The Ministry of Social Affairs presented its part in the so-called zero budget process today. How extensive were the budget cuts identified by your ministry in this process?

I cannot answer that yet, as the guidelines given by the government cabinet today need to be added to this. The Ministry of Finance is working on that.

It appears that this zero-based budgeting project will bring about €150 million in savings across three ministries next year. Is that correct?

It doesn't seem to me that it could be €150 million.

The government's press release mentions setting the parental benefit cap at double the average income taxed with social tax from two years ago. I also read in the press release that a parent can return to work immediately after childbirth and still receive parental benefits.

Yes, if a parent wishes to work during the parental benefit period, we will no longer impose income limits in the future. Until now, the limit has been up to half of the cap, which this year is €2,366 per month.

So, theoretically, a parent could continue their regular job while receiving parental benefits?

Theoretically, it's possible if their job allows it. Statistics increasingly show that people earn taxable income during the parental benefit period, indicating that work patterns have changed. Many people affected by the lowering of the parental benefit cap can arrange their work remotely.

It will be allowed moving forward in the interests of professional self-realization. Being away from the labor market for 18 months is a long time in the rapidly changing world.

Another change concerns old-age pensioners living in care homes who have been receiving the single pensioner benefit of €200 per year. Has this amount been available for personal use by these pensioners, given that a significant portion of the average pension goes towards care home fees?

Firstly, the law requires that a person's entire pension cannot be taken for social services. They still receive some money from their monthly pension. How much depends on the individual.

The amount of the €200 support and how much is immediately needed for expenses, how much is distributed monthly, or how much is left over depends entirely on the individual's overall financial situation. This is quite personal, and generalizations cannot be made.

It's important to understand that public funds, allocated through local governments for elderly individuals in general care, average €596 per month. Thus, it's fair not to pay additional single pensioner support, as they are not factually living alone

Are you suggesting that pensioners are already receiving sufficient funds?

No, I don't mean that. How did you interpret it that way?

Okay. But has the €200 per year been an amount that pensioners could use at their discretion?

I can't provide a definitive answer to this question. Each individual has their own financial capabilities, and they may also have support from their children or family. The Constitution and the Family Law Act both emphasize that there is a maintenance obligation among family members. Therefore, I can't generalize how each family or individual manages their expenses.

However, I can say that those who will no longer receive the single pensioner benefit will still receive an average of €596 per month in public funds. This means they will still be significantly better off compared to other pensioners. This €596 adjustment has been in place for less than a year and a half.

Therefore, as we have been making our systems more generous for those of retirement age, it makes sense to cut back on some expenses.

I also want to remind you that the old-age pension has increased significantly in recent years. This year, the average pension rose by 10.6 percent, and in 2023 it rose by 17.6 percent.

So, pension increases in recent years have been quite substantial. While it's true that Estonian pensions are not exceptionally high, and we are in a poor position compared to other EU countries, the changes in recent years have led to significant pension growth.

The third change concerns parents of children up to eight years old who are not employed and currently receive health insurance coverage from the state. Starting from the time their child turns three, these parents will need to find an alternative way to secure health insurance. What is the purpose of this change?

The purpose of this change is to ensure the most equitable use of public funds. If a parent is a dependent spouse, meaning the family's financial situation allows only one adult family member to work, it is likely that the family can manage without this public financial support.

We have projected that 50 percent of these individuals will register as unemployed with the Unemployment Insurance Fund, 25 percent will enter the labor market and 15 percent will independently purchase private health insurance. Approximately 10 percent [around 100 people] may not be able to address the situation in the first year.

In other words, you expect most of these people to find jobs?

Yes, of course.

It is in the state's interests for the maximum number of people to be active in the labor market, as that is how state budget revenue is created through taxes.

I take it that only the change affecting old-age pensioners will take effect next year and is expected to result in savings of €1.3 to €1.5 million. Is this the change with the greatest budgetary impact found in your field during the zero-based budgeting process for next year?

Yes, I have said for a long time in various governments that political decisions need to be made in good time because people have legitimate expectations regarding certain benefits and regulations, and we cannot change regulations overnight.

Could we then say that the zero budget ambition has been somewhat exaggerated?

I cannot say, as I was not the one who came up with it.

Yes, but no other major decisions that concern people were made in your administrative area it seems.

That is correct. And it's also important to note that making child benefits means-tested is not an isolated issue today. The government's ambition is to analyze the state's legal and IT capabilities to prepare for the potential implementation of necessity-based benefits in the future. In the coming years, we will not be touching child benefits.

In other words, it won't be a matter of the 2026 or 2027 budgets either?

No.

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