Coalition Partners Agree on Parental Pension
After some doubt about the complexity of compensating people at career's end for having children, the parental pension has been approved by the coalition in a form that can be sent to Parliament.
IRL faction member Margus Tsahkna said via a statement from the party on October 10 that current and future parents would receive the benefit, which was one of the party's campaign pledges.
"IRL wants to bring about an end to a situation where raising children can have a negative impact on the size of a pension. It is inevitable that one parent will be sidelined from work for some time after a child is born and this can reduce the amount of his or her future retirement pension."
"Due to Estonia's demographic situation we need solutions that incentivize giving birth and child rearing. The parental benefit is completely novel in the European context as a supplement to pensionable years or retirement funds," said Tsahkna.
Time spent caring for children up to the age of three will be counted toward the amount of time for which the parent is eligible to receive a pension.
Specifically, for parents of children born in 2013 and later, the state will contribute an extra 4 percent on the average salary subject to social tax in this period under the second pillar of the pension scheme.
Parents of children born from 1991 to 2012 and parents of later children who did not join the funded pension will receive three years of credit toward their pension, which amounts to just over 13 euros a month. Parents of children born before 1991 will receive an extra 4.3 euros a month.
Kristopher Rikken