In response to an interpellation by opposition MPs, Ratas said that demographic processes will significantly affect life in Estonia in the near future, and the government is taking this matter very seriously, according to a government press release. Population and pension policies have thus been discussed in depth, he noted, and several important decisions have been made.

Ratas highlighted that in order to extend healthy lifespan of the Estonian people, as well as to improve the accessibility of medical care and sustainability of the healthcare system, more than €220 million will be allocated to the budget of the Estonian Health Insurance Fund (EHIF) from 2018-2021, and nearly €100 million per year thereafter.

In addition, the allowance for a family with many children has been increased, the prime minister said, and the parental leave and benefits system will be reviewed in order to support families with children and young parents. "We are in the process of a pension reform to improve the coping of the elderly and increase their motivation to work via a flexible pension system," Ratas explained. "Last fall, pensioners living alone were paid a benefit for the first time."

Ratas: Estonia at forefront of elderly employment matters

In response to a question about the employment of the elderly, Ratas said that Estonia is already at the forefront among European countries on this matter. "On the one hand, this shows that Estonian employers value the elderly and are more than happy to utilize their knowledge and experience on the labor market," he noted. "On the other hand, this indicates that the Estonian elderly are motivated and wish to apply themselves."

According to Ratas, the state must nevertheless continue to make an effort to improve opportunities available for the elderly on the labor market. Among other things, the government is planning to increase the flexibility of work hours and location. "With these changes, the state hopes to bring to the labor market people who prefer more flexibility in their hours, a smaller work load, or working from home," he explained. "These changes will promote part-time employment among all people, and are thus surely beneficial for the elderly as well."

The Estonian head of government also believes that the planned pension reform will increase motivation to work among the elderly, as a proposal will be made to implement a flexible retirement age. "People will be able to choose when they want to retire, and postpone it, if they so wish," he said. "It is important to note that a flexible pension will also be paid if the person continues to work. Currently, an early old-age pension is not paid should the person decide to continue working, which is why many elderly persons give up working."

According to Ratas, being able to take out a partial flexible pension or postpone it would also increase pensioners' motivation to work. "This would allow working pensioners to save a larger pension for when they wish to stop working," he added.

Ratas said that it is also essential to raise awareness about benefits which already support part-time employment among the elderly. "For example, employers currently have to pay a social tax of at least €155.1 per month for part-time employees, but for pensioners, social tax is paid from net wages even if the sum of the social tax is below the above amount," he said. "This exception supports part-time employment among the elderly, but is often not known."