More and more people are making a conscious choice to be unemployed

Not everyone will return to work when the summer holiday season ends. There are currently around 157,000 unemployed people registered in Lithuania, of whom around 81,000 are receiving unemployment insurance benefits.

These statistics from the Employment Service not only show the pulse of the economic situation, but also reveal a new trend: some people are deliberately choosing temporary unemployment as a way to relax or to pursue personal dreams. However, employers and legal experts are very cautious about this trend – voluntary unemployment can also hide cases of abuse.

„A kind of fashion for voluntary career breaks is growing in Lithuania. Some people do not want to commit to an employer and rest only during their accumulated holidays, while others are tempted by the good opportunity to live abroad at a cheaper price as the cost of living in Lithuania rises. Since unemployment benefits can be quite solid in the first six months, young people are increasingly asking the question "why not?", says expert Eglė Staniulionė.

She says the reasons behind this decision vary. Some people genuinely want to take a break, spend more time with their family, travel, pursue their dreams or look for a new line of work. Others – without significant financial needs – choose to live more modestly, receive unemployment benefits and just wait for the right opportunity to re-enter the labour market.

„It happens that people do see it as an investment. They say, I worked, I paid taxes, and now I'm getting back what I paid. People know exactly how to get the benefit, how long they will pay it for, and they calculate that it will be enough to meet their needs," Staniulionė notes, warning that a system that allows for abuse creates long-term unemployed people who lose their skills and, in the long term, their desire to work at all.

In 2024, the unemployment rate in the European Union (EU) stood at just 5.9%, the lowest since 2009. In Lithuania, unemployment was slightly higher – around 7.1 percent. The most striking is the youth unemployment rate: in 2024, it was 14.07% in Lithuania, compared to 14.9% in the EU.

Often the issue of the free choice not to work becomes an example of abuse of the social system, notes Tomas Bagdanskis, a lawyer and managing partner at WIDEN“.

„Sometimes an employee asks the employer to show his severance pay as a bonus – this way he can receive unemployment benefits. Otherwise, a person who has received, for example, 2 months' severance pay at the rate of average earnings will only be entitled to unemployment benefit from the third month if he or she has not found a new job within that time. Another situation – a person simply does not want to work in the summer, even though he could easily find a job. Formally he is unemployed, but in fact he is – abusing his right to receive the benefit“, – says T. Bagdanski.

Some people do not even have an incentive to work, he says, because the unemployment benefit is barely less than the minimum wage. Additional benefits – such as heating compensation – make it even more attractive to stay on the Employment Service's lists.

„The Employment Service shares that there are cases where workers who have been referred simply ask to write that they are not fit for work so that they can continue to receive the benefit. And even if such people refuse the job offer twice, they find ways to stay on the welfare system," notes an employment law attorney.

He stresses that it is too naive to hope for awareness alone, and that other solutions should be sought. „One could increase the required length of service, reduce the amount of the allowance or shorten the payment period so that the temporary allowance provides an incentive to look for a job rather than embark on a foreign trip. One idea – is to make the receipt of the allowance more closely linked to participation in training or retraining programmes“, – suggests T. Bagdanskis.

In Lithuania, unemployment benefits consist of a fixed component and a variable component, which depends on past earnings. The variable part amounts to 38.79% of a person's average insurable income in the first three months, 31.03% in the fourth –sixth month and 23.27% in the seventh –ninth month.The fixed part amounted to 241.54 euros in 2025.

For example, if a person's average insurable income was €1,000, they would receive around €629 for the first three months, then the amount would fall to €551 and €474 in month 7–9. From the tenth month onwards, only the fixed part would be paid – €241.54.

However, even if you had a much higher salary before the incapacity for work, there is a ceiling on the benefit. The maximum amount of unemployment benefit depends on the country's average wage (AWW) for the previous quarter. Thus, the maximum unemployment benefit in the first quarter of 2025 was €1,294.56.