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Bankruptcies in industry increase the number of people receiving unemployment benefits

2024-06-24 12:14:03Biznes SHKRUAR NGA REDAKSIA VOX

Bankruptcies in industry increase the number of people receiving unemployment

The number of people receiving unemployment benefits increased by 25% this year according to data from INSTAT.

In the first quarter of 2024, about 3,290 people received unemployment benefits, otherwise known as social assistance, from 2,467 people who benefited in the first 3 months of 2023.

The increase in people with social assistance began in the third quarter of 2023, as a result of the bankruptcies that occurred in industrial businesses, especially in the fashion sector. The fall of the euro in exchange for the lek and the increase in the minimum wage caused many fashion subcontractors to close as they worked with low profit margins.

Sources from manufacturers claimed that the number of beneficiaries would be higher, but from companies they have not met the conditions and many employees were in the black. Other data show that last year 29 enterprises with over 50 employees from the industry sector went bankrupt.

Unemployment payment programs are part of the state employment policies which ensure the income support of the unemployed at the time of their exit as such, aiming to create the conditions for their return to the labor market.

Unemployment Payment Programs aim to financially support all unemployed jobseekers in case of unemployment due to reduction of the workplace, termination of the employment contract, bankruptcy of the enterprise, reduction of activity, etc., facilitating their efforts towards employment.

One of the main conditions is that employees have contributed to social security for a period of at least 12 months in total (for each benefit case). But fashion associations claim that this condition has not been met by many businesses that have gone bankrupt after not paying the insurance due to the financial crisis.

The unemployment payment is 50% of the national minimum wage. Each beneficiary is paid unemployment income depending on the period of social security contributions paid by the employer.

Beneficiaries receive 3 months of benefits if they have at least 12 months of total social security contributions (starting from the last benefit). 9 months of benefits, if they have at least 5 years of total social security contributions.

Beneficiaries must have submitted the written request for application and completed the relevant documentation, within 60 days from the date of severance of financial relations with the employer. Outside this period, the beneficiaries lose the right to the payment of unemployment income, except in cases where they are unable to work, this is proven by a medical report or accompanying documents, that they have been admitted to the hospital (entry form and discharge form) from the hospital).

Women over 55 (fifty-five) years old and men over 60 (sixty) years old benefit from unemployment benefits for 12 (twelve) months, provided they have contributed 1 (one) year to social security for each benefit case.


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