Unemployment fund calls for wage support to cover both March and April

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Unemployment Insurance Office (Töötukassa) branch in Pärnu. Source: ERR

The Unemployment Insurance Fund (Töötukassa) is calling for the state to extend its wage support scheme to two months from the planned one month. The supplementary budget issued by the government in response to the latest coronavirus wave should contain enough to do that, the fund says, given that it still has funds left-over from a similar scheme in 2020.

The support would under the unemployment fund's proposal cover March and April, taking into account reduced turnover and also under-employment – a fall in workload or remuneration for employees.

€102 million in the supplementary budget is aimed at compensation, but the Unemployment Insurance Fund has €38 million left in its coffers from last year's supplementary budget which, the board says, would enable support to stretch to two months.

Meelis Paavel, board chair at the Unemployment Insurance Fund said that: "The support would provide employees with an income, and would help employers survive temporary difficulties in a way that would prevent lay-offs."

Employers would have to prove at least 50 percent fall in revenue

The support would under the fund's proposal be permissible for employers whose turnover in the month in which the benefit is claimed fallen by at least 50 percent either over the period December 2019 to February 2020 compared with the second half of 2020, and that this resulted from the effects of the pandemic.

The same would apply to self-employed persons whose entrepreneurial income was 50 percent lower in 2020 compared with the previous year.

Up to 60 percent of the average month's wage, up to €1,000 gross, whichever is lower, would be payable, for those staff who are either underemployed or have or would see wage cuts. Last year's scheme provided up to 75 percent. The employer must pay a minimum of €200 per month gross, before applying for the wage support.

Support for the self-employed would stand at €584 per month.

Other conditions include a requirement no bankruptcy or liquidation proceeds were pending against the business, which also should have no owed tax, and employees must have started work for the company no later than January 1 2021. The staff member may not be dismissed over that month in which the support is received, or the following two months

Applications for the March wage support would be open through April, with the same process following in May, to cover April's support.

The proposals have not yet been adopted by the cabinet.

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Editor: Andrew Whyte

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