Social partners surprised at plan to cut unemployment benefits

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The Free Trade Union Confederation of Latvia was not informed over the plan to cut unemployment benefits starting next year, said the union's deputy head Irēna Liepiņa.

She said that such cuts should be followed by reduced social tax payments for unemployment security. "If nothing changes as concerns social payments, it would be good, correct and foreseeable if nothing changed concerning the benefit size, barring serious circumstances," said Liepiņa.

The Latvian government paid €120m in unemployment benefits, up from €85.2m in 2014. The government now hopes to save €12 million with this measure, to be used to raise pensions and other benefits. But the trade union rep says cuts involving employees should remain with the employees.

"A saving of €12 million is quite big, and it should, we think, be invested into employees or the future unemployed, either for improving skills, or things that will help prepare people for the future needs of the work market," said Liepiņa.

Meanwhile Līga Meņģelsone, the head of the Employers’ Confederation of Latvia, welcomed the move, which according to her could prompt more people to return to the labor market at a time of labor shortages.

"The question is the time before which [such changes] are announced, as we do have to prepare for this," she ventured to say.

Meņģelsone said that this would be a classical topic to be discussed at a meeting between the cabinet and the social partners. However the government has once again acted without consulting social partners.

As reported, the maximum duration for which people can receive unemployment benefits is to be cut to eight months from the current nine. 

As for the amount, the benefits are to be paid in full for the first two months, for 75% for the next two months, for 50% for the next two and 45% for the final two.

Currently benefits are paid in full for the first three months, while the amount is cut to 75% for the next three and to 50% for the final three months of the benefit duration.

In the 2nd quarter of 2019 Latvia's unemployment rate was 6.4%, down 1.3% on year, according to the Central Statistics Office. 

You can find out more about unemployment benefits in Latvia at the State Social Insurance Agency website

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