Around half 2021 coronavirus supplementary budget used up

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Coronavirus restrictions signage, in three languages. Source: Siim Lõvi /ERR

Around half the €260 million in funds allocated for 2021 in a supplementary budget aimed at mitigating the effects of the coronavirus pandemic had been used up as of the end of June. Hundreds of millions of euros in other support measures has also been used.

The largest single component was made up of support measures for the tourism sector, under the direction of the Ministry of Economic Affairs and Communications, while a large proportion was made up of healthcare-related costs, channeled via the social affairs ministry. Unemployment costs also rose, and funds from the supplementary budget were used for this purpose as well.

While the supplementary budget was originally issued in April 2020 with the arrival of the first coronavirus wave, its measures continued into 2021 and are now set to remain in place to year-end.

Tourism

Nearly €50 million in crisis support was channeled via Enterprise Estonia, also known as the EAS, in the first half of this year, mainly to companies engaged in tourism, retail and commercial regular services.

The organization has had to restructure services and benefits within the existing budget, including setting up remote working facilities.

Unemployment Insurance Fund

Registered unemployment has increased by around 13,000 since the crisis began, though Lauri Kooli, communications specialist at the Unemployment Insurance Fund (Töötukassa) said that it was: "Not possible to put a figure on it. However, it can be said that unemployment has risen, and with it, the cost [to the Unemployment Insurance Fund]."

Lauri Kooli, communications specialist at the Unemployment Insurance Fund, said that 2021 cannot be directly compared with previous years, as at the beginning of the year the amount of unemployment benefit increased, while last August the system of paying unemployment insurance benefits also changed. 

The Unemployment Insurance Fund paid out €71.3 million in benefits, of which €55.5 million came from the supplementary budget, while the rest came from the fund's own coffers.

In January and February this year, the unemployment fund paid out €20.4 million in wage support to businesses which had had to close due to the pandemic. The closures were the result of stricter government restrictions and mostly affected businesses in the accommodation, hospitality and catering sectors – predominantly in Harju and Ida-Viru counties.

State support to self-employed people totaled €353,000.

Health Insurance Fund and health sector costs

The Health Insurance Fund (Haigekassa) had €213 million allocated to it from the supplementary budget, in order to cover coronavirus-related costs. €92.7 million of this was used and €120.5 million went unused, and was transferred back to the state budget at year end 2020, head of the fund's finance department Riho Peek said.

As to 2021, Peek said that: "The biggest difference from last year primarily concerns paying for hospital treatment, since during the second wave, significantly more people were admitted to the hospital than last year during the first wave," Peek said.

The fund paid out close to €5 million towards treatment and testing costs in 2020, compared with €31 million this year.

Riho Peek said that his authority made use of both its own budget and the supplementary budget, with €100 million coming from the latter.

The health insurance fund's expenses in the first half of 2021 is estimated at €88 million, with €31 million of this relating directly to COVID-19.

Of this €31 million, €10.4 million was spent on personal protective equipment and €11.5 million on sick pay.

Vaccinations cost €4.7 million over the same period, and other coronavirus pharmaceuticals costs came to €3.4 million.

In the first half of 2020, by comparison, the health insurance fund's costs relating to the virus were €72 million; just under 65 percent of the €260 million allocated to costs was utilized, with activities mainly directed at the readiness of hospitals and to compensate for fixed costs related to the suspension of scheduled treatments, which were off the table during the emergency situation the government declared mid-March to mid-May.

Extraordinary expenses and Enterprise Estonia

The supplementary budget also contained a component set aside towards extraordinary expenses, a potential third wave and also for the release of funds from the Estonian pension system – which was liberalized via a piece of legislation which pre-dated the arrival of the pandemic. These funds, totaling €229.6 million, have not yet been utilized.

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Editor: Andrew Whyte

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