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Biggest pay rise ever for senior civil servants in four years' time

€100 bill.
€100 bill. Source: Siim Lõvi/ERR

While for the next four years, senior civil servants will have to put up with pay rises of a few hundred euros their social solidarity will be repaid in 2028, when a pay rise of between €1,000 and €2,000 is expected.

The claim repeated by coalition politicians that teachers are the only ones whose salaries will rise next year is not really true. Members of the Riigikogu will get a pay rise because the Constitution does not allow them to change their own salaries. But there will also be pay rises for ministers, permanent secretaries, judges and many other senior public officials.

All of these salaries are linked to the highest civil servant salary index, which is determined by the average national salary increase and the increase in the cost of living.

In early December, parliament passed a law that halves the pay rise for many senior civil servants. Ministers, for example, will not receive the €776 pay rise next year, but will have to make do with a smaller increase of €388.

With average wage and price growth slowing down, they will face an even smaller pay rise of €261 the year after next. By 2027, the minister's salary will rise from €7,070 today to just by €1,000 higher.

Judges say a pay rise cut to a few hundred euros is extreme

Finance Minister Mart Võrklaev (Reform) said that the government even discussed freezing the salaries of senior civil servants completely for the next four years. However, the idea was quickly abandoned.

"Otherwise, they would be at a disadvantage compared to those who only have a frozen wage fund," Võrklaev said. The logic is that freezing public sector wages does not generally stop wage growth.

"Life has shown that if we don't add money to the wage bill, wages will still go up," he said. "In fact, they will become more efficient and the number of people in the public sector will begin to fall."

Moreover, even a halfway decent increase in salaries causes loud grumbling in the various institutions. The most worried are judges, whose monthly salaries currently range from €5,400 to €7,070. Under the reform, the increase will be limited to €300 next year and a few hundred the year after.

The head of the Estonian Association of Judges, Anu Uritam, called the amendment extreme in the Constitutional Committee and reminded that judges are subject to very broad restrictions on their activities.

Ivo Pilving. Autor/allikas: Siim Lõvi /ERR

Ivo Pilving, a member of the Supreme Court of Estonia, added that in the salary market, courts compete with law firms and start-ups, where the salary may not be higher, but life is much better. "In the judiciary, the picture is quite different and this has to be balanced by a competitive salary," Pilving said.

Speaking about judges, Võrklaev said that stopping the salary increase would most likely create a constitutional problem for the state. He said that the salary must guarantee the independence of judges. "Some judges have said that even in the face of this rather small reduction in salary increases, they might consider going to court to contest it," the minister said.

The idea of going after the next parliament's salaries was dropped

The chairman of the Riigikogu's constitutional committee, Hendrik Terras (Eesti 200), also highlighted the third reason why senior civil servants had to be guaranteed at least half of the previously expected pay rise.

"If, for example, the salaries of ministers are frozen, we will eventually have a situation where a member of the Riigikogu who has less responsibility than a minister earns more than a minister," Terras said.

Based to today's forecasts, the salary of a member of the Riigikogu will rise to €7,079 in April 2027, which is nine euros more than the current salary of a minister.

However, a new parliament will enter office in March 2027. Ivo Pilving asked at the Constitutional Affairs Committee why the salary of the next parliament could not be changed.

"As the national budget strategy is made for four years, the numbers are calculated inside this one," Terras went on to say. "Perhaps the economic picture will have changed by the time the new parliament is elected. Then they will have to face that problem."

Terras added that savings need to be made now, noting that withholding salary increases for senior civil servants will help save €20 million over four years. "The idea is that in four years we can get the budget in order. And once the budget is alright, we can move forward from where we are now in terms of salary rises."

Mart Võrklaev. Source: Priit Mürk/ERR

A historic pay rise awaits those in power in four years' time

If current projections are extended to 2028, average wage and price growth promises a 4.5 percent increase for key civil servants and politicians. The rule of halving would then no longer apply, and the prime minister's salary, which will reach €9,500 in 2027, could rise by €430 a year later.

The reality is much sweeter, with a raise of €1,835 for the prime minister, €1,560 for ministers and €1,450 for permanent secretaries. The catch is that in 2028, the situation will revert to what it was before the law was changed. That is, that year's salary will be calculated as if the salaries of senior civil servants had been rising at full speed all along, without being halved.

Võrklaev said that in addition to the salaries of the Riigikogu, the December amendment also left the salaries of the heads of constitutional institutions untouched. This means that the salaries of the president of the Supreme Court, the president of the republic, the auditor general and the chancellor of justice will continue to increase at their own pace.

In 2027, for example, the president and the president of the Supreme Court will earn €10,892, while the prime minister will earn only €9,547. And a year later, without a raise, the auditor general and the chancellor of justice would earn more than the prime minister. And under the current law, they should receive the same salary as ministers.

"These values of the index are still related to each other in terms of positions and responsibilities," Võrklaev said. "If we didn't do this equalization in 2028, the gap would remain for a long time."

Terras said he could justify a big pay raise if he were in the minister's shoes

The decision to leave the salaries of the heads of the four constitutional institutions untouched was already taken in government. Võrklaev said that holding back their pay rises would create a constitutional problem.

"If they had wanted to go along with this amendment, they could of course have made this proposal themselves in the proceedings of the Riigikogu," Võrklaev said. "Or it could have been submitted by members of parliament." None of the institutions mentioned asked for a pay cut for their chiefs.

Hendrik Terras (Eesti 200). Source: Siim Lõvi/ERR

Average wages should grow €100-300 in 2028. Will explaining the balance between wage indexes and accountability explain why certain government employees will receive a €1,500 raise?

Hendrik Terras said that if he were in the government at the time, he would have said that ministers do not choose their own pay rises.

"I would say that this salary increase is already set for 2023. It's not about raising your own wage, it's about ending austerity," Terras said, adding that he would also emphasize the great responsibility that comes with running a state.

"To make sure that the quality of the people who choose this profession is high, the remuneration should be commensurate," he said.

Judges and prosecutors reassured that the rate of increase of their special pension will not decrease

The government linked the passage of the wage bill to the vote of confidence. Before doing so, the government also made a change that eased the pain of the bill's most vocal critics, the judges. The pensions of judges and prosecutors will be linked to their pre-retirement salaries.

Judges were concerned that if a district judge retired in 2027, for example, they would receive €5,367 a month, or €760 less than without the law.

The judges' concerns were also understood by the Ministry of Finance, which proposed to soften the cut.

"If a judge or prosecutor retires between April 2024 and March 2028, the amount of their pension is calculated on the basis of the professional salary they would have received if the salary index had not been reduced," the Ministry of Finance proposed.

In particular, the ministry believes that judges have a legitimate expectation of a higher pension. "That is why the change was made so that their long-term social guarantees would not be affected by the fact that their salaries have been reduced over these four years," Võrklaev said.

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Editor: Urmet Kook, Kristina Kersa

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