Parents are now worse off with pension due to years of family leave

Euro coins.
Euro coins. Source: Siim Lõvi/ERR

In order to receive a pension for earned years, paternal leave must be compensated with longer years of service, per the Social Insurance Board's new interpretation. Previously, years spent caring for a child at home were counted toward the required length of service.

About 2,200 Estonians receive service pensions. These include police officers, rescuers, pilots, miners and others whose work involves loss or reduction of professional capacity before reaching retirement age. To be eligible for this pension, you must have worked in a dangerous occupation for at least 25 years.

It did not matter if you stayed at home with your child throughout this period until last autumn. However, the social security board now refuses to provide a pension for years of service if the employee was on parental leave during those 25 years.

This means that parents will have to work longer in a dangerous job to collect a pension for the years they have worked.

Kati Kümnik, head of the Social Insurance Board's benefits department, told ERR that the agency has indeed changed its practice. "As we see more and more situations of persons being on parental leave for a significant portion of the time they want to claim as length of service, it is very important to clarify how the law should be understood," she said.

At the moment, 20 pension applications based on years of service have been rejected because the applicant has been on parental leave within these 25 years.

Some applicants have taken the matter to court. Kümnik said that they are now waiting for the Supreme Court's decision to proceed.

"It needs to be made clearer why the legislature wants to deal differently with work years, which are treated differently under different laws. In the case of service retirement pensions, it is in fact important to work under conditions that lead to a deterioration in health to such an extent that the person must be given the benefit of early retirement," Kümnik said.

From the point of view of the Social Insurance Board, the fact that working half-time is excluded from length of service by law also problematic, she continued.

"A person who has gone to work part-time as a police officer while still caring for a young child will not receive tenure credit for that time. However, if they had remained at home with the child, we would consider that time as tenure. This is a very serious concern."

Another special nuance is that for aviation workers, the law states explicitly that the time spent on parental leave counts towards the length of service, Kümnik explained.

"One case is clearly stipulated in the law while the other is not, and moreover, the purpose of the legislation is that a person has worked in these difficult conditions, so we should not have a situation in which a person who has not worked in these conditions [on full-time parental leave] receives a benefit while a person who has worked a little bit [part-time work during early parenting] does not," she said. "The primary goal is to assure equality within the target group itself."

The justifications do not persuade those affected by the change.

Svetlana Meister, the head of the PPA's personnel accounting and analysis service, pointed out that all other absences from work count towards the years of service.

"In other words, annual leave, maternity leave and sick leave are considered as tenure for a police officer. And the reason why this exception is written into law for aviation workers is because their tenure calculation is entirely different. They are counted in hours flown, so for example a pilot's 20 hours will be considered as one month's tenure. And ostensibly for legal clarity, the legislator has written into the law that parental leave time will be counted towards years of service according to the same principles as for all other professions," Meister said.

Meister said that the agency could have initiated a change in the law. "This is because, according to the current law, this leave must be counted towards length of service, as the State Pension Insurance Act applies to the calculation of length of service and states that leave time is counted towards length of service. An agency cannot unilaterally decide to deviate from the requirements of the law."

According to Kümnik of the Social Insurance Board, there are several regulations governing pension benefits and their vesting, and multiple interpretations are possible.

Meister pointed out that there is a previous court ruling on this issue, which states that parental leave must be counted as part of the length of service.

However, this was a first instance decision, Kümnik said, and a Supreme Court ruling is still necessary for legal clarity.


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Editor: Kristina Kersa

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