Unemployment Insurance Fund promises to pay wages by April 15

Unemployment Insurance Fund (Töötukassa) logo.
Unemployment Insurance Fund (Töötukassa) logo. Source: Siim Lõvi /ERR

The Estonian Unemployment Insurance Fund (Töötukassa) is promising to pay wages for people who are temporarily unemployed due to the effects of coronavirus on the economy by April 15.

Annika Koppel, a spokeswoman for the fund, told ERR on Wednesday: "By April 15 at the latest, all employees will have been transferred money - this is the deadline we've taken on." 

She said the unemployment fund is preparing a web-based application information system through which eligible companies can submit their claims and documents.

"Next week, the system is going to be tested, and next week we will definitely announce the date when applications will begin to be accepted," Koppel said. She added that the unemployment fund had to create technical solutions to make the system work as efficiently and effectively as the tax refund system.

After the employer submits their application to the system, the unemployment fund will have five calendar days to process the application. "Within five days of submitting the application, the person will receive money in their account, along with a notice of how much we paid them," Koppel said. However, the company must have already paid the employee at least €150 of their salary, she added.

In April, the benefit is paid only for March, and from May, employers can apply for a wage subsidy for April, meaning the employer has to apply separately for each calendar month. They can't apply for the next month at the same time, Koppel said.

As part of the government's crisis response package, the state will pay the employee 70 percent of salary, to which the company must add at least €150 including taxes. The maximum the government will compensate is €1,000.

Employers whose turnover has fallen by 30 percent compared to the same month of the previous year, who have had the same amount of wages reduced, or at least 30 percent of their staff cannot work can apply for compensation. 

Employees are entitled to benefits for up to two months over a three-month period from March to May, according to the unemployment fund's website .

The fund pays the compensation and the employer pays the social tax, the unemployment insurance contribution and the mandatory funded pension, as well as the income tax.


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Editor: Helen Wright

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