Child increases and standard entitlement will be abolished on April 1, 2024

At the beginning of April, two legislative changes that affect the amount of earnings-related allowance will come into effect. One of the changes affects recipients of the daily allowance who have children, and the other affects recipients of the daily allowance who also receive earned income alongside the allowance.

Read about whether the changes affect you as a recipient of the daily allowance and how they may potentially impact in the future. Neither of the changes requires any action from the daily allowance recipient.

1. The payment of child increases will end

As of 1 April 2024, child increases will no longer be included in earnings-related unemployment allowance. For those receiving child increases, the daily allowance will decrease significantly with the removal of the child increase, or by €130–240 per month depending on the number of children.

Who is affected?

Child increases have been previously paid to recipients of daily allowance whose family includes children. Child increases have been paid for children under the age of 18 who live in the same household with the daily allowance applicant or who are the applicant’s biological children living elsewhere.

When will the change come into effect?

Child increases will no longer be paid as a part of daily allowances for April 2024 and beyond. The daily allowance earned until 31 March 24 will be paid normally with child increases even after April. In other words, it does not matter when the child increases are paid, but what period of time the daily allowance covers.

2. In the future, even those on low incomes will be paid adjusted daily allowance

Those who receive unemployment allowance and earn an income during a period of unemployment or temporary lay-off (e.g. wages from part-time work, earnings from entrepreneurship, attendance fees) will be entitled to adjusted daily allowance. This means that any income you earn will affect the amount of daily allowance you receive. Your daily allowance will be reduced by an amount equal to 50% of your earned income.

The standard entitlement of €300 will be abolished starting 1 April 2024

Until now, the payment of daily allowance has been paid with the so-called €300 standard entitlement of earnings, which will be abolished due to a legislative change on 1 April 2024. The standard entitlement meant that recipients of the unemployment allowance were allowed to earn €300 per month of wages or business income while unemployed or laid off without the income affecting the daily allowance, meaning that the recipients were paid the full daily allowance. It also meant that the first €300 of income a person earned was not included in daily allowance adjustment, thus also benefitting those earning over €300.

Who is affected?

Those who receive earnings-related unemployment allowance and income taken into account in taxation, such as wages from part-time work, income from business activities (including agricultural and forestry income), or attendance fees.

For those who have been temporarily laid off: If you are temporarily laid off and your shortened working week consists of full days of lay-off and you have no income other than what the employer that laid you off pays you, you will continue to receive full daily allowance. In other words, the wages you receive from the employer that laid you off do not affect your daily allowance.

Read the whole article on KOKO fund website (published onMartch 15, 2024)