Audit Office: In case of crisis, unemployment reserve would last 3 years

Job ads at a Töötukassa-organized job fair.
Job ads at a Töötukassa-organized job fair. Source: (Postimees/Scanpix)

The Estonian Unemployment Insurance Fund (Töötukassa) has accumulated a considerable reserve, but if the rate of unemployment were to increase as quickly as it did during the previous economic crisis, its resources would last for roughly three years, the National Audit Office said on Monday.

"The Töötukassa has calculated how quickly the fund's reserve would be depleted in case of an economic crisis if the unemployment insurance premium rate remained at today's level," it appears in the annual report the National Audit Office submitted to the Riigikogu on Monday. "For instance, if the unemployment rate were to grow quickly, as it did during the previous economic crisis, and a similar scenario were to repeat itself, the Töötukassa's reserves would last for about three years."

It should also be taken into consideration that the fund's target groups and activities have significantly increased in their scope: not only must services be provided to those who have lost their job, but the target group of the work ability reform also needs to be brought to the labour market, and the employment of those already working has to be supported as well, the report said.

According to the National Audit Office's assessment, one of the main reasons why the unemployment insurance premium rate has not been decreased involves the nationwide work ability reform. The reform seeks to recategorise a large number of the roughly 100,000 people currently receiving pensions for incapacity for work as people with decreased working ability. The latter do not receive a pension from the Social Insurance Board; rather, the Töötukassa pays them a work ability allowance funded from the state budget.

A total of €179 million has been allocated for the disbursement of work ability allowance in 2018, which is supplemented by expenditures on the assessment of work ability in the amount of €8 million as well as services for people with decreased work ability totalling €24 million. According to the National Audit Office, the transferring these expenses to the Töötukassa is one of the reasons why the unemployment insurance premium rate has not been reduced despite the fact that the high employment rate would allow for the reduction.

"The fact that preserving the Töötukassa's revenue has a positive effect on the government sector's budgetary position and helps offset the deficit in other parts of the sector could also be a reason," the National Audit Office added. 


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Editor: Aili Vahtla

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