Work ability reform takes effect
On Friday, the government’s work ability reform entered into force. It brings a new law as well as changes to dozens of existing pieces of legislation.
The government’s work ability reform that entered into force on Friday brings with it dozens of new legal acts. While its center piece, the new Work Ability Allowance act, has the aim to bring as many people with reduced ability to work as possible into the labor market and guarantee them an income, there are some 40 existing laws that change as well.
Changes in the income and social tax laws are aimed at reducing the amount of paperwork employers have to put up with. Where businesses that employ people with a reduced ability to work previously had to submit an application for the state to pay their social tax every month, a single application now takes care of the issue.
Prime Minister Taavi Rõivas (Reform) called the package one of the biggest and most important reforms in recent years. It would bring back thousands of people to the labor market, which is why he expected state institutions to work very hard to implement it seamlessly.
According to Rõivas, from now on people’s ability to work, not their inability, will be assessed. “Every person that’s helped to start working again in the course of the reform is a personal victory for them as well as for the Estonian economy,” he said.
He added that around 40,000 people had already indicated that they would like to return to the labor market, and entrepreneurs had also shown readiness to employ people with limited work ability.
As of January 2016 there were 106,000 people permanently incapable to work in Estonia between the age of 16 and 62, which is one in every eight of the working-age population.