"Our goal is to prevent unemployment and support those in the most difficult situations," Gert Tiivas, head of the Unemployment Insurance Fund, said on Wednesday on Vikerraadio's "Vikerhommik." "We're starting with young people. Today, one in five young people is unemployed. Research shows that one of the key factors is the nature of their first work experience," he added.

Since youth summer jobs or camps (malev) are among the first opportunities for young people to gain work experience, efforts are being made to increase the number of participants, as well as to expand other options, such as internships, and to create job opportunities in cooperation with employers, Tiivas said. He also emphasized the importance of improving access to relevant information.

"We need to engage with young people so we don't end up with a generation that's never worked. We need to speak their language and meet them where they are — at school, online. We're also hiring young people to work at the Unemployment Insurance Fund who can communicate with them, rather than having someone like me, a 50-year-old, do it," he said.

Tiivas noted that unemployment in Estonia has declined in recent years and currently stands at around 43,000. However, most employers still say it's difficult to find workers with the right skills.

"This is one of our main priorities — making sure people gain the skills they need. Often, these are very basic skills, like IT skills," he explained. In addition, the Unemployment Insurance Fund is working to identify obstacles that prevent people from entering the workforce. "For example, if someone needs to care for a loved one or struggles with transportation — we need to understand these issues and address them," Tiivas said.

Commenting on recent layoffs at the Unemployment Insurance Fund. where about one-fifth of the staff was let go, Tiivas said the changes were driven partly by the declining number of unemployed people and partly by the fact that many services and interactions can now take place online or by phone. This allows more time for in-person meetings at the Fund to focus on meaningful support.

Another reason for the cuts, according to Tiivas, was an excess of management roles within the organization, which enabled a reduction of up to one-third of those positions.

On Tuesday, the Fund's supervisory board approved its budget for next year, which totals nearly €1 billion.

"That's a substantial amount of money we've been entrusted with. Clients will receive all of their benefits and allowances. Some of them will even increase slightly due to indexation. The unemployment allowance will come to an end, as it has been replaced by the basic unemployment benefit," said Tiivas.

Regarding recent resignations from the Fund's management board — where only two members remain — Tiivas said a recruitment process is currently underway and it should become clear who will be joining the board by January.

Operating expenses down by €9 million for 2026

In the Unemployment Insurance Fund's 2026 budget, approved by its supervisory board, revenues are projected at €989.2 million and expenditures at €992 million.

Compared with the 2025 budget, revenues are set to rise by €11.5 million (+1.2 percent) and expenditures by €21.4 million (+2.2 percent). The increase in spending is primarily due to a rise in benefit payments, driven largely by the state indexation of the work ability allowance. Meanwhile, spending on labor market services and operating costs will decrease (by 7.6 percent and 13.8 percent, respectively). The projected deficit for 2026 is €2.8 million, the fund's spokesperson said Wednesday.

"Major reforms are underway at the Unemployment Insurance Fund aimed at making the organization more efficient and ensuring that resources are used more effectively and with greater focus. Every euro spent on labor market services must create value, avoid duplication with other state services and support those most in need," said Erkki Keldo (Reform), minister of economic affairs and information technology and chair of the fund's supervisory board, in a press release.

The fund's total expenditure on insurance benefits and allowances in 2026 is projected to be €861.6 million. The largest share — €526.2 million — is allocated to work ability allowances. A total of €74.3 million is budgeted for labor market services.

Spending on insurance benefits will amount to €239.2 million in 2026, an increase of 21.8 percent, largely due to the introduction of the new basic unemployment insurance benefit. Starting January 1, the Unemployment Insurance Fund will begin paying this basic benefit and will phase out the current unemployment allowance.

"Although changes to the unemployment benefits system and the rise in indexed benefits will temporarily push the budget into deficit in 2026, forecasts indicate that unemployment will decline in the coming years and the fund's expenses with it," Keldo noted.

Gert Tiivas said the organization is undergoing a transformation. "Our new strategy sets a clearer focus: reducing youth unemployment, developing people's skills and helping people return to work more quickly through cooperation with employers. We're becoming more efficient and cutting operating costs so we can redirect more resources toward helping people find jobs in a changing labor market," Tiivas said in the press release.

Operating expenses for 2026 are projected at €56.1 million, down €9 million (–14 percent) compared with the current year. By the beginning of 2026, the fund's workforce is expected to include 760.5 full-time positions — 17 percent fewer than at the start of this year.

The unemployment insurance premium rate will remain unchanged next year at 2.4 percent, with employees contributing 1.6 percent and employers 0.8 percent.

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