Estonia, Financial Services, Labour Unions

International Internet Magazine. Baltic States news & analytics Thursday, 16.08.2018, 14:39

Estonia's Unemployment Insurance Fund makes proposal to leave premium unchanged

BC, Tallinn, 09.08.2018.Print version
The supervisory board of the Estonian Unemployment Insurance Fund has made a proposal to the government to leave the unemployment insurance premium rates at the present level for the next four years, reports LETA/BNS.

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.

 






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