The government is set to proceed with the universal implementation of the new unemployment benefit, which reaches up to €1,295 and decreases gradually but with double duration of 24 months, for all those who become unemployed from April 1, 2026, after completing the pilot program in the coming February. So far, it is estimated that 12,500 unemployed people have been subsidized with the new proportional benefit and 25% of them managed to return quickly to the labor market, resulting in discontinuing receipt of the benefit. After completion of the program, an evaluation is expected so that, if necessary, the required adjustments can be made and it can acquire permanent characteristics from next April, when the increase in minimum wage for both private and public sectors will have already been announced.
Read: New unemployment benefit up to €1,295 with 24-month duration – Detailed criteria and requirements
The goal, according to the leadership of the Ministry of Labor, is to create a benefit that will be simple, fair, contributory and adapted to market needs. In its new form, the unemployment benefit can reach up to €1,295 during the first months of provision for a beneficiary with many years of work and particularly high earnings over a long period during their working life. Moreover, the benefit is front-loaded, meaning it is higher during the first months of unemployment to cover initial increased needs, and decreases subsequently to provide a strong disincentive to the beneficiary to remain outside the labor market. The total payment duration can be up to 24 months. It should be emphasized that the subsidy amount is based on contributions paid by the unemployed, as already happens in 25 out of 27 EU countries, and cases with large differences will not be equalized, as currently happens in our country.
Unemployment benefit: The three parts and requirements
Today, regardless of whether someone worked 2 years on minimum wage or 20 years with a €2,000 salary, they receive the same benefit for the same period. The new benefit consists of three parts:
1. The fixed subsidy part. Calculated based on the beneficiary’s earnings in relation to the legal minimum daily wage, starting in the first quarter at 70% of the minimum daily wage (or the average daily wage of their earnings if these were lower than minimum wage) and decreasing gradually (60% in second quarter, 50% in third quarter, 40% in fourth quarter, 30% in first half of second year, 20% in second half of second year), while the average subsidy percentage in the first 12 months remains at 55% of the legal minimum daily wage, as today. The prerequisite is completion of at least 175 days of insurance during the 14 months before entering the subsidy, excluding the last 2 months.
2. The variable subsidy part (“bonus”). Depends on years of insurance (from 4th to 20th year of insurance) and the beneficiary’s average earnings. This way, working life is linked to the variable subsidy amount, increasing the total benefit for those who have worked at least four years, strengthening the contributory character of unemployment insurance. It should be noted that unemployment benefit is contributory (derived from paid contributions) and not welfare-based.
3. Additional benefits and supplements, such as Christmas and Easter bonuses, child allowances and -for the first time- single-parent supplements. With the upcoming changes, regular subsidy is essentially merged with long-term unemployment benefit, allowing maximum subsidy duration up to two years (24 months), following an individualized approach for benefit amount. However, an unemployed person will be excluded from benefits if they reject job offers from Employment Promotion Centers three times.
This model puts both entry into subsidy on a more rational basis, setting 175 days of insurance as the limit, and subsidy duration, which is now calculated with a ratio of two months of employment for one month of subsidy in the first year of subsidy, and three months of employment for one month of subsidy in the second year. It also takes into account insurance history for calculating benefit amount, offering a fixed part that everyone receives, and an additional variable part, depending on insurance service record.
Published in Apogeumatini
