Unemployment benefits
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Unemployment benefits, also called unemployment insurance, unemployment payment, unemployment compensation, or simply unemployment, are payments made by authorized bodies to
unemployed Unemployment, according to the OECD (Organisation for Economic Co-operation and Development), is people above a specified age (usually 15) not being in paid employment or self-employment but currently available for Work (human activity), w ...
people. In the United States, benefits are funded by a compulsory governmental insurance system, not taxes on individual citizens. Depending on the jurisdiction and the status of the person, those sums may be small, covering only basic needs, or may compensate the lost time proportionally to the previous earned salary. Unemployment benefits are generally given only to those registering as becoming unemployed through no fault of their own, and often on conditions ensuring that they seek work. In British English unemployment benefits are also colloquially referred to as "the dole"; receiving benefits is informally called "being on the dole". "Dole" here is an archaic expression meaning "one's allotted portion", from the synonymous
Old English Old English (, ), or Anglo-Saxon, is the earliest recorded form of the English language English is a West Germanic languages, West Germanic language of the Indo-European language family, with its earliest forms spoken by the inhabita ...
word ''dāl''.


History

The first modern unemployment benefit scheme was introduced in the
United Kingdom The United Kingdom of Great Britain and Northern Ireland, commonly known as the United Kingdom (UK) or Britain, is a country in Europe, off the north-western coast of the European mainland, continental mainland. It comprises England, Scotlan ...
with the
National Insurance Act 1911 The National Insurance Act 1911 created National Insurance, originally a system of health insurance for industrial workers in Great Britain based on contributions from employers, the government, and the workers themselves. It was one of the foun ...
, under the
Liberal Party The Liberal Party is any of many political parties A political party is an organization that coordinates candidates to compete in a particular country's elections. It is common for the members of a party to hold similar ideas about politics ...
government of H. H. Asquith. The popular measures were introduced to stave off the poverty inflicted through unemployment, though they also had the added benefit to the Liberal Party of combatting the increasing influence of the Labour Party among the country's working-class population. The Act gave the British working classes a contributory system of insurance against illness and unemployment. It only applied to wage earners, however, and their families and the unwaged had to rely on other sources of support, if any. Key figures in the implementation of the Act included Robert Laurie Morant, and William Braithwaite. By the time of its implementation, the benefit was criticized by communists, who thought such insurance would prevent workers from starting a revolution, while employers and
tories A Tory () is a person who holds a political philosophy known as Toryism, based on a British version of Traditionalist conservatism, traditionalism and conservatism, which upholds the supremacy of social order as it has evolved in the English cul ...
saw it as a "necessary evil". The scheme was based on actuarial principles and it was funded by a fixed amount each from workers, employers, and taxpayers. It was restricted to particular industries, particularly more volatile ones like shipbuilding, and did not make provision for any dependants. After one week of unemployment, the worker was eligible for receiving 7 shillings/week for up to 15 weeks in a year. By 1913, 2.3 million were insured under the scheme for unemployment benefit.


Expansion and spread

The Unemployment Insurance Act 1920 created the dole system of payments for unemployed workers in the United Kingdom. The dole system provided 39 weeks of unemployment benefits to over 11 million workers—practically the entire civilian working population except domestic service, farmworkers, railroad men, and civil servants. Unemployment benefits were introduced in Germany in 1927, and in most European countries in the period after the
Second World War World War II or the Second World War, often abbreviated as WWII or WW2, was a world war that lasted from 1939 to 1945. It involved the World War II by country, vast majority of the world's countries—including all of the great power ...
with the expansion of the
welfare state A welfare state is a form of government in which the state (or a well-established network of social institutions) protects and promotes the economic and social well-being of its citizens, based upon the principles of equal opportunity Equa ...
. Unemployment insurance in the United States originated in
Wisconsin Wisconsin () is a U.S. state, state in the Upper Midwest, upper Midwestern United States. Wisconsin is the List of U.S. states and territories by area, 25th-largest state by total area and the List of U.S. states and territories by populatio ...
in 1932. Through the
Social Security Act The Social Security Act of 1935 is a law enacted by the 74th United States Congress and signed into law by US President Franklin D. Roosevelt. The law created the Social Security (United States), Social Security program as well as insurance aga ...
of 1935, the
federal government of the United States The federal government of the United States (U.S. federal government or U.S. government) is the Federation#Federal governments, national government of the United States, a federal republic located primarily in North America, composed of 50 ...
effectively encouraged the individual states to adopt unemployment insurance plans.


Processes

Eligibility criteria for unemployment benefits typically factor in the applicant's employment history and their reason for being unemployed. Once approved, there is sometimes a waiting period before being able to receive benefits. In the US, there is no waiting period on a temporary basis currently due to the COVID-19 pandemic, but in many states there is a waiting week. In Germany and Belgium, there is no waiting week. The current waiting period in Canada is seven days. Countries implement varied potential benefit durations (PBD), which is how long an individual is eligible to receive benefits. The PBD may be a sliding scale function of the applicant's past employment history and age, or it may be a set length for all applicants. In Argentina, for example, six months of work history results in a PBD of two months, while 36 months or more of work history can result in a PBD of a full year, with an extra six months of PBD to applicants over the age of 45. Most countries calculate the amount of unemployment benefit as a percentage of the applicant's former income. A typical replacement percentage is 50–65%. Some countries offer much higher levels of wage replacement, such as the Netherlands (75%), Luxembourg (80%), and Denmark (90%). There are often caps on the maximum benefit level, ranging from 33% of a country's average wage (Turkey) to 227% of its average wage (France). The average maximum benefit level is 77% among
OECD The Organisation for Economic Co-operation and Development (OECD; french: Organisation de coopération et de développement économiques, ''OCDE'') is an intergovernmental organization, intergovernmental organisation with 38 member countries ...
countries. Most benefit payments are constant over the course of the PBD, though countries such as the Netherlands, Sweden, Hungary, Slovenia, Spain, and Italy have a declining benefit path, in which the wage replacement percentage decreases over time. Most countries require those receiving unemployment benefits to search for a new job, and can require documentation of job search activities. Benefits may be cut if the applicant does not fulfil the search requirements, or turns down a job offer deemed acceptable by the unemployment benefits agency. Agencies may also provide resources, training, or education for job seekers. Some countries allow beneficiaries to accept part-time jobs without losing benefit eligibility, which can counter the disincentive of unemployment benefits to accepting jobs that do not fully replace the former wages. Unemployment benefits are typically funded by
payroll tax Payroll taxes are taxes imposed on employers or employees, and are usually calculated as a percentage of the salaries that employers pay their employees. By law, some payroll taxes are the responsibility of the employee and others fall on the em ...
es on employers and employees. This can be supplemented by the government's general tax revenue, which can occur periodically or in response to economic downturn. Contribution rates are usually between 1–3% of gross earnings, and are usually split between the employer and employee.


Systems by country

Across the world, 72 countries offer a form of unemployment benefits. This includes all 37 OECD countries. Among OECD countries for a hypothetical 40-year-old unemployment benefit applicant, the US and Slovakia are the least generous for potential benefit duration lengths, with PBD of six months. More generous OECD countries are Sweden (35 months PBD) and Iceland (36 months PBD); in Belgium, the PBD is indefinite.


Armenia

Armenia Armenia (), , group=pron officially the Republic of Armenia,, is a landlocked country in the Armenian Highlands of Western Asia.The UNbr>classification of world regions places Armenia in Western Asia; the CIA World Factbook , , and '' ...
'
Unemployment Insurance (UI) scheme
has been in force since 1991. In 2005, Armenia adopted the law on Employment of the Population and Social Protection in Case of Unemployment, which provided a legal framework to the Unemployment Insurance and active labor policies. Armenia’s UI is a contributory program, which is obligatory for public and formal private sectors, as well as the self-employed. To be eligible for benefits, the claimant must be unemployed as a result of business reorganization, staff reduction, or the termination of a collective bargaining agreement. To be eligible, applicants must have contributed for at least 12 months prior to unemployment or be actively looking for work after a long period of unemployment. The UI is also available to first-time job seekers. Those who do not qualify for the monthly payment are nonetheless eligible for the UI scheme's capacity building programs. Those who qualify for the monthly unemployment benefit will get a payment of 18,000 AMD per month for a minimum of 6 months and a maximum of 12 months. The UI also includes a scheme to help employers hire people who are unemployed with at least 35 years of UI contributions but have not reached retirement age; unemployed for more than three years; returning from corrective or medical institutions; returning from mandatory military service; disabled; refugees; or are 16 years of age and newly eligible to work. Employers who hire these groups are eligible for a benefit of 50% of the minimum wage to supplement the employee's income. The UI also provides financial assistance and capacity-building programs for unemployed or disabled individuals who want to start their own businesses. Armenia also has a Paid Public Works program that provides jobseekers and the disabled with temporary public employment for three months.


Australia

In
Australia Australia, officially the Commonwealth of Australia, is a sovereign country comprising the mainland of the Australian continent, the island of Tasmania, and numerous smaller islands. With an area of , Australia is the largest country by ...
, social security benefits, including unemployment benefits, are funded through the taxation system. There is no compulsory national unemployment insurance fund. Rather, benefits are funded in the annual Federal Budget by the National Treasury and are administrated and distributed throughout the nation by the government agency,
Centrelink The Centrelink Master Program, or more commonly known as Centrelink, is a Services Australia master program of the Australian Government. It delivers a range of government payments and services for retirees, the Unemployment, unemployed, f ...
. Benefit rates are indexed to the Consumer Price Index and are adjusted twice a year according to inflation or deflation. There are two types of payment available to those experiencing unemployment. The first, called
Youth Allowance Social security, in Australia, refers to a system of social welfare payments provided by Australian Government to eligible Australian citizens, permanent residents, and limited international visitors. These payments are almost always administer ...
, is paid to young people aged 16–20 (or 15, if deemed to meet the criteria for being considered 'independent' by Centrelink). Youth Allowance is also paid to full-time students aged 16–24, and to full-time Australian Apprenticeship workers aged 16–24. People aged below 18 who have not completed their high school education, are usually required to be in full-time education, undertaking an apprenticeship or doing training to be eligible for Youth Allowance. For single people under 18 years of age living with a parent or parents, the basic rate is A$91.60 per week. For over-18- to 20-year-olds living at home this increases to A$110.15 per week. For those aged 18–20 not living at home the rate is A$167.35 per week. There are special rates for those with partners and/or children. The second kind of payment is called '
JobSeeker Payment Social security, in Australia, refers to a system of social welfare payments provided by Australian Government to eligible Australian citizens, permanent residents, and limited international visitors. These payments are almost always administer ...
' (called Newstart until 20 June 2020) and is paid to unemployed people over the age of 21 and under the pension eligibility age. To receive a JobSeeker Payment, recipients must be unemployed, be prepared to enter into an Employment Pathway Plan (previously called an Activity Agreement) by which they agree to undertake certain activities to increase their opportunities for employment, be Australian Residents and satisfy the income test (which limits weekly income to A$32 per week before benefits begin to reduce, until one's income reaches A$397.42 per week at which point no unemployment benefits are paid) and the assets test (an eligible recipient can have assets of up to A$161,500 if he or she owns a home before the allowance begins to reduce and $278,500 if he or she does do not own a home). The rate of allowance as of 12 January 2010 for single people without children was A$228 per week, paid fortnightly. (This does not include supplemental payments such as Rent Assistance or Energy Supplement.) Different rates apply to people with partners and/or children. Effectively, people have had to survive on $39 a day since 1994, and there have been calls to raise this by politicians and NGO groups. On 22 February 2021, the Prime Minister of Australia,
Scott Morrison Scott John Morrison (; born 13 May 1968) is an Australian politician. He served as the 30th prime minister of Australia and as Leader of the Liberal Party of Australia from 2018 to 2022, and is currently the member of parliament (MP) for th ...
, announced that the JobSeeker base rate would be increased by A$50 a fortnight from April 2021. It is also intended to increase the threshold amount recipients can earn before their payment starts to be reduced. The system in Australia is designed to support recipients no matter how long they have been unemployed. In recent years the former
Coalition A coalition is a group formed when two or more people or groups temporarily work together to achieve a common goal. The term is most frequently used to denote a formation of power in political or economical spaces. Formation According to ''A Gui ...
government under
John Howard John Winston Howard (born 26 July 1939) is an Australian former politician who served as the 25th prime minister of Australia from 1996 to 2007, holding office as leader of the Liberal Party of Australia, Liberal Party. His eleven-year tenur ...
has increased the requirements of the Activity Agreement, providing for controversial schemes such as
Work for the Dole Work for the Dole is an Australian Government program that is a form of workfare, or work-based welfare. It was first permanently enacted in 1998, having been trialled in 1997. It is one means by which job seekers can satisfy the "mutual obligat ...
, which requires that people on benefits for 6 months or longer work voluntarily for a community organisation regardless of whether such work increases their skills or job prospects. Since the Labor government under
Kevin Rudd Kevin Michael Rudd (born 21 September 1957) is an Australian former politician and diplomat who served as the 26th prime minister of Australia from 2007 to 2010 and again from June 2013 to September 2013, holding office as the leader of the ...
was elected in 2008, the length of unemployment before one is required to fulfill the requirements of the Activity Agreement (which has been renamed the Employment Pathway Plan) has increased from six to twelve months. There are other options available as alternatives to the Work for the Dole scheme, such as undertaking part-time work or study and training, the basic premise of the Employment Pathway Plan being to keep the welfare recipient active and involved in seeking full-time work. For people renting their accommodation, unemployment benefits are supplemented by Rent Assistance, which, for single people as at 20 September 2021, begins to be paid when fortnightly rent is more than A$124.60. Rent Assistance is paid as a proportion of total rent paid (75 cents per dollar paid over A$124.60 up to the maximum). The maximum amount of rent assistance payable is A$139.60 per fortnight, and is paid when the total weekly rent exceeds A$310.73 per fortnight. Different rates apply to people with partners and/or children, or who are sharing accommodation.


Canada

In
Canada Canada is a country in North America. Its Provinces and territories of Canada, ten provinces and three territories extend from the Atlantic Ocean to the Pacific Ocean and northward into the Arctic Ocean, covering over , making it the world ...
, the system is known as "Employment Insurance" (EI). Formerly called "Unemployment Insurance", the name was changed in 1996. In 2019, Canadian workers paid premiums of 1.62% of insured earnings in return for benefits if they lose their jobs. The Employment and Social Insurance Act was passed in 1935 during the
Great Depression The Great Depression (19291939) was an economic shock that impacted most countries across the world. It was a period of economic depression that became evident after a major fall in stock prices in the United States. The Financial contagion, ...
by the government of R. B. Bennett as an attempted Canadian unemployment insurance programme. It was, however, ruled unconstitutional by the
Supreme Court of Canada The Supreme Court of Canada (SCC; french: Cour suprême du Canada, CSC) is the Supreme court, highest court in the Court system of Canada, judicial system of Canada. It comprises List of Justices of the Supreme Court of Canada, nine justices, wh ...
as unemployment was judged to be an insurance matter falling under provincial responsibility. After a constitutional amendment was agreed to by all of the provinces, a reference to "Unemployment Insurance" was added to the matters falling under federal authority under the
Constitution Act, 1867 The ''Constitution Act, 1867'' (french: Loi constitutionnelle de 1867),''The Constitution Act, 1867'', 30 & 31 Victoria (U.K.), c. 3, http://canlii.ca/t/ldsw retrieved on 2019-03-14. originally enacted as the ''British North America Act, 186 ...
, and the first Canadian system was adopted in 1940. Because of these problems Canada was the last major Western country to bring in an employment insurance system. It was extended dramatically by
Pierre Trudeau Joseph Philippe Pierre Yves Elliott Trudeau ( , ; October 18, 1919 – September 28, 2000), also referred to by his initials PET, was a Canadian lawyer and politician who served as the 15th prime minister of Canada from 1968 to 1979 and ...
in 1971 making it much easier to get. The system was sometimes called the 10/42, because one had to work for 10 weeks to get benefits for the other 42 weeks of the year. It was also in 1971 that the UI program was first opened up to maternity and sickness benefits, for 15 weeks in each case. The generosity of the Canadian UI programme was progressively reduced after the adoption of the 1971 UI Act. At the same time, the federal government gradually reduced its financial contribution, eliminating it entirely by 1990. The EI system was again cut by the Progressive Conservatives in 1990 and 1993, then by the Liberals in 1994 and 1996. Amendments made it harder to qualify by increasing the time needed to be worked, although seasonal claimants (who work long hours over short periods) turned out to gain from the replacement, in 1996, of weeks by hours to qualify. The ratio of beneficiaries to unemployed, after having stood at around 40% for many years, rose somewhat during the 2009 recession but then fell back again to the low 40s. Some unemployed persons are not covered for benefits (e.g. self-employed workers), while others may have exhausted their benefits, did not work long enough to qualify, or quit or were dismissed from their job. The length of time one could take EI has also been cut repeatedly. The 1994 and 1996 changes contributed to a sharp fall in Liberal support in the Atlantic provinces in the 1997 election. In 2001, the federal government increased parental leave from 10 to 35 weeks, which was added to preexisting maternity benefits of 15 weeks. In 2004, it allowed workers to take EI for compassionate care leave while caring for a dying relative, although the strict conditions imposed make this a little used benefit. In 2006, the Province of Quebec opted out of the federal EI scheme in respect of maternity, parental and adoption benefits, in order to provide more generous benefits for all workers in that province, including self-employed workers. Total EI spending was $19.677 billion for 2011–2012 (figures in
Canadian dollar The Canadian dollar (currency symbol, symbol: Dollar sign, $; ISO 4217, code: CAD; french: dollar canadien) is the currency of Canada. It is abbreviated with the dollar sign $, there is no standard disambiguating form, but the abbreviation Can ...
s). Employers contribute 1.4 times the amount of employee premiums. Since 1990, there is no government contribution to this fund. The amount a person receives and how long they can stay on EI varies with their previous salary, how long they were working, and the unemployment rate in their area. The EI system is managed by Service Canada, a service delivery network reporting to the Minister of Employment and Social Development Canada. A bit over half of EI benefits are paid in Ontario and the Western provinces but EI is especially important in the Atlantic provinces, which have higher rates of unemployment. Many Atlantic workers are also employed in seasonal work such as fishing, forestry or tourism and go on EI over the winter when there is no work. There are special rules for fishermen making it easier for them to collect EI. EI also pays for maternity and parental leave, compassionate care leave, and illness coverage. The programme also pays for retraining programmes (EI Part II) through labour market agreements with the Canadian provinces. A significant part of the federal fiscal surplus of the Jean Chrétien and
Paul Martin Paul Edgar Philippe Martin (born August 28, 1938), also known as Paul Martin Jr., is a Canadian lawyer and politician who served as the 21st prime minister of Canada and the leader of the Liberal Party of Canada from 2003 to 2006. The son of ...
years came from the EI system. Premiums were reduced much less than falling expenditures – producing, from 1994 onwards, EI surpluses of several billion dollars per year, which were added to general government revenue. The cumulative EI surplus stood at $57 billion at 31 March 2008, nearly four times the amount needed to cover the extra costs paid during a recession. November 2007 This drew criticism from Opposition parties and from business and labour groups, and has remained a recurring issue of the public debate. The Conservative Party, chose not to recognize those EI surpluses after being elected in 2006. Instead, the Conservative government cancelled the EI surpluses entirely in 2010, and required EI contributors to make up the 2009, 2010 and 2011 annual deficits by increasing EI premiums. On 11 December 2008, the
Supreme Court of Canada The Supreme Court of Canada (SCC; french: Cour suprême du Canada, CSC) is the Supreme court, highest court in the Court system of Canada, judicial system of Canada. It comprises List of Justices of the Supreme Court of Canada, nine justices, wh ...
rejected a court challenge launched against the federal government by two Quebec unions, who argued that EI funds had been misappropriated by the government.


China

The level of benefit is set between the minimum wage and the minimum living allowance by individual
provinces A province is almost always an administrative division within a country or sovereign state, state. The term derives from the ancient Roman ''Roman province, provincia'', which was the major territorial and administrative unit of the Roman Empire ...
,
autonomous regions An autonomous administrative division (also referred to as an autonomous area, entity, unit, region, subdivision, or territory) is a subnational administrative division or territory, internal territory of a sovereign state that has a degree of a ...
and
municipalities A municipality is usually a single administrative division Administrative division, administrative unit,Article 3(1). country subdivision, administrative region, subnational entity, constituent state, as well as many similar terms, are ge ...
.


Denmark


European Union

Each Member State of the European Union has its own system and, in general, a worker should claim unemployment benefits in the country where they last worked. For a person working in a country other than their country of residency (a cross-border worker), they will have to claim benefits in their country of residence.


Finland

Two systems run in parallel, combining a Ghent system and a minimum level of support provided by
Kela Kela or KELA may refer to: * KelA, a sports club in Kellokoski, Finland * KELA (AM), a radio station (1470 AM) licensed to Centralia-Chehalis, Washington, United States * Kela (Finnish institution), the Finnish social security agency * Kela (tribe) ...
, an agency of the national government. Unionization rates are high (70%), and union membership comes with membership in an unemployment fund. Additionally, there are non-union unemployment funds. Usually, benefits require 26 weeks of 18 hours per week on average, and the unemployment benefit is 60% of the salary and lasts for 500 days. When this is not available, Kela can pay either regular unemployment benefit or labor market subsidy benefits. The former requires a degree and two years of full-time work. The latter requires participation in training, education, or other employment support, which may be mandated on pain of losing the benefit, but may be paid after the regular benefits have been either maxed out or not available. Although the unemployment funds handle the payments, most of the funding is from taxes and compulsory tax-like unemployment insurance charges. Regardless of whether benefits are paid by Kela or from an unemployment fund, the unemployed person receives assistance from the ''Työ- ja elinkeinokeskus'' (''TE-keskus'', or the "Work and Livelihood Centre"), a government agency which helps people to find jobs and employers to find workers. In order to be considered unemployed, the seeker must register at the TE-keskus as unemployed. If the jobseeker does not have degree, the agency can require the job seeker to apply to a school. If the individual does not qualify for any unemployment benefit he may still be eligible for the housing benefit (''asumistuki'') from Kela and municipal social welfare provisions (''toimeentulotuki''). They are not unemployment benefits and depend on household income, but they have in practice become the basic income of many long-term unemployed.


France

France France (), officially the French Republic ( ), is a country primarily located in Western Europe. It also comprises of Overseas France, overseas regions and territories in the Americas and the Atlantic Ocean, Atlantic, Pacific Ocean, Pac ...
uses a quasi Ghent system, under which unemployment benefits are distributed by an independent agency (UNEDIC) in which unions and Employer organisations are equally represented. UNEDIC is responsible for 3 benefits: ARE, ACA and ASR The main ARE scheme requires a minimum of 122 days membership in the preceding 24 months and certain other requirements before any claims can be made. Employers pay a contribution on top of the pre-tax income of their employees, which together with the employee contribution, fund the scheme. The maximum unemployment benefit is (as of March 2009) 57.4% of
EUR The euro (currency symbol, symbol: euro sign, €; ISO 4217, code: EUR) is the official currency of 19 out of the Member state of the European Union, member states of the European Union (EU). This group of states is known as the eurozone o ...
162 per day (Social security contributions ceiling in 2011), or 6900 euros per month. Claimants receive 57,4% of their average daily salary of the last 12 months preceding unemployment with the average amount being 1,111 euros per month. In France tax and other payroll taxes are paid on unemployment benefits. In 2011 claimants received the allowance for an average 291 days.


Germany

Germany Germany,, officially the Federal Republic of Germany, is a country in Central Europe. It is the second most populous country in Europe after Russia, and the most populous member state of the European Union. Germany is situated between ...
has two different types of unemployment benefits. Their common goal is to cease dependence on unemployment benefits entirely. Both programs assist their beneficiaries to varying degrees through * a living allowance, * help in finding work or training, and * if necessary, getting state-funded training.


Unemployment benefit I

Unemployment benefits I is the first-tier program supporting unemployed people. It is designed like an insurance, involuntary unemployment through no personal fault being the “event of damage”. It is therefore also known as unemployment insurance (). In order to qualify, the unemployed person * must have made contributions for at least 12 months in the past 30 month period, * be unemployed, and * be able to work now or at least in the foreseeable future. All workers with a regular employment contract (), except freelancers and certain civil servants (), contribute to the system. It is financed by contributions from employees ''and'' employers. This in stark contrast to FUTA in the US and other systems, where only employers make contributions. Participation (and thus contributions) are generally mandatory for both employee and employer. Employees pay 1.5% of their gross salary below the social security threshold and employers pay 1.5% contribution on top of the salary paid to the employee. The contribution level was reduced from 3.25% for employees and employers as part of labour market reforms known as Hartz. Contributions are paid only on earnings up to the social security ceiling (2012: 5,600 EUR). Furthermore, the system is supported by funds from the federal budget. Claimants get 60% of their previous net salary (capped at the social security ceiling), or 67% for claimants with children (as long as beneficiary of
child benefit Child benefit or children's allowance is a social security payment which is distributed to the parents or guardians of children, teenagers and in some cases, young adult (psychology), young adults. A number of countries operate different versions o ...
). The maximum benefit is therefore 2964 euros (in 2012). If the benefits fall below the poverty line, it is possible to ''supplement'' unemployment benefits I with unemployment benefits II if its conditions are met as well. Unemployment benefits I is only granted for a ''limited'' period of time, the minimum being 6 months, and the maximum 24 months in the case of old and long-term insured people. This takes account for the difficulty older people face when re-entering the job market in Germany. Unlike unemployment benefits II, there is no means test. However, it is necessary to remain unemployed while seeking for employment. In this context unemployment is defined as working less than 15 hours a week.


Unemployment benefit II

is a second tier, open-ended welfare programme intended to ensure people do not fall into penury. * In order to be eligible, a person has to permanently reside in Germany, be in possession of a work permit, and be fit for work, i.e. can principally work at least three hours a day. The goal of the programme is to terminate one's dependence on it (welfare-to-work). It is not a Universal Basic Income. * The benefits are subordinated, that means: ** A person may not eligible for other programmes, especially Unemployment benefits I and pension, but also other legal claims – e.g. dependence on parents, or accounts receivable – can not come to fruition. ** The person has to be in need (
means test A means test is a determination of whether an individual or family is eligible for government assistance or welfare Welfare, or commonly social welfare, is a type of government support intended to ensure that members of a society can meet B ...
): He can not afford a minimum standard living by all incomes in total, or by expending his own previously accumulated assets, e.g. by selling real estate not required or adequate for a bare minimum lifestyle. In the course of the SARS-CoV‑2 pandemic these harsh standards have temporarily been reduced to a mere sanity check to avoid undue hardship. Despite its name, unemployment is not a requirement. Due to wage dumping and other labour market dynamics, a large number of ''working'' beneficiaries ''supplement'' their monthly income. They have the same obligations as non-working beneficiaries. People receiving benefits are obligated to cease their eligibility at all costs, but at least ''minimise'' their dependence on welfare until no money would be paid. That means, they are obliged to seek for jobs nationwide, and accept ''every'' job offered, otherwise sanctions (retrenchment) may be applied. There is no recognition of professional qualifications: An academic has to join the menial workforce, regardless of the waste of qualifications. Neither are one's personal religious or ethical concerns relevant: Prostitution is legal in Germany (although as of 2021 no job center has urged any beneficiary to engage in prostitution). In exchange for that, beneficiaries are assisted in that process, e.g. by reimbursing travel expenses to interviews, receiving (free of charge) training in order to increase their chances on the labour market, or subsidising moving expenses once an employment contract has been signed but the place of work requires relocation as it is further than the acceptable daily commute duration (at most 3 hrs a day). If they do not voluntarily participate in training, they may be obliged by administrative action. Beneficiaries not complying with orders can be sanctioned by pruning their allowance and eventually revoking the grant altogether, virtually pushing them into poverty, homelessness and bankruptcy, as there are no other precautions installed. Germany does not have an EBT (electronic benefits transfer) card system in place and, instead, disburses welfare in cash or via direct deposit into the recipient's bank account. As of 2022 a single person without children receives at most €449 per month at free disposal intended to cover living expenses, plus costs for reasonable accommodation (rent and heating). People granted benefits are automatically insured at reduced rates in the national health and nursing care insurances. The national pension insurance accounts the time living on benefits, but it does not increase the pension entitlement since in 2011 the federal government stopped paying €205 monthly. Unemployment benefits II has been heavily criticized since its introduction. As unemployment benefits II are meant to ensure a minimum subsistence level, the mechanism of sanctions has been repeatedly subject in front of the constitutional court. In 2018 the possibility of a 100%-sanction was declared unconstitutional. In July 2022 Germany’s government implemented a one-year moratorium on sanctions, permitting only a 10%-cut for repeatedly missing appointments (). This measure was taken as a precursor to restructuring unemployment benefits II into a
citizen's dividend Citizen's dividend is a proposed policy based upon the Georgist principle that the natural world is the Commons, common property of all people. It is proposed that all citizens receive regular payments (dividends) from revenue raised by leasing ...
(). The reforms revamping the unemployment benefits system into its today's shape is dubbed . The term colloquially refers to Unemployment benefits II.


Greece

Unemployment benefits in Greece are administered through OAED (, Manpower Employment Organization) and are available only to laid-off salaried workers with full employment and social security payments during the previous two years. The self-employed do not qualify, and neither do those with other sources of income. The monthly benefit is fixed at the "55% of 25 minimum daily wages", and is currently 360
euro The euro (currency symbol, symbol: euro sign, €; ISO 4217, code: EUR) is the official currency of 19 out of the Member state of the European Union, member states of the European Union (EU). This group of states is known as the eurozone o ...
s per month, with a 10% increase for each under-age child. Recipients are eligible for at most twelve months; the exact duration depends on the collected number of , that is social security payment coupons-stamps collected (i.e. days of work) during the 14 months before being laid off; the minimum number of such coupons, under which there is no eligibility, is 125, collected in the first 12 of the 14 aforementioned months. Eligibility since 1 January 2013, has been further constrained in that one applying for unemployment benefits for a second or more time, must not have received more than the equivalent of 450 days of such benefits during the last four years since the last time one had started receiving such benefits; if one has received unemployment benefits in this period for more than 450 days then there is no eligibility while if one has received less, then one is only eligible for at most the remaining days up until the maximum of 450 days is reached. In terms of an unemployment allowance, Greece allows for those found in unemployment, who are employed through an independent profession, to receive benefits if their latest paycheck had not exceeded a certain amount, the current rate should not exceed €1,467.35. When receiving benefits an individual cannot be earning money from a self-employed profession. If the income increases the fixed amount, a tax authority must issue a certificate that explains that the individual has "interrupted the exercise of the profession", which must be done within 15 days. Unemployment benefits are also granted to those who have generated an income that does not exceed €1,467.35 from the final paycheck received from a liberal profession. In order to receive a grant, the individual must not be receiving an income from the previous liberal profession. Seasonal aid is also provided to workers whose jobs cannot be performed through the entire year are also provided benefits by the OAED. Under the OAED, individuals who are benefiting from long-term unemployment must be within the ages of 20 to 66 years of age and have a family income that does not exceed €10,000 annually. An individual becomes eligible for long-term benefits if the regular unemployment subsidy is exhausted after 12 months. After the expiration of the 12-month period, an application towards long-term unemployment benefits must be submitted in the first 2 months. If an unemployed person seeks long term unemployment and has a child, the allowance is allowed to increase by €586.08 (per child). Long-term unemployment can only be granted if the individual can be found registered under the OAED unemployment registrar.


Iceland

To receive
unemployment Unemployment, according to the OECD (Organisation for Economic Co-operation and Development), is people above a specified age (usually 15) not being in paid employment or self-employment but currently available for Work (human activity), w ...
benefits in
Iceland Iceland ( is, Ísland; ) is a Nordic countries, Nordic island country in the Atlantic Ocean, North Atlantic Ocean and in the Arctic Ocean. Iceland is the most list of countries and dependencies by population density, sparsely populated coun ...
, one must submit an application to the Directorate of Labour (''Vinnumálastofnun'') and meet a specific criteria set forth by the department. Icelandic
employment rate The Organisation for Economic Co-operation and Development The Organisation for Economic Co-operation and Development (OECD; french: Organisation de coopération et de développement économiques, ''OCDE'') is an intergovernmental organ ...
s have traditionally been higher than every other
OECD The Organisation for Economic Co-operation and Development (OECD; french: Organisation de coopération et de développement économiques, ''OCDE'') is an intergovernmental organization, intergovernmental organisation with 38 member countries ...
country. In the most recent financial quarter, 85.8% of the
Iceland Iceland ( is, Ísland; ) is a Nordic countries, Nordic island country in the Atlantic Ocean, North Atlantic Ocean and in the Arctic Ocean. Iceland is the most list of countries and dependencies by population density, sparsely populated coun ...
ic working-age population were employed, with only 2.8% of the population unemployed. When broken down by age group, Iceland's labor force is highly active, with 74.9% of the population between the ages of 15 to 24 years old and 89.4% of people between the ages of 25 to 55 years old active in the labor market. This low rate of
unemployment Unemployment, according to the OECD (Organisation for Economic Co-operation and Development), is people above a specified age (usually 15) not being in paid employment or self-employment but currently available for Work (human activity), w ...
is attributed to the adoption of the Ghent system, which has been adopted by the countries of
Denmark ) , song = ( en, "King Christian stood by the lofty mast") , song_type = National and royal anthem , image_map = EU-Denmark.svg , map_caption = , subdivision_type = Sovereign state , subdivision_name = Danish Realm, Kingdom of Denmark ...
,
Finland Finland ( fi, Suomi ; sv, Finland ), officially the Republic of Finland (; ), is a Nordic country in Northern Europe. It shares land borders with Sweden to the northwest, Norway to the north, and Russia Russia (, , ), or the Ru ...
and
Sweden Sweden, formally the Kingdom of Sweden,The United Nations Group of Experts on Geographical Names states that the country's formal name is the Kingdom of SwedenUNGEGN World Geographical Names, Sweden./ref> is a Nordic countries, Nordic c ...
, and highly emphasizes trade and labor unions to provide unemployment benefits and protections to workers, which ultimately has led to higher union membership than other capitalist economies. The safety net that these unions provide also leads to more stable job retention and less reliance on part-time employment. Only 11.9% of the working population is dependent on temporary employment. Unlike purely
social-democratic Social democracy is a Political philosophy, political, Social philosophy, social, and economic philosophy within socialism that supports Democracy, political and economic democracy. As a policy regime, it is described by academics as advocati ...
states in
Europe Europe is a large peninsula conventionally considered a continent in its own right because of its great physical size and the weight of its history and traditions. Europe is also considered a Continent#Subcontinents, subcontinent of Eurasia ...
, the
Nordic model The Nordic model comprises the Economic policy, economic and social policies as well as typical cultural practices common to the Nordic countries (Denmark, Finland, Iceland, Norway, and Sweden). This includes a comprehensive welfare state and ...
that
Iceland Iceland ( is, Ísland; ) is a Nordic countries, Nordic island country in the Atlantic Ocean, North Atlantic Ocean and in the Arctic Ocean. Iceland is the most list of countries and dependencies by population density, sparsely populated coun ...
adopted borrows aspects of both a
social-democratic Social democracy is a Political philosophy, political, Social philosophy, social, and economic philosophy within socialism that supports Democracy, political and economic democracy. As a policy regime, it is described by academics as advocati ...
and liberal-
welfare state A welfare state is a form of government in which the state (or a well-established network of social institutions) protects and promotes the economic and social well-being of its citizens, based upon the principles of equal opportunity Equa ...
.
Iceland Iceland ( is, Ísland; ) is a Nordic countries, Nordic island country in the Atlantic Ocean, North Atlantic Ocean and in the Arctic Ocean. Iceland is the most list of countries and dependencies by population density, sparsely populated coun ...
not only sees high government involvement in providing
social welfare Welfare, or commonly social welfare, is a type of government support intended to ensure that members of a society can meet basic human needs such as food and shelter. Social security may either be synonymous with welfare, or refer specifical ...
and amenities as with the
social-democratic Social democracy is a Political philosophy, political, Social philosophy, social, and economic philosophy within socialism that supports Democracy, political and economic democracy. As a policy regime, it is described by academics as advocati ...
model, but like the liberal-
welfare Welfare, or commonly social welfare, is a type of government support intended to ensure that members of a society can meet Basic needs, basic human needs such as food and shelter. Social security may either be synonymous with welfare, or refe ...
model, it is also heavily reliant on
free trade Free trade is a trade policy that does not restrict imports or exports. It can also be understood as the free market idea applied to international trade. In government, free trade is predominantly advocated by political parties that hold Econo ...
and markets. The country relies on an open capitalistic market for economic growth, yet also embraces a corporatist system that allows for wage bargaining to occur between the labor force and employers in order to protect workers and ensure provisions like
unemployment Unemployment, according to the OECD (Organisation for Economic Co-operation and Development), is people above a specified age (usually 15) not being in paid employment or self-employment but currently available for Work (human activity), w ...
benefits are ensured. Currently, the
legislation Legislation is the process or result of enrolling, enacting, or promulgating laws by a legislature A legislature is an deliberative assembly, assembly with the authority to make laws for a Polity, political entity such as a Sovereign st ...
that ensures these benefits is The Act on Trade Unions and Industrial Disputes, which was adopted in 1938 and has been amended five times since its inception to adjust to the rise of
globalization Globalization, or globalisation ( Commonwealth English; see spelling differences), is the process of interaction and integration among people, companies, and governments worldwide. The term ''globalization'' first appeared in the early 2 ...
. In Section 1, Articles 1–13 grant
trade union A trade union (labor union in American English), often simply referred to as a union, is an organization of workers intent on "maintaining or improving the conditions of their employment", ch. I such as attaining better wages and Employee ben ...
s the right to organize and negotiate with employers over fair wages for its members as well as representation for their members in the event of workplace conflicts. These rights for organized unions set forth by the Ministry of Welfare not only provide the country's labor force fair and equal representation within their respective industries, but also allow for these organizations to maintain an active relationship with the Icelandic government to discuss economic issues, promote labor and social equality, and ensure benefits for unemployed laborers, as these unions are highly centralized and not politically affiliated. Unemployment benefits in
Iceland Iceland ( is, Ísland; ) is a Nordic countries, Nordic island country in the Atlantic Ocean, North Atlantic Ocean and in the Arctic Ocean. Iceland is the most list of countries and dependencies by population density, sparsely populated coun ...
(''atvinnuleysisbætur'') can involve up to 100% reimbursement per month for wage earners for a maximum of 30 months. However, these rates of reimbursement are determined by previous status of employment, such as whether an individual is a wage-earner or is self-employed, as well as meeting certain mandates such as being a current resident of
Iceland Iceland ( is, Ísland; ) is a Nordic countries, Nordic island country in the Atlantic Ocean, North Atlantic Ocean and in the Arctic Ocean. Iceland is the most list of countries and dependencies by population density, sparsely populated coun ...
, be actively searching for employment, and retaining a 25% position for three months within the past 12 months before filing for
unemployment Unemployment, according to the OECD (Organisation for Economic Co-operation and Development), is people above a specified age (usually 15) not being in paid employment or self-employment but currently available for Work (human activity), w ...
. Unemployed workers can be compensated through either basic or income-linked benefits. Basic unemployment benefits can cover both wage-earning and self-employing individuals for the first half-month (10 days) after they lose their job, whereas income-linked benefits can cover wage-earning and self-employing individuals for up to three months based on a set salary index and length of employment. However, those who are unemployed must report to the Directorate of Labour once a month to reaffirm their status of unemployment and that they are actively searching for employment or unemployment benefits could be revoked. Under the Icelandic Labour Law, employees must be given a notice period of termination that can range from 12 days to six months and is determined by the length of previous employment under the same employer.


Ireland

People aged 18 and over and who are unemployed in
Ireland Ireland ( ; ga, Éire ; Ulster Scots dialect, Ulster-Scots: ) is an island in the Atlantic Ocean, North Atlantic Ocean, in Northwestern Europe, north-western Europe. It is separated from Great Britain to its east by the North Channel (Grea ...
can apply for either the Jobseeker's Allowance (''Liúntas do Lucht Cuardaigh Fostaíochta'') or the Jobseeker's Benefit (''Sochar do Lucht Cuardaigh Fostaíochta''). Both are paid by the
Department of Social Protection The Department of Social Protection ( ga, An Roinn Cosanta Sóisialta) is a department of the Government of Ireland The Government of Ireland ( ga, Rialtas na hÉireann) is the cabinet (government), cabinet that exercises executive (governmen ...
and are nicknamed "the dole". Unemployment benefit in Ireland can be claimed indefinitely for as long as the individual remains unemployed. The standard payment is €203 per week for those aged 26 and over. For those aged 18 to 24 the rate is €112.70 per week. For those aged 25 the weekly rate is €157.80. Payments can be increased if the unemployed has dependents. For each adult dependent, another €134.70 is added, €112.70 if the recipient (as opposed to the dependent) is aged 18 to 24, and for each child dependent €34 or €37 is added, depending on the child's age. There are more benefits available to unemployed people, usually on a special or specific basis. Benefits include the ''Housing Assistance Payment'', and the ''Fuel Allowance'', among others. People on a low income (which includes those on JA/JB) are entitled to a Medical Card (although this must be applied for separately from the
Health Service Executive The Health Service Executive (HSE) ( ga, Feidhmeannacht na Seirbhíse Sláinte) is the publicly funded healthcare system in Ireland Ireland ( ; ga, Éire ; Ulster Scots dialect, Ulster-Scots: ) is an island in the Atlantic Ocean, Nor ...
) which provides free health care, optical care, limited dental care, aural care and subsidised prescription drugs carrying a €2.00 per item charge to a maximum monthly contribution of €25 per household (as opposed to subsidised services like non medical-card holders). To qualify for Jobseekers Allowance, claimants must satisfy the "Habitual Residence Condition": they must have been legally in the state (or the Common Travel Area) for two years or have another good reason (such as lived abroad and are returning to Ireland after becoming unemployed or deported). This condition does not apply to Jobseekers Benefit (which is based on Social Insurance payments). More information on each benefit can be found here:
Jobseeker's Allowance

Jobseeker's Benefit


India

India follows a social insurance system for unemployment benefits much like its European counterparts. Unemployment allowance is given to workers in India who have contributed to the
Employees' State Insurance Employees' State Insurance Corporation (abbreviated as ESIC) is one of the two main statutory social security bodies under the ownership Ownership is the state or fact of legal possession and control over property Property is a system o ...
for at least three years. The benefit is given for a maximum of one year and is either 50% of the average daily wage or Rs 35,000 a month, whichever is lower.


Israel

In
Israel Israel (; he, יִשְׂרָאֵל, ; ar, إِسْرَائِيل, ), officially the State of Israel ( he, מְדִינַת יִשְׂרָאֵל, label=none, translit=Medīnat Yīsrāʾēl; ), is a country in Western Asia. It is situated ...
, unemployment benefits are paid by Bituah Leumi (National Insurance Institute), to which workers must pay contributions. Eligible workers must immediately register with the Employment Service Bureau upon losing their jobs or jeopardize their eligibility, and the unemployment period is considered to start upon registration with the Employment Service Bureau. To be eligible for unemployment benefits, a person must be at least 20 years old, have been previously employed, and completed a "qualifying period" of work for which unemployment insurance contributions were paid which varies between 300 and 360 days. Employees who were involuntarily terminated from their jobs or who terminated their own employment and can provide evidence of having done so for a justified reason are eligible for immediately receiving unemployment benefits, while those who are deemed to have terminated their employment of their own volition with no justified reason will only begin receiving unemployment benefits 90 days from the start of their unemployment period. Unemployment benefits are paid daily, with the amount calculated based on the employee's previous income over the past six months, but not exceeding the daily average wage for the first 125 days of payment and two-thirds of the daily average wage from the 126th day onwards. During the unemployment period, the Employment Service Bureau assists in helping locate suitable work and job training, and regularly reporting to the Employment Service Bureau is a condition for continuing to receive unemployment benefits. A person who was offered suitable work or training by the Employment Service Bureau but refused will only receive unemployment benefits 90 days after the date of the refusal, and 30 days' worth of unemployment benefits will be deducted for each subsequent refusal. Members of
kibbutz A kibbutz ( he, קִבּוּץ / , lit. "gathering, clustering"; plural: kibbutzim / ) is an intentional community in Israel that was traditionally based on agriculture. The first kibbutz, established in 1909, was Degania Alef, Degania. Toda ...
im and
moshav A moshav ( he, מוֹשָׁב, plural ', lit. ''settlement, village'') is a type of Israeli town or settlement, in particular a type of cooperative agricultural community of individual farms settler, pioneered by the Labor Zionism, Labour ...
im are typically not covered by the national unemployment system and are covered by the community's own social welfare system, unless they are employed outside of their community or directly by the community. There are also unemployment benefits for immigrants who have not yet been able to find employment or who are receiving below minimum wage pay. The time period that they are qualified to receive unemployment benefits is during the first 12 months following their immigration to Israel. They are entitled to support from Havtachat Hachnasa, which is income support that is allocated from National Insurance. Employees deemed to have been terminated from their jobs without legitimate cause are also legally entitled to severance pay from their employers, equivalent of one month's pay for each year that the unemployed individual had worked for his or her previous employer. Unions are also involved with the unemployment system in Israel. One such union group is the Histadrut which is commonly known as the General Organization of Workers in Israel. One of the Histadrut's main objectives is to creates job assistance programs to help unemployed workers back into the workforce. Dr. Roby Nathanson, a doctor in economics at the University of Köl, believes these job replacement programs are successful due to the job unemployment rate in Israel. The unemployment rate in Israel in 2009 had been 9.5% and has since dropped to around 4% in 2018.


Italy

Unemployment benefits in
Italy Italy ( it, Italia ), officially the Italian Republic, ) or the Republic of Italy, is a country in Southern Europe. It is located in the middle of the Mediterranean Sea, and its territory largely coincides with the Italy (geographical region) ...
consist mainly of cash transfers based on contributions (''Assicurazione Sociale per l'Impiego, ASPI''), up to the 75% of the previous wages for up to sixteen months. Other measures are: * Redundancy Fund (''Cassa integrazione guadagni'', or CIG): cash benefits provided as
shock absorbers A shock absorber or damper is a mechanical or hydraulics, hydraulic device designed to absorb and Damping ratio, damp shock (mechanics), shock impulses. It does this by converting the kinetic energy of the shock into another form of energy (typi ...
to those workers who are suspended or who work only for reduced time due to temporary difficulties of their factories, aiming to help the factories in financial difficulties, by relieving them from the costs of unused workforce * Solidarity Contracts (''Contratti di solidarietà''): in the same cases granting CIG benefits, companies can sign contracts with reduced work time, to avoid dismissing redundancy workers. The state will grant to those workers the 60% of the lost part of the wage. * Mobility allowances (''Indennità di mobilità''): if the Redundancy Fund does not allow the company to re-establish a good financial situation, the workers can be entitled to mobility allowances. Other companies are provided
incentive In general, incentives are anything that persuade a person to alter their behaviour. It is emphasised that incentives matter by the basic law of economists and the laws of behaviour, which state that higher incentives amount to greater levels of ...
s for employing them. This measure has been abolished in 2012 and will stop working in 2017. * Citizens' income (''reddito di cittadinanza''): it is a social
welfare Welfare, or commonly social welfare, is a type of government support intended to ensure that members of a society can meet Basic needs, basic human needs such as food and shelter. Social security may either be synonymous with welfare, or refe ...
system created in
Italy Italy ( it, Italia ), officially the Italian Republic, ) or the Republic of Italy, is a country in Southern Europe. It is located in the middle of the Mediterranean Sea, and its territory largely coincides with the Italy (geographical region) ...
in January 2019. Although its name recalls one of a
universal basic income Universal basic income (UBI) is a social welfare proposal in which all citizens of a given population regularly receive an unconditional transfer payment, that is, without a means test or need to work. It would be received independently of an ...
, this provision is actually a form of conditional and non-individual
guaranteed minimum income Guaranteed minimum income (GMI), also called minimum income (or mincome for short), is a social-welfare system that guarantees all citizens or families an income sufficient to live on, provided that certain eligibility conditions are met, typicall ...
. In the Italian unemployment insurance system all the measures are
income Income is the Consumption (economics), consumption and saving opportunity gained by an entity within a specified timeframe, which is generally expressed in monetary terms. Income is difficult to define conceptually and the definition may be diff ...
-related, and they have an average decommodification level. The basis for entitlement is always
employment Employment is a relationship between two party (law), parties Regulation, regulating the provision of paid Labour (human activity), labour services. Usually based on a employment contract, contract, one party, the employer, which might be a co ...
, with more specific conditions for each case, and the provider is quite always the state. An interesting feature worthy to be discussed is that the Italian system takes in consideration also the economic situation of the employers, and aims as well at relieving them from the costs of crisis.


Japan

Unemployment benefits in Japan are called "unemployment insurance" and are closer to the US or Canadian "user pays" system than the taxpayer funded systems in place in countries such as Britain, New Zealand, or Australia. It is paid for by contributions by both the employer and employee. On leaving a job, employees are supposed to be given a "Rishoku-hyo" document showing their ID number (the same number is supposed to be used by later employers), employment periods, and pay (which contributions are linked to). The reason for leaving is also documented separately. These items affect eligibility, timing, and amount of benefits. The length of time that unemployed workers can receive benefits depends on the age of the employee, and how long they have been employed and paying in. It is supposed to be compulsory for most full-time employees. If they have been enrolled for at least 6 months and are fired or made redundant, leave the company at the end of their contract, or their contract is non-renewed, the now-unemployed worker will receive unemployment insurance. If a worker quit of their own accord they may have to wait between 1 and 3 months before receiving any payment.


Mexico

Mexico Mexico (Spanish language, Spanish: México), officially the United Mexican States, is a List of sovereign states, country in the southern portion of North America. It is borders of Mexico, bordered to the north by the United States; to the so ...
lacks a national unemployment insurance system, but it does have five programs to assist the unemployed: * Mexico City Unemployment Benefit Scheme – The only unemployment insurance system based on worker contributions exists in
Mexico City Mexico City ( es, link=no, Ciudad de México, ; abbr.: CDMX; Nahuatl: ''Altepetl Mexico'') is the capital city, capital and primate city, largest city of Mexico, and the List of North American cities by population, most populous city in North Amer ...
. Unemployed residents of Mexico City who are at least 18 years of age, have worked for at least six months, have no income, and are actively seeking work are eligible for unemployment benefits for up to six months, which are composed of payments of 30 days' worth of minimum wage per month. * Mexican Social Security Institute (IMSS) – This institution insures workers in the formal sector, providing pensions and health insurance. Workers insured by the IMSS who are unemployed may withdraw a maximum of 30 days' worth of pension savings every five years. However, this does not cover the majority of workers, as 58% of the labor force is in the informal sector. * National Employment Service – This agency, which has 165 offices nationwide, offers financial support in learning new skills to those aged 16 and above who are unemployed or underemployed, and assistance in finding new jobs in the form of information on vacancies and job fairs. * Temporary Employment Program – This scheme is designed to aid unemployed people who live in rural areas with high unemployment rates, any area undergoing a financial crisis, or an area that has been hit by a natural disaster or some other kind of emergency. The program funds projects to boost employment by hiring local workers aged 16 and above in jobs such as building infrastructure and promoting development, and conserving the environment and cultural heritage sites. They are paid a salary at 99% of the local minimum wage for a maximum of 132 days a year. * Income Generating Options Program – People living in poverty in an area of up to a maximum of 15,000 inhabitants are eligible for funding for projects to generate income for themselves.


Netherlands

Unemployment benefits in the Netherlands were introduced in 1949. Separate schemes exist for mainland Netherlands and for the
Caribbean Netherlands ) , image_map = BES islands location map.svg , map_caption = Location of the Caribbean Netherlands (green and circled). From left to right: Bonaire, Saba, and Sint Eustatius , elevation_max_m = 887 , elevation_max_footnotes = , demograph ...
. The scheme in mainland Netherlands entails that, according to the Werkloosheidswet (Unemployment Law, WW), employers are responsible for paying the contributions to the scheme, which are deducted from the salary received by the employees. In 2012 the contribution was 4.55% of gross salary up to a ceiling of 4,172 euros per month. The first 1,435.75 euros of an employee's gross salaries are not subject to the 4.55% contribution. Benefits are paid for a maximum period of 24 months and claimants get 75% of last salary for 2 months and 70% thereafter with a maximum benefit of 3128 euros, depending on how long the claimant has been employed previously. Workers older than 50 years who are unemployed for over 2 months are entitled to a special benefit called the IOAW, if they do not receive the regular unemployment benefit (WW).


New Zealand

In
New Zealand New Zealand ( mi, Aotearoa ) is an island country in the southwestern Pacific Ocean. It consists of two main landmasses—the North Island () and the South Island ()—and over 700 List of islands of New Zealand, smaller islands. It is the ...
, Jobseeker Support, previously known as the Unemployment Benefit and also known as "the dole" provides income support for people who are looking for work or training for work. It is one of a number of benefits administered by Work and Income, a service of the Ministry of Social Development. To get this benefit, a person must meet the conditions and obligations specified in section 88A to 123D Social Security Act 1964. These conditions and obligations cover things such as age, residency status, and availability to work. The amount that is paid depends on things such as the person's age, income, marital status and whether they have children. It is adjusted annually on 1 April and in response to changes in legislature. Some examples of the maximum after tax weekly rate at 1 April 2019 are: * $200.80 For a single person aged 20–24 years without children * $210.13 for a single person 25 years or over * $325.98 for a sole parent * $350.20 for a married, de facto or civil union couple with or without children ($167.83 each). *Plus winter payments of extra $20 a week More information about this benefit and the amounts paid are on the Work and Income website. External links
Work and Income website



Philippines

In the
Philippines The Philippines (; fil, Pilipinas, links=no), officially the Republic of the Philippines ( fil, Republika ng Pilipinas, links=no), * bik, Republika kan Filipinas * ceb, Republika sa Pilipinas * cbk, República de Filipinas * hil, Republ ...
, workers in the private sector who involuntarily became unemployed, including housemaids and
Overseas Filipino Workers Overseas Filipino Worker (OFW) is a term often used to refer to Filipinos, Filipino migrant workers, people with Philippine nationality law, Filipino citizenship who reside in another country for a limited period of employment. The number of th ...
, are entitled to benefits through the Social Security Act of 2018. Unemployment benefits is sourced from the country's Social Security System (SSS). Under the 2018 legislation, the benefits are dispensed through a one-time payment to equal to 50 percent of the claimant's monthly salary for a maximum of two months. Those who were terminated due to certain reasons such as grave misconduct, gross negligence, and commission of a crime are ineligible to avail unemployment benefits. For government workers, unemployment benefits are sourced from the
Government Service Insurance System The Government Service Insurance System ( fil, Paseguruhan ng mga Naglilingkod sa Pamahalaan, abbreviated as GSIS) is a government-owned and controlled corporation (GOCC) of the Philippines. Created by Commonwealth Act No. 186 and Republic Act ...
(GSIS). Payments are equal to 50 percent of the claimant's average monthly compensation and are dispensed monthly for two to six months, depending on the claimant's length of service.


Poland

In
Poland Poland, officially the Republic of Poland, is a country in Central Europe. It is divided into 16 administrative provinces called Voivodeships of Poland, voivodeships, covering an area of . Poland has a population of over 38 million and is ...
, the system is designed to prevent people from living off unemployment benefits long term, thus forcing them to work or rely on non-state means of support (family, charities). In order to claim any state unemployment support, an adult (18+) claimant has to prove at least one year of continuous, full employment (that is, minimum 40 hours a week/160 hours a month) in the last 18 months prior to registering with the Unemployment Agency. If approved, as of 2019, one is granted 848 zł (224.25 US$ in April 2019) on a month-to-month basis for the first 3 months, then the amount is automatically lowered to 666 zł (176.20 US$ in April 2019) for the remaining 3–9 months. Therefore, if approved, one can claim unemployment benefits only to the maximum of 12 continuous months. However, during that period, one has to cooperate with the Unemployment Bureau in finding an employment under the strict guidelines of losing the unemployed status, and thus the benefits. In comparison to the unemployment benefits paid by the state, as of January 2019, the minimum monthly pay is 2250,00 zł (595.51 US$ in April 2019) .


Spain

The Spanish unemployment benefits system is part of the Social security system of Spain. Benefits are managed by the State Public Employment Agency (SEPE). The basis for entitlement is having contributed for a minimum period during the time preceding unemployment, with further conditions that may be applicable. The system comprises contributory benefits and non-contributory benefits. Contributory benefits are payable to those unemployed persons with a minimum of 12 months' contributions over a period of 6 years preceding unemployment. The benefit is payable for 1/3 of the contribution period. The benefit amount is 70% of the legal reference salary plus additional amounts for persons with dependants. The benefit reduces to 60% of the reference salary after 6 months. The minimum benefit is 497 euros per month and the maximum is 1087.20 euros per month for a single person. The non-contributory allowance is available to those persons who are no longer entitled to the contributory pension and who do not have income above 75% of the national minimum wage.


Sweden

Sweden Sweden, formally the Kingdom of Sweden,The United Nations Group of Experts on Geographical Names states that the country's formal name is the Kingdom of SwedenUNGEGN World Geographical Names, Sweden./ref> is a Nordic countries, Nordic c ...
uses the Ghent system, under which a significant proportion of unemployment benefits are distributed by union unemployment funds. Unemployment benefits are divided into a voluntary scheme with income related compensation up to a certain level and a comprehensive scheme that provides a lower level of basic support. The voluntary scheme requires a minimum of 12 months membership and 6 months employment during that time before any claims can be made. Employers pay a fee on top of the pre-tax income of their employees, which together with membership fees, fund the scheme (see Unemployment funds in Sweden). The maximum unemployment benefit is (as of July 2016) SEK 980 per day. During the first 200 days, the unemployed will receive 80% of his or her normal income during the last 12 months. From day 201–300 this goes down to 70% and from day 301–450 the insurance covers 65% of the normal income (only available for parents to children under the age of 18). In Sweden tax is paid on unemployment benefits, so the unemployed will get a maximum of about SEK 10,000 per month during the first 100 days (depending on the
municipality A municipality is usually a single administrative division Administrative division, administrative unit,Article 3(1). country subdivision, administrative region, subnational entity, constituent state, as well as many similar terms, are ge ...
tax rate). In other currencies, as of June 2017, this means a maximum of approximately £900, $1,150, or €1,000, each month after tax. Private insurance is also available, mainly through professional organisations, to provide income-related compensation that otherwise exceeds the ceiling of the scheme. The comprehensive scheme is funded by tax.


Saudi Arabia

Saudi Arabia Saudi Arabia, officially the Kingdom of Saudi Arabia (KSA), is a country in Western Asia. It covers the bulk of the Arabian Peninsula, and has a land area of about , making it the List of Asian countries by area, fifth-largest country in Asia ...
is an economic
welfare state A welfare state is a form of government in which the state (or a well-established network of social institutions) protects and promotes the economic and social well-being of its citizens, based upon the principles of equal opportunity Equa ...
with free medical care and unemployment benefits. However, the country relies not on taxation but mainly
oil An oil is any nonpolar In chemistry, polarity is a separation of electric charge leading to a molecule or its chemical groups having an electric dipole moment, with a negatively charged end and a positively charged end. Polar molecules m ...
revenues to maintain the social and economic services to its populace. Payment: 2000 SAR (US$534) for 12 months for an unemployed person from ages 18–35 External links
Social Services of Saudi Arabia


Turkey

By law, legally employed workers, regardless of their citizenship are eligible for unemployment benefits given that they are at least 18 years old, the employees contribute 1% to unemployment funds while the employers contribute 2%, and the workers are eligible to receive benefits after 600 days of contributions within the preceding 3 years of employment. the benefit payment is 50% for the average daily earnings based on the last 4 months and cannot be higher than the minimum wage (per industry). Benefits may be paid for a max of 1,080 days depending on the number of contributions. Some are skeptical of how well the system is functioning in Turkey


United Kingdom

Unemployment benefit is paid in the United Kingdom either as Jobseeker's Allowance or (for most people) as an element of
Universal Credit Universal Credit is a United Kingdom Welfare state in the United Kingdom, social security payment. It is Means test, means-tested and is replacing and combining six benefits for working-age households with a low income: income-related Employment ...
.


Jobseeker's Allowance rates

Jobseeker's Allowance (JSA) is changed annually; for the 2020/2021 tax year (commencing 6 April 2020) the maximum payable is £74.35 per week for a single person aged over 25 or £58.90 per week for a single person aged 18–24. The rules for couples where both are unemployed are more complex, but a maximum of £116.80 per week is payable, dependent on age and other factors. For those who are still getting Income-based JSA or are getting Universal Credit, and having savings of over £6,000, there is a reduction of £1 per week per £250 of savings up to £16,000. People with savings of over £16,000 are not able to get Income-based JSA or Universal Credit at all. The British system previously provided rent payments as part of a separate scheme called
Housing Benefit Housing Benefit is a means-tested social security Welfare, or commonly social welfare, is a type of government support intended to ensure that members of a society can meet Basic needs, basic human needs such as food and shelter. Social ...
, however for most new claimants, this benefit is now instead paid as an element of the comprehensive
Universal Credit Universal Credit is a United Kingdom Welfare state in the United Kingdom, social security payment. It is Means test, means-tested and is replacing and combining six benefits for working-age households with a low income: income-related Employment ...
scheme.


United States

In the United States, there are 50 state unemployment insurance programs plus one each in the
District of Columbia ) , image_skyline = , image_caption = Clockwise from top left: the Washington Monument and Lincoln Memorial on the National Mall, United States Capitol, Logan Circle (Washington, D.C.), Logan Circle, Jefferson Memoria ...
,
Puerto Rico Puerto Rico (; abbreviated PR; tnq, Boriken, ''Borinquen''), officially the Commonwealth of Puerto Rico ( es, link=yes, Estado Libre Asociado de Puerto Rico, lit=Free Associated State of Puerto Rico), is a Caribbean island and Unincorporated ...
and
United States Virgin Islands The United States Virgin Islands,. Also called the ''American Virgin Islands'' and the ''U.S. Virgin Islands''. officially the Virgin Islands of the United States, are a group of Caribbean islands and an unincorporated and organized territory ...
. Though policies vary by state, unemployment benefits generally pay eligible workers as high as $855.00 in
Massachusetts Massachusetts (Massachusett language, Massachusett: ''Muhsachuweesut assachusett writing systems, məhswatʃəwiːsət'' English: , ), officially the Commonwealth of Massachusetts, is the most populous U.S. state, state in the New England ...
to a low as $235 per week maximum in
Mississippi Mississippi () is a U.S. state, state in the Southeastern United States, Southeastern region of the United States, bordered to the north by Tennessee; to the east by Alabama; to the south by the Gulf of Mexico; to the southwest by Louisiana; a ...
. Eligibility requirements for unemployment insurance vary by state, but generally speaking, employees not fired for misconduct ("terminated for cause") are eligible for unemployment benefits, while those who quit or who are fired for misconduct (this sometimes can include misconduct committed outside the workplace, such as a problematic social media post or committing a crime) are not. Though the participation rate varies by state from below 10% to above 60%, nationwide only 29% of unemployed Americans (those seeking work) received unemployment benefits.


Economic rationale and issues

The economic argument for unemployment insurance comes from the principle of
adverse selection In economics Economics () is the social science that studies the Production (economics), production, distribution (economics), distribution, and Consumption (economics), consumption of goods and services. Economics focuses on the beha ...
. One common criticism of unemployment insurance is that it induces
moral hazard In economics Economics () is the social science that studies the Production (economics), production, distribution (economics), distribution, and Consumption (economics), consumption of goods and services. Economics focuses on the ...
, the fact that unemployment insurance lowers on-the-job effort and reduces job-search effort.


Macroeconomic function

To Keynesians, unemployment insurance acts as an
automatic stabilizer In macroeconomics, automatic stabilizers are features of the structure of modern government budgets, particularly income taxes and Welfare (financial aid), welfare spending, that act to damp out fluctuations in real GDP. The size of the government ...
. Benefits automatically increase when unemployment is high and fall when unemployment is low, smoothing the business cycle; however, others claim that the taxation necessary to support this system serves to decrease employment.


Adverse selection

Adverse selection In economics Economics () is the social science that studies the Production (economics), production, distribution (economics), distribution, and Consumption (economics), consumption of goods and services. Economics focuses on the beha ...
refers to the fact that "workers who have the highest probability of becoming unemployed have the highest demand for unemployment insurance." Adverse selection causes profit maximizing private insurance agencies to set high premiums for the insurance because there is a high likelihood they will have to make payments to the policyholder. High premiums work to exclude many individuals who otherwise might purchase the insurance. "A compulsory government program avoids the adverse selection problem. Hence, government provision of UI has the potential to increase efficiency. However, government provision does not eliminate moral hazard."


Moral hazard

"At the same time, those workers who managed to obtain insurance might experience more unemployment otherwise would have been the case." The private insurance company would have to determine whether the employee is unemployed through no fault of their own, which is difficult to determine. Incorrect determinations could result in the payout of significant amounts for fraudulent claims or alternately failure to pay legitimate claims. This leads to the rationale that if government could solve either problem that government intervention would increase efficiency. The moral hazard argument against unemployment insurance is based on the idea that such insurance would increase the risk, or 'hazard,' that the insured worker would engage in activity that is undesirable, or 'immoral,' from the insurer's point of view. That is, unemployment insurance could create longer or more frequent episodes of unemployment than would otherwise occur. This could occur if workers partially cushioned against periods of unemployment are more likely to accept jobs that have a higher risk of unemployment, or spend more time searching for a new job after becoming unemployed.


Unemployment insurance effect on unemployment

In the
Great Recession The Great Recession was a period of marked general decline, i.e. a recession, observed in national economies globally that occurred from late 2007 into 2009. The scale and timing of the recession varied from country to country (see map). At t ...
, the "moral hazard" issue of whether unemployment insurance—and specifically extending benefits past the maximum 99 weeks—significantly encourages unemployment by discouraging workers from finding and taking jobs was expressed by Republican legislators. Conservative economist Robert Barro found that benefits raised the unemployment rate 2%. Disagreeing with Barro's study were Berkeley economist Jesse Rothstein, who found the "vast majority" of unemployment was due to "demand shocks" not " nemployment insuranceinduced supply reductions."Would Extending Unemployment Benefits Increase Unemployment?
Simon van Zuylen-Wood. 30 November 2011
A study by Rothstein of extensions of unemployment insurance to 99 weeks during the Great Recession to test the hypothesis that unemployment insurance discourages people from seeking jobs found the overall effect of UI on unemployment was to raise it by no more than one-tenth of 1%. A November 2011 report by the
Congressional Budget Office The Congressional Budget Office (CBO) is a List of United States federal agencies, federal agency within the United States Congress, legislative branch of the United States government that provides budget and economic information to Congress. Ins ...
found that even if unemployment benefits convince some unemployed to ignore job openings, these openings were quickly filled by new entrants into the labor market. A survey of studies on unemployment insurance's effect on employment by the
Political Economy Research Institute The Political Economy Research Institute (PERI) is an independent research unit at the University of Massachusetts Amherst The University of Massachusetts Amherst (UMass Amherst, UMass) is a Public university, public research university in Amh ...
found that unemployed who collected benefits did not find themselves out of work longer than those who ''didn't'' have unemployment benefits; and that unemployed workers did not search for work more or reduce their wage expectations once their benefits ran out. One concern over unemployment insurance increasing unemployment is based on experience rating benefit uses which can sometimes be imperfect. That is, the cost to the employer in increased taxes is less than the benefits that would be paid to the employee upon layoff. The firm in this instance believes that it is more cost effective to lay off the employee, causing more unemployment than under perfect experience rating.


Unemployment insurance effect on employment

An alternative rationale for unemployment insurance is that it may allow for improving the quality of matches between workers and firms. Marimon and Zilibotti argued that although a more generous unemployment benefit system may indeed increase the unemployment rate, it may also help improve the average match quality. A similar point is made by Mazur who analyzed the welfare and inequality effects of a policy reform giving entitlement for unemployment insurance to quitters. Arash Nekoei and Andrea Weber present empirical evidence from Austria that extending unemployment benefit duration raises wages by improving reemployment firm quality. Similarly, Tatsiramos studied data from European countries and found that although unemployment insurance does increase unemployment duration, the duration of subsequent employment tends to be longer (suggesting better match quality).


Effect on state budgets

Another issue with unemployment insurance relates to its effects on state budgets. During recessionary time periods, the number of unemployed rises and they begin to draw benefits from the program. The longer the recession lasts, depending on the state's starting UI program balance, the quicker the state begins to run out of funds. The recession that began in December 2007 and ended in June 2009 significantly impacted state budgets. According to The Council of State Governments, by 18 March 2011, 32 states plus the Virgin Islands had borrowed nearly $45.7 billion. The Labor Department estimates by the fourth quarter of 2013, as many as 40 states may need to borrow more than $90 billion to fund their unemployment programs and it will take a decade or more to pay off the debt.


Insurance funds

Possible policy options for states to shore up the unemployment insurance funds include lowering benefits for recipients and/or raising taxes on businesses. Kentucky took the approach of raising taxes and lowering benefits to attempt to balance its unemployment insurance program. Starting in 2010, a claimant's weekly benefits will decrease from 68% to 62% and the taxable wage base will increase from $8,000 to $12,000, over a ten-year period. These moves are estimated to save the state over $450 million.


Job sharing / short-time working

Job sharing Job sharing or work sharing is an employment Employment is a relationship between two party (law), parties Regulation, regulating the provision of paid Labour (human activity), labour services. Usually based on a employment contract, contract ...
or work sharing and
short time Short-time working or short time (in German: ) is a governmental Unemployment benefits, unemployment insurance system in which private sector employees agree to or are forced to accept a reduction in working time and pay, with the state making up ...
or short-time working refer to situations or systems in which employees agree to or are forced to accept a reduction in working time and pay. These can be based on individual agreements or on government programs in many countries that try to prevent unemployment. In these, employers have the option of reducing work hours to part-time for many employees instead of laying off some of them and retaining only full-time workers. For example, employees in 27 states of the United States can then receive unemployment payments for the hours they are no longer working.https://oui.doleta.gov/unemploy/pdf/uilawcompar/2019/special.pdf ''U.S. Department of Labor, Comparison of State Unemployment Insurance Laws tbl. 4-5 (2019).''


International Labour Convention

International Labour Organization The International Labour Organization (ILO) is a United Nations agency whose mandate is to advance social and economic justice by setting international labour standards. Founded in October 1919 under the League of Nations, it is the first and ol ...
has adopted the Employment Promotion and Protection against Unemployment Convention, 1988 for promotion of
employment Employment is a relationship between two party (law), parties Regulation, regulating the provision of paid Labour (human activity), labour services. Usually based on a employment contract, contract, one party, the employer, which might be a co ...
against unemployment and
social security Welfare, or commonly social welfare, is a type of government support intended to ensure that members of a society can meet Basic needs, basic human needs such as food and shelter. Social security may either be synonymous with welfare, or refe ...
including unemployment benefit.


See also

*
Compensation of employees {{no footnotes, date=April 2010 Compensation of employees (CE) is a statistical term used in national accounts, balance of payments In international economics, the balance of payments (also known as balance of international payments and abb ...
* HIRE Act *
Involuntary unemployment Involuntary unemployment occurs when a person is unemployed despite being willing to work at the prevailing wage. It is distinguished from voluntary unemployment, where a person refuses to work because their reservation wage is higher than the prev ...
*
Labour power Labour power (in german: Arbeitskraft; in french: force de travail) is a key concept used by Karl Marx in his critique of capitalism, capitalist political economy. Marx distinguished between the capacity to do work, labour power, from the physi ...
*
Lorenz curve In economics Economics () is the social science that studies the Production (economics), production, distribution (economics), distribution, and Consumption (economics), consumption of goods and services. Economics focuses on the behav ...
*
Reserve army of labour Reserve army of labour is a concept in Karl Marx's critique of political economy. It refers to the unemployed and Underemployment, underemployed in Capitalist mode of production (Marxist theory), capitalist society. It is synonymous with "industria ...
*
Social insurance Social insurance is a form of Social protection, social welfare that provides insurance against economic risks. The insurance may be provided publicly or through the subsidizing of private insurance. In contrast to other forms of Welfare, soci ...
*
Social rights Economic, social and cultural rights, (ESCR) are socio-economic Socioeconomics (also known as social economics) is the social science that studies how economic activity affects and is shaped by social processes. In general it analyzes how mode ...
*
Smart contract A smart contract is a computer program A computer program is a sequence or set of instructions in a programming language for a computer to Execution (computing), execute. Computer programs are one component of software, which also includes sof ...
* Unemployment extension * Workfare


References

* Bojas George J., ''Labor Economics'', Second edition, 2002,
McGraw-Hill McGraw Hill is an American educational publishing company and one of the "big three" educational publishers that publishes educational content, software, and services for Pre-kindergarten, pre-K through postgraduate education. The company also ...
.


External links

*
European Union web site: your rights in the European Union for transferring unemployment benefits (Your Europe)



Supplemental Unemployment Insurance
US unemployment insurance for 47 of 50 states
Government site: One-Stop Career Centers – in each state

Text of the California Unemployment Insurance Code

Economic Policy Institute
– To calculate the unemployment insurance benefits you might receive in the United States (based on 2004 rates)
Office of the Public Guardian

Unemployment Assistance and Transition to Employment in Argentina

Unemployment Funds in Switzerland
i
History of Social Security in Switzerland
{{Authority control Labour law