Austria introduces new rules on eligibility for unemployment insurance

Following a Constitutional Court ruling in March 1998, the Austrian Parliament has brought forward the introduction of new regulations on unemployment benefit from 1 January 2000 to 1 April 1998. They remedy discrimination on grounds of nationality, but do not tackle the breach of the rules highlighted by the Court, and lawyers and officials expect the Court soon to overturn the new regulations.

In early March 1998, the Austrian Constitutional Court (Verfassungsgerichtshof, VfGH) declared existing regulations on unemployment benefits unconstitutional. At issue were the rights of third-country nationals who are obliged to contribute to compulsory unemployment insurance but whose entitlement to benefit is curtailed (AT9703104F). Benefit entitlement for Austrian citizens or other citizens of the European Economic Area (EEA) is of unlimited duration if they remain available for employment and are in need of financial support. However, entitlement of non-EEA third-country nationals used to expire after a period of between 20 and 104 weeks depending on the duration of previous employment, and age and permit status unless they were refugees granted indefinite leave to stay. Parliament had amended the law on 11 June 1997, removing this discrimination on grounds of nationality but, at the behest of the Austrian People's Party (Österreichische Volkspartei, ÖVP), the minority partner in the coalition Government, it set the date for the introduction of the new regulations at 1 January 2000 (AT9706121N).

In a swift response to the Constitutional Court ruling, Parliament has now brought forward the entry into force of the new regulations to 1 April 1998. They require applicants for extended benefits following the expiry of the initial unemployment benefit, known as "destitution support" (Notstandshilfe), to satisfy at least one of the following four criteria:

  • to have been born in Austria;
  • to have paid contributions to unemployment insurance for at least eight of the past 10 years;
  • if under the age of 25, to have completed half their compulsory schooling in Austria, including graduation; or
  • to have had their legal residence in Austria for at least half of their life.

The claims of benefit recipients at the time of the change-over remain unaffected. The Ministry of Labour, Health and Social Affairs (Bundesministerium für Arbeit, Gesundheit und Soziales, BMAGS) was quoted in the press as estimating that some 2,500 unemployed non-EEA nationals would now have access to extended benefits and that on average there would be about 2,000 unemployed people who would have met the former criteria but will not meet the new ones. Officials estimated the original cost at ATS 15 million for the year 2000, but they added that all these estimates were vague and unreliable.

Most of the unemployed people no longer qualifying will be EEA citizens, naturalised Austrians, holders of one particular type of labour market permit, and refugees. Non-governmental organisations expect a much larger number than the government estimate.

There is an almost general expectation that the new regulations will again be overturned by the Court. This is because they address only the discrimination issue that has been simmering for a long time, but probably continue to violate other rules on eligibility. Only one of the four criteria, eight years of insurance contributions over the past 10 years, is expected to survive a Court ruling. Nevertheless, officials expect that giving up the other three criteria will have little impact on numbers.

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