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Government mulls cuts to child benefits to save money

Signe Riisalo (Reform).
Signe Riisalo (Reform). Source: Priit Mürk/ERR

Minister of Social Protection Signe Riisalo (Reform) denied the government is looking to reduce parental leave from 18 months to 12 months to find money to balance the budget. Junior coalition partner SDE said it would only support such a plan for high earners.

The Ministry of Social Affairs will carry out an analysis to decide on a way forward next autumn, "Aktuaalne Kamaera" reported on Wednesday.

Prime Minister Kaja Kallas (Reform) on Tuesday said the family benefits system is under review as savings need to be made. She did not give a straight answer to whether parental leave is being reviewed.

Riisalo told AK the goal is to move towards a needs-based way of supporting people.

"That helps more of those who need extra help. And maybe not so much those who can manage by themselves. Changes in both directions can be discussed – both increases and decreases," the minister said.

She said changes have been needed for a long time.

"​Their preparation will be discussed no earlier than in next year's budget discussions [August 2024]. And then it will also be possible to decide already, based on what the proposed amendments are, how soon it is reasonable and possible to implement them," said Riisalo.

SDE chairman and Minister of the Interior Lauri Läänemets does not think parental leave should be cut. He said balancing the budget is not more important than supporting families.

However, Läänemets said the measure could be reduced for people in the highest income categories.

"Shortening the period does not contribute to the goal of more children being born in Estonia. This goal will be helped by the fact that at the lower end, those who receive a small or medium salary, their parental benefit should be increased, and if money is needed for this, then those who receive a parental benefit of €4,000 may not need to receive so much. Quite a few children in today's Estonia are brought up on €3,000 a month," he said.

Parental allowance costs almost €400 million a year and is the 10th largest social benefit paid out.

AK spoke to Marili Paakspuu about how the change could affect her family. She currently has a nine-month-old toddler.

"It affects all of our future decisions that we have made so far. We have a new home, we are planning another child. And if so, when will we have it and how will this home be paid for in the future? Everything is calculated now, but if it starts to change, then all our plans will have to be reconsidered," she told the show.

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Editor: Aleksander Krjukov, Helen Wright

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