Reform, Center, SDE election pledge: State pension at least €1,000 a month

Pensioners at a park in Lasnamäe. Photo is illustrative.
Pensioners at a park in Lasnamäe. Photo is illustrative. Source: Ken Mürk/ERR

The Reform Party has pledged to raise monthly state pensions to €1,000 per month by 2027, as has the Center Party, while for the Social Democratic Party (SDE) the promise is even higher, to €1,200 per month, ERR reports.

The Reform Party election manifesto also contains a promise to keep average pensions free of income tax, and to raise average pensions by €400 over a four-year period.

The party's manifesto states that: "As of January 1, 2022, the average pension in Estonia stands at €596. By January 1, 2027, the average pension must stand at least €1,000 per month."

Additionally, the Reform Party has pledged to change the allowance granted to pensioners living alone, into a monthly pension supplement, for people aged 80 and over.

Center's manifesto meanwhile contains a pledge to boost average old-age pensions via indexation and extraordinary pension rises, to a minimum of €1,000, by 2027.

"To accomplish this, the base component of pensions must be increased by at least €50 each year, the average old-age pension must be kept tax-free, and dental benefits to the elderly must rise to €170 per year," Center's manifesto states.

SDE would raise the old-age pension to €1,200 a month, and to a level not less than 50 percent of the average monthly wage.

"We will triple the disability allowance for pensioners," the party's election program states.

"We will set up a minimum pension floor of €400 [per month], and not less than twice the subsistence limit. We will also establish an occupational pension," SDE's manifesto states.

The Conservative People's Party of Estonia (EKRE) states that it would provide pensioners with a "13th month" pension, in order to bridge the gap between quality of life and income brought about by inflation. EKRE vice-chair Henn Põlluaas told ERR that the party also supports a pension increase, but was unable to say what that increase might be.

Former Isamaa political party member Liisa Pakosta, now running with Eesti 200, told ERR that if that party entered into coalition, pensions would certainly rise.

She said: "Specifically, thanks to indexation, pensions rise every year on April 1 to the extent to which wages and prices have risen in the meantime. We will add to this the income tax exemption for the average pension, which would lead to an average pension increase of more than €100 a month already this year. If the rise in wages and prices continues, then the pension rise becomes a self-fulfilling prophecy, though unfortunately due to inflation."

Isamaa chair Helir-Valdor Seeder said that his party will boost the current 3.5-year coefficient pension supplement to a child, to a 7-year coefficient. "As a result of this reform, a mother or father who raised a child will receive an additional pension for each child, to the amount equivalent approximately to one average monthly pension," Seeder said.

Seeder noted that Isamaa naturally supports the continuation of indexation of pensions, but the previously permitted pension rise to, for example, €1,000 may rise to this level anyway as a result of indexation.

In 2019, the year the last Riigikogu elections were held, the average old-age pension stood at €475 per month, while the Ministry of Finance has indicated in its forecast that the average old-age pension of €595 per month in 2022, will increase to €704 per month in 2023, taking into account the extraordinary pension increase and the tax-free income component of the average old-age pension.

Pensions in Estonia are indexed every spring, whereby pension insurance receipts within the social tax from the previous year are taken into account, along with inflation. Individual pensions are calculated for each individual, depending on their previous work contribution.

The above concerns the state pension, the so-called "first pillar" of the national pension system.


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Editor: Andrew Whyte, Aleksander Krjukov

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