Government confirms €20 pension increase for 2023

Pensioners. Source: Siim Lõvi /ERR

The government approved an extraordinary €20 pension increase starting from the beginning of 2023. The increase of the basic amount of the pension sum will improve the livelihoods of more than 321,000 pension recipients and over 3,200 national pension recipients.

Minister of Social Protection Signe Riisalo (Reform) said that: "The decision to carry out an extraordinary pension hike was made in the state budget strategy at the start of this year when the economic forecast estimated that there will soon be a need for cost-cutting, therefore, we decided to postpone the extraordinary pension hike until the start of 2023 -- the same time when the basic income tax exemption for retired recipients of the average pension steps into effect."

"The combined impact of these decisions will improve the coping of all pensioners, and what I deem most important is that it will improve the situation of pensioners who do not work and received a smaller pension -- it will be boosted by the extraordinary rise in the base amount of the pension," Riisalo went on.

The basic part of the pension is currently €235 for all pension receivers. Qualification period, insurance and common parts are added, which are different for everybody.

After the extraordinary pension increase, the pension sum for a person with a qualifying period of 44 years will be €611. In 2021, it was €552.38.

According to estimates, pensions will increase by €38 in 2022, which will make the average pension €591. The predictions also show that the average pension will be €654 in 2023, meaning pensions will increase by €100 for the average pensioner by April 1 2023.

Next year, the pension of a pensioner living alone will increase from €115 to €200. This will be paid in October to pensioners who live alone and whose monthly pension is less than 1.2 times the average pension, which in 2021 is €636.

Increasing the basic part of the pension will decrease the relative poverty rate of pensioners by 1.6 percentage points. Although one percent of Estonian pensioners are living in absolute poverty, the relative poverty rate is highest among pensioners aged 65 and above.

According to data from 2019, 41.4 percent of people aged 65 and above and 76.8 percent of pensioners living alone are living in relative poverty and their income is less than €611.

National pension are for people who do not have a high enough qualifying period, which is 15 years. The rate of the national pension is €255.18.


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Editor: Roberta Vaino

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