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Unemployment benefit could be reduced by 3 months under new reform

The Estonian Unemployment Insurance Fund office in Tartu.
The Estonian Unemployment Insurance Fund office in Tartu. Source: Aili Vahtla/ERR

The Ministry of Economic Affairs and Communications is pressing forward with reforms to the Unemployment Insurance Fund and the biggest aim is to save money. The payment of benefits will likely be reduced by three months.

The ministry wants to combine the unemployment insurance benefit paid by the Unemployment Insurance Fund and the unemployment benefit coming directly from the state.

"If we merge the two grants, we have one system and we do not have to manage them separately. This will certainly bring some savings," said Kaia Vask, head of the Estonian Trade Union Confederation.

Minister of Economy and Information Technology Tiit Riisalo (Eesti 200) said: "The first reason to do this is to make these systems uniformly administrable. This is a purely administrative saving, which is certainly a welcome move for everyone. And the second is that it will then also be easier to understand."

Majandus- ja IT minister Tiit Riisalo Autor/allikas: Siim Lõvi /ERR

The reform aims to both save money and get people back to work faster. One proposal is to reduce the payment of benefits from nine months to six.

"It is not a good idea to keep this period too long, but it should be of a reasonable length. What it will be for is one question. And the other question is, of course, the rational use of resources, to see if it allows savings to be made," said Riisalo.

Both the amount of savings and the unemployment fund's budget depend on the extent to which the reform is moved forward. Riisalo said it is still necessary to negotiate with unions to find a reasonable compromise.

The Estonian Trade Union Confederation said job seekers' training needs should be better identified and comprehensive counseling and assistance should be provided. They see no space for cuts in this area.

Kaia Vask. Source: Siim Lõvi /ERR

"We need to step up the measures that help people into work, so that they can get into work quickly, so that they can get into work that gives them a decent income," said Vask.

The legislative part of the reform should be ready in the summer.

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Editor: Merili Nael, Helen Wright

Source: Aktuaalne kaamera

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