Finance Minister wants option for monthly maternity benefit payouts

Minister of Finance Toomas Tõniste (Pro Patria).
Minister of Finance Toomas Tõniste (Pro Patria). Source: Siim Lõvi/ERR

Citing more convenient taxation, among other reasons, Minister of Finance Toomas Tõniste (Pro Patria) is seeking to have legislation amended that would introduce the option of receiving maternity benefits in monthly instalments rather than a lump sum.

"We propose considering amending the Health Insurance Act as soon as possible so as to enable recipients of the maternity benefit to receive the benefit in monthly payouts if they wish, not as a single payout for the entire period," Mr Tõniste wrote in a letter to Minister of Health and Labour Riina Sikkut.

The minister pointed out that the taxation period for the income of private individuals is one year, and that income is taxed in the same year in which the income or benefit is paid out. Thus, in principle, it would make sense to disperse the payouts of state-paid benefits, including the maternity benefit, over the period for which they are paid.

Large one-off payouts, such as that of the maternity benefit, may otherwise leave recipients paying additional income tax.

"Even though the additional tax claim can be avoided via the advance planning of one's yearly income, we find that the state could demonstrate greater flexibility in executing payouts and allow the parent a choice," Mr Tõniste added.

Editor: Aili Vahtla

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