Small increase in unemployment security

An increase in the level of basic daily allowance will enter into force on 1 January 2020. The increase will also concern the labour market subsidy, the amount of which is the same as basic daily allowance. The change will also affect the amount of earnings-related daily allowance and alternation compensation in accordance with the Alternation Leave Act. The change in the amount of earnings-related daily allowance will be small.

The increase will be implemented in such a way that the basic daily allowance will be raised by 20 euros per month at the turn of the year. In practice it means that the amount of basic daily allowance will be 33.33 euros per day in the Unemployment Security Act. At present the amount of basic daily allowance is 32.40 euros per day. For the purposes of calculation, there are 21.5 payment days in month, so the increase of 0.93 euros per day equals 20 euros per month.

The amount of basic daily allowance is tied to the national pension index. After the increase the amount of basic daily allowance set by the law equals the index value of the national pension index in 2019. The increase is intended to enter into force on 1 January 2020, so the amount of basic daily allowance in euros can be other than 33.33 euros per day, if the index value of the national pension index for the next year changes.

The index value has been the same since 2017, and before that it exceptionally fell in two years in a row. The previous increase in the level of the daily allowance was made in 2012.

Effect of the increase on earnings-related daily allowance

The amendment of the basic daily allowance also affects earnings-related daily allowance. The earnings-related daily allowance comprises of basic part and earnings-related part. The basic part equals the basic daily allowance, and the earnings-related part is calculated from the income preceding unemployment.

As the earnings-related daily allowance is calculated separately, an increase in basic daily allowance will not directly increase the amount of earnings-related daily allowance to the same extent. Read more about the calculation of earnings-related daily allowance.

At present, the earnings-related daily allowance that equals a monthly salary of 2500 euros is 67.93 euros. If the other factors stay the same, the earnings-related daily allowance calculated using the same data would amount to 67.99 euros after the amendment. Thus the effect of the increase on such daily allowance is approximately 1.30 euros per month.

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