Ghent System definition
The Ghent system refers to arrangements where responsibility for paying unemployment benefits is undertaken by trade unions rather than government agencies or departments acting on behalf of the government.
The system is named Ghent because it was first implemented in the city of Ghent in Belgium. Today it’s popular in Scandinavia, including in Denmark, Sweden and Finland as well as Iceland. Although it originated in Belgium, the country now has a joint system where funds are distributed by both government and labour unions.
In most cases, funds held by the trade unions for distribution are regulated or subsidised by the government. The amount received by individuals will typically depend on previous earnings.