A new type of restructuring protection introduced for people over 55

New package Many of the measures introduced are aimed at improving the labor market situation for people over the age of 55. They include restructuring protection allowances and voluntary training. For employers, this means paying a new restructuring protection fee. Also, those born in 1963 or 1964 will have an increased age limit for unemployment allowances, and those born after 1965 will not be eligible at all. With the abolition of the extended unemployment allowance, the components of the liability payable by the employer will also be abolished.

A new package of restructuring safeguards for dismissed employees will take effect in early 2023. This includes restructuring protection allowances, the right to training, and longer paid leave for job hunting.

Dismissed employees may apply for restructuring protection if their contract ends after January 1, 2023 for financial or production-related reasons and they reach the age of 55 before being dismissed. Also, they must have been with the same employer for at least five years.

The Unemployment Fund pays dismissed employees a restructuring protection allowance equivalent to about a month’s salary. Employees who are not part of the Unemployment Fund can apply for restructuring protection benefits from Kera.

The collection of restructuring protection benefits does not affect the beneficiary’s unemployment or eligibility for other benefits, except for social assistance. Restructuring protection allowances will also be paid during the notice period. That is, the recipient does not have to be unemployed yet.

Participation in restructuring protection training is voluntary for dismissed employees. Training is outsourced to the TE office or the Center for Economic Development and Transportation Environment and can last up to 6 months.

For employees eligible for restructuring protection who have been dismissed for financial or production-related reasons, the paid leave to find employment will be five days longer.

Employers who dismiss staff are obliged to pay new restructuring protection fees

Restructuring protection is funded by the Employment Fund with payments collected from employers. Half of the support is covered by restructuring protection fees paid by employers by dismissing staff. The other half is covered by an increase in unemployment insurance contributions levied on all employers.

New restructuring protection fees are levied on employers aged 55 and over who have dismissed employers and employees who have been with them for more than five years, and redundancy is based on financial or production-related reasons. Small employers are exempt from fees.

Fees must be paid by the employer who dismisses the staff and whose total salary covered by unemployment insurance is higher than the specific threshold for the year prior to the dismissal. In 2022, this amount will be around 2.2 million euros.

Extension of eligibility for unemployment allowance will be phased out

The additional days of unemployment allowance qualification allows unemployed persons aged 61 or 62 to continue to collect income-related unemployment allowances beyond the 300-500 day deadline until they reach the age of 65. The age limit for eligibility for extension will increase from 61-62 to 63 for those born in 1963 and to 64 for those born in 1964. Those born after 1965 are completely unqualified. The extended unemployment allowance will be abolished in 2030 for all age groups.

With the abolition of the unemployment allowance extension and the new restructuring protection provision, employers will no longer be charged the liability portion of employees born after 1965. A new type of restructuring protection introduced for people over 55

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