How would the staggering of income support affect the daily allowance?

Topics

• Income security
• Law change

Orpos government is planning to introduce a staggered system of income security. This would not affect the amount of daily allowance for short periods of unemployment, but would cut it significantly for longer periods of unemployment.

Changes to unemployment benefits have been agreed in the government programme. The forthcoming legislative changes will introduce a range of tightening measures on the conditions and level of support for those in receipt of income support. The timing of the changes will depend on the action of the government and parliament, so we do not yet know when the conditions of income support will change. As a general rule, the changes will only affect benefits granted after the changes in the law. 

One of the entries concerns the staggering of income support. According to the government programme, “the level of income support will be staggered from the current level, so that after eight weeks of unemployment the benefit will fall to 80% of the initial level and after 34 weeks to 75% of the initial level.”  

What does this change mean for you?

Your income support is reduced when unemployment is prolonged

Staggering means that the level of earnings-related daily allowance decreases as unemployment continues. Under the government’s proposal, the earnings-related allowance would fall from its original full level to 80% after eight weeks of unemployment and 75% after 34 weeks of unemployment.  

The impact of the staggering on your earnings-related allowance will depend on the initial level of your earnings-related allowance and on how long you remain unemployed.   

Your daily allowance at the beginning of unemployment (per day) 100 %	Your daily allowance after the 1st step 80 %	This is how much the daily allowance decreases per month	Your daily allowance after the 2nd step 75 %	This is how much the daily allowance decreases per month
50 €	40 €	215 €	38 €	269 €
55 €	44 €	237 €	41 €	296 €
60 €	48 €	258 €	45 €	323 €
65 €	52 €	280 €	49 €	349 €
70 €	56 €	301 €	53 €	376 €
75 €	60 €	323 €	56 €	403 €
80 €	64 €	344 €	60 €	430 €
85 €	68 €	366 €	64 €	457 €
90 €	72 €	387 €	68 €	484 €
95 €	76 €	409 €	71 €	511 €
100 €	80 €	430 €	75 €	538 €
105 €	84 €	452 €	79 €	564 €
110 €	88 €	473 €	83 €	591 €
115 €	92 €	495 €	86 €	618 €
120 €	96 €	516 €	90 €	645 €

Example 1

Your daily allowance is 80 € per day. You are unemployed for 40 days. In total, you get 3 200 € before tax. The staggering will not affect your daily allowance.

80 €/day x 40 days = 3 200 €   

Example 2

Your daily allowance is 80 € per day. You are unemployed for 80 days. For the first 40 days, you will receive a total of 3 200 €.  

For the next 40 days, your earnings-related allowance will be 20% lower, giving you a total of 2 560 €. For 80 days, you will receive a total of 5 760 € before tax. Without staggering, your 80 days’ earnings-related allowance would be 6 400 €, so staggering reduces your total earnings-related allowance in this situation by 640 €.

With staggering: (80 €/day x 40 days) + (80 €/day x 0,80 x 40 days) = 5 760 €  
Without staggering: 80 €/day x 80 days = 6 400 €  

Example 3

Your daily allowance is 80 € per day. You are unemployed for 250 days. For the first 40 days, you will receive a total of 3 200 €.  

For the next 130 days, you will receive 80% of the initial amount, i.e. 8 840 €.  

After 170 days, you will receive 75% of the original amount, giving you a total of 4 800 € for the following days until you reach the end of your unemployment.  

This gives you a total of 16 320 € before tax for 250 days. Without the staggering, your 250 days’ earnings-related allowance would be 20 000 €, so the staggering reduces your total earnings-related allowance in this situation by 3 680 €.

With staggering: (80 €/day x 40 days) + (80 €/day x 0,80 x 130 days) + (80 €/day x 0,75 x 80 days) = 16 320 €  
Without staggering: 80 €/day x 250 days = 20 000 €