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If you are laid off, you can get earnings-related allowance

Updated: 05.05.2021

Earnings-related allowance is paid to people between the ages of 17 and 64 no matter whether they are laid off, unemployed or working part-time. However,  people between the ages 65 and 67 are eligible for earnings-related daily allowance if they are laid off from a permanent job, prevented from working due to bad weather or industrial action by other employees or the employer.

Allowance can only be paid on the basis of a statement by the Employment and Economic Development Office also known as TE Office. This is why, if you are laid off, you need to register with the TE Office as an unemployed jobseeker and apply for full-time work no later than on the first day of the lay-off.

You can find instructions about how to apply for daily unemployment allowance here. The application process is the same for everyone but required attachments depend on the applicant's situation. 

Lay off from 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 are fully laid off and have no working hours or days during the application period, we can pay your daily allowance in full for the whole lay off period. The benifit is only paid for weekdays, not for weekends. 

If your hours have been reduced due to a lay off (from a full time position) the adjustment of earnings-related allowance depends on the manner how your hours have been reduced. If you have been laid off from full-time work, your working hours are reviewed on a weekly basis.  If the weekly working hours exceed 80% of the full-time working hours determined 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 you have both full work days and full lay off days during the application period allowance can be paid in full for the full lay off days. This means that you don't receive an allowance for the full working days even if you have earned less than the exempt amount on those days.  In addition, according to 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 on the weekend. Allowance 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 as you have worked two full days during the weekend.

In lay off situations where your working hours vary daily, your income will be taken into account when adjusting your daily unemployment allowance. 

Lay off from part-time work

You are considered as a part-time worker  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,  your salary is always adjusted based on the payment day. The allowance depends on the salary paid on the adjustment period. For this reason, if you are laid off from part-time work, your allowance is affected by the salary earned before you were laid off if it is paid on the adjustment period. 

Example 1:  If your lay off starts on 1 May 2021 and your salary for April is paid on 15 May 2021, it affects the amount of allowance 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 allowance even without being laid off.

If you work part-time or you have been laid off from part-time work, your working hours are reviewed for the entire  adjustment period.  The adjustment period is based on your pay period, being either a month or four weeks. If the number of working hours paid on the payment day on the adjustment period exceeds 80% of the full-time working hours in the collective agreement, you are not entitled to adjusted allowances for that adjustment period. In calculating working hours, paid periods of annual holiday and sick leave are also taken into account.

Example 2: Your lay-off starts on 1 June 2021. In May you worked 135 hours in the commercial sector, and your salary for May is paid in June. In June you are not eligibile to receive any unemployment allowance 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).

If you work part-time we advice you to stay registered as a jobseeker at the TE-office even after your lay off end. This way you can apply for earnings-related daily allowance outside your lay off as a part-time employee. 

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