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Effects of legislative changes

Some of the legislative changes concerning unemployment security entered into force on 1.1.2024. In this news article, we will discuss the practical effects of these legislative changes.

Parliament has approved some of the legislative changes concerning unemployment security. Some of the changes proposed by the Government are still awaiting consideration and approval by Parliament. In this article, we will go through which legislative changes have entered into force as of 1.1.2024 and what kind of practical effects the changes will have.

Periodisation of holiday compensation

Holiday compensation is periodised if it is paid for a full-time employment relationship of more than two weeks that ends on or after 1.1.2024.

The accrual of holiday compensation postpones the start of entitlement to earnings-related daily allowance. If the employer pays holiday compensation for untaken annual holidays, holiday compensation is periodised, in which case the payment of earnings-related unemployment allowance is prevented from being paid during the periodisation time.

As a rule, the periodisation of holiday compensation begins at the end of the employment relationship. Periodisation is based on imputed daily wages. The periodisation time is calculated by dividing the amount of holiday compensation by the daily wage to obtain the number of periodisation days. Only weekdays (Mon-Fri) are taken into account in the calculation.

The periodicity of holiday compensation and the waiting period cannot run at the same time, so a waiting period may still be set after the periodisation, during which no daily allowance is paid. However, the suspension period set by the TE Office and the periodisation of holiday compensation may run simultaneously.

Holiday compensation paid for part-time work or full-time work lasting no more than two weeks is not periodised but adjusted in the daily allowance based on the payment date.

An example of how the payment of holiday compensation affects the commencement of entitlement to earnings-related daily allowance
Example of effects if you are paid holiday compensation for full-time work

Extension of the waiting period

The waiting period may be set when you become an applicant for earnings-related daily allowance. In addition, a waiting period can be set if the employment condition is met again. As a result of the legislative change, the waiting period corresponds to seven weekdays of unemployment, whereas before the legislative change it was the corresponding period of five working days. The waiting period is the period corresponding to seven days’ unemployment if the waiting period begins on or after 1.1.2024.

As a rule, earnings-related daily allowance is not paid for the waiting period. In practice, the longer waiting period means that the payment of earnings-related unemployment allowance will begin later.

An example of how extending the waiting period to 7 days affects the payment of earnings-related unemployment allowance
Example of effects when the waiting period is extended

You can read more about the waiting period via the button below.

Freezing of index increases

Usually, benefits are indexed at the turn of the year due to rising consumer prices. Parliament has decided that index increases will be frozen between 2024 and 2027, which means that no annual increases will be made to unemployment benefits.

An example of how it affects earnings-related unemployment allowance when no index increase is made
Example of effects when no index increase is made

Other changes as of 1.12024

In 2023, an additional 20% increase was made to child increase in addition to the index increase. This additional increase has been in force until 31.12.2023, so from 1.1.2024 the level of child increase will decrease. As of 1.4.2024, child increase will be completely abolished.

Example of the amount of child increments in 2023, for the period 1.1.2024 - 31.3.2024 and from 1.4.2024
Example of effects if you are paid child increase

We will also update information on the progress of legislative changes in a separate section on our website entitled Legislative changes 2024. You can access the page from the button below.

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