New government plans would change this system, however, so that the unemployment allowance will be discontinued from July next year.

This will mean that in the future, some job seekers may be left without any substitute income.

The state currently pays this unemployment allowance, while local governments provide the subsistence benefits. Both benefits are targeted at staving off poverty.

The Estonian state says it believes it is not rational to maintain this twin system, hence the changes.

Ulla Saar, deputy undersecretary at the Ministry of Economic Affairs, said: "The unemployment insurance system will remain, where in addition to the existing unemployment insurance benefit, which depends on your previous salary, a new benefit called the base rate unemployment insurance benefit will be created."

"The principle is that we protect those who have worked and contributed to the insurance system by paying unemployment insurance contributions," Saar added.

For those who have not worked at all or who have not paid any unemployment insurance contributions in the past six months, future assistance will be provided through the subsistence benefit system, according to the bill and if it passes.

At present, unemployment allowance can also be applied for by registered young unemployed people aged 16-24.

However, it is not right now possible for a young person up to 24 years old to apply for subsistence support on their own (ie. dependents are factored in).

The Ministry of Social Affairs has raised the question of how many of these young people, who stand to lose their unemployment allowance payments, will be able to get part of either the subsistence support or any needs-based study support, going forward.

Kati Nõlvak, head of economic subsistence at the Ministry of Social Affairs, said: "In terms of subsistence support, he is counted into the household, and in terms of needs-based study support, he is also counted into the household, but we are not totally sure whether their social protection will remain as it is today, whether it will be sufficient or whether it will decrease. That is why we say that additional analysis is needed here."

Two options have been discussed to provide some assurance to young people amid these changes.

Nõlvak said these are: "Either to give local governments the discretionary decision, so if a local government employee sees that this young person lives separately from their parents, and they are studying and the parents really do not support them, then they would be eligible for subsistence support, or a second option is that we simply lower the age threshold from 24 years to 21 years of age."

The Employment Insurance Fund (Töötukassa) says it believes the issue is broader.

According to the under-development bill, approximately 8,700 people will need to apply for subsistence support in the future.

While unemployment allowances are individualized, subsistence support is available to a person or family whose monthly net income after housing costs is below an established subsistence threshold.

Again this means that not all those in need may qualify for subsistence support in the future.

Meelis Paavel, head of the Employment Insurance Fund, said: "It needs more explanation or discussion, on the one hand, as to whether all these people will actually get the subsistence support, whether they require it, and what were the reasons before that it was considered that people should receive unemployment allowance during the job search period. This is one of the biggest political choices of this change."

Ulla Saar at the Ministry of Economic Affairs said state supports should indeed be needs-based.

"I would say that if a person now goes to apply for subsistence support, they are not working and if it is seen that they actually have some income, even if other family members support them and provide them with what they need for life, then the question is, why should they receive additional income?" Saar opined.

The association of Estonian cities and municipalities (Eesti linnade ja valdade liit) says a precise forecast in the bill as to the the proportion of individuals who will seek help from local governments following the cessation of unemployment allowance payments is currently lacking.

Veikko Luhalaid, executive director of the association, said: "Regardless of what the person has struggled with, the local government must still feed its needy. Where will the finances for the local governments come from?"

According to Ulla Saar, the anticipation is that the pressure on subsistence support may increase. This increased need will be covered by the state from the state budget.

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