Estonian govt approves increases in family allowances

TALLINN - The Estonian government at a sitting on Thursday approved and sent to the parliament a bill geared at increasing family allowances, supporting the economic coping of families with children and increasing people's confidence in planning more children.

The monthly total sum of allowances for families with three children will be 860 euros from Jan. 1, 2023.

The support for first and second children and allowance for single parents will increase to 80 euros per month from 2023. The said allowances are currently 60 euros and 19.18 euros, respectively.

The allowance for families with many children from third and sixth child will rise from 300 euros to 600 euros per month and from seven and more children to from 400 euros to 800 euros per month. 28 percent of all children in Estonia live in families with three to six children.

Starting from Jan. 1, 2023, the allowance for families with many children will be paid until its gradual end when the youngest child in the family turns 24 years old.

The allowance for families with many children will be indexed with the pension index starting from May 1, 2024.

"The increase in the cost of living concerns all people in Estonia, which is why it is important to support the coping of families and provide people with confidence about planning more children also during complicated times," Minister of Social Protection Signe Riisalo said. "The state is paying special attention to single parents and families with many children who are experiencing an increased risk of poverty and for whom expenditures on children are larger."

The increase in family allowances will cost the state close to 164 million euros in 2023, plus expenditures on IT developments and labor to the tune of 1.7 million euros. The National Social Insurance Board will need to hire 23 new employees, most of whom will personally handle the gradual termination of allowances for families with many children. The Health and Welfare Information Systems Center will need to recruit four additional employees.

The minister of social protection said that agencies of the Ministry of Social Affairs will do their best to ensure smooth disbursement of allowances.

"We've also said previously that there is such a short period between the passing of the law and the amendments' entry into effect that we will not have enough time to develop and test the information systems. The e-state will temporarily go back in time and the National Social Insurance Board will handle the allowance for children aged up to 24 years by hand. The development takes time because the logic of allowances linked to children acquiring education will have to be changed completely," Riisalo said. 

Additional expenditures on family allowances will grow to almost 226 million euros by 2026, therefore, the ministry is planning the total cost of family allowances to amount to some 521 million euros.