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 The Unemployment Insurance Fund was founded in 1998. Its main function is to fund unemployment insurance benefits.
The operations of the Fund are based on the Act on the funding of unemployment benefits and the Decree on the regulations of the Fund. The Act took effect on September 1, 1998 and the Decree on December 1, 1998. According to the Act on the funding of unemployment benefits, the Fund is liable for the costs of earnings-related unemployment insurance in so far as the State and individual unemployment funds are not. The benefits concerned are the following: daily unemployment allowance, support for labour market training, compensation during switch leave and support for study arranged by an unemployed person. The Fund also pays the total costs of wage security and 94.5 per cent of the costs incurred from the employee's layoffs and additional days of unemployment insurance. The Fund is also responsible for the costs of benefits granted by the Education Fund. Such benefits are severance pay, the adult education supplement to severance pay and the vocational training allowance. The Council of State appoints the members of the Fund's Supervisory Board for three years at a time, following proposals by the labour market parties. There are twelve members representing employers and six representing wage-earners. The chair alternates annually between representatives of employers and of employees. The Supervisory Board appoints the members of the Board for one year at a time, following proposals from the labour market parties. There are eight members representing employers on the Board and four representing wage-earners. The Fund's assets derive from unemployment insurance contributions collected from employers and wage-earners. The employer's unemployment contribution (year 2009) is
0.65 per cent of total earnings for 1,788,000 € of payroll and 2.7 per cent of the amount exceeding 1,788,000 €. The wage-earner's contribution to unemployment insurance is
0.20 per cent of wages. The revenue of the Fund will amount to some 2,012 million € in 2009 and expenditure 2,140 million €. The Fund includes a 'business cycle' buffer of approximately 1,000 million € (at the end of 2008). Its purpose is to level out the pressure for increases in the insurance contribution due to business cycle fluctuations. The Fund's recession deficit may be the equivalent of the maximum 'business cycle' buffer.
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