€200 to be shaved off large families benefit

Minister of Social Protection Signe Riisalo (Reform).
Minister of Social Protection Signe Riisalo (Reform). Source: Raul Mee/riigikantselei

The coalition of the Reform Party, Eesti 200 and Social Democratic Party (SDE) wants to amend the family benefits system that only entered into force from the start of this year. The plan is to slash the large family benefit and abolish the planned indexation of benefits, while necessity-based instruments, such as maintenance allowance and survivor's pension, will grow.

The new family benefits system, in effect from the start of the year, sees families with three to six children paid €650 and those with seven or more children €850 a month. The new coalition's plan prescribes reducing both sums by €200. The first and second child benefit will be retained at €80 per month and that for the third and consecutive children at €100.

"Therefore, families will get more than last December but less than what the system yields today," Minister of Social Protection Signe Riisalo said.

Future finance minister Mart Võrklaev said that the aim is to render the Family Benefits Act more accommodating of the budget. The benefits will also not be indexed in line with pensions, which was the original plan.

"Indexation is one of the things adding to state budget expenses, and things are complicated on that front as we know."

The gradual exit from the family benefits system will also be abolished. If based on the current system, a family qualifies for the large family benefit even if one of the children is an adult and not studying, such families will be considered as having two children in the future.

"Right now such a family would qualify for benefits of €600, while a family with two children would get €160. They would be treated equally as families with two children," Võrklaev said.

Leader of the opposition Isamaa party, which introduced the larger family benefits when in cabinet, described the decision to slash the benefits and do away with indexation as foolish steps that work to increase inequality.

"To behave in such a manner in a situation where all five parliamentary parties came together to support these decisions just a few months ago, while just two of them are now dialing them back, erodes people's trust in the state, trust in the stability of family policy and legislation regulating demographic aspects," Seeder suggested.

However, family benefits will be extended to adult children who are attending school.

The new coalition's vision will see necessity-based services and their availability improved. For example, maintenance allowance (benefit for children whose parent does not or parents do not perform their maintenance obligation – ed.) will go from the current €100 to €200, while the survivor's pension instrument will be replaced with the survivor's benefit.

The survivor's pension used to depend on the late parent's previous income, but because children need the same level of help and support, these differences are currently too big," Riisalo explained.

People coming out of the parent's pay period will be compensated based on their salary and not the minimum salary when going on sick leave with a child. The government wants to introduce the changes quickly while still allowing for some time for exiting the current system.


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Editor: Marcus Turovski

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