The Joint Ministerial Decision (JMD) between the Ministries of National Economy and Finance, and Labor and Social Security has been signed, introducing the new unemployment benefit on a pilot basis.

The pilot program is being implemented following a study by the Public Employment Service (DYPA) in collaboration with the OECD and as part of a technical assistance project by DG REFORM.

According to a related announcement, the aim of the new pilot unemployment benefit is to adapt to the needs of the modern labor market, motivate job-seeking, and become more effective, fairer, and more contributory.

The implementation of the new pilot unemployment benefit is expected to begin in the first months of 2025 and may last up to 16 months.

Objectives of the New Unemployment Benefit
The objectives of the new unemployment benefit are as follows:

• Motivation for Employment: It will encourage unemployed individuals to return to work more quickly, as it will start higher in the initial months of unemployment and decrease over time.
• Contributory and Fair: The system will recognize paid contributions and avoid treating cases with significant differences in the same way, as already happens in 25 of the 27 EU countries. Currently, in Greece, whether someone worked two years with a minimum wage or 20 years with €2,000 per month, they receive the same benefit for the same duration.
• Efficiency: The merging and automation of complex procedures will ensure simplicity and efficiency in the benefit provision process.

Structure of the New Benefit
The new unemployment benefit consists of three parts:

1. Fixed Subsidy Component: This is calculated based on the recipient’s earnings. It starts at 70% of the legislated minimum daily wage or the recipient’s average daily wage (if their earnings were below the minimum wage) and decreases gradually toward the end of the benefit period. Eligibility requires a minimum of 175 days of insurance in the 14 months before applying for the benefit, excluding the last two months.
2. Variable Subsidy Component (“Bonus” for those with longer insurance periods): This depends on the recipient’s years of insurance (counting from the 4th to the 20th year) and their average earnings if these exceed the minimum wage. The calculation involves multiplying coefficients corresponding to years of insurance and the average earnings by the legislated minimum daily wage.
3. Additional Provisions and Bonuses: These include Christmas and Easter bonuses and increments for dependents and single-parent families.

The unemployment benefit is contributory in nature, meaning it is derived from unemployment contributions made during the individual’s working life and not a welfare benefit.

Eligibility Criteria
Eligibility requirements include:
a) Enrollment in regular unemployment benefits,
b) At least 900 days of insurance in the 50 months before applying for the benefit (excluding the last two months), and
c) Earnings equal to or greater than the minimum wage during the 14 months prior to applying for the benefit (excluding the last two months).

Historical Context and Reform Goals
The institutional framework for regular unemployment benefits, as it stands today, was established in the 1950s and 1980s and no longer adequately addresses key social and economic policy objectives, such as meaningful support for the unemployed at critical times and incentives for reintegration into the labor market.

The program will be evaluated after the pilot phase. Based on the findings of the final evaluation, it will be adjusted and implemented universally for all unemployed individuals.

Questions and Answers About the Pilot Program for Regular Unemployment Benefits

1. Why is a change to the unemployment benefit needed?
   The institutional framework for unemployment benefits was developed in the 1950s. Thus, it needs updating to align with the needs of the modern labor market and address current priorities, such as providing meaningful and fair support for the unemployed and encouraging their reintegration into the labor market.

2. What are the core principles of the pilot program?

• Motivation for Employment: Encourages quicker return to work, starting with higher benefits in the initial months and gradually decreasing.
• Contributory and Fair: Recognizes contributions made, avoiding equal treatment of cases with significant differences.
• Efficiency: Streamlines complex processes for simplicity and effectiveness.

3. When is the pilot program expected to begin, and how long will it last?
   The implementation of the new unemployment benefit pilot is expected to begin in early 2025, with a maximum duration of up to 16 months, depending on each recipient’s insurance history.

4. What needs does the pilot program aim to address?
   The program seeks to:

• Modernize unemployment benefits to meet current socioeconomic conditions,
• Support recipients, particularly in the initial challenging months of unemployment, and expedite their return to the labor market, and
• Enhance the contributory nature of the system, linking benefits to years of work and contributions.

5. What are the key changes introduced?
   Key changes include:

• Consolidation of regular benefits with long-term unemployment benefits, allowing a maximum duration of up to 24 months, with a tailored approach to benefit amounts.
• Rationalization of eligibility and benefit duration criteria, calculated as two months of work per one month of benefits in the first year and three months of work per one month of benefits in the second year.
• Incorporation of insurance history to determine benefit amounts, combining a fixed component for all and a variable component based on work history.
• Introduction of a front-loaded benefit, with higher payouts initially to motivate reemployment.

6. How will beneficiaries be selected for the pilot program?
   Beneficiaries will be randomly selected using an automated system (RCT methodology) from all applicants meeting the new eligibility criteria.

7. How is the application process for the pilot program conducted?
   No separate application is needed. The existing application for regular benefits will be used, with the same supporting documents, except for an additional document verifying single-parent status, if applicable.

8. Will beneficiaries of the pilot program receive lower benefits?
   No beneficiary in the pilot program will receive less than what they would under the current system.

9. Does the pilot program affect those already receiving benefits?
   No. Those already receiving benefits under the current system will continue without any changes.

10. Does the pilot program include seasonal unemployment benefits?
    No. Seasonal unemployment benefits remain separate and are not part of the pilot program.

11. When will the new program be fully implemented?
    The pilot program will be evaluated, and based on the findings, it will be adjusted and implemented universally for all unemployed individuals.