State to raise benefits for unemployed entrepreneurs next year

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

The government is planning to increase the benefit for unemployed people starting a business through the Unemployment Insurance Fund (Töötukassa) to €6,000 to encourage entrepreneurship.

The government's draft explanatory memorandum notes that currently, unemployed people starting their business receive €4,474 but the rate has remained the same for more than ten years and is not enough to cover costs for a freshly founded business.

€3 million will be allocated to the benefit measure, with an additional €3.2 million coming in 2022 as well.

The draft law would allow for necessary initial investments to be covered and the Unemployment Insurance Fund estimates a 5 percent increase in applications. The benefits would not be given out for nothing however, as applicants must present reports on the use of the measure twice in the first year.

The fund is estimating an average of 44,200 registered unemployed for 2021, 39,200 for 22 and 35,600 unemployed people for 2023.

According to the estimations, the Unemployment Insurance Fund's measures will be used by 35.2 percent of registered unemployed monthly, with that number expected to increase to 39.9 percent by 2022 and 40.3 percent by 2023, not including those with reduced work capacity.

The fund expects an increase in work capacity for the coming years, which is why the institution is asking for supplemental staff and an increase in running costs coverage.

The Unemployment Insurance Fund bases its estimation off the Ministry of Finance's economic forecast, which states that the unemployment rate is forecast to increase to 9.3 percent in the next year, with a drop to 8.2 percent expected in 2022.


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Editor: Kristjan Kallaste

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