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Cabinet greenlights social benefit cuts

The Slovak cabinet passed several amendments to the Labour Code, the Employment Law and the Housing Contribution Law on August 18, paving the way for deep cuts in social benefits.
The revision to the employment law cuts the maximum unemployment benefit from 5,400 Slovak crowns ($130) per month to 4,500 crowns ($107).
The term of eligibility for receiving these benefits has been cut from one year to nine months.

The Slovak cabinet passed several amendments to the Labour Code, the Employment Law and the Housing Contribution Law on August 18, paving the way for deep cuts in social benefits.

The revision to the employment law cuts the maximum unemployment benefit from 5,400 Slovak crowns ($130) per month to 4,500 crowns ($107).

The term of eligibility for receiving these benefits has been cut from one year to nine months.

The revision also reduces the basis for the calculation of unemployment benefits from the current 60% of average income to 50% of this sum in the first three months, and from 50% to 45% in the remaining months. As Social Affairs Minister Peter Magvaši told a news conference after the cabinet meeting, these parameters are standard in neighbouring countries.

The cuts should save 1.2 billion crowns in unemployment expenditures in the year 2000. The revision also establishes a guarantee fund, which is to protect employees in case their employer becomes insolvent. The fund should launch operations on May 1, 2000, and contributions will be paid as of July 1, 2000.

The draft amendment to the Labour Code changes the current provision for mass layoffs of employees. A mass layoff will have to be announced 90 days in advance of the action, and the maximum number of released employees is set at 20. An employer will have to discuss the reasons, number, and structure of layoffs with trade unions two months in advance of the date.

The Housing Contribution Law will take effect in January 2000. The introduction of the contribution will raise state budget revenues by 1.7 billion crowns. According to Magvaši, it will affect 392,000 households, whose average contribution will be 700 crowns.

The contribution is to compensate for the increased cost of providing housing for low-income citizens. The first contributions are to be paid in January 2000.

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