Parent's pay system to be changed

Photo: Tairo Lutter / Postimees

The social ministry presented its parental benefits and leave reform package, Minister of Social Protection Kaia Iva believes could become law as early as next year, to the government yesterday. No decisions were made yesterday, however, and the cabinet is set to discuss the matter again in March.

Iva's predecessor Margus Tsahkna (both IRL) shed some light on the ministry's plans last summer when he said that even though fathers can also go on parental leave, 91 percent of people who opt for the benefit are women.

Iva is now prepared to present the reform in more detail and said she cannot name a single change that could be criticized. „The system will become a lot more flexible,“ she says. It needs to be discussed with employers how much advance notice parents should give in terms of leave, part-time work, and returning to work.

The plan would abolish separate instruments of pregnancy and maternity leave, paternal leave, and parental leave. They will be replaced with universal parental leave and benefit. Parents would have 605 days of leave per child to be used freely over a period of three years. Parents can also work during parental leave without losing the benefit. It was the latter possibility that sparked the sharpest debate in the government yesterday, leaving its eventual entry into force questionable.

A mother cannot work 30 days prior to and after the birth of her child in the interests of the mother and the child. Exclusive paternal leave will be 30 days instead of the current 10. It will be possible for parents to be on parental leave simultaneously.

Use of paid child care leave days will become more flexible. Both parents would have ten working days of paid leave per child once the reform takes effect. These days would be available between the end of the parental leave period and before the child turns nine. Child care leave pay would be hiked to half of the person's average salary for the previous year in case of the maximum period of 30 days.

Changes would see maternity benefits paid out by the social insurance board that is currently responsible for parent's pay. Iva said that the order of financing will be discussed in the future.

The minister added that while attempts will be made to reshuffle existing expenses, some additional cost is inevitable. For example, in a situation where the number of fathers to make use of the benefit would grow by 80 percent with the parental benefit period extended by one month, additional expenses would come to €11.1 million in 2018. That makes up roughly 2.5 percent of the parental benefit budget. The ministry cannot say how many father would make use of their 30-day individual leave.

The ministry perceives as one potential source for covering expenditure child care allowance it plans to abolish. The allowance is currently made available after the end of the parental leave period and comes to €38.5 a month for a child of up to three years of age and €19.18 for children between the ages of three and eight. The child care budget for 2018 is €13.6 million.

Because non-capped maternity benefit will be replaced with the limited parental benefit, the state will save approximately €550,000.

The ministry hopes that more flexible options for working during child care leave provided by the reform will in the long run result in additional tax revenue in the volume of €10 million.