Unemployment insurance benefit in Estonia

Who receives the unemployment insurance benefit?

An insured person is entitled to the income-based benefit if they are registered as unemployed and have at least 12 months of insurance record within the 36 months before registration (TKindlS § 6 lg 1) [1]. To register as unemployed, you submit an application to the Unemployment Insurance Fund (Eesti Töötukassa) (TöMS § 8 lg 1) [6]; a person who works under an employment contract or another contract under the law of obligations, for example, is not registered (TöMS § 8 lg 4 p 3) [6].

There is no right to the income-based benefit if the last employment ended (TKindlS § 6 lg 2) [1]:

• by the employee's own termination, except, for example, extraordinary termination because of the employer's material breach of its obligations (TLS § 91 lg 2) [7] or termination because of a reduction of wages (TLS § 37 lg 5) [8];
• by the employer's termination for the employee's breach, for example a breach of work duties, being at work intoxicated or a loss of trust (TLS § 88 lg 1 p 3–8) [9];
• by agreement of the parties (TKindlS § 6 lg 2 p 3) [1] – a contract may be ended by agreement at any time (TLS § 79) [10], but then the income-based benefit is not available.

An insured person registered as unemployed with at least eight months of insurance record in the 36 months before registration is entitled to the base-rate benefit (TKindlS § 6¹ lg 1) [3]. Its conditions do not include the grounds for ending employment that exclude the income-based benefit (TKindlS § 6 lg 2) [1]. As a rule, a person entitled to the income-based benefit does not receive the base-rate benefit (TKindlS § 6¹ lg 2) [3].

A sole proprietor (FIE) and a person who has reached the old-age pension age, for example, are not insured persons (TKindlS § 3 lg 2 p 1 and 5) [11]. From 01.01.2027, a natural person who provides a service under a contract under the law of obligations to a natural person, other than a sole proprietor, is also not an insured person (TKindlS § 3 lg 2 p 7) [12].

How is the insurance record counted?

The insurance record is the period for which the insured person was paid remuneration from which the unemployment insurance premium had to be withheld (TKindlS § 7 lg 1) [13]. One calendar month counts as one month of record (TKindlS § 7 lg 2) [13]. Maternity, paternity or parental leave and temporary incapacity for work, for example, are not counted unless a record for work arises at the same time (TKindlS § 7 lg 2²) [13]. If you took maternity, paternity, adoptive or parental leave within the 36 months, that period is extended by the time on leave if there is no insurance record data for that time (TKindlS § 6² lg 1) [14]. When the income-based benefit is granted, the record is reset to zero (TKindlS § 7 lg 3) [13]; when the base-rate benefit is granted, the record gathered in the 36 months is reset to zero (TKindlS § 7 lg 3¹) [13].

How much is the benefit and for how long is it paid?

The income-based benefit is calculated from the average daily wage found from the remuneration paid in the nine months of work before the last three months of work (TKindlS § 9 lg 1) [2]; the sum is divided by 270 (TKindlS § 9 lg 2) [2]. The benefit is 60% from the first to the 100th calendar day and 40% from the 101st calendar day to the end of the period (TKindlS § 9 lg 4) [2]. If the average wage exceeds three times the Estonian average daily wage of the previous calendar year, the benefit is calculated from the latter (TKindlS § 9 lg 3) [2]. If the benefit would be less than 50 percent of the minimum daily wage, 50 percent of that minimum is paid (TKindlS § 9 lg 5) [2].

The income-based benefit is paid according to the insurance record (TKindlS § 8 lg 1) [15]:

1. less than five years – 180 calendar days;
2. five to ten years – 210 calendar days;
3. ten years or more – 300 calendar days.

When registered unemployment is high, the period may be extended on the conditions set out in the law (TKindlS § 8 lg 1¹–1⁴) [15].

The base-rate benefit is 50 percent of the minimum daily wage calculated from the monthly minimum wage in force on 1 July of the previous calendar year; the monthly minimum is divided by 30 (TKindlS § 9¹ lg 1) [4]. It is paid for 180 calendar days (TKindlS § 8¹ lg 1) [16]; when registered unemployment is high, this period may also be extended (TKindlS § 8¹ lg 2) [16].

What is different on redundancy?

On redundancy, the employer pays compensation equal to one month's average wage, and the employee is also entitled to the insurance benefit under the Unemployment Insurance Act (TLS § 100 lg 1 and 2) [17]. The insurance benefit is due to an employee whose employment with that employer lasted at least five years (TKindlS § 14¹) [5]; for five to ten years it equals one month's average wage, for more than ten years two months' average wage (TKindlS § 14² lg 1) [18]. From 01.01.2027, the pay taken into account when calculating the insurance benefit also includes pay made to the employee under the Employment Contracts Act by a person who ordered subcontracting from the employer (TKindlS § 14² lg 2) [19].

The employer submits the application to Töötukassa within five calendar days after the employment ends; if it does not, the employee may submit it (TKindlS § 14³ lg 1 and 2) [20]. The benefit is paid no later than on the fifth calendar day after the decision (TKindlS § 14⁴ lg 4) [21].

For a redundant employee whose employment lasted five to ten years, the right to the unemployment insurance benefit starts 30 calendar days after the employment ends; after more than ten years, 60 calendar days after it ends (TKindlS § 6 lg 4) [1]. The same applies if the employee terminated the contract because of a reduction of wages (TKindlS § 6 lg 4) [1], and to the base-rate benefit as well (TKindlS § 6¹ lg 6) [3].

Is the unemployment allowance (töötutoetus) still paid?

The law speaks of abolishing töötutoetus: the ministry, together with Töötukassa, will analyse „töötutoetuse kaotamise ja baasmääras töötuskindlustushüvitise maksmise mõju ja tulemuslikkust“ (translation: the impact and effectiveness of abolishing the unemployment allowance and paying the base-rate benefit) presumably in 2031 (TKindlS § 52¹⁰) [22]. If an application for töötutoetus was submitted before 1 January 2026 and no decision had been made by then, the decision is made under the earlier wording (TöMS § 33 lg 6) [23]; to those who were paid it under the wording in force before 1 January 2026, that wording applies until the payment ends (TöMS § 33 lg 7) [23].

What the law says

• „Õigus sissetulekupõhisele töötuskindlustushüvitisele on kindlustatul“ who is registered as unemployed and has „töötuskindlustusstaaži vähemalt 12 kuud töötuna arvelevõtmisele eelnenud 36 kuu jooksul“ [1] (translation: an insured person is entitled to the income-based benefit ... with at least 12 months of insurance record in the 36 months before registration; TKindlS § 6 lg 1) – both conditions must be met.
• „Kindlustatul on õigus saada baasmääras töötuskindlustushüvitist 180 kalendripäeva.“ [16] (translation: the insured person is entitled to the base-rate benefit for 180 calendar days; TKindlS § 8¹ lg 1) – the length does not depend on the insurance record.
• „Töötuskindlustushüvitist maksab töötukassa kindlustatule igakuiselt eelmise kalendrikuu eest jooksva kalendrikuu 10. kuupäevaks.“ [24] (translation: Töötukassa pays the benefit monthly for the previous month by the 10th day of the current month; TKindlS § 12 lg 1).
• „Kindlustatu on kohustatud teatama Töötukassale viivitamatult kõikidest asjaoludest, mis toovad kaasa töötuskindlustushüvitise saamise õiguse lõppemise.“ [25] (translation: the insured person must notify Töötukassa without delay of all circumstances that end the right to the benefit; TKindlS § 14 lg 1) – for example, starting work.

What to do

1. Apply to Töötukassa to be registered as unemployed; the decision is made no later than on the second working day, and you are registered from the day of the application, but not before the day you meet the conditions (TöMS § 8 lg 1 and 3) [6].
2. Apply for the unemployment insurance benefit (TKindlS § 10 lg 1) [26]. Töötukassa decides within 14 calendar days (TKindlS § 11 lg 1) [27]. The benefit is counted from the eighth day after the application, but not before the eighth day after registration as unemployed (TKindlS § 11 lg 5) [27].
3. On redundancy, check that the employer applied for the insurance benefit within five calendar days; if not, apply yourself (TKindlS § 14³ lg 1 and 2) [20].
4. Meet the duties of an unemployed person: take part in drawing up the action plan and in counselling at least once in 30 days, be ready to accept suitable work and look for work yourself (TöMS § 9 lg 1) [28]. If you refuse suitable work or the action plan without good reason, the benefit stops (TKindlS § 13 lg 1 p 2) [29]; the same happens if you miss the agreed counselling without good reason (TKindlS § 13 lg 1 p 3) [29].
5. If you think your rights were violated when the benefit was granted or paid, file a challenge (vaie) with Töötukassa (TKindlS § 45 lg 1) [30]; the decision states how and by when it can be challenged (TKindlS § 11 lg 2 p 5) [27].

Frequently asked questions

Do I get the benefit if I terminated the employment contract myself?

As a rule, not the income-based benefit (TKindlS § 6 lg 2 p 1) [1]. An exception is, for example, extraordinary termination because of the employer's material breach of its obligations (TLS § 91 lg 2) [7]. The conditions of the base-rate benefit do not name the grounds on which the employment ended (TKindlS § 6¹ lg 1) [3].

May I work temporarily while registered as unemployed?

Yes, up to eight days in a calendar month, but in no more than 12 calendar months within a 24-month period (TöMS § 11 lg 2) [31]. The pay may not exceed 40 percent of the monthly minimum wage (TöMS § 11 lg 3) [31]. From 01.01.2027, pay for temporary work also includes pay made under the Employment Contracts Act by a person who ordered subcontracting from the employer (TöMS § 11 lg 3) [32]. Temporary work does not give a right to the benefit (TKindlS § 6 lg 2¹) [1].

Do redundancy compensation and the unemployment insurance benefit exclude each other?

No. The employer's compensation and the insurance benefit for redundancy are separate rights (TLS § 100 lg 1 and 2) [17]; after at least five years of employment, the right to the unemployment insurance benefit starts 30 or 60 calendar days after the employment ends (TKindlS § 6 lg 4) [1].

Does the amount of the benefit change at the start of a new year?

No. Neither the income-based nor the base-rate benefit is recalculated when the calendar year changes (TKindlS § 9 lg 7; TKindlS § 9¹ lg 2) [2] [4].