The Unemployment Insurance Fund Council made a proposal to the government on August 31. They want the unemployment insurance premium to remain at 2.4 percent in 2027. Starting from 2028, it should decrease to 2.1 percent. The employee's contribution rate would drop from 1.6 percent to 1.4 percent. The employer's contribution rate would drop from 0.8 percent to 0.7 percent.
The proposal was supported by the six-member council of the Unemployment Insurance Fund. The council is represented by employers, trade unions, and the state. The council includes two representatives from the Estonian Employers' Confederation, two employee representatives, and two state representatives.
Hando Sutter, the managing director of the Employers' Confederation, said it is difficult to understand why the government is ignoring the council's proposal. He said the board of the Unemployment Insurance Fund made a justified proposal, and the council supported it. The decision was preceded by a thorough risk analysis. The board of the Unemployment Insurance Fund had made professional preparations.
The net assets of the Unemployment Insurance Fund this year exceed 600 million euros. For using the reserve, the state paid the Unemployment Insurance Fund an interest rate of 2 percent on average last year. At the same time, the state borrowed money at an interest rate of 3.5 percent. Calculations by the Unemployment Insurance Fund show that with a reduction in the contribution rate, the fund's reserves would be nearly 582 million by the end of 2030. This would be sufficient even in case of risks.
Sutter said that unemployment insurance premiums are collected to give people a sense of security in case of job loss. If the necessary funds are available and the reserves are sufficient, there is no reason to collect more money. He added that 50 million euros per year is money that could remain with people and businesses.
Sutter also said that the Unemployment Insurance Fund shows that costs can be saved and operations made more efficient in the public sector. He said the state should reduce its expenses and tax burden. The Unemployment Insurance Fund has reduced its costs and been successful in this. This could serve as an example.