Minister: Covid crisis unemployment should not impact parental benefits
A government cabinet meeting approved a proposal to draft an amendment to the Family Benefits Act which would mean unemployment caused by the coronavirus crisis would not impact on future parental benefits.
The proposed amendment was put forward by Minister of Population Riina Solman (Isamaa) and must be submitted to the government by November 30.
The aim of the changes is to stop future parents from putting their plans to have children on hold. Solman said the amendment is needed "otherwise, the spread of the coronavirus and its socio-economic impact will affect family planning choices and jeopardize the confidence of young families for many years to come".
According to the proposed draft, parental benefit for the next three years would be equal to the average salary before the loss of a parent's job. The changes are being proposed for a limited period and would affect parents whose children will be born between January 1, 2021 and December 31, 2023.
The calculation period for parental benefit for children born during this period includes March 2020, when the emergency situation was declared, and the period of subsequent recession.
The amendment is based on the experience of the previous economic crisis, when the economic recovery and the normalization of the unemployment situation took about three years.
"Unemployment due to the coronavirus crisis should not reduce the amount of parental benefit paid out. This is an important signal that the state can and must send to young families. Children are very welcome in their families, and temporary unemployment due to the global coronavirus crisis should not affect these decisions," said Solman.
"One of the lessons of the previous crisis was the emigration of thousands of people from Estonia. We need to learn from our mistakes and take care of our families."
The parental benefit sum is based on earned income for which an employer has paid social tax.
When calculating the amount of parental benefit the government first subtracts the nine months preceding the month of birth of the child and then calculates the amount of benefit on the basis of income earned over the course of the 12 months preceding those nine months.
When calculating the parental benefit amount, annual gross income will be added up and then divided. Sick leave, care leave, maternity leave, or adoption leave from 365 days are all included.
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Editor: Helen Wright