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People under special tax regime may be given right to receive unemployed benefits

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Covid-19, idleness, economy, coronavirus, Welfare Ministry, benefit, pension, Ramona Petraviča, special tax regime, state supportPersons who work under a special tax regime may be provided the right to receive the status of unemployed persons, said Latvian Welfare Minister Ramona Petraviča during a press-conference on Tuesday, 24 March.

The minister said the government will consider the option to provide people the right to receive unemployed person status if they do not receive income working under the special tax regime.

This may applied to patent tax payers, said the politician.

Read also: Idleness benefits planned to be paid in Latvia this week

The politician also explained the government plans to add amendments to the Solidarity Tax, which provide for diverting the 14 percentage points of this tax without personalizing it. The current order dictates that these 14 percentage points are personalized, which allows residents to receive very large pensions in the future. However, the minister said «we all have to be supportive of one another now». This is why from 1 April until the end of the year the solidarity tax will be transferred to the state pension special budget.

The government will also review amendments to the State Funded Pensions Fund. The amendments state that if a person is a member of the state funding pension scheme, this means when requesting retirement pension these people have the right to postpone the pension capital costs.

As previously reported, Latvian Finance Minister Jānis Reirs said the state support for prevention of Covid-19 damages has exceeded EUR 2 billion.

The government’s supported proposal for idleness benefits for industries impacted the most by the crisis may cost the state budget EUR 60 million to EUR 200 million, if the decision is made to expand the list of supported industries.

Latvian Free Trade Unions Association (LBAS) has urged the government to increase unemployed persons benefits and extend the period of time the benefit is paid to 12 months.

The legislative draft mentions that if employers of industries from effected industries do not employ their employees or fails to perform the acts necessary to accept the performance of the employee’s obligations, in this case the state will compensate wages up to 75% of the amount but no more than EUR 700 per calendar month.


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