Estonia axes unemployment benefit for young people finishing conscription

Estonia axes unemployment benefit for young people finishing conscription New eligibility requirements mean that young graduates cannot receive unemployment benefits after finishing school or completing military service, unless they have previously worked for at least eight months. A young person who goes straight from school into compulsory military service may be surprised to discover that, when looking for work after completing their service, they will have to rely on someone else for financial support because the Estonian Unemployment Insurance Fund will not pay them benefits. The exception is if they managed to work enough while still in school. Previously, both school graduates and young people completing military service were eligible for unemployment allowance, but that form of support ceased to exist at the beginning of this year. Unemployment insurance benefits are now available, with eligibility depending on a person's previous participation in the labor market, said Kirsti Melesk, head of the employment department at the Ministry of Economic Affairs and Communications. "As with any other type of insurance, the system works so that a person becomes entitled to benefits if they have contributed to the insurance system and the insured event then occurs. In the case of unemployment insurance, that means becoming unemployed. The same principle can be compared with home or auto insurance: If a person has never paid insurance premiums, they cannot claim an insurance payout when an insured event occurs. The purpose of unemployment insurance benefits is to partially replace income previously earned from employment during the period when a person is looking for work, rather than directly guaranteeing an income to everyone who is out of work, including those who did not previously have such an income," Melesk said. She said conscripts are in the same position as school graduates who also have no previous work experience when they begin looking for work after graduation and have to manage without financial support from the state. Young people can nevertheless register as unemployed and make use of services designed to help them find work. "We currently have no plans to create any kind of exemption for conscripts. Instead, we consider it important to support young people in their job searches, helping them gain their first work experience and get a foot in the door of the labor market. Since the beginning of this year, for example, the Unemployment Insurance Fund has also had youth counselors who specialize specifically in supporting young people's job searches and providing them with counseling," Melesk said. In certain cases, however, young school graduates may still be eligible for unemployment insurance benefits if they managed to work while attending school. To qualify, they must have worked during at least eight months over the preceding three years, for at least one day in each of those months. "A person must have accumulated at least eight months of unemployment insurance coverage. This can be accrued, for example, through employment under an employment contract, and if a person has worked under an employment contract for eight months, the requirement has already been met," said Vadim Djomin, head of unemployment insurance benefits at the Unemployment Insurance Fund. There are, however, exceptions. "If a person works under a contract governed by the law of obligations, there must be eight payments from which unemployment insurance premiums have been withheld. In the case of employment contracts, a person must have worked for eight months and those months do not have to be consecutive. They can be under different contracts and in different months, but there must be at least eight months in total," Djomin said. According to Djomin, a young person could accumulate the required eight months by working over three summers and would then be eligible for benefits from the Unemployment Insurance Fund after graduating. The Estonian Defense Resources Agency has not discussed providing conscripts with financial support while they look for work after completing their service. If such support were introduced, it would have to come from the defense budget at the expense of specific military capabilities, the agency's director general, Anu Rannaveski, said. "What is military service if not another form of training? Just as people study different fields at university, military service itself is training in national defense. Of course, as a society, we want to make it as easy as possible for young people to enter the labor market. I think military service itself already gives a young person a very strong competitive advantage. The studies we have conducted also show that, in the future, young people who have completed military service earn more than those who have not," Rannaveski said. She said the trend in recent years also shows that a significant number of young people remain in the Estonian Defense Forces as active-duty personnel after completing their military service. They account for around 7.5 percent of conscripts. -- Editor: Marcus Turovski, Johanna Alvin