Eagerness to raise benefits puts social insurance board in difficult spot

Waiting area at a Social Insurance Board (SKA) customer service office.
Waiting area at a Social Insurance Board (SKA) customer service office. Source: Social Insurance Board (SKA)

The eagerness of politicians to raise family benefits and pensions ahead of the upcoming elections has put the Estonian Social Insurance Board (SKA) in a difficult situation. The SKA now finds itself urgently needing to hire new staff in order to calculate allowances manually as the IT system needed to do so will not be fully ready until the end of next year.

The Estonian state spends €1 million a year on employees tasked with manually calculating family allowances and pensions. However, more staff are now needed as it will take some time before the necessary IT systems to complete the task automatically according to the new criteria are fully operational.

"More people are needed because the criteria for receiving benefits have changed and the current (IT) information system only knows the previous criteria," said Kati Kümnik, head of the SKA's benefits department.

Therefore, Kümnik explained, more staff are needed to manually enter details and make calculations, which would usually be done automatically by the information system.

Kümnik said, that the current situation is rather exceptional. Previously, it has generally been possible to negotiate realistic timeframes for the implementation of new criteria, meaning there has rarely been a need for such a high amount of manual work during transitions.

However, according to Kümnik, decisions taken by politicians at the end of last year have forced the SKA to postpone making a number of important and much-needed developments in other areas.

"One thing is the new functionality, which is needed to stay in line with the law. Another is that you have to make sure the system itself doesn't become obsolete, that there isn't too much technological debt and it doesn't lag behind. But, that's the first thing you cut back on on when you simply don't have the time or resources," said Andres Aavik, CEO of Flowit.

If you change the law year on year, and do it faster and faster, as has been the case recently ahead of the elections, at some stage the technological debt may become extremely large.

"There are certain tasks and activities that you have to keep up with. You have security risks, the development process takes longer, and it takes more time to do things. But, you have to find time to do them, in order to reduce the technological debt," Aavik said.

According to Minister of Social Protection Signe Riisalo (Reform), it is usually considered good practice to allow at least a year for preparatory work to be completed ahead of the implementation of a law like this.

However, the Riigikogu has the right to bring laws into force more quickly, even if there are risks involved in doing so.

Riisalo pointed out, that up to now, pensions, child and family benefits have been successfully paid out according to the new criteria, even in cases when tax exemptions and other conditions have had to be taken into account.

"In that sense the system is working. However, the truth is, that making such quick decisions is not sustainable. (Because), overnight you need technical solutions, which take time," Riisalo said.

The SKA will need a total of 23 additional staff members to calculate pensions and family allowances manually until the new system is up and running.


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Editor: Michael Cole

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