Nearly fifth of those who have lost work still awaiting relief from state

Salon window.
Salon window. Source: Priit Mürk/ERR

Beginning in April, the state will begin paying compensation for those who have lost work or wages due to the current crisis, but the right to this compensation does not extend to self-employed persons or operators of single-person companies. Nearly one fifth of those who have ended up jobless and without wages overnight are still waiting for help that the state has yet to offer.

There are over 550,000 people in Estonia earning wages from an employer, but there are another 100,000 people who are not currently receiving compensation being offered by the state, among them employees of the beauty services, entertainment and catering sectors, reported ETV news broadcast "Aktuaalne kaamera. Nädal" on Sunday.

Janne Terve closed down her year-old beauty salon early last week, leaving five people jobless. Terve operates the salon as a one-person business, which in turn buys the services of businesses owned by salon employees. Terve pays taxes on her company, which means she should have the right to receive compensation from the state as well.

"Right now, no relief package of any kind has been offered to beauty services workers," she said. "We'll see. If it comes, then naturally I will accept it with open arms and in gratitude; it is all a great help. But right now I'm not seeing that I can pin my hopes on anyone but the landlord — as much as is possible for them, and how big a heart they have, what opportunities they have, because naturally they have bills to pay too."

Terve is currently living off of savings, but should the coronavirus crisis last for an extended period of time, her savings will run out too.

"When you have four-figure fixed costs each month and your doors are closed, and you have no services coming in, then you can't provide any services, and it may only be a matter of months until you have to close down," she said.

Whether or not her salon would survive the current situation would depend on whether or not any aid is made available.

Terve has a small child at home, and her husband has a job in the catering sector, which is facing an equally difficult situation.

Beginning in April, those who have been temporarily left without work or wages can apply for compensation from the Unemployment Insurance Fund equal to up to two months' wages, but only companies employing at least one employee via employment contract can apply for this compensation.

The relevant bill states that compensation may be received by at most 83 percent of those in work, meaning that 17 percent of people will not receive compensation. The latter includes nearly 40,000 private limited companies as well as another 20,000 self-employed persons with no employees. People employed under a contract under the law of obligations or an authorization agreement as well as members of company management boards are likewise not entitled to this compensation.

"If they are worried about their job, and have no work — if we're talking right now about people employed via authorization agreements — then they always have the opportunity to contact the Unemployment Insurance Fund," said Livia Laas, a service manager at the Unemployment Insurance Fund. "And if they are not working, and they are under no binding obligations, they can register themselves as unemployed, and then they will begin receiving support and opportunities accordingly."

Unemployment benefits and and unemployment insurance benefits, however, depend on whether the individual has been paying into unemployment insurance.

According to Laas, however, those who have not paid any taxes at all can likewise register as unemployed. Anther option in the current situation is also temporary work.

"We have several sectors and employers who don't need this compensation, but rather labor right now," she noted. "They have contacted us."

Minister: Self-employed persons don't contribute in taxes

The government has calculated that the current wage relief measure will extend to 70,000-100,000 people in Estonia. Self-employed persons and one-person companies, however, do not count; no relief measures exist for them.

Minister of Social Affairs Tanel Kiik (Center) said that single-person private limited companies and self-employed persons aren't counted under the measure because they do not contribute to the Unemployment Insurance Fund via taxes.

"It's always a matter of social guarantee — when there is someone who hasn't contributed to this fund, others who have contributed to it will be justified in asking whether their money is going to be distributed to everyone else then too," Kiik said.

Those tens of thousands of people to whom the current relief package does not extend also have families, however, and increasingly common are situations in which all providers in a family are currently without work or wages, including those with several dependents. The state is only just considering how to help such people.

"These people need to support their families as well," Kiik acknowledged. "Supporting them is no doubt perhaps the most difficult right now, as the state does not have a good measure or targeted fund or compensation for this; one needs to be devised. It must be considered to what extent and how it will be possible to support them at least in the short term with various guarantees, loan sureties or other such solutions."

One idea that has been brought up in government crisis discussions has been basic income, which would be paid to everyone when unemployment reaches an especially high level. According to Kiik, however, the government's €2 billion relief package was put together with the aim of preventing such a situation.

"This is likewise an Unemployment Insurance Fund measure," the minister explained. "Right now we have made these decisions. Further steps must be taken in accordance with what the future holds, how this crisis develops, and how the spread of the coronavirus in Europe and worldwide continues."


Download the ERR News app for Android and iOS now and never miss an update!

Editor: Aili Vahtla

Hea lugeja, näeme et kasutate vanemat brauseri versiooni või vähelevinud brauserit.

Parema ja terviklikuma kasutajakogemuse tagamiseks soovitame alla laadida uusim versioon mõnest meie toetatud brauserist: