Estonia uses outdated computer systems to pay pensions, benefits
The Estonian state uses extremely outdated computer systems to pay pensions and other social benefits. Bolstering the system would require €25-30 million over the next few years, but whether that money can be found in the state budget remains unclear.
Monday was pension day in Estonia, and this time, all monthly pension payments went out on time. Last month, however, some elderly people did not receive their pensions when expected.
Two information systems called SKAIS are used to calculate pensions in Estonia. One of the two systems is 25 years old; the other is eight. From an IT standpoint, both are obsolete, and because development work on the systems has stalled, paying out pensions requires a significant amount of work to be done by hand.
"Our biggest challenge came in 2023," said Kristina Pähkel, director of the Development Department at the Social Insurance Board (SKA). "When the income tax exemption for retirement-age individuals went into effect, we migrated pension payments from the old IT system to the new one. That led to us having to do a lot of checks, manual work and hands-on processing."
Epp Laanepõld from the Health and Welfare Information Systems Center (TEHIK) admitted that the systems they use may not be far off from collapse.
"They're not going to hold up much longer," said Laanepõld. "SKAIS1 is in such a state that it simply cannot be developed further from a technological standpoint, because the technological platform is so outdated that newer versions are no longer available for it. And on top of that, there are no developers who can manage or write code for such old technology."
SKA and TEHIK have both repeatedly submitted requests for additional funding to develop the information systems, and the issue has also been discussed already in both the Riigikogu and the government.
"As part of our plan, we've written that we would need €24.8 million over the next five years to reach a point where we can ensure sustainability, the work being automated and the risks minimized."
Minister of Social Affairs Karmen Joller (Reform) acknowledges the request is entirely justified, and the issue of funding the technical upgrade of these systems is likewise on the table in coalition negotiations.
"We've discussed it very seriously as part of the coalition agreement, but what exactly will make it into the deal, I can't say before the agreement is signed," Joller said.
SKA is making preparations in case the information system should collapse, but has declined to reveal what exactly these plans are.
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Editor: Mari Peegel, Aili Vahtla
