Coming soon: Unemployment benefits for employees and entrepreneurs from the same fund

Topics

• Income security
• Insurance
• Membership

Preparations for the combined unemployment insurance scheme are moving forward: in the future, both employees and entrepreneurs will be able to receive unemployment benefits from the same unemployment fund. The government’s proposal on the combined unemployment insurance scheme is now undergoing a public comment period. The new insurance is intended to strengthen income security for those working as both entrepreneurs and employees. The reform will improve income security, particularly in creative fields.

In this context, it is proposed that, in the future, an unemployment fund could, at its discretion, insure employees, entrepreneurs and those covered by combined insurance. In the future, for example, when transitioning from being a wage earner to an entrepreneur, a member of an unemployment fund would not need to switch funds if the fund also offers coverage for entrepreneurs.

The intention is for the laws to take effect on January 1, 2028. Starting then, the funds would be able to accept individuals with combined insurance coverage as members.

Security for employees and entrepreneurs

The purpose of combined insurance is to improve the income security of individuals who work alternately or concurrently as both entrepreneurs and employees. This is a new type of unemployment insurance whose employment eligibility requirements could take into account both wage income and entrepreneurial income. The aim is therefore to improve income security for those who are currently excluded from income security under the existing model. Combined insurance also serves as supplementary insurance for those who are already covered by income security, either as entrepreneurs or as wage earners.

Combined insurance would cover all situations of combined employment as a entrepreneur and in salaried work as defined in the Unemployment Security Act, as well as situations of employment in salaried work or as a entrepreneur and in self-employment.

The aim is to extend combined insurance to as broad a group as possible. According to the proposal, it would be possible to combine wage-earning employment or entrepreneurial activity with work compensation, family care allowances, and grant-funded work covered by MYEL insurance.

With regard to work grants and family caregiver allowances, it is further proposed that these could be insured not only as part of the diverse forms of employment covered by the combined insurance but also as a person’s sole income in the form of entrepreneurial income.

Duration and income basis of the working condition

According to the proposal, the working condition for combined insurance is 12 months during a 28-month review period. For the working condition requirement under combined insurance, income from entrepreneurship, income from self-employment, grants, or work compensation, and wage income would be aggregated on a calendar-month basis. A month counts toward the working condition requirement if the income is at least 930 euros per month.

Income from entrepreneurial activity is generally considered as earned income under the YEL insurance scheme. If a person does not have mandatory YEL insurance, the income could be considered as income under voluntary YEL insurance. If a person does not have mandatory or voluntary pension insurance, the income to be insured under the combined insurance plan would be based on the person’s own declaration, reduced by 1 200 euros. However, the insured income must be at least 1 200 euros per year. The insured income would be valid for 12 months, and it would be possible to change the income once a year.

A person working both as an employee and as a entrepreneur, as well as a person who, in addition to being employed or running a business, works as a family caregiver or receives a work grant, could choose which source(s) of income they wish to insure with the unemployment fund in case of unemployment. To receive daily benefits, applicants must continue to meet the other eligibility requirements for daily benefits, such as labor market policy requirements.

Less bureaucracy and more flexibility for members

Offering combined insurance would be optional for unemployment funds. An unemployment fund could therefore, if it so chooses, continue to offer unemployment insurance to both entrepreneurs and wage earners. Unemployment funds must have separate membership fees and equalization funds for the unemployment insurance of wage earners and self-employed individuals.

This change would allow members to flexibly switch from one type of insurance to another during times of change, enabling their situation to be handled holistically. This would reduce the bureaucracy associated with switching funds and minimize the risk of misclassification.