Social Security Programs Throughout the World: Europe, 2010

Estonia

Exchange rate: US$1.00 equals 10.87 kroons.

Old Age, Disability, and Survivors

Regulatory Framework

First law: 1924.

Current laws: 1992 (old-age pensions); 1992 (superannuated pensions); 2000 (funeral benefit); 2001 (funded pensions); 2004 (individual accounts); and 2004 (investments).

Type of program: Social insurance and mandatory individual account system.

Coverage

Social insurance: All persons residing permanently in Estonia; noncitizens residing temporarily in Estonia and legal refugees.

Mandatory individual account: All persons born after December 31, 1982, who are covered by social insurance, including self-employed persons. Voluntary coverage for persons born after December 31, 1941, or before January 1, 1983.

Voluntary coverage is possible.

Source of Funds

Insured person

Social insurance: None.

Mandatory individual account: 2% of earnings plus administrative fees.

There are no maximum earnings used to calculate contributions.

Self-employed person

Social insurance: 16% of declared covered earnings.

The maximum monthly declared earnings used to calculate contributions are 26,053 kroons.

Mandatory individual account: 4% of declared earnings plus administrative fees.

Employer

Social insurance: 16% of gross payroll.

There are no maximum earnings used to calculate contributions.

Mandatory individual account: 4% of gross payroll.

There are no maximum earnings used to calculate contributions.

Government

Social insurance: The total cost of national pensions and pension supplements and allowances for some categories of insured persons; and the cost of funeral grants.

Mandatory individual account: None.

Qualifying Conditions

Social insurance

Old-age pension: Age 63 with at least 15 years of service (men) or age 61 with at least 15 years of service (women). (The retirement age for women is being raised gradually until it reaches age 63 in 2016; the retirement age for men and women will be raised gradually from 2017 to 2026 until it reaches age 65.)

Retirement is possible up to 5 years before the normal retirement age with at least 15 years of service if the insured worked under dangerous or hazardous conditions.

Early pension: Retirement is possible up to 3 years before the normal retirement age with at least 15 years of service (men and women).

Deferred pension: The pension may be deferred. There is no age limit.

National old-age pension: Age 63 and does not qualify for a social insurance old-age pension. Must have resided in Estonia for at least 5 years before applying for benefits and must not be receiving a pension from any other country.

Pension supplement: The supplement is paid to veterans of the Estonian War of Independence and their widow(er)s; persons assessed as at least 40% incapacitated for work as a result of a nuclear test or accident; and veterans of WWII or members of the Estonian Defense Force.

Disability pension: Paid to insured persons from age 21 to 23 with at least 1 year of coverage to age 60 to 62 with at least 14 years of coverage; no coverage requirement from age 16 to 20.

The pension is paid for a total disability (100% loss of earning capacity) or partial disability (40% to 99% loss of earning capacity).

The pension is paid for 6 months; for 1, 2, 3, or 5 years (renewable periods); or until retirement age, according to the assessed degree of disability.

A medical expert assesses the degree of disability.

National disability pension: The insured must be assessed with a loss of at least 40% of earning capacity, must not qualify for a social insurance disability pension, and must not receive a pension from any other country.

Pension supplement: The supplement is paid to veterans of the Estonian War of Independence and their widow(er)s; persons assessed as at least 40% incapacitated for work as a result of a nuclear test or accident; veterans of WWII or members of the Estonian Defense Force; and certain prisoners of war.

Survivor pension: Survivors must be incapable of gainful activity. Paid to insured persons from age 21 to 23 with at least 1 year of coverage to age 60 to 62 with at least 14 years of coverage; no coverage requirement from age 16 to 20.

An eligible spouse must satisfy one of the following conditions: in at least the 12th week of pregnancy; nonworking and rearing the deceased's child who is younger than age 3; permanently disabled and married to the deceased for at least a year; divorced and permanently incapable of work before the divorce or if the incapacity began in the year immediately after the divorce, must have been married for at least 25 years and reached pensionable age within 3 years after the divorce; or of pensionable age. Other eligible survivors include children, stepchildren, siblings, and grandchildren younger than age 18 (age 24 if a full-time student, no limit if disabled); parents or stepparents of pensionable age or disabled; or a nonemployed guardian rearing the deceased's children.

National survivor pension: Paid on the death of the family breadwinner who was not eligible for a social insurance pension. The survivor must not receive a pension from any other country.

Mandatory individual account

Old-age pension: age 63 with at least 15 years of service (men) or age 61 with at least 15 years of service (women), receiving the social insurance old-age pension, and first contributed to the individual account at least 5 years before the date of retirement. (The retirement age for women is being raised gradually by 6 months each year until it reaches age 63.)

Survivor pension: The pension is paid to survivors named by the deceased; in the absence of named survivors, the pension is paid to the deceased's spouse and orphans.

Old-Age Benefits

Social insurance

Old-age pension: A monthly flat-rate amount of 1,793.44 kroons (April 2010) plus a length-of-service component (for years of service up to December 31, 1998) and an insurance component (for those who have paid the social tax since January 1, 1999).

The monthly length-of-service component is 67.94 kroons (April 2010) multiplied by the number of years of service up to December 31, 1998.

The insured component is the sum of annual factors for each year of pension insurance multiplied by 67.94 kroons (April 2010).

Persons receiving an old-age pension may continue working.

Early pension: For each month the old-age pension is received before the normal retirement age, the pension is reduced by 0.4%.

Persons receiving the early pension must cease all gainful activity.

Deferred pension: For each month the claim for an old-age pension is deferred, the pension is increased by 0.9%.

The minimum monthly old-age pension is the national pension rate of 2,008.80 kroons (April 2010).

There is no maximum old-age pension.

Benefit adjustment: Benefits are adjusted annually in April according to changes in the consumer price index and the annual increase in social tax contributions.

National old-age pension: The monthly national pension is the national pension rate of 2,008.80 kroons (April 2010).

Pension supplement: Veterans of the Estonian War of Independence and their widow(er)s receive 100% of the national pension rate; persons incapacitated for work as a result of a nuclear test or accident and veterans of WWII or members of the Estonian Defense Force receive 10%.

The monthly national pension rate is 2,008.80 kroons (April 2010).

Benefit adjustment: The national pension is adjusted annually by the Estonian parliament.

Mandatory individual account

Old-age pension: The value of the pension depends on the insured's contributions plus accrued interest. At retirement, the accumulated capital must be used to provide a life annuity or if the pension is less than 25% of the national pension rate, to make programmed withdrawals.

The monthly national pension rate is 2,008.80 kroons (April 2010).

Permanent Disability Benefits

Social insurance

Disability pension: The monthly disability pension is the insured's old-age pension or the sum of a flat-rate amount of 1,793.44 kroons (April 2010) plus a length-of-service component based on 30 years of coverage multiplied by the assessed degree of disability, whichever is greater.

The monthly length-of-service component is 67.94 kroons (April 2010) multiplied by the number of years of service up to December 31, 1998.

The minimum monthly disability pension is the national pension rate of 2,008.80 kroons (April 2010).

There is no maximum disability pension.

Persons receiving a disability pension may continue working.

The disability pension is replaced by an old-age pension at retirement age.

Benefit adjustment: Disability pensions are adjusted annually in April according to changes in the consumer price index and the annual increase in social tax contributions.

National disability pension: A percentage of the monthly national pension rate is paid according to the assessed degree of disability. The monthly national pension rate is 2,008.80 kroons (April 2010).

Persons receiving the national pension may continue working.

The monthly national pension rate is 2,008.80 kroons (April 2010).

Benefit adjustment: The national pension rate is adjusted annually by the Estonian parliament.

Survivor Benefits

Social insurance

Survivor pension: The monthly survivor pension is a percentage of the reference pension corresponding to the number of eligible survivors. One survivor receives 50% of the reference pension, two survivors receive 80%, and three survivors or more receive 100%. The amount is split equally among all eligible survivors.

The reference pension is the higher of the deceased's old-age pension or the sum of the flat-rate amount of 1,793.44 (April 2010) plus a length-of-service component based on 30 years of coverage (see old-age pension).

The survivor pension is paid for 12 months after remarriage.

Full orphans receive the survivor pension for both parents.

The minimum survivor pension is 40% of the old-age pension payable for a person with a length-of-service component based on 30 years of coverage (see old-age pension).

The maximum survivor pension is 100% of the old-age pension payable for a person with a length-of-service component based on 30 years of coverage (see old-age pension).

National survivor pension: For one survivor the monthly pension is 50% of the national pension rate; for two survivors, 80%; and for three survivors or more, 100%. The amount is split equally among eligible survivors.

The monthly national pension rate is 2,008.80 kroons (April 2010).

Benefit adjustment: The national pension rate is adjusted annually by the Estonian parliament.

Death grant: A lump sum of 3,000 kroons is paid by local governments only.

Mandatory individual account

Survivor pension: If the insured dies before retirement, designated survivors receive the accumulated value of the individual account. If the insured dies after retirement, designated survivors may receive a periodic benefit for at least 5 years.

Administrative Organization

Social insurance

Ministry of Social Affairs (http://www.sm.ee) is responsible for general management and supervision.

National Social Insurance Board (http://www.ensib.ee) is responsible for overall planning and coordination.

Regional pension offices administer the program at the local level.

Mandatory individual account

Ministry of Finance (http://www.fi.ee) supervises the Financial Supervisory Authority and the Registrar of the Estonian Central Register of Securities.

Financial Supervisory Authority (http://www.fi.ee) supervises financial services providers, including pension management companies and life insurance companies.

Registrar of the Estonian Central Register of Securities (http://www.e-register.ee) sets up a pension account for each insured person.

Sickness and Maternity

Regulatory Framework

First law: 1924.

Current laws: 2000 (health insurance fund), implemented in 2001; 2002 (health organization); and 2002 (health insurance).

Type of program: Social insurance system.

Coverage

Cash benefits: Insured employees, employers, and self-employed persons.

Medical benefits: Insured persons with an employment contract; an insured person's spouse who is not less than 5 years away from retirement age; public servants; the non-working spouses of diplomats and public servants; conscripts in the Defense Forces; persons receiving unemployment benefits, child care or social allowances, or state pensions; persons caring for persons with disabilities; persons who worked in the elimination of nuclear waste; persons younger than age of 19; and students.

Voluntary coverage for persons who were previously insured for at least 12 months in the last 2 years and for persons receiving a pension from another country.

Source of Funds

Insured person: None.

Voluntarily contributors pay 1,679 kroons a month.

Self-employed person: 13% of declared earnings.

The self-employed person's contributions also finance work injury benefits.

Employer: 13% of payroll.

The employer's contributions also finance work injury benefits.

Government: None.

Qualifying Conditions

Cash benefits: The insured must be a current member of the Health Insurance Fund, regardless of the length of service.

A doctor must certify the incapacity for work from the second day of incapacity.

Medical benefits: The insured must be a current member of the Health Insurance Fund.

Insured persons must satisfy a qualifying period: 14 days for workers with an employment or service contract exceeding 1 month, self-employed persons, and civil servants; 3 months for persons with contracts under the Law of Obligations. There is no qualifying period for persons for whom the government pays the total contribution (see source of funds under Old Age, Disability, and Survivors).

Sickness and Maternity Benefits

Sickness benefit: 70% of the insured's average wages is paid by the employer from the fourth to the eighth day of incapacity. Thereafter, the benefit is paid by the Health Insurance Fund as a percentage of the reference wage: 70% for temporary sick leave from employment or periods of quarantine; 80% for hospitalization, outpatient treatment, nursing a child younger than age 12 or a sick family member at home, or caring for a child younger than age 16 with a disability; and 100% for an occupational disease or a work injury, or if the incapacity is the result of an act to prevent a criminal offense, protect the national or public interest, or save a human life.

The reference wage is the insured's average gross daily wage in the previous calendar year. There is no maximum reference wage.

The benefit is paid for up to 182 calendar days for each case of sickness; for up to 240 calendar days for tuberculosis.

Benefits also include wage compensation for a temporary transfer to another job as a result of the incapacity. The benefit is equal to the difference between earnings before and after the job transfer. The benefit is paid from the transfer day for up to 60 calendar days.

Pensioners receive cash benefits for prostheses every 3 years.

Maternity benefit: The benefit is 100% of the reference wage and is paid for up to 140 calendar days; an adoption allowance is paid for up to 70 calendar days for the adoption of a child younger than age 10.

The reference wage is the insured's average gross daily wage in the previous calendar year. There is no maximum reference wage.

Benefits also include wage compensation for a temporary transfer to another job as a result of pregnancy. The benefit is equal to the difference between earnings before and after the job transfer. The benefit is paid from the transfer day until the start of the maternity leave period.

Workers' Medical Benefits

National and local health care institutions provide medical benefits.

The duration of the benefits is unlimited as long as the insured is covered; after coverage ceases, the insured continues to qualify for new benefits for up to 2 months.

Pharmaceutical products: Only products approved by the Health Insurance Fund are eligible for compensation based on the diagnosis and according to a schedule in law.

Cost sharing: The insured pays 20 to 50 kroons and between 0% and 50% of the cost of prescribed medicines, according to a schedule in law. The Health Insurance Fund pays up to 200 kroons per prescription when the insured pays 50% of the cost. The insured's copayment is paid to the pharmacy; the Health Insurance Fund pays the discount part directly to the pharmacy on receipt of the relevant documentation.

Pharmaceutical products are free for children younger than age 4. Children aged 4 to 16 years, insured persons older than age 63, and persons receiving disability pensions under the National Pension Insurance Act or a pension under the State Pension Insurance Act pay 10% for certain pharmaceutical products.

The Health Insurance Fund also compensates the insured for 50% of the annual cost of medicines between 6,000 and 10,000 kroons, up to 2,000 kroons; plus 75% of the costs from 10,000 to 20,000 kroons, up to 7,500 kroons.

A copayment of up to 50 kroons is made for each home visit or visit for specialized outpatient care and up to 25 kroons for hospitalization. No copayment is required for periods of intensive care, inpatient specialized medical care as the result of pregnancy or childbirth, or inpatient medical care for a child.

The insured receives temporary prosthesis after amputation and certain additional appliances.

The Health Insurance Fund may authorize planned medical treatment abroad in special cases.

Dependents' Medical Benefits

National and local health care institutions provide medical benefits.

The duration of the benefits is unlimited as long as the insured is covered; after coverage ceases, the insured continues to qualify for new benefits for up to 2 months.

Pharmaceutical products: Only products approved by the Health Insurance Fund are eligible for compensation based on the diagnosis and according to a schedule in law.

The insured receives temporary prosthesis after amputation and certain additional appliances.

Children younger than age of 19 receive free dental care.

The Health Insurance Fund may authorize planned medical treatment abroad in special cases.

Administrative Organization

Ministry of Social Affairs (http://www.sm.ee) is responsible for general management, supervision, and planning.

Health Insurance Fund (http://www.haigekassa.ee) coordinates health insurance.

Doctors, polyclinics, and hospitals provide medical benefits.

Health Insurance Fund administers benefits.

Work Injury

Regulatory Framework

First law: 1924.

Current laws: 1956 (civil code), 1999 (work injuries and occupational diseases), 2001 (pension insurance), 2002 (health insurance), and 2002 (obligations).

Type of program: Social insurance system. (There is no specific program for work injuries and occupational diseases. Cash and medical benefits are provided through the Sickness and Maternity and Old Age, Disability, and Survivor programs. Under the civil code, additional benefits are provided by employers.)

Coverage

Insured employed and self-employed persons.

Source of Funds

Insured person: None.

Self-employed person: See source of funds under Sickness and Maternity.

Employer: See source of funds under Sickness and Maternity.

Government: The payment of compensation for employees with work injuries or occupational diseases whose employer is insolvent.

Qualifying Conditions

Work injury benefits: All employed and self-employed persons who reside permanently in Estonia. Accidents that occur while commuting to and from work are covered.

Temporary Disability Benefits

The benefit is 100% of the reference wage until the degree of disability has been assessed.

The reference wage is the insured's average gross daily wage in the previous calendar year. There is no maximum reference wage.

A medical commission assesses the degree of disability.

Permanent Disability Benefits

Permanent disability pension: A permanent disability pension is paid with at least a 40% loss of earning capacity.

The monthly pension is the reference pension multiplied by the assessed degree of loss of earning capacity.

The reference pension is the greater of the old-age pension or the sum of the flat-rate amount of 1,793.44 kroons (April 2010) plus a length-of-service component based on 30 years of coverage.

The monthly length-of-service component is 67.94 kroons (April 2010) multiplied by the number of years of service up to December 31, 1998.

The minimum monthly pension is the monthly national pension rate of 2,008.80 kroons (April 2010).

There is no maximum permanent disability pension.

Benefit adjustment: Benefits are adjusted annually in April according to changes in the consumer price index and the annual increase in social tax contributions.

Compensation benefit: A benefit is paid for a loss of earning capacity between 10% and 40%. The benefit is the insured's average gross earnings in the last 12 months before the work injury or occupational disease began multiplied by the assessed loss of earning capacity minus the amount of any pension paid by the government.

Workers' Medical Benefits

National and local medical institutions provide medical benefits.

Medical rehabilitation is provided. Local authorities are responsible for the provision of social rehabilitation (including special transportation for persons with disabilities, necessary adaptation of the person's home, and personal assistance).

If the medical commission certifies the need for additional expenses, the responsible employer is obliged to meet the cost of prostheses and aids, prescribed medicines, treatment in a sanatorium, travel expenses to a health establishment or sanatorium, and expenses for auxiliary care.

Survivor Benefits

Survivor pension: The monthly pension is a percentage of the reference pension corresponding to the number of eligible survivors. One survivor receives 50% of the reference pension, two survivors receive 80%, and three survivors or more receive 100%. The amount is split equally among all entitled survivors.

The reference pension is the higher of the old-age pension or the sum of the flat-rate amount of 1,793.44 kroons (April 2010) multiplied by a length-of-service component based on 30 years of coverage.

The monthly length-of-service component is 67.94 kroons (April 2010) multiplied by the number of years of service up to December 31, 1998.

The survivor pension is paid for 12 months after remarriage.

Full orphans receive the survivor pension of both parents.

The minimum survivor pension is 40% of the old-age pension payable for a person with a length-of-service component based on 30 years of coverage.

The maximum survivor pension is 100% of the old-age pension payable for a person with a length-of-service component based on 30 years of coverage.

Death grant: A lump sum of 3,000 kroons is paid by local governments.

Administrative Organization

Ministry of Social Affairs (http://www.sm.ee) is responsible for general management and supervision.

Health Insurance Fund (http://www.haigekassa.ee) administers health insurance in counties and towns.

Medical benefits are provided by doctors, polyclinics, and hospitals.

Regional pension offices administer permanent disability benefits.

Unemployment

Regulatory Framework

First law: 1991.

Current laws: 2000 (unemployment); and 2001 (unemployment insurance).

Type of program: Social insurance and social assistance system.

Coverage

All persons residing permanently in Estonia aged 16 to the retirement age who are capable of gainful activity, noncitizens residing temporarily in Estonia, and legal refugees.

Source of Funds

Insured person

Unemployment insurance benefit: 0.6% of gross earnings.

Unemployment allowance: None.

Self-employed person

Unemployment insurance benefit: None.

Unemployment allowance: None.

Employer

Unemployment insurance benefit: 0.3% of gross payroll.

Unemployment allowance: None.

Government

Unemployment insurance benefit: None.

Unemployment allowance: The total cost.

Qualifying Conditions

Unemployment insurance benefit (social insurance): The insured must be aged 16 to the normal retirement age (except for early pensioners), registered as unemployed with the employment service, and be involuntarily unemployed with at least 12 months of work in the 36 months before registering as unemployed.

There is a waiting period of 7 calendar days.

The benefit is suspended if the insured does not register with the local employment office at least once every 30 calendar days or refuses a suitable job offer.

Unemployment allowance (social assistance): The insured must be aged 16 to the retirement age (except for early pensioners), registered as unemployed with the employment service, have at least 180 calendar days of employment in the 12 months before applying for benefits, and personal income must be less than the value of the unemployment allowance. Employment periods include full-time education, military service, rearing a child younger than age 7, treatment in a hospital, providing care for a sick person, or periods of disability or detention.

There is a waiting period of 7 calendar days; 60 calendar days for recently graduated students, for voluntary unemployment, or for dismissal for cause.

Unemployment Benefits

Unemployment insurance benefit (social insurance): The benefit is 50% of reference earnings for the first 100 calendar days; thereafter, 40% of reference earnings. The benefit is paid for 180 calendar days with a coverage period of up to 56 months; for 270 calendar days with 56 to 110 months; or for 360 calendar days with 111 months or more.

Reference earnings are average daily earnings on which unemployment insurance contributions have been paid during the 12 months before registering as unemployed.

The maximum daily earnings used to calculate benefits are 3 times the national average daily income for the previous calendar year.

Unemployment allowance (social assistance): A daily allowance of 32.90 kroons is paid for up to 270 calendar days; 210 calendar days for unemployed persons who left their previous employment on the initiative of the employer for a breach of duties, loss of confidence, or indecent act. Unemployed persons who have received unemployment insurance benefits for a period shorter than 270 days are eligible to receive the unemployment allowance until the end of the 270-day period.

The unemployment allowance may be extended up to the pensionable age if there are less than 180 calendar days until the claimant reaches the pensionable age; up to the expected date of childbirth if the insured is pregnant and there are less than 70 calendar days until the expected date of childbirth; or for up to 90 days if the insured is rearing at least three children younger than age 18.

An additional retraining grant of 1.5 times the unemployment allowance is paid if the claimant attends retraining courses.

Administrative Organization

Ministry of Social Affairs (http://www.sm.ee) is responsible for legislation and supervision.

Estonian Unemployment Insurance Fund (http://www.tootukassa.ee) registers the unemployed and pays benefits.

Family Allowances

Regulatory Framework

First law: 1922.

Current laws: 2004 (family) and 2001 (family benefits).

Type of program: Social assistance system.

Coverage

All persons residing permanently in Estonia; stateless persons and their spouses and children who are of Estonian origin; noncitizens residing temporarily in Estonia; and refugees and their children.

Source of Funds

Insured person: None.

Self-employed person: None.

Employer: None.

Government: The total cost.

Qualifying Conditions

Family allowances: All children younger than age 16 (age 19 if a full-time student).

The child and parent must reside in Estonia.

Family Allowance Benefits

Childbirth allowance: 5,000 kroons is paid for each child; also paid to adoptive parents.

Child allowance: A monthly allowance is paid at twice the child allowance rate for each of the first two children; at 6 times the child allowance rate for each additional child.