Bill: Ending stay-at-home parents' health insurance in line with new family model
The government's proposed change, which would revoke health insurance for non-working parents of children up to eight years old, is intended not only to save state funds but also to align social tax exemptions with work-life balance objectives and evolving family models, according to the explanatory memorandum of the draft bill.
Under current regulations, the state pays social tax for the spouse or registered partner of an insured individual who is raising a child up to eight years old or between three and six children older than eight. However, according to the draft bill prepared by the Ministry of Social Affairs, this will no longer be the case. As a result, these individuals will lose their health insurance, and the explanatory memorandum states that the goal is to encourage both parents to participate in the labor market.
"Three-year-old children can attend kindergarten, which enables a parent to obtain health insurance protection through labor market participation. Moreover, labor market participation also provides protection against other risks – such as ensuring pension insurance and unemployment insurance. The state will continue to pay social tax for parents of young children and those with large families," the document states.
Additionally, the memorandum highlights that this change aligns with the principles of Estonia's social security system, where social protection rights are generally individual and not dependent on being a spouse or registered partner of an insured person.
"The aim of this change is to save state funds in a way that minimally infringes on individuals and to align social tax exemptions for health insurance with work-life balance goals and evolving family models," the memorandum explains.
The goal of balancing work and family life, the document adds, is to support both parents in remaining active in the labor market.
Social Protection Minister Signe Riisalo stated on Wednesday that if a family's economic situation allows only one adult family member to work, it is likely a family that can manage without public financial support.
According to the explanatory memorandum, those stay-at-home spouses whose social tax will no longer be covered by the state and who do not plan to enter the labor market can enter into a voluntary insurance contract with the Health Insurance Fund. The terms are set by law, with a monthly payment equal to 13 percent of the previous calendar year's average gross monthly wage in Estonia. This year, that would amount to a monthly fee of €238.20, or €2,858.40 annually.
However, in the section addressing the constitutionality of the bill, the memorandum notes that since the changes will worsen individuals' situations compared to the previous system, it can be said that the principles of legal certainty and legitimate expectations are being infringed upon. At the same time, the document states that the principle of legitimate expectations does not require freezing the current regulations in place indefinitely.
"The broader goal of the changes is to harmonize state benefits, create a more balanced and fiscally sustainable health insurance system and ensure that benefits are distributed more fairly. These objectives can be considered legitimate in terms of justifying the infringement on legal certainty and legitimate expectations," Ministry of Social Affairs officials argue in the explanatory memorandum.
Furthermore, the document emphasizes that this benefit has been distributed by the state based on social policy considerations. While the law is being amended, these individuals will not be left without health insurance, as they will be eligible for health coverage again if they register as unemployed.
The bill also changes the deadlines by which the Social Insurance Board must make decisions regarding family benefits, disability assessments and state pensions. For family benefits, the Social Insurance Board (SKA) will have 30 working days instead of the current ten. For determining the severity of a disability, the timeframe will increase from 25 to 40 working days, and for pension decisions, it will go from 15 to 30 days.
"The deadline for granting family benefits is being extended from ten to 30 working days to ensure thoroughness and feasibility of the process with fewer staff," the bill states, noting that SKA's workforce has decreased.
The same reasoning applies to the extension of other decision deadlines. "Given SKA's reduced workforce, it is not possible to complete all processes within the current deadlines," the document states.
Additionally, support for pensioners living alone will no longer be provided to residents of care homes. Minister Riisalo explained on Wednesday that individuals who will no longer receive the support for living alone in the future are already receiving an average of €596 per month in public funds, meaning they still benefit significantly compared to other pensioners.
"We have made our systems more generous for old-age pensioners, so it makes sense to cut back on some expenses," the minister said.
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Editor: Karin Koppel, Marcus Turovski