Budget, Estonia, Financial Services, Labour-market

The premium of 2.4% is made up of a contribution of the insured person amounting to 1.6% and of a contribution of the employer amounting to 0.8% of the person's gross pay, spokespeople for the government said.

According to an estimate of the Estonian Unemployment Insurance Fund, a combined rate of 2.4% means that premiums collected by the fund will total 166.8 mln euros next year, 178 mln euros in 2018, 189 mln euros in 2019 and 200 mln euros in 2020.

One of the reasons why the rates have to be left unchanged is the Work Ability Allowance Act that stepped into force this year, which says that a person's work ability is assessed and the work ability allowance granted and paid by the Estonian Unemployment Insurance Fund using partially money of unemployment insurance. Hence the availability of sufficient funds has to be guaranteed to be able to meet these obligations in a sustainable manner, the government said.

Under law, unemployment insurance is a type of compulsory insurance the purpose of which is to provide labor market services, pay labor market benefits, except unemployment allowance, provide, upon unemployment, partial compensation for the lost income to insured persons for the time of the search for work, compensation of the expenses related to the termination of employment contracts to employees and service relationships to officials in the case of layoffs, and the protection of the claims of the employees upon insolvency of employers.