Everything you need to know
The Joint Ministerial Decision (KYA) was signed between Ministries of National Economy and Finance and Labor and Social Security, with which the new is put into pilot application unemployment benefit.
The pilot program is implemented, following the preparation of a study by the Public Employment Service (PSS) in collaboration with the OECD and within the framework of a technical assistance project by DG REFORM.
As stated in the relevant announcement, the aim of the new pilot unemployment benefit is to adapt to the needs of the modern labor marketbe more motivating to find work and become more efficient, fairer and more remunerative.
The implementation of the new pilot unemployment benefit is expected to start within the first months of 2025 and may last up to 16 months.
The objectives of the new unemployment benefit are as follows:
Motivation to work: It will motivate the unemployed to return to work faster, as it will start higher in the first months of unemployment and gradually decrease.
Reciprocity and fairness: The system will recognize the contributions paid and will not equate cases with large differences, as is already the case in 25 of the 27 EU countries. Today, in our country, regardless of whether someone worked for two years at minimum wage or 20 years at 2,000 euros, they receive the same benefit for the same duration.
Effectiveness: Consolidation and automation of complex processes will ensure simplification and efficiency of provision.
The new allowance consists of three parts:
Fixed part subsidy: Calculated, based on the beneficiary’s earnings. It starts with a subsidy of 70% of the statutory minimum daily wage or the average daily wage of the beneficiary, if his earnings were lower than the minimum wage, and gradually decreases at the end of the subsidy period. The condition is the completion of at least 175 days of insurance during the 14 months, before joining the subsidy, excluding the last two months.
Variable grant portion (“bonus” for those with a longer insurance life): It depends on the beneficiary’s years of insurance (counted from the 4th to the 20th year of insurance) and his average earnings, when it is higher than the minimum wage. The calculation is made by multiplying the coefficients corresponding to the years of insurance and the average salary with the statutory minimum daily wage.
It is noted that unemployment benefit is compensatory in naturethat is, it results from unemployment contributions paid during the working life and not of a welfare nature.
Conditions
a) joining the regular subsidy, b) 900 days of insurance at least during the 50 months, before joining the subsidy, excluding the last two months, c) earnings equal to or greater than the minimum wage during the 14 months, before inclusion in the subsidy, excluding the last two months.
Additional benefits/surcharges include Christmas gift, Easter and surcharges, due to protected members and single parenthood.
According to the announcement, the institutional framework for the regular unemployment benefit, as it applies today, was formed in the 1950s and 1980s and no longer adequately responds to basic social and economic policy objectives, such as the substantial support of the unemployed in a critical time and the provision incentives for reintegration into the labor market.
The program will be evaluated after the end of the pilot application and, based on the findings of the final evaluation, it will be modified accordingly and applied universally to all the unemployed.
The following are questions and answers for the DYPA regular unemployment subsidy pilot program:
- Why does unemployment benefit need to change?
The institutional framework for the unemployment benefit was formed in the 1950s. Therefore, it is necessary to update it, so that it is connected to the needs of the modern labor market and responds to today’s basic demands, which are the essential and fair support of the unemployed and the motivation to rejoin the labor market.
- What are the basic principles of the DYPA regular unemployment subsidy pilot program?
- Incentive to work: It will motivate the unemployed to return to work faster, as it will start higher in the first months of unemployment and then decrease.
- Responsiveness and fairness: The system will recognize the contributions paid, as is already the case in 25 of the 27 EU countries, and will not equalize cases with large differences.
Today, regardless of whether someone worked for two years at minimum wage or 20 years at 2,000 euros, they receive the same benefit for the same duration.
- Efficiency: Consolidation and automation of complex processes will ensure simplification and efficiency of provision.
This reform was technically supported by the OECD, through the Technical Support Instrument of the European Commission and is financed by the Recovery and Resilience Fund. Complements the work allowance of Law 4921/2022, which provides that the subsidized unemployed who find work, before the completion of the subsidy, are entitled to 50% of the remaining subsidy in addition to their salary.
- When is the pilot application of the new regular unemployment benefit program expected and how long will it last?
The implementation of the new pilot unemployment benefit is expected to be launched by the Public Employment Service in the first months of 2025 and, depending on the insurance conditions of each unemployed person, may last up to 16 months.
- What needs does the new regular unemployment subsidy pilot program aim to cover?
The new regular unemployment subsidy pilot program aims to:
- in the modernization of the provision, in order to respond to the modern socio-economic conditions and to strengthen its efficiency,
- in supporting the beneficiaries in dealing with unemployment, especially in the first difficult months and in their faster reintegration into the labor market and
- in strengthening the remunerative character, subsidizing the beneficiaries according to the years of work and the amount of their wages, i.e. their contribution to the insurance system.
5. What are the main changes in the new regular subsidy program to serve the above objectives?
The changes are focused on three axes: a) the inclusion conditions, b) the duration and c) the amount of the subsidy.
Specifically:
- It merges the regular subsidy with the long-term unemployment benefit, allowing a maximum subsidy duration of up to two years (24 months), following an individualized approach to the amount of the benefit.
- It puts on a more rational basis both inclusion in the subsidy and the duration of the subsidy, which is now calculated on the basis of the ratio two months of employment: one month of subsidy for the first year of the subsidy and three months of employment: one month of subsidy for the second year.
- It takes insurance history into account to calculate the amount of the benefit, offering a fixed part, which everyone receives, and an additional variable part, depending on the unemployed person’s insurance history.
- It sets a limit of 175 days of insurance in the 14 months before the termination of the employment relationship (the last two months are not counted, as is the case today).
- In addition to the giving of gifts for the Christmas and Easter holidays and the increases due to children, for the first time it takes into account the status of a single parent, which is reinforced with an additional amount.
- They are front-loaded, with the subsidy being higher in the first months and gradually decreasing, to boost reintegration into the labor market, as is the case in 17 EU member states.
6. How will the beneficiaries be selected for the new unemployment subsidy pilot program?
The selection of the beneficiaries will be carried out randomly, through an automated system (RCT methodology), from all the applications submitted for inclusion in the regular unemployment subsidy, once it is established that the new eligibility conditions are met.
The new pilot program concerns those who have not received a regular subsidy in the previous four years from the termination of their employment relationship.
- How to apply for the new regular unemployment benefit pilot scheme?
A separate application is not required, as the same application submitted for the existing regular subsidy program is used, through the online services of DYPA.
The supporting documents remain the same and are sought ex officio. Only one additional supporting document is provided to establish the status of a single parent, which will be attached to the application, as it is not possible to search ex officio for this supporting document alone.
- Will beneficiaries of the regular unemployment subsidy program in the pilot application receive a lower subsidy amount?
No unemployed person participating in the pilot unemployment benefit will receive a lower level of benefit than they would have received under the current system, just as the law provides for the said pilot program.
- Are those already receiving unemployment benefits affected by the pilot program?
No. Those receiving unemployment benefit under the current system continue to receive it as normal for the duration of their benefit, unaffected, as will those who will not be selected for the pilot scheme.
- Does the pilot application of the unemployment benefit also apply to the seasonal benefit?
No. The pilot application concerns only the regular unemployment benefit and is not related to the seasonal unemployment benefit.
The reform of the seasonal unemployment benefit is a separate subject of study, with the aim of achieving the greatest possible reciprocity and its correlation with real working time.
- When is the full implementation of the new regular unemployment benefit program expected?
During the pilot, the program will be evaluated and, based on the findings of the final evaluation, modified accordingly and applied universally to all the unemployed.
