Exempt amount

The exempt amount of earned income has been removed on 1 April 2024. ‘Exempt amount’ means the amount that you can earn without its affecting your earnings-related allowance. We adjust your earnings-related allowance by deducting 50% of the portion of your income that exceeds the exempt amount. There is no exempt amount in the context of the alternation allowance. Until 31 March 2024 the exempt amount was EUR 300 for a one-month application period and EUR 279 for a four-week application period. The exempt amount is deducted from the income on which you pay tax at source, i.e. your gross income. If your taxable income does not exceed the exempt amount, you will receive your full earnings-related allowance. Remember to always declare your income in your application even if it does not exceed the exempt amount. There is an exception to the rule about the exempt amount: There is a cap on the amount of the adjusted allowance. If your income is equal to or greater than the wage on which your earnings-related allowance is based, we cannot pay you an adjusted allowance. The exempt amount does not apply in such circumstances.  

Exempt amount of earned income has abolished on 1 April 2024

The exempt amount of earned income has been removed on 1 April 2024. In the future, half of the earnings before taxes paid during the application period for earnings-related unemployment allowance would reduce the amount of allowance. For example, if a person earns €500 doing gig work, the full earnings-related unemployment allowance paid for the whole month is reduced by half of this amount (€250). Until 31 March 2024, the exempt amount is €300 for a one-month application period. Half of the earnings in excess of the exempt amount are deducted from the earnings-related unemployment allowance. The abolition of the exempt amount applies to application periods starting on or after 1 April 2024. Example after the exempt amount is abolished, with an application period of one month: You are applying for earnings-related allowance for the period 1–30 April 2024. Your full earnings-related allowance is 70 euros a day. On 15 April 2024, you are paid wages of 500 euros before taxes from working gigs. Your earnings-related allowance is reduced by an amount corresponding to half of your wage income (€250). This amount is divided by the number of workdays in the adjustment period (21.5 days). This amount (€11.60) is deducted from your full daily earnings-related allowance. After the deduction, your earnings-related allowance is €58.40 a day. Example after the exempt amount is abolished, with an application period of four weeks: You are applying for earnings-related allowance for the period 15 April to 12 May 2024. Your full earnings-related allowance is 70 euros a day. On 30 April 2024, you are paid wages of 500 euros before taxes from working gigs. Your earnings-related allowance is reduced by an amount corresponding to half of your wage income (€250). This amount is divided by the number of workdays in the adjustment period (20 days). This amount (€12.50) is deducted from your full daily earnings-related allowance. After the deduction, your earnings-related allowance is €57.50 a day. Example with the exempt amount of 300 euros still in place, with an application period of one month: You are applying for earnings-related allowance for the period 1–31 March 2024. Your full earnings-related allowance is 70 euros a day. On 15 March 2024, you are paid wages of 500 euros before taxes from working gigs. The exempt amount of 300 euros is applied to the wages. Your earnings-related allowance is reduced by an amount corresponding to half of your wage income after applying the exempt amount (€100 of €200). This amount is divided by the number of workdays in the adjustment period (21.5 days). This amount (€4.70) is deducted from your full daily earnings-related allowance. After the deduction, your earnings-related allowance is €63.70 a day. Example using an exempt amount of 279 euros, with an application period of four weeks: You are applying for earnings-related allowance for the period 18 March to 14 April 2024. Your full earnings-related allowance is 70 euros a day. On 31 March 2024, you are paid wages of 500 euros before taxes from working gigs. Since your application period started before 1 April 2024, the exempt amount of 279 euros is applied to your wages. Your earnings-related allowance is reduced by an amount corresponding to half of your wage income after applying the exempt amount (€110.50 of €221). This amount is divided by the number of workdays in the adjustment period (20 days). This amount (€5.50) is deducted from your full daily earnings-related allowance. After the deduction, your earnings-related allowance is €64.50 a day.