State wants to prioritize children when paying survivor's pensions

Family walking in park.
Family walking in park. Source: Siim Lõvi/ERR

The Ministry of Social Affairs has drafted amendments to the survivor's pension regulation, including adjustments to the amount and the withdrawal of the benefit for certain groups.

The survivor's pension is paid to individuals who have a deceased relative or family member and become eligible for state benefits as a result.

As it is a pension, the subsequent payment is dependent on the deceased's income. It also implies that all beneficiaries of a survivor's pension will have to split the total amount.

"If a household has one child and the pension contribution should be €500, that child would receive €250, or half of that amount. If there were two children in the household, each would receive 40 percent, or €200. If there are five children, whether they were born into the same family or two separate families, then the €500 would be divided among the five children, meaning that each child would receive only €100," Ulvi Tüllinen, adviser at Ministry of Social Affairs, explained.

This has been the situation for over two decades. The Ministry of Social Affairs seeks to update the assistance provided to families in the event of the death of a breadwinner since family structures have evolved and the overall support system has improved. In this regard, a draft bill has been produced, and feedback from interested parties is being sought.

The main change would be that if a breadwinner died, the family would now receive a family benefit rather than a pension. This has several advantages: the amount is not based on the deceased's income and does not vary from one family to the next, no income tax is required on the amount received, and the allowance is provided automatically without the need for a separate application. Most importantly, regardless of how many children the deceased parent had or whether they were married or not, each child will receive a predetermined amount.

"While it is currently related to the composition of the family and the number of children in the family, as well as whether a sibling or half-sister is studying or not, in the future, each child will determine and justify the entitlement to this benefit and in this specific amount," Pirjo Künnapuu, head of family benefits at the Social Insurance Board (SKA), said.

The sum paid to children who have lost a breadwinner would be about equivalent to the existing maintenance amounts.

"This would be based on the average child maintenance cost and indexed to the consumer price index, or we could add 3 percent of the average annual gross income as reported by the statistical office. Perhaps it will be very similar to the current maintenance scheme," Tüllinen said.

According to Künnapuu, the SKA has worked hard to ensure that no one will be worse off as a result of the changes to the survivor pension system. This is why there is a transitional period during which the amounts of survivor's pensions already granted will not be changed.

"However, this will increase the cost to the state," Tüllinen said.

"In fact, the increase in public expenditures in the first few years will be on the order of €2 million, in addition to the €20 million already anticipated," she said.

The smallest survivor pension payment was €30 per month last year, while the biggest was nearly €2,000.

The main focus is on children, so there is a plan to end the payment of survivor's benefits to adults, such as pregnant women or parents raising children under the age of three.

"Benefits should be as uniform as possible, always child-based and always pro-active where possible, so that people do not have to worry about missing out on something they do not know," Künnapuu said.

The draft adjustments to the survivor's pension are set for discussion this winter; no changes are envisaged before 2026.


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Editor: Aleksander Krjukov, Kristina kersa

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