Enough funds to cover 12 years of unemployment

ALS, the Faroese Unemployment Service, has enough funds to cover an 8-percent unemployment rate for 12 years.

If the unemployment rate were to rise to 10 percent, ALS could pay benefits for six years before running out of funds.

These figures form the background of a new bill, which seeks to lower the unemployment contributions from wage earners and increase benefit payments for unemployed people.

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The unemployment rate can reach 5.5 percent before ALS’s daily operations will result in a deficit.

The unemployment rate currently lies at an all-time low of 0.8 percent.

According to the new bill and the underlying directive, the unemployment contribution will drop from 1.25 percent to 1 percent. This will reduce the annual contributions from DKK 255 million to DKK 200 million.

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Unemployment benefits have not been increased since 2012, and the new bill seeks to increase these benefits from 75 percent to 80 percent of the calculation basis and to increase the maximum monthly unemployment benefit payment by DKK 1,000 – from DKK 17,500 to DKK 18,500.

Translated by prosa.fo