No deal – Unemployment benefit: government has failed with reforms


Negotiations on the long-planned unemployment insurance reform have failed to produce consensus among government partners even at the latest attempt. This means that there will be no major changes in the labor market in the current legislature, Minister of Labor Martin Kocher (ÖVP) told journalists in Vienna on Friday. In particular, the adjustment of the additional income limits and the specific design of the unemployment benefit failed.

“The extra income was one of the decisive factors,” explains the politician. The ÖVP proposed a model that significantly limits additional acquisitions for the unemployed. According to Kocher, current regulations lack clear work incentives, especially for people with low incomes.

No agreement between the ÖVP and the Greens
The People’s Party hoped that adjusting the additional income opportunities would reduce unemployment, and the minister argued that this would also have reduced long-term precarious employment. The green negotiating partner rejected this mainly out of fear that those involved would be driven into poverty.

There was also a model for a degressive unemployment benefit in three steps on the table. The plan meant that no unemployment benefits would be paid for the first few days without work. Then the net replacement rate after three months would have been 70 percent and 55 percent.

Greens collided with hold time
This would initially have made unemployment benefits more expensive, but according to Kocher this would have been offset by the hoped-for employment effect. According to him, the Greens were mainly concerned about the waiting time. The fear of the small ruling party: Employers could have systematically exploited this and created a gateway to precarious working conditions.

While no agreement was reached, the talks were “conducted with mutual respect,” the Labor Minister said on Twitter (see above). This makes him optimistic that “smaller, more important reform steps” can be taken in the coming months.

Source: Krone


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