President Recep Tayyip Erdoğan has signed a new decree increasing the share of the Unemployment Insurance Fund that can be used for purposes other than direct unemployment payments, according to the Official Gazette published today.
Under the new measure, the cap on the fund’s annual income that may be allocated to various employment support programs has been raised from 30% to 50%. The change is authorized under Article 48 of the Unemployment Insurance Law (Law No. 4447), which allows the president to raise this allocation up to 50%.
The fund, financed primarily through employer and employee contributions, is designed to provide financial support to unemployed workers. However, Article 48 also permits spending on programs aimed at improving workforce skills, reducing unemployment risk due to technological changes, and implementing employment-boosting measures.
The official provision states that "30% of the previous year's premium income from the fund may be used to increase employability, reduce unemployment risk by improving workforce qualifications, redirect workers expected to lose their jobs due to technological developments, implement and support employment-increasing and protective measures, provide job placement and counseling services, conduct labor market research and planning, and pay the financial and social rights of contract personnel."
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Labor unions and opposition parties have long criticized the use of te unemployment fund. They argue that the fund’s primary purpose, to support unemployed individuals, is being compromised by the diversion of resources to employer-oriented subsidies.
In previous years, similar increases in the allocation ratio were followed by government measures that primarily directed fund resources to employer subsidies or short-term employment programs during economic downturns.
Official data has shown that direct payments to unemployed workers have lagged behind the amounts spent on employer assistance. (HA/VK)
