Finance minister: Pensions to rise in 2017

Euros. Photo is illustrative. (Toomas Huik/Postimees/Scanpix)
10/29/2016 10:30 AM
Source: BNS
Category: Business

The average old age pension in Estonia will be raised to €416 per month next year, Minister of Finance Sven Sester (IRL) said presenting the draft of the 2017 state budget to the Riigikogu earlier this week.

"Pensions will rise along with wages. The budget sets aside 1.67 billion euros for pensions. The average old age pension will rise by 20 euros to 416 euros [per month] and remain tax-free also in the future," Sester said in the Riigikogu on Wednesday. In addition, the state would pay a special allowance of 115 euros per year to pensioners living alone.

Money available to the Health Insurance Fund would rise by 66m million to 1.09 billion euros next year as a result of growing wages as well as social security contributions pegged to wages.

"Claims that lowering social tax would reduce the income of the Health Insurance Fund are misleading and incompetent, since the law contains a compensation formula that makes sure changes in laws will not affect the income of the Health Insurance Fund. Besides, the construction of primary-level health care centers with the help of European Union funds will swing into motion next year," Sester said.

To support healthier lifestyles, the Riigikogu is also working on a bill that would allow employers to pay up to 100 euros per quarter toward the costs of health-related activities of their employees from 2018 without it being taxed as a fringe benefit.

Editor: Aili Vahtla

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