Concerns have been raised however that the proposed system could be open to abuse, for instance by those engaged in the gig economy, seasonal work, or by students working part-time.

A new base rate unemployment insurance benefit is to be introduced, which, according to the bill under preparation, requires only six months of employment within the past three years in order for a person to qualify as a recipient.

Under the current system, unemployment allowances are calculated on a daily basis, but under the Ministry of Economic Affairs' proposal, the new base rate unemployment insurance benefits would be calculated monthly.

Undersecretary at the ministry Ullar Saar said: "Today, there are two systems: Unemployment allowance, which is calculated based on the number of days worked (180 days), and unemployment insurance benefit, which depends on the recipient's previous salary and requires 12 months of employment, with no requirement to count the number of days."

This means that under the new base rate unemployment insurance benefit, the number of days worked during the period will not be relevant.

According to the bill, individuals who have worked for a total of at least six months in the preceding three years would be eligible for the new benefit.

Saar noted that the monthly calculation method also allows part-time workers to apply for benefits.

"The issue here is one of fairness. If a person has worked and contributed by paying taxes, why shouldn't they receive a benefit?" Saar explained.

According to economist Raul Eamets, the monthly work calculation planned to be used when applying for the base rate unemployment insurance benefit raises some issues, however, for instance, working for six months could be far from six months' actual work.

He said: "Basically if a person works one day per month across all the months over half a year, they would get the equivalent of six months' work time, and so could apply for this unemployment insurance benefit, which according to last year's figures would have a minimum rate of €360."

Since 16-18-year-olds who were studying at the time would also be able to register as unemployed under the proposed system, it would be open to abuse.

"All it takes is one, eight-hour workday per month; job opportunities like that are readily available online," Eamets, a former University of Tartu dean, noted.

"You could work for one day, at the weekend, get paid officially, and that month would count. As a parent myself, I would say it's nice when high school students can get extra pocket money from the state, but whether this is the most sensible use of unemployment fund resources is another matter," Eamets continued.

Stakeholders, including the Unemployment Insurance Fund (Töötukassa), have provided feedback on the draft bill currently under review.

The Unemployment Insurance Fund has also said that the calculation of work accrued requires further analysis.

According to the agency's reasoning, a monthly rather than daily work calculation could lead to an increase in the number of registered unemployed, as people may register as unemployed to receive benefits who currently do not – in other words the issue of under-employment, rather than unemployment.

They also questioned the proportionality between the contributions of someone who simply works one day per month and the amount of benefit they could claim based on short-term work of that kind.

Saar said that statistics on wage-linked unemployment insurance benefits show that only about 1 percent of benefit recipients are people who work on short-term contracts, which, she said, is not a significant number.

Saar said: "We are discussing with stakeholders what the system should look like in order to be equitable, so that everyone who has contributed receives the appropriate compensation from the state."

"One proposal would be to limit the base rate benefit to one claim every three years. In this way, no matter how many short-term jobs a person takes on, they cannot continuously work a little bit and then claim benefits repeatedly. This risk can certainly be mitigated by setting restrictions," Saar added.

The government is scheduled to review the draft bill in August.

The current twin-track system is also divided up between the state and local government, in terms of payment.

As reported by ERR News, unemployment allowance being discontinued, from next summer if the bill passes into law, may mean that in the future, some job seekers may be left without any substitute income.

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