The government's plan would reportedly create a budget shortfall of nearly €50 million in respect of the unemployment fund, which would need resolving.

It is still unclear what form the final version of the Unemployment Insurance Fund (Töötukassa) overhaul will take, while it is expected to be implemented next summer.

Stakeholders have expressed a desire to delay on its implementation, while the government plans to proceed on schedule.

Representatives of trade unions and employers discussed various options during the board meeting, but did not reach a firm agreement.

They oppose raising the unemployment insurance premium, and are not eager to use reserves or cut services.

Kaia Vask, head of the Central Confederation of Trade Unions (Aametiühingute keskliit) told ETV news show "Aktuaalne kaamera" (AK): "This is most concerning because it deteriorates the support given to help unemployed people return to the labor market."

Aaro Lode, Unemployment Insurance Fund board chair, said the organization also opposes the ministry's plan. "If we start drawing from the reserves long-term, we will eventually run out of money, leading to an inevitable tax increase."

"We don't back this idea. If it were particularly short-term, maybe for a year, it might be conceivable. But beyond that, this is just a case of burning through money too quickly," Lode added.

The Unemployment Insurance Fund's supervisory board had discussed a Ministry of Economic Affairs and Communications plan to raise additional expenses of €50 million, from the state budget, to go towards the fund.

Minister of IT and Economic Affairs Tiit Riisalo (Eesti 200) said the budget could be balanced in one of two ways: Either by hiking the unemployment insurance premium, or by reviewing the fund's expenses.

Minister Riisalo told AK: "Broadly speaking, there are two options here. Either raise the unemployment insurance premium or look into the fund to see what different options exist - be it by utilizing reserves, reviewing forecasts, or cutting services that may not be seen as essential."

The ministry's proposal aims to combine unemployment support directly funded by the state budget with unemployment insurance benefits paid by the Unemployment Insurance Fund itself.

This streamlining would as noted increase the fund's expenses, creating a budget shortfall of €45-50 million, according to current calculations.

Meelis Paavel, head of the Unemployment Insurance Fund, said: "A €50-million additional cost will significantly impact on our budget and future activities, so we need to be exact."

Up to now, one proposed cost-saving measure had been to reduce the payout period for new benefits.

There was also a suggestion to review the eligibility criteria for benefits, which would not necessarily decrease the number of recipients.

The minister also noted that the current system, where those who have paid unemployment insurance for years who then leave voluntarily or by mutual agreement then do not qualify for unemployment insurance benefits, is being revisited with employers.

"Naturally, trade unions would prefer this aspect to be as generous as possible," Riisalo added.

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