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Unemployment benefit

At the end of July 2015, 120 000 people were registered as unemployed in Norway, and for many of them unemployment benefit is their only source of income for a shorter or longer period of time.

The sole purpose of the unemployment benefit scheme is to partially replace income that is lost due to unemployment. In such circumstances, a form of income support is provided while the jobseeker tries to find new employment. 

However, the unemployment benefit scheme is also intended to motivate unemployed people to find new employment, to get and keep a job, and to participate in labour market measures. The level of benefit is therefore lower than the recipient's previous income, and the time period for receiving it is limited. 

Who is eligible for unemployment benefit?

Unemployment benefit is income-based, not means tested. This means that a person who qualifies on the basis of certain conditions will receive unemployment benefit regardless of their personal wealth. Most employees, though not all, are entitled to unemployment benefit. 

Two basic conditions are that they must be a member of the Norwegian National Insurance Scheme and must reside in Norway; see the National Insurance Act, sections 4-2 and 2-1. Regulations stipulate some exceptions to the condition of residence in Norway for people who are seeking employment in other countries in the European Economic Area (EEA). You may apply to continue receiving unemployment benefit for up to three months while seeking employment in another EEA country.

Your local NAV office has brochures providing more information on the conditions and procedures for applying to retain unemployment benefit.
Another basic condition is that you are regarded as an employee according to the National Insurance Act. A further condition for entitlement to unemployment benefit is that your working hours have been reduced by at least 50 per cent.

In order to be entitled to unemployment benefit, your minimum earned income must be equivalent to 1.5 times the national insurance basic amount (NOK 135 102). You may also use an estimate of your average earnings for the previous three years. The national insurance basic amount, which on 1 May 2015 was equivalent to NOK 90 068, is normally revised in May every year.

Once you first meet the minimum requirements and qualify for unemployment benefit, other income such as unemployment benefit, sickness benefit, and parental and adoption benefit will also be included in the calculation basis for unemployment benefit.

The general rule is that people applying for unemployment benefit must be willing to take any job anywhere in Norway; requirements known as occupational and geographical mobility. For example, if you are unable to practice certain occupations for health reasons, you must obtain a medical certificate to this effect in order to be exempted from that type of job.

Recipients of unemployment benefit must be registered as jobseekers with NAV and must submit an employment status form every 14 days. They must attend meetings at NAV when summoned. 

Temporary loss of unemployment benefit

If you take a new full-time job, you are no longer entitled to unemployment benefit, but are there other circumstances that might also cause you to lose your entitlement?

If it is your fault that you are unemployed, you must normally wait eight weeks from the date on which you submit your claim for unemployment benefit before unemployment benefit is paid. This applies if you left or resigned without reasonable grounds, or if you are summarily dismissed or dismissed from your job due to circumstances of your own fault. What constitutes reasonable grounds will be determined after an individual assessment.

This period is a kind of quarantine period during which you are not entitled to unemployment benefit. These eight weeks come in addition to the three waiting days. However, you must continue to register with NAV and to meet the conditions for entitlement to unemployment benefit during the extended waiting period. This means that you must submit an employment status form and continue to register, otherwise the extended waiting period will be prolonged for as long as you fail to register.

Termination agreements are increasingly used in today's labour market, and represent compensation for having to leave a job. They may, for example, agree that the employee be paid a sum equal to half a year's pay on condition that the employee agrees to voluntarily resign. NAV will convert this sum into monthly amounts equivalent to a monthly wage. This means that the employee will not be entitled to unemployment benefit during those six months. In addition to this will be the notice period, the waiting days, and the extended waiting period if you resigned voluntarily.

During workforce reductions, employees are often offered severance pay if they resign voluntarily, unaware of the consequence this will have on their entitlement to unemployment benefit. In such cases, they should obtain confirmation from their employer that they resigned as an alternative to being dismissed by the enterprise. This will avoid the eight-week extended waiting period.

The unemployment benefit scheme is based on a relationship of mutual trust between the jobseeker and NAV. Anyone who inadvertently or deliberately provides incorrect information or fails to provide information of significance to his/her entitlement to unemployment benefit may be excluded from such entitlement for up to two years.

Unemployment benefit: How much will you receive?

The amount of unemployment benefit you receive is determined on the basis of your earned income and of any other benefits received in the form of unemployment benefit, sickness benefit, parental benefit or adoption allowance; see the National Insurance Act, section 4-11. You may choose between using either the calendar year prior to submitting your claim or the three previous calendar years if this is more favourable.

An unemployment benefit payment covers five days a week, and the daily rate amounts to 0.24 per cent of the unemployment benefit basis; see the National Insurance Act, section 4-12. This gives an average of 62.4 per cent of the previous income before tax. An unemployment benefit basis of NOK 100,000 will therefore result in a daily rate of NOK 240. Income exceeding six times the national insurance basic amount (NOK 540 408) is not included in the calculation of unemployment benefit basis; see the National Insurance Act, section 4-11.

If you support a child under 18 years of age, you will receive child supplement. If both parents receive unemployment benefit, the supplement will only be paid to one of them. The general rule is that the child must reside in Norway.

You will receive holiday supplement (holiday pay) if you have received unemployment benefit for more than eight weeks during the calendar year.

For how long may you receive unemployment benefit?

Essentially, you are entitled to unemployment benefit from the time at which you apply for it. It is therefore vital that you register with your local NAV office as soon as you become unemployed.

You are not entitled to unemployment benefit for the first three days of unemployment, the so-called waiting days; see the National Insurance Act, section 4-9.

The length of your entitlement will depend on how much income you have earned. If you earned income worth at least twice the national insurance basic amount (NOK 180 136) in the previous calendar year or on average in the previous three calendar years before applying for unemployment benefit, you will receive unemployment benefit for a maximum period of 104 weeks. If your income was less than twice the national insurance basic amount, you will receive unemployment benefit for a maximum period of 52 weeks.

Unemployment benefit during layoff

Employees who are laid off are entitled to unemployment benefit under the National Insurance Act, section 4-7. Employees who are laid off are temporarily or fully released from their obligation to work due to a cutback in operations or a work stoppage implemented by the employer. Officially, the employment relationship continues during the layoff period, and the employee still has the right and obligation to return to his/her job at the end of the layoff period.

It is important to distinguish between dismissal and layoff. During a notice period for dismissal, the employer has an obligation to pay wages and the employee has an obligation to work during the notice period stipulated in laws or agreements. During a layoff period, the employee is entitled to receive pay under the Act concerning the Obligation to Pay Wages during Layoffs. Once a notice of layoff expires, a layoff is effected and the employee no longer works, the employer is obligated to pay wages for 10 days in the case of full layoff and at least 40 per cent reduction or working hours. Three waiting days come in addition to the employer's obligation to pay wages.

Unemployment benefit is not intended to subsidise the employer's obligation to pay wages during the notice period, so when NAV processes applications for unemployment benefit, it will assess the legitimacy of the layoff. If a layoff appears to be a case of disguised dismissal on the part of the employer, the employee's application for unemployment benefit will be refused on the basis that he/she is receiving wages or is entitled to them.

As a rule, employees must receive notice of layoff no later than 14 days before a layoff is implemented. In the case of unforeseen events such as fire, flood, etc., the time limit is two days. A notice of layoff must contain a time limit. The employer must also document the reason for the layoff and its expected duration (if possible).

The employer's option to lay off employees is stated in collective agreements or individual employment contracts or is based on non-statutory grounds. The layoff period without pay is normally limited to 30 weeks in an 18-month period.

Employees who participate in a strike or who are affected by a lockout or other type of industrial dispute are not entitled to unemployment benefit. Employees who are laid off due to an industrial dispute at their enterprise may only be entitled to unemployment benefit as long as their wages are not affected by the outcome of the dispute. NAV must take several considerations into account when assessing such cases. Whether an employee is organised or not is immaterial; the focus of the assessment will be the same: will the employee's wages be affected by the outcome of the dispute?

Employees in public enterprises are normally not entitled to unemployment benefit when they are laid off, though an exception applies to public enterprises that operate on the same principles as private enterprises and that are organised as independent entities. However, this restriction does not apply if a layoff is due to fire, accident, natural disaster or other unforeseen event, nor if a layoff is due to an industrial dispute.

How to apply for unemployment benefit

In order to be entitled to unemployment benefit, you must first register at your local NAV office. Normally you will need to complete two standard forms: a registration form stating your education and work experience and an application form for unemployment benefit. Both forms must be completed and submitted to NAV along with the necessary documentation. Applications for unemployment benefit cannot be processed before all the necessary documentation is submitted.

Contact your local NAV office for more details regarding other documentation.

Useful tips

If you become unemployed, contact NAV immediately to register and to obtain an application form for unemployment benefit.
Be alert when it comes to termination agreements and grounds for dismissal; they may affect your entitlement to unemployment benefit.

Submit the employment status forms regularly, correctly completed and on time. This is often the only information NAV has on your situation.

Do not despair if you have to contact NAV to apply for unemployment benefit during a transition phase; most people find a new job in the space of three to six months.

Spend time on preparing a good CV that not only says something about what you have done, but also about what you are capable of doing.

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