Unemployment benefits are generally given only to those registering as unemployed, and often on conditions ensuring that they seek work. Eligibility criteria for unemployment benefits typically factor in the applicant’s employment history and their reason for being unemployed. There are often caps on the maximum benefit level, ranging from 33% of a country’s average wage to 227% of its average wage. The average maximum benefit levels is 77% among OECD countries.
About Unemployment benefits in brief
Unemployment benefits are generally given only to those registering as unemployed, and often on conditions ensuring that they seek work. The first modern unemployment benefit scheme was introduced in the United Kingdom with the National Insurance Act 1911. In the United States, benefits are funded by a compulsory governmental insurance system, not taxes on individual citizens. Eligibility criteria for unemployment benefits typically factor in the applicant’s employment history and their reason for being unemployed. There are often caps on the maximum benefit level, ranging from 33% of a country’s average wage to 227% of its average wage. The average maximum benefit levels is 77% among OECD countries. Most countries calculate the amount of unemployment benefit as a percentage of the applicant’s former income. Some countries allow beneficiaries to accept part-time jobs without benefit eligibility, which can counter-incentive of unemployment benefits to accepting jobs that do not fully replace the former wages. Contribution rates are usually between 1 and 1.3% of former wages, but can occur periodically or in response to economic downturns. The average benefit level is 77%. Some countries offer much higher levels of wage replacement, such as the Netherlands, Luxembourg, and Denmark. Most countries can require documentation of search activities, and can require benefits to be cut if the applicant does not fulfil the job requirements, or turns down a job offer deemed acceptable by the unemployment agency. In Argentina, for example, six months of work history results in a PBD of two months, while 36 months or more of work.
can result in a full year, with an extra 6 months of PBD to applicants over the age of 45. In the US, Germany, and Belgium, there is no waiting period, but the waiting period in Canada is seven days. Countries implement varied potential benefit durations, which is how long an individual is eligible to receive benefits. The Unemployment Insurance Act 1920 created the dole system of payments for unemployed workers in the U.S. Through the Social Security Act of 1935, the federal government effectively encouraged the individual states to adopt unemployment insurance plans. The scheme was based on actuarial principles and it was funding by a fixed amount each from workers, employers, and taxpayers. It was restricted to particular industries, particularly more volatile ones like shipbuilding, and did not make provision for any dependants. By 1913, 2.3 million were insured under the scheme for unemployment benefit. By 1930, over 11 million workers were covered by the system in the UK, including domestic service, farmworkers, railroad men, and civil servants. The system was criticized by communists, who thought such insurance would prevent workers from starting a revolution, while employers and tories saw it as a \”necessary evil\”. It was implemented in Germany in 1927, and in most European countries in the period after the Second World War with the expansion of the welfare state. It is funded by payroll taxes on employers and employees and can be supplemented by the government’s general tax revenue.
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This page is based on the article Unemployment benefits published in Wikipedia (as of Dec. 28, 2020) and was automatically summarized using artificial intelligence.
