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% of their earnings and employers pay 1% 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 of the previous 36 months.
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.
If you do not meet the conditions to receive an unemployment insurance benefit, or if you have exhausted your rights to a benefit, you may still qualify for the unemployment allowance. A person is entitled to a state unemployment allowance if he or she has registered as unemployed with the Estonian Unemployment Insurance Fund and has been employed or engaged in an activity equivalent to work (e.g. attended daytime studies, was raising a child under the age of eight, etc.) for at least 180 days during the 12 months prior to registering as unemployed. The allowance is calculated on the basis of a daily rate of 3.28 EUR. In the latter case the benefits are paid for up to 270 days.