Unemployment Insurance Fund recommends leaving contributions at current level
The supervisory board of the Unemployment Insurance Fund made a proposal to the government on Monday to leave the unemployment insurance premium of 2.4%, made up of a contribution of 1.6% by the employee and 0.8% by the employer, at the present level for the next four years.
Although the present size of the contribution brings more money to the Unemployment Insurance Fund than the fund spends on services and benefits, these funds are needed to start offering labor market services to employed people next year in order to improve the quality of the Estonian workforce.
“The Unemployment Insurance Fund is developing a package of measures to prevent unemployment, which will enable workers with no professional training and outdated knowledge to upgrade their skills with the help of unemployment insurance funds. This in turn will result in a significant increase in the volume of services offered by the Unemployment Insurance Fund,” said chairman of the supervisory board of the Estonian Unemployment Insurance Fund, Minister of Health and Labour Jevgeni Ossinovski (SDE), adding that the decision to make the recommendation to the government to leave the rates unchanged had been unanimous.
The supervisory board tasked the fund’s management with the development of a program to support employment in collaboration with the Ministry of Social Affairs, aimed at providing retraining to people who currently have a job in addition to helping people who have lost theirs.
With the 2.4% contribution rate, the fund’s income in 2017 would total €166.8m, while unemployment insurance costs would reach €144.9m. Labor market services are budgeted to get €27.4m euros from the Unemployment Insurance Fund, €13.9m likely to be allocated to services for the target group of the government’s work capacity reform. An additional three million will be added to the project from the state budget.
Net assets of the Unemployment Insurance Fund are expected to reach €701.9m by the end of 2017, up from €679.7m by the end of this year.