Training loan from the Labour Fund

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Name of the instrument - Local language
Pożyczka szkoleniowa z Funduszu Pracy
Name of the instrument - English translation
Training loan from the Labour Fund
Scheme ID
175
Country
Poland
Reporting year
2020
Type of instrument
Loan
Sub-type of instrument
Loan specific for (a subfield of) adult learning
Type of entry
Single instrument
Short description

This training loan is available to the unemployed, job seekers, and employees aged 45+ registered in the district job centre. The loan is fully subsidized (zero interest rate and grace period) by the state (Labour Fund). Since Labour Fund is a public fund, in practice the State does not collect the interest rate from the learner until the loan is repaid. If a learner uses a loan for a purpose other than this specified in a contract or does not start or finish the training programme, the learner is obliged to pay the interest rate (which was up to 3.6% in 2020). The maximum amount of the loan is 400% of the average salary. The loan repayment starts immediately after graduation. The maximum period of the loan repayment is 18 months after completing the training. There is no loan forgiveness. There is no limitation to re-use the loan.

Level of operation
National
Name of a part of the country
Not applicable
Name of the region (for regional instruments)
Not applicable
Name of the sector (for sectoral instruments)
Not applicable
Relevance
Further instrument
Act on employment promotion and labour market institutions, Art 42
Objective(s) and target(s)
The role of training loan is to develop an individual's skills by participating in a training programme in order to find employment or to maintain current job position
Year of implementation
1997
Year of latest amendment
2019
Operation/management
District job centres play a key role in managing the instrument. They collect and assess applications forms; grant loans; sign the contract with the learners; agree on the mode of loan repayment; transfer money to learners; control the training provision.
Eligible group(s)
The following categories of individuals, registered in the district job centre, are eligible to receive co-financing of post-graduate studies: a) the unemployed; b) employees aged 45 years and more; c) jobseekers, who fulifll at least one of the following criteria: - are in the period of notice related to an employment relationship or service relationship for the employer's fault, - are working for an employer in the state of insolvency or liquidation - are receiving social allowance payable during the miner's leave or the miner's social benefit - are participating in an individual integration programme or classes of the Social Integration Centre - are reservists - are receiving a training pension - are receiving a training allowance paid by the employer - are living in the household with a farmer or a farmer's spouse, looking for a job outside agriculture and subject to social insurance - are foreigners, e.g. a national of a European Union member state or a state which executed relevant agreements with the European Community, a refugee, a person holding a permanent residence permit or a settlement permit.
Group(s) with preferential treatment
No preferential treatment
Education and training eligible
Education and training leading to skills/competencies/knowledge needed to take up/maintain employment or self-employment, including: - General courses (e.g. language courses); - Occupational courses connected to the present economic activity of the participant; - Occupational courses of all kinds.
Source of financing and collection mechanism
Labour Fund (up to 400% of average salary) and individuals (if the total cost of training exceeds 400% of average salary) are the funding sources.The state provides the loan. The district job centre is responsible for the assessment of the application form submitted by an individual, signing a contract, transferring money to the individual.
Financing formula and allocation mechanisms
The state provides the loan. The district job centre is responsible for the assessment of the application form submitted by an individual. If the assessment is positive, the contract between the district job centre and a learner is signed (the learner is obliged to complete the training course listed in the application form). If a learner uses a loan for a purpose other than this specified in a contract or does not start or finish the training programme is obliged to pay the interest rate (which was up to 3.6% in 2020). The maximum amount of the loan is 400% of the average salary. The loan can be disbursed in one payment or in installments. The loan repayment starts immediately after graduation. The maximum period of the loan repayment is 18 months after completing the training. There is no loan forgiveness. There is no limitation to re-use the loan.
Eligible costs
Eligible costs include: tuition fees, insurance, travel and accommodation costs, physician and/or psychological tests, if necessary
Volumes of funding
Not available. The Ministry of Economic Development, Labour and Technology does not collect any details with regard to training loans, except the number of granted loans per year.
Beneficiaries/take up
Total number of beneficiaries:2017: 22018: 32019: 4
Organisation responsible for monitoring/evaluation
District job centres
Monitoring/evaluation reports available
Not available
Most relevant webpage - in English
https://lang-psz.praca.gov.pl/en/dla-bezrobotnych-i-poszukujacych-pracy…
Most relevant webpage - local language
http://psz.praca.gov.pl/-/14193-pozyczka-szkoleniowa
Recent changes

14-07-2019. The amendment of the Act on employment promotion and labour market institutions (being in force since 14th June 2019) canceled the profiling of the unemployed. As a result, the training loan became available for all unemployed (previously these instruments were available only to these individuals classified to the II profile of the unemployed). This amendment was of a systemic nature, not related only to training loan. The unemployed profilling, introduced in 2014, appeared to be inefficient which led to its cancelation in 2019.

Recent changes in response to COVID-19

No changes

Sources
Act on employment promotion and labour market institutions
Website of PES: http://psz.praca.gov.pl/-/14193-pozyczka-szkoleniowa
Website of district job centre in Belchatow http://pupbelchatow.pl/dla-bezrobotnych-i-poszukujacych-pracy/finansowe…
Exemplary application form for training loan http://pupbelchatow.pl/dla-bezrobotnych-i-poszukujacych-pracy/finansowe…
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