. If the amendments are adopted, the first effect will be that next January, there will be no increase in the earnings-related daily allowance, because there will be no index adjustment. This change will apply to all recipients of the earnings-related allowance.
The next impact would be felt in May at the latest, when we pay the April daily allowance. Then we will no longer pay child increases. This change will affect you if you have dependent children and have received child increase.
From April, we would no longer take the exempt amount into account in the amount of the adjusted daily allowance. In May, when we pay the daily allowances for April, the amount of adjusted daily allowances we pay will be lower than before. This change will affect you if you have income from part-time work next April or after.
From the beginning of the year, the holiday compensation would be phased in. The periodic payment of holiday compensation prevents the payment of daily allowance for the period for which the holiday compensation corresponds. This applies to you if your employment ends after 1 January 2024 and you have untaken holidays which are offset against holiday compensation.
From the beginning of the year, the waiting period would be extended from five to seven days. This will apply to those who will be unemployed next year or who will have a new waiting period after the employment condition is met.
The changes to the working condition will ultimately affect everyone, because the right to a daily allowance is based on the working condition. In practice, the change will initially only apply to those who are due to meet the working condition next autumn. After that, everyone will start to accumulate the working condition under the new rules. The impact on the amount of the earnings-related allowance will be limited.
Freezing of indexes
According to the Aaw, the amounts of the basic daily allowance, the supplementary part of the basic daily allowance and the child supplement increase the amount of earnings-related daily allowance are adjusted by the national pension index. In practice, this means that the amount of earnings-related daily allowance has changed slightly each year in line with changes in the cost of living.
Under the current proposal, no such cost-of-living adjustment would be made between 2024 and 2027. This means that the level of the earnings-related daily allowance will not change even if the cost of living changes. Without the proposed index freeze, the level of the earnings-related daily allowance would rise by around €15-20 per month next year, depending on the level of the earnings-related daily allowance.
The index freeze would take effect from the beginning of next year.
Periodicity of holiday compensation
Under the government's proposal, we would only be able to start paying the daily allowance after the effect of the holiday compensation has ended.
If you have untaken holidays at the end of your employment, they will be paid to you in cash. Such holiday compensation in the future would prevent us from paying you an earnings-related daily allowance for the period for which it is accrued. For example, if you are paid in cash for a month's leave, we would not be able to start paying you the daily allowance until about a month after you become unemployed.
The planned entry into force of the Act is 1 January 2024. The amendment would apply to annual leave pay paid for employment of at least two weeks after the entry into force of the Act.
Increasing the number of waiting period days from five to seven
There is a deductible period at the start of unemployment. Only in exceptional cases can we pay daily allowance for the waiting period. At present, the waiting period is five days. When the waiting period is used, we can only pay the daily allowance after you have been unemployed for the equivalent of five full working days.
Under the government proposal, this waiting period will be increased from five days to seven days. When the waiting period is used, we would therefore only be able to pay you an earnings-related daily allowance after you have been unemployed for a period equivalent to seven full working days. This longer waiting period would apply if the waiting period starts after 1 January 2024.
Abolition of child increases
According to the government's proposal, we would no longer pay child increases to the earnings-related daily allowance from 1 April 2024.
Deletion of a exempt amount
According to the Government's proposal, the exempt amount would no longer be taken into account when calculating the amount of the adjusted daily allowance. This change would apply when the claim period starts on or after 1 April 2024. In practice, this change will reduce the amount of adjusted earnings-related daily allowance.
Tying the working condition to your income and extending it to 12 months
According to the Government's proposal, in order to meet the employment condition, you would need to have accumulated twelve months of employment during the 28 months immediately preceding the month in which you were a member of the unemployment fund.
A calendar month in which you have been paid at least 930 € (at 2023 levels) would count as a month of employment. Months of employment could also be counted as half months if your earnings in a calendar month were at least 465 € but less than 930 €. The euro amounts would be adjusted annually by the national pension index.
The changes to the employment condition would apply from 2 September 2024. If your employment condition is met before 2 September 2024, we would apply the current provisions for meeting the employment condition and for calculating the earnings-related daily allowance.
