A groundbreaking unemployment benefit system with a "three-part" structure will be introduced in Greece on a pilot basis, following the signing of a Joint Ministerial Agreement between the Ministry of National Economy and Finance and the Ministry of Labour and Social Insurance on Monday.
The revised unemployment benefit departs from the existing flat-rate model, which provided a fixed amount for all unemployed individuals regardless of prior salary or years of work. The new structure is the result of a study conducted by the Public Employment Service in collaboration with the Organisation for Economic Co-operation and Development (OECD) under the support of the European Commission’s DG REFORM programme.
The updated benefit is designed to incentivise a quicker return to the workforce while ensuring fairness. It introduces a tiered payment system that begins with higher initial amounts, which gradually decrease over time. The benefit calculation will factor in the size and duration of an individual’s social insurance contributions, making the system more "reciprocal" and reflective of previous work history.
Under the pilot programme, the benefit will consist of three components:
- A Fixed Component – Equivalent to 70% of the minimum wage or an individual’s average wage if lower.
- Variable Bonus Components – Based on the recipient's years of insurance contributions and average wages, provided these are higher than the minimum wage.
The Public Employment Service plans to roll out the pilot phase in the first months of 2025, with the programme offering benefits for a maximum duration of 16 months. Crucially, no recipient will receive less than they would have under the current benefit scheme. The decision to fully implement the system will follow an assessment of the pilot’s outcomes.
This initiative represents a significant step towards modernising Greece’s unemployment support framework, aligning it more closely with international standards and creating stronger incentives for re-entering the job market.