Both coalition and opposition politicians have said there are no plans to link the child benefit system in Estonia to income.
This follows the publication of a freshly released country report on Estonia from the Organization for Economic Co-operation and Development (OECD).
The report noted Estonia provides very generous family benefits, recommending these be gradually reduced in proportion to income, starting from the average wage level.
At present in Estonia, the universal child benefit is €80 per month for the first and second child, rising to €100 per month starting with the third child. Additional support is available for large families, meaning those with three or more children.
Speaking at a press conference earlier in the week, Minister of Finance Jürgen Ligi (Reform) said Estonia’s child benefits system is in any case outdated and ineffective. However, when speaking to “Aktuaalne kaamera,” the minister said the government has no plans to cut child benefits for anyone.
“It would certainly be more effective if we were able to target benefits better. Universal child benefits—although we do not intend to reduce these—do not have the impact on most families’ livelihoods that is often attributed to them. The most critical issue right now is tax exemptions, which in some cases are actually being applied incorrectly,” Ligi said.
“We are not planning to boost child benefits, but we are investing in services and trying to place greater emphasis on targeted support. For example, we recently increased the single-parent benefit,” he added.
Reform’s coalition partner Eesti 200 said that since the formation of the current government in March last year, the party has maintained a call for the reform of child and family benefits, including reducing those going to higher earners.
“We do indeed have very high benefits, and they are universal—that is, everyone receives them regardless of need. Even people with very high salaries receive generous family benefits,” said the party’s leader and Education Minister Kristina Kallas.
“We have a coalition agreement that benefits, including family and child benefits, will be made needs-based,” Kallas went on.
The five-year state budget strategy envisages making benefits needs-based in 2028, Kallas noted, adding that so far the Ministry of Social Affairs has not submitted an analysis or proposal to the government. “The strategy includes projected savings in benefit expenditure resulting from the transition to a needs-based system. The government has made this decision in principle for the long term; now concrete solutions are needed to make it happen,” Kallas said.
The opposition Social Democrats (SDE) say they do not see a need to make child benefits needs-based either, arguing that doing so would not generate meaningful financial savings.
“My understanding is that, even with considerable effort, only a few percentage points could be saved from the current universal child benefit. That would require comprehensive information on the households in which children live and on their incomes, but the state currently does not have such an overview. I do not consider that kind of intrusion, under the banner of needs-based support, to be reasonable,” said SDE MP and former social affairs minister Riina Sikkut.
Hanna Vseviov, deputy secretary general of the Ministry of Social Affairs, said no needs-based system in family benefits is currently being worked on within the ministry, nor has it been included in the government’s action program, citing a Foresight Centre analysis from 2024 which found that introducing an income-based system would be challenging, as household income and composition are difficult to assess accurately. An innovation study is now examining technological and legal solutions using registry data, with results due by March 2027, Vseviov added.
Child and family benefits last year cost €393 million, the Ministry of Social Affairs said.
In its report the OECD recommended improving the efficiency of family benefits, meaning family policy should be less generous. Social spending has risen in recent years, family benefits are relatively high, and the OECD said child benefits for high-income earners should be cut, among other measures to consolidate the state budget at a time when defense spending is a major focus.
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