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Who and under what conditions receive unemployment benefit?

Autor: Aet Sallaste

Temporary subsidies from the Unemployment Insurance Fund will be paid to those employees who are working under an employment contract and whose employers are significantly impacted by the current extraordinary circumstances.

The subsidy will grant an income for the employees and help the employers to overcome these temporary difficulties without having to lay off their staff or file for bankruptcy.

The subsidy is paid when an employer is in a situation where they comply with at least two of the following terms:

  • The employer must have suffered at least a 30% decline in turnover or, in the absence of turnover, revenue for the month they wish to be subsidised for, compared to the same month last year.
  • The employer is not able to provide at least 30 percent of their employees with work.
  • The employer has cut the wages of at least 30% of employees by at least 30% or down to the minimum wage.

The amount of the subsidy will be 70% of the average monthly wage of the employee. The maximum amount of the subsidy is €1000. In addition, the employer must pay a wage of at least €150 to the employee.

Any employee’s wage can be subsidised for up to two months during a three-month period (March, April and May 2020).

If the employer terminates the employment relationship with the employee due to redundancy in the same calendar month for which the subsidy is claimed or in the following month, he must repay the subsidy to the Unemployment Insurance Fund.

Further information is available in Estonian, Russian and English on the website of the Unemployment Insurance Fund.

Nothing in this alert should be construed as expert advice. This alert is a generalized summary. Professional counselling should therefore be sought before any action is undertaken.

Grant Thornton Baltic advisors can help you:

  • assess whether your company qualifies for this measure;
  • draw up the staff documents necessary to apply for the subsidy;
  • assess the necessity and scope of applying for the subsidy.

Contact us to discuss your company and our legal services!