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Estonia's minimum wage increase to hike benefits, some kindergarten fees

Caregiver holding a baby.
Caregiver holding a baby. Source: Priit Mürk/ERR

The national gross minimum wage is set to increase by €95 to €820 a month from the new year, bumping up with it both some benefits as well as some local governments' monthly kindergarten fees.

Minimum maternity, paternity, adoptive parent and parental benefits are all to increase by €95 next year – from €725 to €820 a month.

"The minimum daily rate for both child leave as well as child leave for the parent of a disabled child will be increasing from €34.25 to €38.74 next year," Social Insurance Board (SKA) communications adviser Elis Maria Oldekop said.

These benefits are paid at the minimum rate in cases where the recipient lacked income subject to social tax during the calendar year preceding the year in which they qualify for the benefit.

Also pegged to the monthly minimum wage rate are various services and compensation provided to victims under the Victim Support Act.

"As of this April 1, when the new Victim Support Act entered into force, we compensate victims of violent crime for damage caused to personal aids [e.g. glasses, dentures] up to the extent of the minimum wage, or in the case of the victim's death, funeral expenses incurred by loved ones up to the extent of the minimum wage," Oldekop noted.

Thus, maximum compensation in these cases will go up by €95 from January 1 as well.

The payment of social tax in special cases under the Social Tax Act is similarly tied to the monthly minimum wage, however the rate based upon which the tax will be calculated in 2024 is the previous year's minimum wage rate, i.e. the current €725.

Unemployment benefits will likewise rise along with the minimum wage from the new year, with the monthly maximum benefit to go up from €327.05 to €362.50.

"The minimum unemployment insurance benefit will be changing as well, but the size thereof will be revealed at the beginning of the year," said Laura Laaster, director of the Public Relations Department at the Ministry of Economic Affairs and Communications.

"Work ability benefits will likewise be indexed next year, however the size thereof will be determined on April 1, when pensions are indexed," she added.

Kindergarten fees to go up in some towns

As some local governments have pegged kindergarten fees to the national minimum wage, these monthly fees are set to rise from the new year as well. Some of Estonia's bigger cities, however, will be compensating the difference, sparing parents from the upcoming increase.

For residents of the Estonian capital, parents' share of the fee at Tallinn's municipal kindergartens will remain unchanged at €88.45, and €97.15 for kindergartens with swimming pools.

"With the increase in the minimum wage, the fee for Tallinn's municipal childcare institutions will be going up, but also increasing along with it will be the city's support for parents," said Tallinn city government spokesperson Leini Jürisaar. "Given the general increase in the cost of living and in support of families with young children, for the third year in a row, Tallinn will continue to compensate families for the increase in kindergarten fees."

The increase in benefits in Tallinn will also bump up foster family parental benefits – which equal half of the monthly minimum wage – from €362.50 to €410 a month.

By a decision of the city government, kindergarten fees in Tartu, Estonia's second-largest city, will remain unchanged at €81 through 2026.

In contrast, Pärnu has opted to increase the parental contribution. Increasing from €57 to €70 a month next year will be fees at kindergartens in Audru and Paikuse, Central Pärnu kindergartens without swimming pools as well as Central Pärnu kindergartens with pools during the months of June, July and August, with fees at kindergartens with pools to go up from €71 to €88 for the remainder of the year.

The kindergartens at Lindi Kindergarten-Elementary School and Jõõpre School, meanwhile, will see their fees go up from €46 to €56, and Tõstamaa Kindergarten from €34 to €42.

Monthly kindergarten fees are also set to increase by an average of €10-11 per month in Viljandi.

Minimum wage bumped by deal

On December 7, the Estonian government confirmed the national monthly minimum wage at €820 and hourly minimum wage at €4.86 for 2024, marking an increase in the monthly wage of €95 on year.

Next year's new minimum wage was confirmed based on the collective agreement reached between the Estonian Trade Union Confederation (EAKL) and the Estonian Employers' Confederation (ETK) on October 10.

According to a deal between the EAKL, the ETK and the government, Estonia's minimum wage is to reach 50 percent of the national average wage by 2027.

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Editor: Aili Vahtla

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