Unemployment fund proposes leaving premium unchanged

EUIF office.
EUIF office. Source: Postimees/Scanpix

The supervisory board of the Estonian Unemployment Insurance Fund (EUIF) has proposed to the government to leave unemployment insurance premium rates at the current level for the next four years.

The current rate for an insured person is 1.6% and the employer's rate 0.8% of the sums stipulated by law.

"The supervisory board of the EUIF found that the economic policy of the state must be counter-cyclical," EUIF supervisory board chairman and Estonian Employers' Confederation chairman Toomas Tamsar said in a press release on Wednesday. "During good times like we are having now, reserves have to be accumulated. During bad times, insurance premium rates should be lowered and expenditures increased, that is, reserves should be tapped into. Before making this decision, the supervisory board also looked at potential crisis scenarios, and we can be sure that with the assets of unemployment insurance we can cope during more difficult times as well."

According to Tamsar, it must also be taken into consideration that the EUIF's responsibilities toward people have increased. "The fund's expenditures, such as the unemployment insurance benefit, are directly connected to wages," he explained. "Consequently, the reserve should grow at the same pace as wages in order for existing buffers to be preserved."

With a rate of premium of 2.4%, the total income of unemployment insurance will reach €202 million in 2019, with estimated expenditures to total €163.1 million.

The Estonian government in September 2017 adopted the unemployment insurance premium rates for 2018-2021, leaving them at current levels.

The unemployment insurance premium rate has been 2.4% in Estonia since 2015.

Editor: Aili Vahtla

Source: BNS

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