"The saddest part is that local governments, meant to be the central government's partners, are cheated and forced to turn to court," Räpina Municipality Mayor Enel Liin said.

Räpina Municipality turned to the justice chancellor because it does not have the resources to pay for a part of residents' nursing home fees as per Estonia's nursing care reform that is set to enter into force from July 1. A Ministry of Social Affairs table reveals that Räpina Municipality will receive €400 per nursing home resident from the government, while its need is around €1,000 per resident, Liin said. For example, Haljala Municipality is set to receive €1,400 per resident.

"Our number one complaint is unfair treatment of local governments. The calculation makes no sense from where we're standing and puts colossal pressure on our budget, which we did not know to expect because it has been said all along that the central government will cover local counterparts' additional expenses in connection with this reform," Enel Liin explained.

The justice chancellor pointed to a Supreme Court precedent accord to which local governments are not obligated to use own funds to perform additional state-level tasks.

"If the Räpina Municipality Council finds that the local government has not been allocated enough funding for performing additional tasks pursuant to the Social Welfare Act, the municipality can seek constitutional review proceedings by turning directly to the Supreme Court. Only the Supreme Court can decide whether the government has violated the Constitution," the chancellor of justice's reply reads.

While filing the action needs to be decided by the Räpina Municipality Council, Enel Liin said that it is indeed the local government's plan. Räpina will try to bring more local governments on board as other Southeast Estonian municipalities, such as Antsla, Kanepi and Setomaa, are also struggling with the reform.

Kurmet Müürsepp, deputy municipality mayor for Antsla, told local paper Lõuna-Eesti Postimees that Rae (in Harju County) and Antsla municipalities have roughly the same number of nursing home residents. But while the former will receive €380,000 for the reform in 2024, Antsla will have to make do with just €220,000.

Ministry: Local governments treated equally

It has been suggested that the Social Ministry has admitted during meetings with cities and municipalities that its calculations failed. Meeli Tuubel, adviser at the ministry's welfare services and social inclusion department, said that the differences are caused by the fact the ministry looked at municipalities' entire elderly populations.

"This means that all local governments were treated equally. If some local governments had more people in nursing homes than the model average predicted, we plan to revise the formula for next year. We will be making concessions for local governments that have more people in nursing homes as a temporary transitional measure in the interim," Tuubel said.

But Tuubel added that the formula for apportionment cannot be described as faulty and was a conscious choice by the ministry.

"We do not want to send the message that the government only supports people who take a nursing home place. What we want to support is the [entire] long-term care system so that local governments' additional resources are used to develop home care," Tuubel explained.

Formula subject to revision

It was decided in 2022 that local governments would be allocated €40 million for the nursing care reform this year and €57 million next year.

"Such long-term allocations are meant for a period of at least four years. Perhaps opportunities for additional funding can be found in the coming years, while we would rather look at specific local governments and why they are short on funds," Tuubel said.

She said that €28 million of the €40-million pot is meant for nursing expenses, while the rest should be spent on reform preparations and home care services.

"We need to look at specific local governments in terms of why they are already short on funds in 2023. We are prepared to revise our calculations and are scheduled to meet with individual local governments."

But if Räpina fails to secure additional funding for the reform, the municipality needs to cut costs elsewhere.

"We will need to find the money in our budget in the next six or even three months in a situation where most budgeted expenses have already been made. Cutting that much in just three months is a superhuman effort so as not to say impossible," Liin said.

Räpina is not the only municipality struggling with the reform. Tallinn Mayor Mihhail Kõlvart wrote that the capital needs an extra €9.5 million for the reform compared to what the state is paying. Tartu is short €3 million, Saaremaa Municipality €2 million and Pärnu €1 million.

Enel Liin said that compensating local governments from the equalization fund has been discussed, while Räpina Municipality believes it cannot be done without altering the fund's principles and formulae.

Local government to pay €300-1,000 per person

One of the aims of the nursing care reform is to create a situation where people could afford a care home place for just their pension. Liin pointed out that reform funding allocated for local governments is calculated based on the average old-age pension, while the average pension in Southeast Estonia is around €100 below the national average.

"Wages have been among the lowest in Põlva, Võru and Valga counties for years, meaning that pensions also do not match the national average."

Liin said that Räpina's calculations suggest that what the government has allocated is not enough to cover most nursing home fees. "Of 20 applications we reviewed yesterday, the maximum missing sum was €1,000, while at best people would need an additional €300 from the local government."

Liin emphasized that around 80 percent of nursing home residents are living fully on the local government's dime. Räpina Municipality paid €100,000-150,000 for residents in nursing homes last year. "Adding half a million to this next year does not constitute sensible financial obligations placed on local governments. There is a massive error somewhere," Liin suggested.

No limits and muddled data

July nursing home bills might not have the local government's part subtracted yet as some have not decided how much of people's nursing home bills they will be paying. The cost-sharing component needs to be sufficient to secure a place in at least one care facility.

Mart-Peeter Erss, head of services at the Social Insurance Board's local government advisory unit, said that 61 local governments out of 79 have laid down cost-sharing ceilings.

"One local government has told us that since the spirit of the reform is for the local government to pay for nursing homes places, that is what they will do."

Erss added that local governments failing to participate in paying July bills is not a problem as customers will be compensated in hindsight and accounts settled with nursing homes.

Another problem is availability of accurate data as not all nursing home patients are registered in the national social services and benefits register STAR. The Estonian Association of Cities and Rural Municipalities has described the database as unfit for an e-state.

"We are suffering from a slight data shortage," Meeli Tuubel admitted, "because a part of people have turned directly to nursing homes, and even though the operator should make an entry in STAR, it is sometimes unclear whether the data reached the register, whether it was entered properly, whether people have been deleted from the register etc. Therefore, the picture we have might not be too accurate."

Andrus Jõgi, head of local governments' financial management at the Ministry of Finance, said during a Riigikogu Social Affairs Committee sitting a few weeks ago that data from local governments suggests nursing homes have 1,000 more people than what the state counted on based on figures presented by nursing homes themselves. He said that when the Social Insurance Board wanted to verify the data by merging the different registers, they were left with the figure suggested by the nursing homes.

Both Tuubel and Erss said that data in STAR will be fixed up as part of the reform.

Reform hurried and sends wrong signal

Enel Liin said that Estonia can come up with the money if there is sufficient political will, despite the difficult economic situation in all fields. "Perhaps work on the reform should have continued for longer, involved more consideration and data collection, instead of pushing for the July 1 deadline at all costs. The reform is far from finished."

The local government head also believes Estonia has sent people the wrong signal by promising people a nursing home place for their pension.

"We have no overview of how many people are currently in nursing homes, how many need a nursing home place and to what extent the state can afford to pay for the difference between one's pension and what it costs to live in a nursing home to really make good on the promise."

Liin also said that the fact of Estonia's considerable nursing home waiting lists has been overlooked, whereas no one can forecast what those waiting times will be in the future.

"The general availability of nursing home places changes very little from one month to the next and even year to year."

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