Graduated reduction of earnings-related allowance

The level of the earnings-related unemployment allowance is graduated. This means that the level of the allowance decreases after a certain period of receiving the allowance.

Allowance decreases:

• To 80% of the original amount after receiving the allowance for 40 days (approximately two months), and
• To 75% of the original amount after receiving the allowance for 170 days (approximately eight months).

You can estimate your allowance level after the reduction using the allowance calculator.

Who does the reduction apply to?

The legislative amendment concerning the graduated reduction comes into effect on September 2, 2024. The reduction generally applies to allowance periods that begin after the legislative amendment has come into force. If your unemployment begins after the law has come into effect and you have received a salary in September 2024 or later, so that your entitlement to earnings-related unemployment allowance accrues, the reduction will apply to you.

The earnings-related allowance will not be reduced if the last workweek credited toward the earnings-related allowance ends on or before September 1, 2024.

If you are self-employed, your business must cease operations, and your unemployment must begin on or after September 2, 2024, for the reduction to apply.

Partial employment and the reduction

The earnings-related unemployment allowance is also reduced during periods of partial employment. However, the 40- and 170-day deadlines for the reduction are reached more slowly during periods of partial employment.

Example: Your full allowance is 70 euros per day. You work part-time and receive adjusted unemployment allowance of 35 euros per day during this period. It will take 80 days to reach the 40-day deadline for the reduction.

When both a reduction due to partial employment income and a reduction due to the graduated scale apply simultaneously, the reduction related to the graduated scale is applied before the reduction related to income from employment. You can estimate your allowance amount after the reductions using the allowance calculator.

Example: Your full allowance is 70 euros per day. You have been receiving the allowance long enough that the level is reduced due to the graduated scale. Your reduced allowance is 56 euros per day. You earn an income of 430 euros per month. The daily reduction due to this income is 10 euros. The resulting allowance is 46 euros per day.

Graduated reduction and the minimum rule

The earnings-related unemployment allowance has a minimum amount. Due to the rule regarding the minimum amount, the earnings-related unemployment allowance is always paid at least at the level of the basic unemployment allowance. The basic unemployment allowance is not subject to the graduated reduction.

If the allowance amount is equal to the basic unemployment allowance before the reduction, the reduction does not affect the allowance. If the allowance is close to the level of the basic unemployment allowance, the impact of the reduction may be smaller than usual. The allowance calculator also considers the minimum amount when providing an estimate.