Faroe Islands propose fixed subsidy for hiring unemployed people

The Faroe Islands are proposing to replace work placements for unemployed people with jobs carrying a wage subsidy, KVF reported. A draft amendment to the regulation is now open for consultation.

Under the proposal, employers would receive a fixed reimbursement instead of an amount linked to the unemployment benefit the worker is entitled to. The reimbursement would equal the maximum unemployment benefit, but could not exceed 80 per cent of the worker’s wages.

Currently, employers receive an amount equivalent to the worker’s unemployment benefit, capped at 80 per cent of wages. The reimbursement can never exceed the maximum unemployment benefit, which is currently an average of DKK 23,013 a month.

The Ministry of Social Affairs and Housing says the change is intended to encourage employers to offer subsidised jobs to people who receive lower unemployment benefits. In most cases, the fixed reimbursement would be higher than the benefit those workers receive, meaning they would leave the unemployment benefit system sooner.

If they later return to the system, their benefit will be recalculated, with wages from the subsidised job included in the calculation basis.