The ABC of adjusted unemployment allowances
A lot of the work done in service sectors is typically part-time. If you work part-time, you are entitled to adjusted allowances if the working hours in your employment contract do not exceed 80% of the working hours of a full-time employee.
Due to Covid-related lay-offs, the working hours of many full-time workers have also been reduced. In most cases, workers who have been partially laid off are entitled to adjusted allowances. A condition for receiving allowances is that you are registered as a jobseeker with the TE Office.
Who is entitled to adjusted allowances?
Part-time workers and partially laid-off workers are entitled to adjusted allowances. You can also get adjusted allowances for full-time work lasting not more than two weeks. For allowances to be paid, applicants must be registered as jobseekers with the TE Office. Adjusted earnings-related allowances are applied for in four-week or monthly periods, depending on your pay period.
If you work part-time, your income is adjusted depending on the payment day
Work is part-time if the working hours in your contract do not exceed 80% of the full-time working hours in the collective agreement. If your contract is part-time, you are considered a part-time employee even if more work is available.
If you work part-time, wages are always adjusted based on the payment day. The allowances depend on the wage income paid during the period being applied for. For this reason, if you are laid off from part-time work, the amount of your allowances will depend on the wage income paid before you were laid off if it is paid during the lay-off period.
Example: If your lay-off starts on 1 May 2021 and your wages for April are paid on 15 May 2021, this will affect the amount of allowances in May. So for May you get adjusted allowances even if you have been laid-off full-time. You should continue to be registered as a jobseeker even after the lay-off ends because as a part-time worker you are entitled to allowances even without being laid off.
If you work part-time or you have been laid off from part-time work, your working hours are calculated based on the application period. The application period is determined based on the pay period, either per month or four weeks. If the number of working hours paid on the payment day exceeds 80% of the full-time working hours in the collective agreement, you are not entitled to adjusted allowances for that application period. In calculating working hours, paid periods of annual holiday and sick leave are also taken into account.
Example: Your lay-off starts on 1 June 2021. In May you worked 135 hours in the commercial sector, and your wages for this are paid in June. In June you are not entitled to allowances because your working hours in May exceeded 80% of the working hours limit (37.5 hours/week * 21.5 = 161.25 hours, making the 80% limit 129 hours).
Reduced working hours due to lay-off in full-time work
If the working hours agreed in your employment contract exceed 80% of the full-time working hours in the collective agreement, you work is considered full-time. Employment is defined as full-time or part-time based on the working hours in the employment contract, not the actual working hours.
If you have been laid off from full-time work due to your working hours being reduced, earnings-related allowances are adjusted on an earnings basis. For example, the wages you earn in April affect your allowances in April.
If you have been laid off from full-time work, your working hours are calculated on a calendar week basis. If the weekly working hours calculated exceed 80% of the full-time working hours in the collective agreement, you are not entitled to allowances for that week. You are not entitled to earnings-related allowances for periods of annual holiday earned from full-time work.
If a lay-off is implemented as full working and lay-off days, allowances are paid in full for full lay-off days. Under the law the number of days of compensation may not exceed five days a week and full working days reduce the maximum number of days to be compensated.
Example: You have been laid off for five full weekdays and you have worked two full working days at the weekend. Allowances can be paid for a maximum of three lay-off days and two lay-off days are rejected on the basis of the number of days of compensation.
In cases where working hours vary daily, allowances are paid on an adjusted basis.
Other points to note in calculating adjusted allowances
There is a protected amount in adjusted allowances. The protected amount means the monetary amount you can earn gross without it affecting the amount of your allowance. If your application period is monthly, your protected amount is € 500. If your application period is four weeks, your protected amount is € 465. Half of any wages exceeding the protected amount reduce the amount of allowances paid.
Example: you get wages for part-time work of € 1000 per month. Then the amount that reduces your allowances is € 250 ((€ 1000 - € 500) / 2 = € 250)
The total of the adjusted allowances paid by the fund and any wages you receive may not exceed the amount of the wages forming the basis of your allowances. The maximum amount is calculated by deducting the earned income per day from the daily wages forming the basis of the allowances. If this amount is zero or below, no allowances are paid. In calculating the maximum amount, the protected amount is not taken into account – all earned income counts.
The current protected amounts are in force until 30 June 2021. From 1 July 2021 the protected amount is € 300 per month or € 279 per four weeks.
Read more about adjusted allowances here.