Small extraordinary pension hike bill to be put to 1st reading Tuesday

TALLINN - A government-initiated bill of amendments to the State Pension Insurance Act, whereby an extraordinary seven-euro pension rise is to be implemented from April 1 next year in addition to the rise in pensions from indexation, will be put to first reading in the Estonian parliament on Tuesday.

In the letter of explanation accompanying the bill, it is said that the extraordinary increase of the base amount of the pension as a solidarity component will increase the pensions of all old-age pensioners, including those of people receiving pension on the basis of the Old-Age Pensions under Favorable Conditions Act and the Superannuated Pensions Act, and the pensions of people receiving pension for incapacity for work or for loss of a provider.

Pensioners not participating in the labor force will benefit most from the rise, which in total concerns some 330,000 people in 2020 and is estimated to reduce the share of people in relative poverty by 0.6 percentage point.

The opposition has criticized the bill, highlighting that the election promise of the Center Party, the leading party of the current government coalition, was to carry out an extraordinary pension hike in the amount of 100 euros.