Unemployment Fund Diverted to Employers as Jobless Face Exclusion

The Unemployment Insurance Fund, originally designed to support the jobless, has increasingly turned into a financial pipeline for employer incentives, experts warn. A new government regulation now allows 50% of the fund’s revenues to be allocated toward employer support, up from the previous 30% cap—a move that has intensified criticism over misuse of resources.

According to İŞKUR data, while the fund’s size surged by 82% in 2024—reaching ₺359 billion, only ₺45.7 billion went directly to unemployed citizens. Meanwhile, ₺71 billion was transferred to employers under the guise of subsidies and incentives.

Only 14.2% of Officially Unemployed Receive Benefits

Despite a swelling jobless population, only 14.2% of registered unemployed individuals were granted unemployment benefits in 2024. In the first five months of 2025, just 48% of applicants were approved for aid. Critics say the fund’s primary beneficiaries are now employers, not those it was designed to help.

“This fund has turned into a cash cow for employers,” said economist İnan Mutlu.
“Instead of expanding eligibility for the jobless, the government expanded employer access.”

Employer Support Now Dominates Fund Spending

Breakdown of 2024 spending reveals that of the ₺174 billion spent by İŞKUR:

• ₺71 billion supported employers directly,

• ₺45.7 billion went to unemployed workers,

• ₺57.2 billion was spent under the “job-creation and activation programs” heading.

This means over ₺124 billion was directed toward employers or state-aligned programs, while only a third was allocated to the unemployed themselves.

Further support for businesses included:

• ₺30.8 billion in active labor market programs,

• ₺22.1 billion via on-the-job training schemes,

• ₺125.8 million from the Wage Guarantee Fund for firms under legal protection (concordato).

“Sweet Revenue Stream” for the State

Economist İbrahim Kahveci criticized the fund’s transformation into a quasi-tax revenue tool:

“This fund no longer supports the jobless—it finances state spending. If unemployment were truly being addressed, the money would fund factories and permanent jobs.”

Kahveci noted that initially only 5% of the fund could be used for employer-related purposes. Now, the figure has surged to 50% via a presidential decree published on July 13, 2025.

“This money comes from workers’ wages, yet it’s being rerouted to everyone but the unemployed. It’s now seen as a ‘sweet source’ of state income,” he said.

Broader Jobless Numbers Paint a Darker Picture

Despite improvements in narrow unemployment rates (now 8.4%), the broadly defined unemployment rate—which includes discouraged workers and those underemployed—has soared to 31%. According to TÜİK’s May 2025 Household Labor Force Survey, Turkey now has 12.6 million broadly unemployed citizens, a 2.47 million increase from May 2024.

Only Half of Applicants Received Aid Since 2002

From 2002 to 2025, 21.6 million people applied for unemployment support. Only 11.6 million were approved, meaning nearly half of all applicants received no aid. Over 23 years, total disbursements to the unemployed amounted to just ₺137.2 billion—far less than the ₺124.2 billion handed to employers in just the past year.