REPORT

for the period of July 1, 2018 to June 30, 2019

by the Government of the Republic of Estonia on measures implementing the provisions of the European Code of Social Security signed by the Government of Estonia on January 24, 2000.

The provisions of the Code are connected with the following legal acts in Estonian social security system.

Acts:

1)                  Health Insurance Act – parts II, III, VIII;

2)                  State Pension Insurance Act – parts V, IX, X;

3)                  Labour Market Services and Benefits Act – part IV and XII;

4)                  Unemployment Insurance Act – part IV and XII;

5)                  Work Ability Allowance Act – part IX;

6)                  Family Benefits Act - part VII and XII;

7)                  Social Tax Act – parts II, III, V, VI, IX, X, XII;

8)                  Administrative Procedure Act – part XII.

The legislation can be accessed in Estonian and English at www.riigiteataja.ee.


PART II – MEDICAL CARE

No significant changes(persons protected, contingencies covered, cost-sharing) duringthe reporting period.

  Extension of the revenue base of the Estonian Health Insurance Fund

In order to ensure sustainability of financing of health care system and medical care, the government has decided to extend the revenue base of the Estonian Health Insurance Fund by making available additional provision for non-working pensioners. During years 2018-2022 more than 300 millionof euros will be made available to health care systems, 92,5 million in 2018 and 140 million in 2019.

  Broadening of dental benefit package for people with disabilities

A new dental care benefit was established starting from July 1st, 2017 and since then there have been no major changes. Only change took place in the beginning of 2019, when the Estonian Health Insurance Fund broadened the dental benefit package for people with mental and/or physical disability, for whom the doctor has assessed that they need essential dental care services. Essential dental care services reimbursed are X-ray, inserting medication, temporary and inexpensive permanent filling, tooth removal, opening and treating abscess, root canal treatment, gum pockets deep cleaning, anaesthesia.

Article 9

A.    The recourse is had to Article 9 (c) of the Code.

B.     The protected persons are defined in the Health Insurance Act, § 5 subsection (1) - “an insured person is a permanent resident of Estonia or a person residing in Estonia on the basis of a temporary residence permitor the right of residence or a personlegally staying and working in Estonia based on a temporary ground for stay for whom a payer of social tax must pay social tax or who pays socialtax for themselves in accordance with the procedure, in the amountsand within the time limits provided for in the Social Tax Act, or a person considered equal to such persons on the basis of this Act”.

C.     Statistical information (Part III Article 74)

(a)    Number of insured persons at Estonian Health Insurance Fund as of December 31, 2018 was 1 251 617 (Estonian Health Insurance Fund);

(b)   Total population as of January 1, 2019 was 1 324 820 (StatisticsEstonia);

(c)    Number of insured persons amounted to 94.47% of the total.

a)      Number of insured persons

Insured persons

31.12.2018

1 251 617

31.12.2017

1 240 927

31.12.2016

1 237 277

31.12.2015

1 237 336

31.12.2014

1 232 819

Source: Estonian Health Insurance Fund

b)      Total population (beginning of the year)

Total population

01.01.2019

1 324 820

01.01.2018

1 319 133

01.01.2017

1 315 635

01.01.2016

1 315 944

01.01.2015

1 313 271

01.01.2014

1 315 819

Source: Statistics Estonia

c)      Number of insured persons per cent total population, %

%

 2018

94.47

2017

94.07

2016

94.0

2015

94.0

2014

93.9

2013

93.6

D.    Please refer to the answer given in point B.

E.     Non-applicable.

Article 10

 

A. The health insurance fund will assume the obligation of an insured person to pay for health services if the services are entered in the list of health services of the health insurance fund and the provision thereof is therapeutically justified (subsection § 29 (1) of the Health Insurance Act). The list of the services funded by Estonian Health Insurance Fund is provided in Regulation of the Government of the Republic “List of Health Services of Estonian Health Insurance Fund”.

An insured person is entitled to receive the health insurance benefits provided for in § 25 of the Health Insurance Act.

In 2017, cost-sharing of Estonian people when paying for health services constituted 23.6% of total healthcare expenditures (EU average 16%). The largest part of cost-sharing constitute the expenses on medicines (according to the National Institute for Health Development (NIHD), 35% in total, out of which 15% constitute the expenses on OTC medicines and 19% the expenses on prescription medicines). The second leading cause of cost-sharing is dental care (31%). This is followed by outpatient services (14%).

Pursuant to this list, patient cost-sharing in 2018 is the following:

Health service

Cost-sharing in 2018

Rehabilitation supporting the functions (to the person of at least 19 years of age), 20% (code 8030)

13,15 euros per day, 10 days in total

Induced abortion at woman’s own request, 30% (code 1M2110)

40,82 euros  

Medical abortion, 50% (code 246R)

17,67 euros

In-patient fee of independent in-patient nursing (former nursing care), 15% (code 2063)

11,03 euros

 

Since 2018 patient cost-sharing of pharmaceuticals is (§ 41-42 of the Health Insurance Act) 2.50 euros and it does not depend at the discount rate as in 2017. 

If the price limit or the agreed price of a medicine is lower than retail price, the patient must also pay the part exceeding the price limit or the agreed price in addition to the cost-sharing. More information about the calculation examples is available at the Estonian Health Insurance Fund homepage https://www.haigekassa.ee/en/people/benefits/medicinal-products. The limits for the payment obligation of an insured person assumed by the health insurance fund will be 90% or 50% of the agreed price (i.e. retail price) of the medical device or sales packaging of the medical device entered in the list of medical devices, or of a reference price, if the reference price is applicable to a group of medical devices. Patient cost-sharing is a difference between the retail price of the medical device and the payment obligation assumed by the health insurance fund.

 

Since July 1, 2017, dental care is also covered for adult insured persons. There is a list of services that will be covered when the service is provided by the dentist who has a contract with EHIF. The adults’ out-of-pocket payment is 50% of the bill and the maximum sum what EHIF covers is 40 euros per year. There are some patient groups whose out-of-pocket payment share is 15% and the maximum limit of the benefit that EHIF pays is 85 euros per year. The higher benefit is paid for the next groups:

·         for pregnant women and mothers of children under one year of age;

·         for old-age pensioners;

·         for persons receiving pension for incapacity for work;

·         for persons with partial or no work ability;

·         for persons over 63 years of age;

·         for persons with increased need for dental care.

Emergency care of an insured person will be paid by the health insurance fund, dental care expenses of the persons not covered by health insurance will be paid for out of the funds prescribed for such purpose in the state budget. Emergency care means health services which are provided by health care professionals in situations where postponement of care or failure to provide care may cause the death or permanent damage to the health of the person requiring care (§ 5 of the Health Services Organisation Act). The need for emergency care shall be determined by health care provider.  

 

Pursuant to subsection § 63 (3) of the Health Insurance Act, in addition to the prosthetic dentistry expenses, the dentures benefit in the maximum amount of 260 euros within three years will be paid to a person whom pension for incapacity for work or old-age pension has been granted in accordance with the State Pension Insurance Act, or who has been found to have partial work ability or no work ability under the Work Ability Allowance Act, and to insured persons of over 63 years of age. More information is found from EHIF’s webpage: https://www.haigekassa.ee/en/people/benefits/dental-care-benefits.  

 

Financing of benefits for medicinal products increased by 8% compared to 2017. Compared to the last year, the number of discount prescriptions increased by 5%, it also reflects the increase in the use of medicinal products and the renewed supplementary benefits. The cost of an average discount prescription has decreased by 8% for the patient. 

 

Upon purchasing prescription medicines, cost-sharing of an insured person has decreased from 37% to 35% during last year, average cost of prescription was 6.31 euros for a patient. The decrease in the cost-sharing of an insured person is caused by supplementary benefits.

From the beginning of 2018, supplementary benefits for people with high expenses on medicinal products will start. Supplementary benefits for medicinal products are provided to insured persons who pay at least 100 euros per calendar year for discount prescriptions (so far they received benefits from the expenses of 300 euros per year). The benefit is meant to help those who spend more money than average for the purchase of discount medicines. From the beginning of 2018, the supplementary benefit for medicinal products is automatic, the insured person will receive additional benefits, along with the usual medical benefit, at the time of purchase of the drug at the pharmacy, and submission of an application to the Health Insurance fund is not required.

https://www.haigekassa.ee/en/people/benefits/medicinal-products.

B. The description of the extent to which the patient is required to share the cost of medical care received in provided under point A.

C. No changes.

D. No changes.

Article 12

No changes.



PART III – SICKNESS BENEFIT

No significant changes (persons protected, contingencies covered) during the reporting period.

Article 15

A.    Recourse is had to Article 15 (b) of the Code.

B.     No changes.

C.     Statistical information (Part II, Article 74):

a)       Number of economically active insured as of December 31, 2018 was 632 428 (Estonian Health Insurance Fund);

b)       Total population as of January 1, 2019 was 1 324 820 (Statistics Estonia);

c)       Number of economically active insured made up 46,9% of total population in 2017

a) Number of economically active insured (end of the year).

Number of economically active insured

31.12.2018

632 428

31.12.2017

618 289

31.12.2016

604 781

31.12.2015

615 333

31.12.2014

600 998

Source: Estonian Health Insurance Fund

b)   Total population as of (beginning of the year)

Total

population

01.01.2019

1 324 820

01.01.2018

1 319 133

01.01.2017

1 315 635

01.01.2016

1 315 944

01.01.2015

1 313 271

Source: Statistics Estonia

c)   Number of economically active insured of total population, %

%

 2018

47.7

2017

46.9

2016

46.0

2015

46.8

2014

45.8

2013

44.4

Article 16

A. The recourse is had to Article 65 of the Code.

Titles I and II, Article 65

In 2018, the minimum monthly wage for full-time work was 500 euros. From January 1, 2019, the minimum monthly wage is 540 euros per month.

The sickness benefit is taxable with income tax (in 2018, the income tax rate is 20 percent and the income tax exemption varies from 0 to 500 euros per month).

B, C. The average income of insured persons taxable with social tax was 1182,7 euros per month in 2018 (data by the Social Insurance Board). Respectively, the gross monthly earnings of a regular skilled male worker pursuant to Article 65 (6) (c) of the Code were as follows in 2018:

1,25 * 1182,7 = 1478,38 euros.

Average income of insured persons taxable with social tax, euros a month

euros

2018

1182,7

2017

1106,60

2016

1029,85

2015

969,05

2014

908,12

Source: Social Insurance Board

Gross monthly earnings of a regular skilled male worker, euros

euros

 2018

1478,38

2017

1383,25

2016

1287,31

2015

1211,32

2014

1135,15

Source: Social Insurance Board

D. In 2018, the amount of the sickness benefit for a standard beneficiary (in in-patient care) for one month was as follows:

0,7 * 1478,38 = 1034,86 euros.

Sickness benefit for a standard beneficiary, euros

euros

 2018

1034,86

2017

968,28

2016

901,12

2015

847,92

2014

794,61

Source: Social Insurance Board

E, F. In 2018, the amount of family benefits for a standard beneficiary with two children amounted to 110 euros per month. Payment of family benefits is not related with working/not working of parents or receiving other social security benefit, i.e. the same family benefit is paid both while working and receiving sickness benefits.

Family benefits for a standard beneficiary with two children, euros

euros

 2019

120

 2018

110

2017

100

2016

100

2015

90

2014

38,35

Source: Ministry of Social Affairs

G. The gross replacement rate of a standard beneficiary of sickness benefit in 2018 was (1034,86 + 110) / (1478,38 + 110) * 100 = 72.0%.

Gross replacement rate of a standard beneficiary of sickness benefit, %

%

2018

72.1

2017

72.0

2016

72.2

2015

72.1

2014

71.0

The benefit for temporary incapacity for work

The benefit for temporary incapacity for work will not be paid to persons coveredby insurance on the grounds specified in clauses 5 (2) 3) (persons for whom social tax is paid by state, local authority or artistic association) and 6) (persons receiving an unemployment insurance benefit on the basisof the Unemployment Insurance Act) or subsection 5 (4) (personsconsidered equal to insured persons) of the Health Insurance Act or to persons considered equal to insured persons on the basis of a contract.

No benefits will be paid for the first 3 days of sickness, an employer shall pay to an employee sickness benefit from the fourth until the eighth calendar day of sickness (§ 122 of the Occupational Health and Safety Act), the Health Insurance Fund will pay sickness benefit to everyone as of the ninth day of sickness (subsection § 56 (1) of the Health Insurance Act).

Article 18

No changes.


PART IV – UNEMPLOYMENT BENEFIT

No significant changes (persons protected, contingencies covered) during the reporting period.

The maximum amount of unemployment insurance benefit in 2019 is1546,28  1546,28 1546,28 euros a month. The minimum amount of unemployment insurance benefit for 31 days is 258,23 euros (minimum daily rate is  8,33 euros).

The basis of the maximum amount of unemployment insurance benefit is three times the average remuneration per calendar day in Estonia, which is 33,25 euros this year. The average remuneration per calendar day is recalculated every year by theUnemployment Insurance Fund on the basis of unemployment insurance premiums paid in the preceding year.

The amount of unemployment insurance benefit is:

-   for the first 100 days - 50% of nine months average daily remuneration a person has received 3 months before getting unemployed (maximum daily rate 49,88 euros in 2019);

-   for the subsequent days - 40% of nine months average daily remuneration a person has received 3 months before getting unemployed (maximum daily rate 39,90 euros in 2019).

Also unemployment allowance daily rate has changed on January 1, 2019, and is 5,65 euros a day. In 2018, unemployment allowance daily rate was 5,31 euros. In 2019, the unemployment allowance amount for 31 days is 175,15 euros.  

Article 20

No changes.

Article 21

A.    The recourse is had to Article 21 (a) of the Code.

B.     No changes.

C.     In 2018, according to Estonian Tax and Customs Board, unemployment insurance premiums were collected from 641 913 insured persons. The total number of employed and unemployed persons was 702 400 in 2018 (according to Statistics Estonia). Therefore 91.4% of the total number of employed and unemployed persons was insured.

Number of insured persons by collection of unemployment insurance premiums

Insured persons

2018

641 913

2017

623 518

2016

613 899

2015

612 216

2014

608 476

Source: Estonian Tax and Customs Board data


Total number of employed and unemployed persons

Total

2018

702 400

2017

698 800

2016

691 400

2015

683 100

2014

674 400

Source: Statistics Estonia

Number of insured persons per cent of total number of employed and unemployed, %

%

2018

91.4

2017

89.2

2016

88.8

2015

89.6

2014

90.2

In 2018 the unemployment insurance premiums from insured persons added up to 123 654 thousand euros and the unemployment insurance premiums from employers added up to 66 583 thousand euros.

Unemployment insurance premiums from

Unemployment insurance premiums from

Total of unemployment insurance

insured persons, thousand euros

employers, thousand euros

premiums , thousand euros

 2018

 123 654

 66 583

190 237

2017

112 824

60 751

173 575

2016

103 472

55 715

159 187

2015

97 376

52 433

149 809

2014

113 517

61 124

174 641

Source: Unemployment Insurance Fund data

Article 22

A. The recourse is had to the provisions of Article 65 of the Code.

Unemployment insurance benefit is taxable with income tax. In 2018, the income tax rate was 20%. Annual basic exemption (non-taxable amount) is up to 500 EUR in a month and up to 6000 EUR in the year, but decreasing depending on the total income amount. If total amount of all income is 25 200 EUR in a year or more, there is no right to basic exemption at all.

B, C. The average income of insured persons taxable with social tax was 1182,7 euros per month in 2018 (data by the Social Insurance Board). Respectively, the gross earnings of a regular skilled male worker pursuant to Article 65 (6) (c) of the Code were as follows in 2018: 1,25 * 1182,7 = 1478,38 euros.

D. The amount of unemployment insurance benefit to a standard beneficiary (during the first 100 days of unemployment) in a month was:

0,5 * 1478, 38 = 739,19 euros.

E, F. In 2018 and 2019, the amount of family benefits for a standard beneficiary with two children amounted to 110 and 120 euros per month accordingly. Payment of family benefits is not related to working/not working or receiving other benefits, i.e. the same family benefit is paid both while working and during unemployment.

G. Accordingly, the gross replacement rate of a standard beneficiary of unemployment insurance benefit in 2018 was:

(739,19+100) / (1478,38 +100)*100 = 53.2%

B, C. The average income of insured persons taxable with social tax, euros

euros

2018

1182,7

2017

1106,60

2016

1029,85

2015

969,05

2014

908,12

Source: Social Insurance Board

Gross wage of a regular skilled male worker, euros

euros

2018

1478,38

2017

1383,25

2016

1287,31

2015

1211,32

2014

1135,15

Source: Social Insurance Board

D. The amount of unemployment insurance benefit to a standard beneficiary (during the first 100 days of unemployment), euros

euros

2018

739,19

2017

691,63

2016

643,66

2015

605,66

2014

567,58

Source: Social Insurance Board

E, F. Family benefits for a standard beneficiary (corresponds to child allowance paid to a family with 2 children), euros

euros

 2019

120

 2018

110

2017

100

2016

100

2015

90

2014

38,35

Source: Ministry of Social Affairs

G.   Gross replacement rate of a standard beneficiary of unemployment insurance benefit, %

%

2018

53.2

2017

53.4

2016

53.6

2015

53.5

2014

51.6

Article 23

No changes.

Article 24

1.      Starting from July 1, 2014, the insurance accumulation period is accounted in months and years. Every 12 months of an insurance accumulation period are accounted as one year of the insurance accumulation period.

According to the provisions of subsection § 8 (1) of the Unemployment Insurance Act, if the insured person’s insurance accumulation period is:

-          shorter than 5 years, the Unemployment Insurance Fund grants the benefit for 180 calendar days;

-          5 to 10 years, the Unemployment Insurance Fund grants the benefit for 270 calendar days;

-          10 years or more, the Unemployment Insurance Fund grants the benefit for 360 calendar days.

2.      No changes.

3.      No changes.

4.      No changes.

 


PART V – OLD-AGE BENEFIT

Changes to the State Pension Insurance Act

In 2018, the Parliament adopted changes to the State Pension Insurance Act. These changes addressed the problems of pensions’ adequacy of low wage earners and the sustainability of pension system. In order to reduce the impact of the contributions to the future pensions, changes in pension formula were made. From 2021 onwards, the fourth part of pension formula, which is called the compound part, will be collected. The compound part is a symbiosis of second and third part of pension formula (length of service and insurance components). As a result of the change in the pension formula, the first pillar pensions will not become as unequal as they would have become only with a three-part pension formula. As the first pillar pension formula will be supplemented with a more solidarity part from 2021, people who wish to have their future pension more dependent on the amount of social security contributions will be able to join the second pension pillar. It is possible to join the second pillar for people born between 1970 and 1982 from January 1, 2020 to November 30, 2020. The second pillar contributions will be made by new entrants from January 1, 2021.

Linkage of pensionable age with life expectancy

Another important development is the linkage of pensionable age with life expectancy. Pension age will be linked to life expectancy from 2027 when the previous rise in pensionable age is achieved (65 years for men and women). The change in pension formula and the rise in pensionable age will make everybody’s (especially low-income persons’) pensions bigger in the future.

The adoption of the concept of flexible pension

The flexible retirement concept will allow people to retire flexibly before legal pensionable age as they receive pensions even while they keep on working. Earlier retirement has been restricted in terms of pension qualifying period, as it keeps people from retiring too soon with a pension which is too small. If the general pension qualifying period is 15 years, in case of retiring up to one year before the retirement age one can retire with at least 20 years of pension qualifying period, up to two years before 25 years of qualifying period, up to three years before 30 years of qualifying period, up to four years before 35 years of qualifying period and up to five years before 40 years of qualifying period. In order to increase one’s pension it is now possible to stop the pension payments and start them later again. While the pension payments are stopped they will grow actuarially neutrally. It is also possible to take out only half of pension which makes later pension payments higher. In 2021, the concept of flexible pension will come into force.

Lump-sum support for pensioners living alone with low income

Pensioners who are living alone face the highest risk of poverty among all pensioners. Thus, a new measure targeted specially to this group was introduced in 2017.  A lump sum support of 115 € per year was introduced from 2017 for pensioners living alone with pension lower than 1.2 times the amount of average old-age pension (less than 470€). The aim of the allowance is to improve financial independence and reduce poverty of pensioners’ living alone. To avoid non-take-up, the benefit is paid out automatically without any application required, based solely on Population Register and Social Insurance Board data. In 2018, 79 370 pensioners received pensioners living alone allowance.

Pension supplement

From 2018 a pension supplement in the amount of the value of a year of pensionable service (from 1st of April 2019 it is 6,627 euros) is paid monthly to a parent, parent's spouse, guardian or foster parent for every child whom he or she has raised for at least eight years. Pension supplement is paid for 229 000 pensioners.

Pensions’ export

Starting from January 1, 2018, the old-age pensions earned in Estonia are exported all over the world. Thus, a residency restriction has been abolished and out-payment of pensions has been extended to all the countries.

Please see the State Pension Insurance Act, Sections 42.2 and 4.3 https://www.riigiteataja.ee/en/eli/504022019001/consolide.

As of May 16th, 2019, the pension export possibility is used by 381 persons residing in following countries:

Country

Number of persons

Belorussia

134

United States of America

129

Israel

90

Armenia

2

Georgia

2

Argentina

1

Azerbaijan

1

Iraq

1

Kazakhstan

1

Venezuela

1

Total

381

Article 27

A.    The recourse is had to the sub-paragraph (b) of Article 27 of the Code.

B.     Starting from January 1, 2017, pensionable age in Estonia is gradually raising to attend 65 years by 2026. Pensionable age depends on year of birth.

The objective of the pension reform, which was formalized in 2018, is to prevent a reduction in pensions and to ensure the country’s financial sustainability. The most important changes are supplementing the pension formula, opening the possibility of joining the second pillar for those born in 1970-1982, linking the retirement age with life expectancy and the implementation of a flexible retirement pension.

Pension age will be linked to life expectancy from 2027 when the previous rise in pensionable age is achieved (65 years for men and women).

From 2021 onwards, people can choose the most suitable time for retirement, suspend their pension if they wish, or take half the pension.

C.     Statistical information (Article 74):

a)                the number of economically active insured persons as of December 31, 2018, was 632 428 (data by Estonian Health Insurance Fund);

b)               the total population of Estonia as of January 1, 2019, was 1 324 820 (data by Statistics Estonia);

c)                number of economically active insured persons was 47.7% of total population.

a)      number of economically active insured as of December 31

2018

632 428

2017

618 289

2016

604 781

2015

615 333

2014

600 998

Source: Estonian Health Insurance Fund

b)      total population of Estonia as of January 1

2019

1 324 820

2018

1 319 133

2017

1 315 635

2016

1 315 944

2015

1 313 271

Source: Statistics Estonia

c)      economically active insured persons per cent of total population

%

2018

47.7

2017

46.9

2016

46.0

2015

46.8

2014

45.8

D.    Non-applicable

Article 28

A.    The recourse is had to Article 66 of the Code with regard to the calculation of old-age pension.

As of April 1, 2018, the base amount for pension was 175,439 euros per month, the monthly national pension rate was 189,31 euros and the value of a year was 6,161 euros per month.

Old-age benefit is taxable with income tax. In 2017, the income tax rate was 20% and the income tax exemption was 180 euros a month. In 2018, annual basic exemption (non-taxable amount) is up to 500 EUR in a month and up to 6000 EUR in the year, but decreasing depending on the total income amount. If total amount of all income is 25 200 EUR in a year or more, there is no right to basic exemption.

Titles I and III Article 66

a. Regular unskilled male worker is defined as an unskilled male industry worker (ISCO-08 International Standard Classification of Occupations, occupation code9).

Gross wage of a regularunskilled male workeris calculated and forecasted on the basisof gross hourly wage of a male worker in processing industry. Processing industry was chosen because it has been the industry with the largest number of employees, comprising 19.5% of all employees in 2018 (the average number of employees working full-time in processing industry was about 104.2 thousand employees, the total number of employed people working full-time in all fields of work was about 534.8 thousand).

b. In 2018, the average grosshourly wage of a male worker workingin processing industryfor full-time and part-time work was 8 euros and 14 cents. The calculated average gross hourly wage of a regular unskilled male worker for full-time and part-time work was 5 euros and 96 cents (i.e., 73.2% of a male worker's gross hourly wage). The calculation is based on Statistics Estonia gender gap pay survey from October 2017 (PA5335) and from the Statistics Estonia 2017 and 2018 data about gross hourly wage of workers, labour costs, number of hours worked and number of employees (PA001).

When comparing data from the two previously mentioned sources, it follows that the gross hourly wage of male workers was 9.8% higher than the average gross hourly wage in 2017.

As in 2018 the average gross hourly wage in processing industry was 7,42 euros (PA001) according to the Statistics Estonia, the average gross hourly wage has been multiplied by coefficient 1.098 in order to get the data about a male worker (the Statistics Estonia will publish gender specific statistical data about 2018 gross hourly wage in October 2019). The calculations of the estimated gross monthly wage of a male worker in processing industry are based on the data of 2017, when the average number of hours worked was 163.35. According to that the estimated gross monthly wage of a male in processing industry in 2018 was 974,04 euros and the monthly net salary was 851,18 euros.

In 2018, the income tax rate is 20 percent and the income tax exemption varies from 0 to 500 euros per month), the unemployment insurance premium rate was 1.6% and the rate of contributions to the mandatory funded pensions (the second pillar of pension insurance) for people who had joined pension insurance was 2%.

c. According to the pension formula, in 2018 the old-age pension of a beneficiary with a pensionable period of 30 years was 175,439 + 6,161*30 = 360,27 euros

d., e. The persons with pension insurance shall still not receive family benefit for their wife during their work or pension period.

f. In 2018,the old-age pensionof a standard beneficiary (a man with awife of pensionable age) formed (360,27+189,31)/851,18*100 = 64.6% of a regular unskilled male worker's net wage.

a) the old-age pension of a beneficiary with a pensionable period of 30 years, euros

The old-age pension with a pensionable period of 30 years

Pension components

Base part

National pension rate

Value of a year

2018

360,27

175,439

189,31

6,161

2017

334,91

161,9038

175,94

5,767

2016

318,72

153,3035

167,40

5,514

2015

301,61

144,2585

158,37

5,245

2014

283,83

134,9093

148,98

4,964

Source: Social Insurance Board

d), e) Gross and net monthly wage of a regular unskilled male worker in processing ¹, euros

Gross wage

Net wage

2018

974,04

851,18

2017

941,04

761,73

2016

907,56

733,91

2015

787,39

638,03

2014[1]

721,35

577,31

The increase in net wage in 2018 was affected by the change in Income Tax Act. In 2018, the income tax rate was 20%, but the overall tax-free amount (basic exemption) changed. Annual basic exemption (non-taxable amount) is up to 500 EUR in a month and up to 6000 EUR in the year, but decreasing depending on the total income amount. If total amount of all income is 25 200 EUR in a year or more, there is no right to basic exemption at all.

f) Old-age pension of a standard beneficiary (a man with a woman of pensionable age) per cent of a regular unskilled male worker

%

2018

64.6

2017

67.1

2016

66.2

2015

72.1

2014[2]

75.0


PART VII – FAMILY BENEFIT

There have been minor changes regarding the conditions of family benefit system during the reporting period.

Minor changes regarding the conditions of family benefit system

On 1st March 2018 allowance for multiple birth of three or more children was established.

Also from March 1, 2018, the parental benefit of the person earning a salary was reduced, only if the earned salary exceeds the upper limit of the parental benefit (which corresponds to a one and a half times the average salary). Previously the parental benefit was reduced if the person earned a larger salary than the current parental benefit rate (for example, 470 euros in 2018).

In addition, the child allowances have increased in 2018 and 2019 (see table below).

All the family benefits in Estonia are universal, no qualifying period is required. All the residents are entitled to receive the benefits as of the first day of registration of residence in Estonia (entering the data of a person’s residence in the population register).

Periodical benefits and their amounts as of entry into force of Family Benefits Act:

Type of benefit

Amount of benefit

Child allowance

-   for the first and second child of family – 55 euros per month in 2018 and 60 euros in 2019;

-    for third and every consequent child - 100 euros per month.

Single parent’s child allowance

19,18 euros per month.

Child care allowance

-    to the parent raising a child of up to three years of age or to the person other than a parent who uses parental leave 38,35 euros for each child of up to 3 years of age per month;

-   in the family where in addition to the child of up to 3 years of age, there are also children between 3 and 8 years of age, to one parent

19,18 euros per month for each child between 3 and 8 years of age;

- in the family with three or more children who are at least 3 years of age and who receive child allowance to one parent 19,18 euros per month for each child between 3 and 8 years of age.

Child care allowance shall not be paid, if a parent receives parental benefit.

Foster care allowance

240 euros per month.

Allowance for families with many children;

For the family with three to six children - 300 euros per month.

For the family with seven or more children - 400 euros per month.

Allowance for multiple birth of three or more children

1000 euros per month paid from the children’s birth to a parent, who is raising triplets or more children born at the same time. The right to receive this allowance applied until the day that the children turn 18 months old. (The allowance for multiple birth of three or more children came to force on 1 March 2018.)

Parental benefit

The amount of benefit is calculated on the basis  of  the  applicant’s  average income of

one calendar month of the preceding calendar year and it is generally 100% of the average income of one calendar month of the preceding calendar year subject to social tax.

The ceiling for parental benefit is 3319,80 euros per month. The parental benefit rate is 500 euros per month. Parental benefit in the amount of the benefit rate is paid to a person who had no income taxable with social tax in the preceding calendar year (e.g. not working students).

Parental benefit in the amount of minimum wage (540 euros in 2019) is paid to a person whose average monthly income of the preceding calendar year was equal to or smaller than minimum wage.

Article 41

A.    The recourse is had to the sub-paragraph (b) of Article 41 of the Code

B.     Protected persons are all permanent residents of Estonia or aliens residing in Estonia on the basis of temporary residence permits or temporary right of residence.

C.     Statistical information Title II Article 74:

Title II of Article 74 is not the most suitable for getting statistical data on persons affected by the State Family Benefits Act. Therefore, in order to show the fulfilment of the requirements in Article 41 of the Code, the number of covered persons shall be deemed equal to the total number of male population of economically active age (15–64).

a)      In 2018, the number of Estonian male population aged 15–64 was 422 821  (Statistics Estonia);

b)      In 2018, the total population of Estonia (annual average) was 1 321 977 (Statistics Estonia);

c)      The number of covered persons amounted to 32.0% of the total population.

a)   number of Estonian male population aged 15–64 (annual average)

2018

422 821

2017

421 669

2016

422 397

2015

423 583

2014

425 348

2013

428 714

Source: Statistics Estonia

b)   total population of Estonia (annual average)

2018

1 321 977

2017

1 317 384

2016

1 315 790

2015

1 314 608

2014

1 314 545

2013

1 317 997

Source: Statistics Estonia

Notes (Statistics Estonia): Data for 2000-2013 recalculated on January 17, 2014.

Corresponding changes male for years 2011 and 2012.

c)   covered persons per cent of total population

%

2018

32.0

2017

32.0

2016

32.1

2015

32.2

2014

32.4

2013

32.5

Article 42

The recourse is had to the sub-paragraph (a) of Article 42 of the Code

A.  Gross monthly wage of a regular unskilled male worker was 974,04 euros in 2018 (see information provided under Article 28).

B.  The total amount of family benefits (excluding parental benefits and (one-time) childbirth allowance) for 2018 was 278,41 million euros (data by the Ministry of Social Affairs), which makes on average 23,201 million euros per month.

C.  i. The number of children (average, entitled to payment of child allowance) was 228 795 in 2018 (data by Statistics Estonia, children 0–15 years of age);

ii. In 2018 the total value of family benefits was 10,4% of the multiplication of the gross wage of a regular unskilled male worker by the children of all residents.

A. Gross and net monthly wage of a regular unskilled male worker, euros

Gross wage, euros

Net wage, euros

2018

974,04

851,18

2017

941,04

761,73

2016

907.56

733,91

2015

787.39

665,14

2014

721.35

601,77

Source: Statistics Estonia

B. Total amount of family benefits, millions of euros

millions of

euros

2018

278,41

2017

224,35

2016

189.45

2015

174.581

2014

96.074

Source: Social Insurance Board

C. i. Number of children entitled to payment of child allowance

Children 0-15 y.o (annual average)

2018

228 795

2017

226 651

2016

224 725

2015

222 527

2014

220 345

Source: Statistics Estonia

ii. total value of family benefits per cent of t of the multiplication of the gross wage of a regular unskilled male worker by the children of all residents

%

2018

10,41

2017

8,77

2016

7.74

2015

8.3

2014[3]

5.04

Article 44

No changes.


PART VIII – MATERNITY BENEFIT

No significant changes (persons protected, contingencies covered) during the reporting period.

Article 48

A.    The recourse is had to the sub-paragraph (b) of Article 48 of the Code.

B.     No changes.

C.     Updated statistical information

a)      In 2018, the number of Estonian female population aged 15–64 (annual average) was 422 716 (Statistics Estonia);

b)     In 2018, the total population of Estonia (annual average) was 1 321 977(Statistics Estonia);

c)      The number of covered persons amounted to 32.0% of the total population.

a)    number of Estonian female population aged 15–64 (annual average)

2018

422 716

2017

424 868

2016

428 467

2015

432 167

2014

436 323

2013

441 942

Source: Statistics Estonia

b)    total population of Estonia (annual average)

2018

1 321 977

2017

1 319 133

2016

1 315 635

2015

1 314 608

2014

1 314 545

2013

1 317 997

Source: Statistics Estonia

c)   covered persons per cent of total population

%

2018

32.0

2017

32.2

2016

32.6

2015

32.9

2014

33.2

2013

33.5

2012

33.8

2011

34.1

D.     No changes.

Article 50

A. For the calculation of the in cash (maternity) benefit the recourse is had to the Article 65 of the Code.

B.   Updated statistical information Titles I and V, Article 65 of the Code.

a.   Maternity benefit is subject to income tax. In 2017, the income tax rate was 20% and the income tax exemption was 180 euros; in 2018, the income tax rate is 20% and the income tax exemption varies from 0 to 500 euros.

In 2017, the minimum wage was 470 euros per month in case of full-time work and accordingly the upper limit for the income taxable with social tax for sole proprietors was 7050 euros per month. As of January 1, 2018, the minimum monthly wage for full-time work is 500 euros per month and accordingly the upper limit for the income taxable with social tax for sole proprietors is 7500 euros per month.

b, c. In 2018 the pursuant to Article 65 (6) (c) were 1478,38 euros.

Gross earnings of a regular skilled male worker, euros

Gross earnings of a

regular skilled male worker, euros

2018

1478,38

2017

1383,25

2016

1287,31

2015

1211,32

2014

1135,15

2013

1062,06

Source: Social Insurance Board

d. In 2018, the standard beneficiary’s maternity benefit per month was: 1,00 * 1478,38 = 1478,38 euros.

Standard beneficiary’s maternity benefit per month and maternity benefit gross replacement rate

Standard beneficiary’s maternity benefit per month,

euros

maternity benefit gross replacement rate, %

2018

1478,38

100

2017

1383,25

100

2016

1287,31

100

2015

1211,32

100

2014

1135,15

100

2013

1062,06

100

g.   Standard beneficiary’s maternity benefit gross replacement rate was: 1478,38/1478,38 = 100

Article 51

No changes.

Article 52

1.   No changes.

2.   No changes.

3.   No changes.


PART IX – INVALIDITY BENEFIT

Work ability allowance

Work ability reform replaces incapacity for work pension with work ability allowance. The latter’s amount is not linked nor to a person’s previous income, neither employment record.

Work ability allowance daily rate (as of April 1, 2019) is 13,79 euros. The effective allowance amount is:

-          57% of daily rate in case of partial work ability –  7,86 euros a day or ca 235,81 euros a month;

-          100% of daily rate in case of no work ability –  13,79 euros a day or ca  413,70 euros a month.

Similarly, to state pension’s daily rate of work ability allowance indexed on yearly basis on April 1, which presumably raises the rate each year. Unlike state pensions work ability allowance is not taxed with income tax.

Transition provisions from the heritage system to the new one

All the incapacity for work pensioners will enter the new work ability systemby 2020. With an exception for a small category of those who are assessed as permanently incapable for work with no re-assessment term given (termless) – this category will be receiving incapacity for work pension until reaching retirement age. Nevertheless, they can join the new system on voluntary basis.

Article 54

The contingency covered shall include inability to engage in any gainful activity, to an extent prescribed, which inability is likely to be permanent or persists after the exhaustion of sickness benefit.

Since July 1, 2016, Estonia has implemented new work ability support system (work ability reform). Benefit for limited work ability (work ability allowance) shall be granted to the persons with partial or no ability for work between the age of 16 and the pensionable age. 

Article 55

A.    The recourse is had to the sub-paragraph (b) of Article 55 of the Code.

B.     All permanent residents of Estonia and aliens residing in Estonia on the basis of temporary residence permits or temporary right of residence between the age of 16 and the pensionable age.

C.     Please refer to the information provided under Article 27.

D.    Non-applicable.

Article 56

A.    The recourse is had to the Article 66 of the Code.

The national pension rate is the minimum guarantee in determination of pension for incapacity for work. Starting with April 1, 2018 the national pensionrate was 189,31 euros per month.

B.     In 2018, the old-age pension for a person with 30 years of pensionable service was 360,27 euros per month.

Titles I and II, Article 66

a.   For the selection of a regular unskilled male worker, see information under Article 28.

b.   In 2018, the gross wage for a regular unskilled male worker was 974 euros and 04 cents and the net wage was 851 euros and  18 cents (see also information under Article 28).

c.     At the end of 2018, the pension for incapacity for work for a standard beneficiary (a person totally incapacitated for work) was at least 360,37 euros.

d, e. In 2018, the family benefit sum paid for a standard beneficiary with two children was 110 euros per month. Payment of family benefits is not related to the parents working or receiving other socialsecurity benefits, i.e. the same family benefitis paid both while workingand during periods of incapacity for work

f. In 2018, the standard beneficiary’s pension for incapacity for work amounted to: (360,27 + 110 / (851,18+ 110)*100 = 48,9% of a regular unskilled male worker’s net wage.

Gross and net monthly wage of a regular unskilled male, euros

Gross wage

Net wage, euros

2018

974,04

851,18

2017

941,04

761,73

2016

907,56

733,91

2015

787,39

638,03

2014

721,35

577,31

Source: Statistics Estonia

a.                   Pension for incapacity for work for a standard beneficiary (a person totally incapacitated for work), euros

Euros

2018

360,27

2017

334,91

2016

318,72

2015

301,61

2014

283,83

Source: Social Insurance Board

d, e. Family benefits for a standard beneficiary with two children, euros

euros

 2018

110

2017

100

2016

100

2015

90

2014

38,35

Source: Social Insurance Board

Pension for incapacity for work for a standard beneficiary per cent of a regular unskilled male worker net monthly wage, %

%

2018

48.9

2017

50.5

2016

50.2

2015

53.8

2014[4]

52.3

Article 57

Starting with April 1, 2018 the national pension rate is 189,31 euros per month and the national pension for a person with 40 percent incapacity for work is 75,72 euros per month.

Article 58

No changes.


PART X – SURVIVOR’S BENEFIT

Pensions’ export

Starting from January1, 2018 the survivor’s pensionsearned in Estoniaare exported all over the world. Thus a residency restriction has been abolished and out-payment of pensions has been extended to all the countries. Please see State Pension Insurance Act, Section 42.2 https://www.riigiteataja.ee/en/eli/504022019001/consolide.

Article 60

Contingency covered is death of provider. In this case, family members who were maintained by the providerhave the right to receive survivor’s pension.It is important to point out that the right of the provider’s widow or widower to receive a survivor’s pension does not depend on whether they were maintained by the provider or not (during provider’s lifetime).

However, incapacity of widow or widower to maintain himself/herself is essential for determining eligibility for survivor’s pension.

-          Provider’s non-working widow who is pregnant (from the 12th week of pregnancy) has the right to receive a survivor’s pension.

-          Provider’s widow or widower, who has been established to have no work ability or who is of pensionable age, has also the right to receive a survivor’s pension.

Article 61

No changes.

Article 62

A.    The recourse is had to the Article 66 of the Code

Survivor’s pension for a spouse with two children is equal or bigger (but no less) than old-age pension, available to a person with a pensionable period of 30 years. Starting from April 1, 2018 the old-age pension for a person with 30 years of pensionable service was 360,27 euros per month Therefore, starting with April 1, 2018he survivor’s pension for a spouse with two children is at least 360,27 euros per month.

Starting from April 1, 2018the survivor’s pension amount is:

-                      for three family members 360,27 euros;

-                      for two family members 288,22 euros;

-                      for one family member 180,14 euros.

Titles I and IV, Article 66

a.   For the selection of a regular unskilled male worker, see information under Article 28.

b.   In 2018, the gross wage for a regular unskilled male worker was 974,04 euros and the net wage was 851,18 euros (see also information under Article 28).

c.     In 2018, the survivor’s pension for a standard beneficiary (spouse with two children) was 360,37 euros per month.

d., e. In 2018, the family benefit sum paid for a standard beneficiary with two children was 110 euros per month. Payment of family benefits is not related to the parents working or receiving other social security benefits, i.e. the same family benefit is paid both while working and during periods of incapacity for work.

f. In 2018, the survivor’s pension for a standard beneficiary per cent of a regular unskilled male worker’s net wage was:

(360,27+ 110) / (851,18+ 110)*100= 48.9%

b)   Gross and net monthly wage of a regular unskilled male, euros

Gross wage

Net wage, euros

2018

974,04

851,18

2017

941,04

761,73

2016

907,56

733,91

2015

787.39

638.03

2014[5]

721.35

577.31

2013

624.4

503.78

Source: Statistics Estonia

c)   Survivor’s pension for a standard beneficiary (with 2 children), euros

euros

2018

360,27

2017

334,91

2016

318,72

2015

301.61

2014

283.83

2013

268.36

  Source: Social Insurance Board

d, e)

Family benefits for a standard beneficiary with two children, euros

euros

 2018

 110

2017

100

2016

100

2015

90

2014

38.35

2013

38.35

Source: Social Insurance Board

the survivor’s pension for a standard beneficiary per cent of a regular unskilled male worker’s net wage, %

%

2018

48.9

2017

50.5

2016

50.2

2015

53.8

2014[6]

52.3

2013

56.6

Article 64

No changes.


PART XII – COMMON PROVISIONS

Article 70

No changes.


Replies to the Committee’s questions

           I.            Concerning why maternity benefit is paid to the members of management or controlling bodies of legal persons etc. “without pregnancy and maternity leave”

Maternity leave is for persons who are working or in service under the Employment Contracts Act (§ 59) and the Civil Service Act (§ 43 (1)). It is also provided in the Health Insurance Act that for previously mentioned insured persons (§ 51 (2) of the Health Insurance Act), maternity leave is considered to be an insurance case. The time of issuing maternity leave and certificate for maternity leave corresponds to the deadlines set in the Employment Contracts Act (compare § 59 of the Employment Contracts Act and § 58 of the Health Insurance Act).

As insured persons who are members of management or controlling bodies of legal persons, self-employed persons, spouse participating in the activities of the undertaking of the self-employed persons, payers of business income tax, and persons receiving remuneration or service fees on the basis of a contract under the law of obligations, do not belong into the scope of the Employment Contracts Act and the Civil Service Act (as they decide for themselves how they work), they are paid maternity benefit without maternity leave (§ 51 (2) of the Health Insurance Act). Eligible persons have the rights to receive the maternity benefit for 140 calendar days on the basis of a certificate for maternity leave (§ 58 (3) of the Health Insurance Act). According to the Health Insurance Act, maternity leave is a temporary incapacity for work benefit and during the period of receiving maternity benefit there are specific requirements for receiving temporary incapacity for work benefit. For example, it is prohibited to conduct business activities and to receive taxable profit from social tax (§ 60 (2) of the Health Insurance Act). Therefore, it is not allowed for members of management and controlling bodies of legal persons etc., to work during the period when they are receiving maternity benefit. If these persons work during that period, they will lose the right to receive maternity benefit for the period that they are conducting employment or service duties or engaging in business. Also, the 140 days of maternity leave (compensated by maternity allowance) can be taken between 30 to 70 days before the expected date of birth. If less than 30 days leave are taken before the expected birth, leave is shortened accordingly.

        II.            Concerning survivor’s benefit, to what extent the presumptions of the widow/widower to be incapable of self-support are applicable to spouses

Survivor’s benefit is applicable to spouses if they are: a provider’s non-working widow who is pregnant (from the twelfth week of pregnancy); a provider’s widow or widower who has been established to have partial or no work ability pursuant to the Work Ability Allowance Act or who is of pensionable age and whose marriage to the provider had a duration of at least one year; a provider’s divorced spouse who attained pensionable age or was established to have partial or no work ability pursuant to the Work Ability Allowance Act before the divorce or within three years after the divorce and whose marriage to the provider had a duration of at least twenty-five years; a parent or guardian of a provider’s child who is not employed and is raising the provider’s child who is under 3 years of age in his or her family.



[1] Data for the year 2014. is updated (In a report submitted in 2015 the gross and net monthly wage of a regular unskilled male worker was 658,49 and 529,64 euros respectively).

[2] Data for the year 2014 is updated as the corresponding data on gross and net monthly wage of a regular unskilled male worker was recalculated (In the report submitted in 2015 the percentage for the year 2014 was 81,7).

[3] According to gross wage presented in previously the percentage 5.52.

[4] Data for year 2014 was recalculated. Previously submitted per cent was 56,7.

[5] Previously submitted data for year 2014: Gross and net monthly wage of a regular unskilled male 658.49 euros and 529.64 euros respectively.

[6] Data for year 2014 is recalculated. Previously submitted percentage was 56,7.