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I am seeking help with the construction of the part in bold.

Act B replaced Act A. Act A was based on weeks, and Act B is based on hours.

The entrance requirement was significantly increased [under Act B] from 700 hours to 910 hours of insurable work; under the old Act [Act A], this would be equivalent to an increase from 20 weeks to 26 weeks of full-time work.

Now, a native speaker suggested that "would have been" would be a better fit. Like this:

(1) ...under the old Act [Act A], this would have been equivalent to an increase from 20 weeks to 26 weeks...

This makes sense to me as the old act has been replaced by the new one. In other words, the old act is dead. Compare: "Your father would have been proud..." that is the father is dead now.

My problem is with what follows equivalent, a change in the number of weeks.

(2) ...under the old Act [Act A], this would have been equivalent to increasing the requirement from 20 weeks to 26 weeks...

Neither 1 nor 2 sounds right, it does not feel like how someone would speak. Which one is idiomatic?

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I think that you are right that both sound slightly odd, but the reason is to do with the use of "under". In this context "under" means "in accordance with the provisions of" but it is being used to refer to something that is not covered by the old Act, and so cannot be in accordance with its provisions. Matters are also confused a bit by a "this" that is not linked strongly to a preceding thought.

I would amend it as follows: "...insurable work (equivalent to an increase from 20 to 26 weeks as defined by the old Act)."

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