Unemployment insurance is a compulsory insurance that is collected to pay benefits to employees in the event of unemployment. All employees pay in 2012 2.8% of their earnings and employers pay 1.4% of the payroll for unemployment insurance. Unemployment insurance is withheld from the employees’ salary automatically. Persons, who are old enough to receive an old age pension do not have to pay unemployment insurance.
Unemployment insurance benefits are paid to legal residents of the EU. To receive an unemployment insurance benefit, unemployment insurance contributions must have been paid for at least 12 months during the two previous years.
A legal resident of the EU has the right to apply for an unemployment insurance benefit from the country where he or she last worked and paid taxes. The period of time that a person has worked and paid unemployment insurance contributions in other EU countries is considered when deciding whether and how long a person is entitled to receive the unemployment insurance benefit. The sum of the benefit paid by Estonia is calculated on the basis of the wages earned in Estonia.
An unemployed person should register himself at an employment office of the Estonian Unemployment Insurance Fund in order to receive the unemployment insurance benefit and unemployment benefit. Unemployment insurance benefits are paid by the Estonian Unemployment Insurance Fund.
Those who are not entitled to receive unemployment insurance benefits, or who have received unemployment benefits for the maximum period, but have not found a job during that time, are entitled to receive the state unemployment benefit. In the latter case the benefits are paid for up to 270 days. State unemployment benefits are paid by the Estonian Unemployment Insurance Fund‘s offices.
