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Changes in the Family Benefits Act

Changes that will take effect starting of 1 April 2022

On 1 April 2022, reforms to the parental benefit system will enter into force. This will involve a number of changes designed to make life easier and smoother for families bringing up a new citizen of the world. These changes will affect families with a child born on or after 1 April 2022.

The following changes affecting parental benefit will enter into force on 1 April:

  • Parental benefit and additional parental benefit for fathers will become maternity benefit, parental benefit for fathers, and shared parental benefit.
  • Maternity leave will be transferred from the Health Insurance Fund to the Social Insurance Board (maternity leave will be renamed in Estonian from ‘sünnituspuhkus’ to ‘ema vanemapuhkus’, but the name will remain unchanged in English), for which the mother’s parental benefit shall be paid.
  • The parent can interrupt and continue parental benefit for fathers and shared parental benefit by calendar days.
  • Parents will be able to take up to two months of parental leave at the same time.
  • The right to additional days off arises.
  • A new type of parental benefit for adoptive parents is created.

Whereas parents previously had to deal with both the Health Insurance Fund and the Social Insurance Board regarding the subject of benefits, as of 1 April the whole system of state benefits for children will be centralised within the Social Insurance Board (except for any benefits paid by local governments). Mothers will be affected the most, as maternity leave will change from temporary incapacity for work to simply a form of parental benefit. The new benefit will continue to be called maternity benefit in English (in Estonian, maternity benefit will be renamed from ‘sünnitushüvitis’ to ‘ema vanemahüvitis’).

Maternity benefit will last for up to 100 calendar days, 70 of which are before the expected date of birth of the child. A working mother who is subject to social tax contributions also has maternity leave for the purposes of health protection during this period, and this is also entered in the employment register. If social tax has not previously been paid for work performed by the mother, then she is entitled to only 30 days of parental benefit from the birth of the child.

Although it may initially appear that maternity benefit (in Estonian, maternity benefit will be renamed from ‘sünnitushüvitis’ to ‘ema vanemahüvitis’) is paid for less time, this is not accurate – 40 days will instead be moved under shared parental benefit. As such, not one day will be lost and families will have more flexibility when it comes to claiming parental benefit.

In turn, the father shall become entitled to parental benefit for fathers 30 days before the expected date of birth of the child, for a total of 30 days. This benefit can be withdrawn by the father on a daily basis until the child reaches the age of 3 or until the father starts to take shared parental benefit. The father is also not allowed to work while receiving parental benefit for fathers – the father is on paternity leave, which is recorded in the employment register.

After the end of the maternity benefit period, it is up to the mother and the father to decide which of them will continue to receive parental benefit. This benefit is called shared parental benefit. Shared parental benefit can be withdrawn within 475 days. This benefit may be interrupted and continued by calendar days. If the mother did not have an employment or service relationship subject to the payment of social tax prior to the birth of the child, and was therefore entitled to only 30 days of maternity leave, the duration of parental benefit to be divided is 515 days.

NB: If one of the parents is on parental leave after the child reaches 30 days of age, that parent is entitled to shared parental benefit.

In addition, parents can take shared parental benefit for 60 days at a time. The number of days taken at the same time is deducted from the total duration of the payment of parental benefit. For example, if the mother takes 475 days of parental benefit, but decides with the father that the father could also receive 60 days of shared parental benefit, the father would receive 60 days of parental benefit and the mother 415 days. The aim is to allow both parents to also take part in the child’s upbringing at home.

It is possible to interrupt and continue both the parental benefit for fathers and the shared parental benefit by calendar days. This means, for example, that a parent can receive parental benefit for half a month and work for the other half. Even so, please note that if parental benefit has been paid in one calendar month, the normal earnings limit applies when calculating the amount of parental benefit. If a parent wishes to earn income exceeding more than half of the earnings limit for a given year, he or she must suspend receiving parental benefit for the duration of the month in question in order to avoid a reduction in the amount of parental benefit.

A new type of parental benefit will be created for adoptive families – parental benefit for adoptive parents. This benefit is payable to a working adoptive parent who is on adoptive parent leave or to a foster parent who is entitled to receive the benefit for temporary incapacity for work under the Health Insurance Act. The adoptive or foster parent is entitled to receive parental benefit for 70 calendar days within a period of six months from the date of entry into force of the court judgment on adoption or the date of the conclusion of the foster parent contract.

The amount of parental benefit is calculated on a monthly basis, as the right to withdraw parental benefit arises per day. The amount of parental benefit calculated is divided by thirty, to find the amount of parental benefit for one day. This amount is then multiplied by the number of days in the month. Therefore, when you look at the payment, it may appear that you have received less or more parental benefit in a month, but in reality the amount of parental benefit does not change, it simply depends on the number of days in the month.

For example, if the parental benefit is calculated as EUR 1000, and the parent rests on all of the days in the month, the amount of parental benefit payable in July would be as follows: (1000/30)*31= EUR 1033.33; in February of a normal year, however: (1000/30)*28= EUR 933.33.

When using parental benefit, remember that the state pays social tax on it, which is the basis for the health insurance offered by the health insurance fund, as well as for the pension qualifying period calculated in the future. Before transferring the shared parental benefit from one parent to the other, the family should discuss whether it makes sense in terms of health insurance and the pension qualifying period.

From 1 April, the system for taking child leave will also change. While each parent was previously entitled to a total of 3–6 days of leave per year, depending on the age of the children, the reform will entitle each parent separately and on a per-child basis – each parent will be entitled to a total of 10 days of parental leave per child (i.e. a total of 20 days) until the child reaches the age of 14 (in other words, leave will no longer be calculated on a per-year basis, but all days will be spread over the period until the child reaches the age of 14). The use of parental leave does not shorten the annual holiday period. The child leave benefit will be paid under similar principles to that of the parental benefit, depending on previous income. Child leave is awarded for each child separately, up to a maximum of 30 calendar days per year. The use of child leave does not shorten the annual holiday period. Child leave benefit will be paid under similar principles to that of parental benefit, depending on previous income. You can take child leave for each child separately, up to a maximum of 30 calendar days per year.

 

 

     

    Child care allowance will no longer be granted as of 1 September 2019

    • In connection with children born on 01.09.2019 and later child care allowance will no longer be paid. The state will gradually incorporate the funds that become available as a result thereof in the parental benefits system during 2020–2022. Read more about the planned changes on the website of the Ministry of Social Affairs (in Estonian).
    • We will grant and keep paying child care allowance pursuant to the old procedure to all families where a child is born on 31 August 2019 at the latest.
    • We will also keep paying child care allowance to all who are already being paid child care allowance on 31 August 2019 or to whom we have granted the allowance earlier. 
      We will keep paying child care allowance until the expiry of the right to the allowance or until 31 August 2024 at the latest.

    Additional info

    The amount of child care allowance is 38.36 euros per month from the time the payment of parental benefit is stopped until the child attains 3 years of age. If there are other children 3–8 years of age in the family, we will also pay child care allowance for them 19.18 euros a month per child. Families with 3 and more children have the right to child care allowance (19.18 euros) for all children up to 8 years of age. 

    Please note that parental benefit and child care allowance are not paid to a family at the same time – so during the time we pay the family parental benefit for one child we suspend the payment of child care allowance for all children in the family.

    Read more about child care allowance here.