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Women on parental leave face obstacle applying for home loans

Gender and Equal Treatment Commissioner Liisa Pakosta.
Gender and Equal Treatment Commissioner Liisa Pakosta. Source: (Postimees/Scanpix)

Gender and Equal Treatment Commissioner, Liisa Pakosta, received a complaint by a woman on parental leave who was not granted a home loan on terms equal to those offered to others. The bank said as the state could not guarantee kindergarten placement of the child later on, the parent could end up in a financially difficult situation, which was their reason for rejecting the application.

The commissioner was able to confirm that the legal situation and the facts of the case supported the bank’s position, and instead took the position that local government was to blame that couldn’t guarantee the child’s placement in kindergarten.

Pakosta told ERR’s Estonian news portal that the principle of equal treatment meant that nobody could be discrimated against because of their family status and obligation, which is why they had started an investigation in the matter.

While they had checked the situation with the bank, they had asked around on social media whether or not there were similar cases, and indeed there turned out to be plenty of people in a similar situation.

Not the bank’s fault

Pakosta pointed out that following the maximum 18 months of parental leave, the time it took a parent to get back to work often depended on how long local government took to provide kindergarten placement. Because of this, parents with a loan to pay off could get into financial trouble, and the bank needed to take this into account when making the decision whether or not to grant a loan.

This meant that the bank wasn’t to blame, as it was merely dealing with a risk that was created because of a gap due to the time a municipality or city took to provide a spot for the child in a kindergarten.

The office of the commissioner had then sent out a letter to all local councils in the country, Pakosta said. In it, it was explained that in this case it was local government that discriminated the parents in question, though not directly. Still, the fact that kindergarten placement depended on availability and not on the need of parents for a place for their child meant that there was inequality created between those that got in, and those that didn’t.

Possible solution could be municipality’s guarantee

Pakosta suggested that to solve the problem, local councils could offer the affected parents a letter of guarantee for the bank. In this letter, it would formally guarantee that it would offer the parent a kindergarten spot, as it was legally required to do.

The commissioner said she had also informed the Ministry of Education and Research, as well as the Ministry of Social Affairs, calling on them to find a solution for this problem based in the activity of local government. The Estonian Banking Association had also been informed of the problem, and asked to tell its members to direct parents in such a situation to their local councils to ask for a guarantee.

Editor: Editor: Dario Cavegn

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