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← Overview Database of Innovative Social Policies in Europe

Higher degressivity in unemployment benefits

Country of implementation
General short description of the innovation
The reform of the unemployment benefit system made the unemployment benefits more degressive over the duration of unemployment. Unemployment benefits will decrease over time in several steps at a pace which depends on household situation and the previous career length. Job seekers fall back on a lump sum slightly higher than social assistance benefits at latest after 4 years, but much earlier for those unemployed with short working careers (as soon as 16 months). / / The reform leads to a stepwise reduction of the unemployment benefit and can be broken down in 3 phases. / 1) For the initial three months of unemployment the net replacement rate of benefits is raised to 65 percent of the last wage (instead of 60% before).The next 9 months the net replacement rate drops back to 60% and decreases over time. / 2) In a second phase the net replacement rate is reduced to 60%, 55 or 40% depending on the household situation. This phase exists out of a fixed period of two months and a variable period, which depends on career length before unemployment (extension of two months for each year of work). / 3) The third phase starts as soon the second phase ends (between 16 and 48 months). Job seekers fall back on a fixed minimum rate which depends on the household situation, and is at a level just above social assistance. / / The degression does not apply to unemployed people who have worked for more than 20 years, the temporarily unemployed and people over the age of 55. These categories of people maintain the same level as during the first 12 months of the second period for an unlimited period of time. /
Target group
Total Population
Policy Field
  • employment
Type of Policy
  • public
Duration of the policy
Reform of the unemployment benefit system entered into force in November 2012.
Scope of innovation
  • Scope: structural
  • Spatial coverage: national
General description of (intended) objectives and strategies
Prevent long-term unemployment by providing stronger financial incentives for unemployed to take up work more quickly. Making work more attractive and increase labour market participation
Type of ideal-typical strategy for the innovation
  • encompassing security
  • liberalisation
  • others (decreasing social protection )
Type of innovation
  • new policy, practice or measure
New outputs
  • benefit duration
  • benefit eligibility
  • benefit level
Intended target group
All beneficiaries of unemployment benefits
Working age population
  • main source of income: social protection (unemployment benefits )
Actors involved in policy-making/implementation and/or evaluation
  • agency or national social insurance body (National Employment Agency (RVA))
Intended output
  • benefit duration
  • benefit eligibility
  • benefit level
Clarification of outcomes in terms of impacting resilience and labour market inclusion
The policy aims to lower unemployment rates by providing stronger financial incentives for unemployed to take up work more quickly, but there is no evaluation data available yet. / / As well as in the case of degressivity of unemployment benefits1 as in the case of expiration of unemployment benefits2, studies show the importance of notifying unemployed about the time profile of their benefit entitlement (when and to what extent their benefits are reduced) in order to change job search behavior. /
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