On March 28, 2025, the pilot program for a new unemployment benefit officially launched, as announced by the Public Employment Service (DYPA). This initiative is designed to modernize the unemployment support system in Greece, aiming to meet the evolving needs of the labor market and provide fairer, simpler, and more effective assistance to job seekers.
The pilot program is rooted in the Joint Ministerial Decision 54427/20-12-2024, which outlines a comprehensive framework for the new unemployment benefit. The program will evaluate potential beneficiaries through a specialized algorithm, ensuring that those who qualify will receive at least the same amount, if not more, than they would under the existing system. This evaluation process is a key part of the pilot action, which is being implemented by the DYPA in collaboration with the OECD, as part of a technical assistance project funded by the European Commission's Directorate-General for Structural Reform Support (DG REFORM).
With a budget of €100 million from the National Recovery and Resilience Plan, the new unemployment benefit program aims to enhance support for the unemployed and encourage their return to the labor market. Specifically, it will provide greater financial assistance during the first six months of unemployment, gradually decreasing thereafter. This approach is intended to motivate individuals to seek employment more actively.
The new system introduces several key features aimed at improving fairness and effectiveness in the distribution of unemployment benefits:
- Stable Benefit: The benefit amount will be calculated based on the beneficiary's previous earnings, starting at 70% of the minimum wage for the first three months. This percentage will decrease over time, reaching 20% by the end of the second year.
- Variable Benefit: A bonus component will be added, which depends on the number of years the individual has been insured and their average earnings. This aims to reward those with longer work histories.
- Additional Benefits: Recipients will also receive holiday bonuses for Christmas and Easter, as well as allowances for children and, for the first time, additional support for single-parent families.
As the labor market evolves, the need for an updated unemployment benefit system has become increasingly apparent. The current framework, established in the 1950s, does not adequately address the realities faced by modern job seekers. The new pilot program seeks to rectify this by linking benefits more closely to the contributions made by individuals during their working years.
In terms of eligibility, the pilot program will utilize an automated selection process based on an RCT methodology (Randomized Controlled Trial). This means that individuals applying for the regular unemployment benefit will automatically be considered for the pilot program, provided they meet the new criteria and their potential benefit under the new system is greater than what they would receive under the current framework.
DYPA has made it clear that no participant in the pilot program will receive a lower benefit than they would have under the existing system. Those currently receiving unemployment benefits will continue to do so without any disruptions during the pilot phase.
The pilot program is set to include approximately 15,000 unemployed individuals who have not received unemployment benefits in the past four years. This targeted approach aims to provide assistance to those who have been out of work for an extended period, helping them to reintegrate into the workforce more effectively.
One of the primary goals of this new unemployment benefit is to encourage active job searching among recipients. To that end, the program requires beneficiaries to engage in job-seeking activities and may ask for additional documentation to verify their efforts. This proactive approach is expected to yield better outcomes for the unemployed, facilitating their return to work.
As the pilot program unfolds, its effectiveness will be closely monitored and evaluated. The findings from this evaluation will guide the eventual full implementation of the new unemployment benefit system, ensuring that it meets the needs of job seekers and aligns with contemporary labor market conditions.
The pilot program is not just a response to the immediate challenges of unemployment but also a strategic move towards a more sustainable and equitable labor market framework. By linking benefits to contributions and work history, the government aims to create a system that not only supports the unemployed but also incentivizes employment and economic participation.
In summary, the new unemployment benefit pilot program represents a significant shift in how unemployment support is structured in Greece. By modernizing the system and aligning it with current labor market demands, the government hopes to provide a more effective safety net for those facing job loss while encouraging their swift return to the workforce.
The pilot program will be evaluated comprehensively, and adjustments will be made based on its success and the feedback from participants. The full rollout of the new unemployment benefit system is anticipated to follow this pilot phase, potentially transforming the landscape of unemployment support in Greece.
