Estonia, Financial Services, Labour Unions
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Saturday, 27.04.2024, 02:53
Estonia's Unemployment Insurance Fund makes proposal to leave premium unchanged
The current rate for an insured person is 1.6% and the
employer's rate is 0.8 % of the sums stipulated in the law.
"The supervisory board of the Estonian Unemployment
Insurance Fund found that the economic policy of the state must be
counter-cyclical. During good times like we are having now, reserves have to be
accumulated. During bad times the insurance premium rates should be lowered and
expenditures increased, that is, the reserves tapped into. Before making the
decision the supervisory board also looked at potential crisis scenarios, and
we can be sure that with the assets of unemployment insurance we can cope also
during more difficult times," Toomas
Tamsar, chairman of the supervisory board of the Unemployment Insurance
Fund and head of the Employers Confederation, said.
"It also has to be taken into consideration that the
duties of the Unemployment Insurance Fund toward the people have increased. The
expenditures of the Unemployment Insurance Fund -- such as the unemployment
insurance benefit -- are directly connected to wages. Consequently, the reserve
should grow at the same pace as wages in order for the existing buffers to be
preserved," Tamsar said.
With a rate of premium of 2.4%, the total income of
unemployment insurance will reach 202 mln euros in 2019, compared with
estimated expenditures of 163.1 mln euros.
The Estonian government in September 2017 adopted the
unemployment insurance premium rates for 2018-2021 and left them at the present
level.
With all incomes and expenses related to unemployment
insurance assets taken into account, the assets of the Unemployment Insurance
Fund would grow by 38.8 mln euros in 2019 to an estimated 811.8 mln euros by
year-end. The net value of the fund's assets at the end of 2017 was 748 mln
euros.
Unemployment insurance was launched in Estonia in 2002. The
rate of the premium was highest in 2009-2013 -- 4.2%, consisting of a contribution
of the insured person at 2.8% and a contribution of the employer at 1.4%. The
unemployment insurance premium rate has been 2.4% since 2015.