Under current rules, employers who hire individuals with lower competitiveness on the labor market, such as the long-term unemployed, young people, former prisoners or people with reduced capacity for work, can apply for a wage subsidy from the Unemployment Insurance Fund that covers 50 percent of the employee's gross monthly salary.

Until now, this subsidy has been paid for up to 12 months, depending on the individual's situation. But under changes to the 2024–2029 employment program approved at the government's previous meeting, the maximum duration for receiving the wage subsidy will be reduced to six months.

At the same time, employers will gain a new option: they can apply for the subsidy when hiring unemployed people aged 55 and older who have been out of work for at least six months. In another new initiative, the Unemployment Insurance Fund will begin organizing visits for young people to employers and educational institutions to help them secure their first job.

The option of offering Estonian language instruction through the Unemployment Insurance Fund to people already in work will be discontinued. However, employers will still be able to apply for support to provide Estonian lessons to their employees. Job seekers will continue to have access to state-funded language courses.

Support for participation in formal education will also be scaled back. This benefit is currently available to unemployed individuals who face difficulties finding work due to a lack of education. As of this year, the gross monthly amount is €410.13. Previously, it was paid throughout the nominal study period, but in the future, it will no longer be available during the summer months, as classes generally do not take place during that time.

Addiction counseling will also no longer be offered through the Unemployment Insurance Fund. Since it is already available as a healthcare service, the state will eliminate redundancy by providing such support solely through the healthcare system going forward.

Two separate services — job clubs and job training — will be discontinued as well. Their functions will be folded into other career counseling and work capacity support programs.

The Ministry of Economic Affairs justified the reforms by citing the need to better target support measures, avoid duplication and use unemployment insurance resources more efficiently.

"Every euro invested in labor market services must create more value by providing smarter and more focused support, avoiding overlap with other state services and above all helping those who need it most," said Minister of Economic Affairs and Information Technology Erkki Keldo (Reform).

As a result of these changes, the employment program's annual expenditures are expected to decrease by €7.8 million to €11 million from next year through 2029.

According to Postimees, discontinuing Estonian lessons for employed people is expected to save €4.2–€7.1 million per year, while cutting the wage subsidy period could save €0.4–€1.8 million annually.

Eliminating the summer support payments for those enrolled in formal education is projected to save €1.3–€1.5 million per year. Ending addiction counseling through the Unemployment Insurance Fund would cut spending by around €80,000.

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