Estonia's care reform put local governments in a position where they had to cover at least part of all clients' nursing home bills without the state having allocated additional funding for this purpose.

Following an analysis of the care reform prompted by an appeal submitted by Põlva Municipal Council, Räpina Municipal Council and Tartu City Council, the Supreme Court en banc ruled last July that if existing local government funding is insufficient for filling the relevant necessary duties, local governments may submit a complaint to an administrative court to demand additional funding from the state.

Last September, all three local governments confirmed that they were considering pursuing this route. While none have yet done so, Tartu City Secretary Jüri Mölder told ERR that their city government is in the process of finalizing their numbers and will be submitting a claim to the state soon, requesting the voluntary reimbursement of the city's additional expenses.

"Then we'll see what happens next," Mölder said. "If the state won't compensate us voluntarily, then we'll take this to court."

The city secretary could not yet specify the exact amount Tartu is set to claim from the state, as these calculations are still underway. He added that submitting this claim has taken so long precisely because it's best to base it on actual data.

"At the end of last year, we could only discuss projected revenues and expenses; it's easier today, now that last year's budget execution is clear," he explained.

Põlva Deputy Municipal Mayor Koit Nook (Center) said that their municipality is waiting to see what Tartu does, and won't start taking the lead in demanding funds from the state. He admitted they also lack the legal capacity to do so. They are, however, closely monitoring the actions Tartu is taking.

"Overall, the situation this year has improved somewhat," Nook said. "If Tartu takes this step, then we'll recalculate and reassess, but at this point, we have not been planning on taking the matter to court again."

According to the deputy mayor, the municipality has also gotten better by now at managing its finances. At the same time, however, he acknowledged that it's clear that the reform's plan to develop home care services in addition to nursing homes is unrealistic, as all available funding already is being spent on care services.

"We have home care services in place, and they work well, but when it comes to development — developing new services or technological solutions — state funding is definitely insufficient," Nook emphasized.

Numerically, he added, this year's budget has been structured to make ends meet, with no planned deficit.

Räpina Municipal Mayor Enel Liin confirmed their municipality is also crunching their numbers, but considered it premature to discuss the matter before all relevant circumstances have emerged. She pointed out that the National Audit Office's report makes an important point: the funding of nursing home services is currently unsustainable.

Estonia's nationwide care reform took effect on July 1, 2023, with the goal of making nursing home care accessible for the cost of a pension.

In a report published earlier this month, however, the National Audit Office found that the reform's objective of ensuring access to nursing home care for the average pension is slipping away, and that the funding model for care services should be revised.

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