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Social Insurance in the EU

E-mail: 
info at sotsiaalkindlustusamet dot ee
 

 Information line 
+372 612 1360
           or
16106 (in Estonia)
         

working days 9. 00–17.00

every last Friday of the month
9.00-13.00

 

Endla 8, 15092
Tallinn Estonia
 

Fax: +372 640 8155

Registry code: 70001975 
 

 

Certificate A1 will be issued in two business days following an electronic request filed with the Social Insurance Board

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Certificate A1 ensures that employees seconded to EU Member States enjoy insurance coverage under the Estonian social security system. During the certificate's validity period, the employers must pay for their employees the social tax, contributions to mandatory funded pension, and the unemployment insurance premiums to the Estonian authorities.

According to Evelyn Hallika, the Head of International Benefits Unit, the Social Insurance Board has issued 10,872 certificates A1 in the first eight months of 2016. 85% of the requests for certificates were filed in electronic form. In the past, it took up to 30 days to issue certificate A1.

Employers, employees and officials can file electronic requests through the state portal www.eesti.ee. If the request is filed with the Social Insurance Board in electronic form, the certificate A1 will be issued on the following business day.
Instructions for requesting certificate A1 are available at www.sotsiaalkindlustuaamet.ee. According to Evelyn Hallika, it is essential that requests are correctly filled in. The current practice indicates that up to 35% of the filed requests feature shortcomings.
In the long run, the Social Insurance Board intends to introduce automated processing of requests to ensure that the certificate will be issued immediately after filing the request.
 

 

 

Hiring a person with a disability

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Employers are sometimes unsure of themselves when hiring a person with a disability. They ask themselves whether they should even take the person on in the first place; what they will have to take into account if they do; and many other questions. Often the same questions will be asked by different people.

As something of an FAQ, the following is an overview of the main issues employers are interested in and should take into consideration when hiring a person with a disability.

Disability allowance for working age people and/or pension for incapacity for work

Employers often ask whether allowances and/or pensions are suspended for people with disabilities if they begin working.

The disability allowance for working age people is not suspended if the person starts work. The benefit is designed to help compensate the additional costs disabled people incur due to their disabilities. As such, there is no reason to suspend payment of the benefit simply because they take up work. On the contrary: the Social Benefits for Disabled Persons Act stipulates that the benefit may continue to be paid to people with disabilities who have found employment. It is meant to assist them in covering any expenses related to their work.

The amount of a pension for incapacity for work is determined on the basis of the degree of incapacity. Assessment of this is carried out from anywhere between every six months to every five years. Pensions for incapacity for work are not suspended if a person with a disability finds work. However, their degree of incapacity may be revised downwards during the next assessment, as a result of which the amount of their pension may be reduced.
 

Exceptions in the payment of social tax

The state covers part of the cost of the social tax paid on employees of companies, non-profit organisations, foundations and sole proprietors (hereafter referred to as the employer) who receive a pension for incapacity for work on the basis of the State Pension Insurance Act. People are entitled to receive such a pension when the degree of the incapacity for work is determined to be at least 40%. However, the state does not pay social tax for people who have been registered as incapable of working but who do not have a sufficient history of employment to obtain a pension for incapacity for work. Such people receive a national pension.

The state pays social tax starting from 320,00 €, which is the monthly base rate for the payment of social tax in 2014.

In order for the state to pay the social tax on an employee, the employer must submit monthly applications to Social Insurance Board indicating these details of employees receiving a pension for incapacity for work:

- first name and surname;
- personal identification code;
- date of commencement/termination of working relationship;
- the amount of social tax to be paid by the state.
Applications must be submitted by the 2nd of the month following the month of calculation of the salary.

Will the state pay social tax for a sole proprietor who is incapable of working?

The exception on the payment of social tax described above is designed as a subsidy for employers who pay social tax for their employees. If a sole proprietor is an employer to a person who has been determined to be incapable of working, the state will pay the social tax on that employee on behalf of the sole proprietor (see the previous point). However, a sole proprietor cannot act as their own employer.

Another exception to the Social Tax Act applies to sole proprietors who are incapable of working. They are not required to meet the minimum obligation of payment of social tax if they do not receive any income. The minimum obligation means that if no income is earned, social tax must be paid during the year on an amount equal to 12 times the monthly rate. The monthly rate in 2014 is 320,00 €, which means that the minimum obligation is 3840,00 €. If sole proprietors earn income, they must meet this minimum obligation.

Income Tax Act

The following are exempt from income tax:

- The expenses incurred by employers in the treatment of impaired health suffered by an employee as a result of occupational accidents, illnesses and diseases.
- Technical aids obtained by an employer for an employee whose incapacity for work has been designated as at least 40% (or in the case of people with hearing disabilities, a loss of hearing of at least 30 decibels) or who have a certified disability. The value of a technical aid in this case may not exceed 50% of the amount of payments made to the employee and is subject to income tax in a calendar year.
- Benefits paid by the employer to a person with a disability in regard to their use of a personal vehicle for travel between work and home in the event that it is not possible to use public transport for this purpose or if the use of public transport would result in a significant reduction in capacity for work or movement.

Tax benefits arising from extended holidays

On the basis of the Holidays Act, those receiving pensions for incapacity for work have the right to 35 days of holidays per year instead of the ordinary 28 days of annual holidays. The extra days are taxed from state budget resources, and therefore do not lead to any additional direct costs for employers.

In-service training allowance
In accordance with the Social Benefits for Disabled Persons Act, a person with a disability who is working can apply for an in-service training allowance. They can submit such an application themselves or have one submitted on their behalf by their legal representative. In addition to the application itself, the disabled person must submit documents evidencing their employment (such as their employment record book) and training costs to the Social Insurance Board closest to their place of residence or work.

The in-service training allowance can be paid for work-based training or formal education acquired within the adult education system. Work-based training enables people to obtain or update their professional and vocational skills and knowledge as well as to retrain, either in a training institution or the work place itself.

Depending on the decision of the Social Insurance Board, the allowance is paid to either the person with the disability or the party providing the training.

Starting from the first time it is approved, the in-service training allowance can be paid to a value of up to 613,68 euros over three calendar years (i.e. 24 times the social benefit rate in 2014). The allowance is paid for the covering of actual training costs. More detailed information is available online from the Social Insurance Board at www.sotsiaalkindlustusamet.ee.

The in-service training allowance enables people with disabilities to become more qualified and therefore more competitive. Employers gain more qualified employees. Sole proprietors with disabilities can also apply for the benefit.

 

 

As from April 1, the average monthly retirement pension amounts to EUR 375.04

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The state pensions were indexed using the coefficient 1.063 which means that as from April 1 the base amount of the pension is EUR 144.2585, the value of a year of pensionable service is EUR 5.245 and the national pension amounts to EUR 158.37.
Recalculation using the new values resulted in an average monthly pension increase of EUR 20. As from April 1, the average monthly retirement pension is EUR 375.04.

In addition to the indexation of all pensions, for 132 887 pensioners who were employed last year and paid social tax from their income, the personal annual coefficient was calculated with reference to the national pension insurance register’s data. Depending on the amount of the annual coefficient, the pension insurance component and thus the entire pension increased. In this context, it is irrelevant whether the person worked for the entire year or a couple of months, whether full time or less. The pension increased in accordance with the pension insurance component of the social tax calculated on the basis of the person’s income.

For the preceding year, factor 1 was attributed to a person whose monthly average income subject to social tax in 2014 was EUR 908.12 provided that he or she had not joined the second pension pillar.
If the average taxable income for the preceding year remained below the said amount, the annual factor is smaller than 1 and the pension increased by a relatively small amount. However, for persons who earned income exceeding EUR 908.12 and thus paid more social tax, the annual factor was greater than 1 and their pensioned increased more.

The value of annual factor 1 is equal to the currently applicable value of a year of pensionable service – EUR 5.245.

 

1.04.2015

 

 

Social Insurance Board services clients from 16th March at the new address in Tallinn: Endla street 8

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Social Insurance Board services clients from 16th March at the new address in Tallinn: Endla street 8.

Tallinn Client Service as well as Social Insurance Board units and management is located from 16th March in the same building.

The legal address of Social Insurance Board since 16th March is Endla 8, 15092 Tallinn, Estonia.

Client Service: M 8.30-18.00; Tu, W, Th 8.30-16.30, F 8.30 – 13.00. All telephone numbers will remain unchanged. Client service on Pronksi street 12 is closed from 13th March.
 

 

 

As from April 1, the average monthly retirement pension amounts to EUR 353.20

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The state pensions were indexed using the coefficient 1.05 which means that as from April 1 the base amount of the pension is EUR 134.9093, the value of a year of pensionable service is EUR 4.964 and the national pension amounts to EUR 148.98.
Recalculation using the new values resulted in an average monthly pension increase of EUR 20. As from April 1, the average monthly retirement pension is EUR 353.20.

In addition to the indexation of all pensions, for 137 191 pensioners who were employed last year and paid social tax from their income, the personal annual coefficient was calculated with reference to the national pension insurance register’s data. Depending on the amount of the annual coefficient, the pension insurance component and thus the entire pension increased. In this context, it is irrelevant whether the person worked for the entire year or a couple of months, whether full time or less. The pension increased in accordance with the pension insurance component of the social tax calculated on the basis of the person’s income.

For the preceding year, factor 1 was attributed to a person whose monthly average income subject to social tax in 2013 was EUR 849.65 provided that he or she had not joined the second pension pillar.
If the average taxable income for the preceding year remained below the said amount, the annual factor is smaller than 1 and the pension increased by a relatively small amount. However, for persons who earned income exceeding EUR 849.65 and thus paid more social tax, the annual factor was greater than 1 and their pensioned increased more.

The value of annual factor 1 is equal to the currently applicable value of a year of pensionable service – EUR 4.964.

 

 

 

As from April 1, the average monthly retirement pension amounts to EUR 353.20

print


The state pensions were indexed using the coefficient 1.05 which means that as from April 1 the base amount of the pension is EUR 134.9093, the value of a year of pensionable service is EUR 4.964 and the national pension amounts to EUR 148.98.
Recalculation using the new values resulted in an average monthly pension increase of EUR 20. As from April 1, the average monthly retirement pension is EUR 353.20.

In addition to the indexation of all pensions, for 137 191 pensioners who were employed last year and paid social tax from their income, the personal annual coefficient was calculated with reference to the national pension insurance register’s data. Depending on the amount of the annual coefficient, the pension insurance component and thus the entire pension increased. In this context, it is irrelevant whether the person worked for the entire year or a couple of months, whether full time or less. The pension increased in accordance with the pension insurance component of the social tax calculated on the basis of the person’s income.

For the preceding year, factor 1 was attributed to a person whose monthly average income subject to social tax in 2013 was EUR 849.65 provided that he or she had not joined the second pension pillar.
If the average taxable income for the preceding year remained below the said amount, the annual factor is smaller than 1 and the pension increased by a relatively small amount. However, for persons who earned income exceeding EUR 849.65 and thus paid more social tax, the annual factor was greater than 1 and their pensioned increased more.

The value of annual factor 1 is equal to the currently applicable value of a year of pensionable service – EUR 4.964.

 

 

 

Non-resident pension recipient

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Life Certificate

On 1 May 2013, a provision was added to the Estonian State Pension Insurance Act which requires that a receipt of the pension who is a non-resident in Estonia submits a life certificate to the Social Insurance Board not later than by 1 March each year.
If Estonian pension receiver is living outside Estonia, we ask to submit the Life Certificate certified by the authority of the state of residence to the Social Insurance Board not later than by 1 March each year. The authority may be social system authorities, the Pension Board or local government institutions or notary public of your state of residence. Life certificate may be replaced by a certificate concerning residence issued by the tax board of your state of residence.

Please send the certificate to the following address:

Sotsiaalkindlustusamet

Lembitu 12

15092 Tallinn

ESTONIA

Life Certificate is valid for one year and Estonian Social Insurance Board need renewed Life Certificate each year. In case of a failure to submit a certificate within the prescribed term, payment of pension shall be suspended as of 1 April. If a certificate is submitted later, payment of pension shall continue retroactively as of suspension of the payment of pension.

A life certificate form

Please note that the specified procedure shall remain in force and we expect you to submit a Life Certificate not later than by 1 March each year.

 

 

 

Transfers between banks become slower

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From 1 February 2014, all transfer between banks in Estonia will be effected via the pan-European retail payments system which operates during specified hours. Settlement of interbank payments in the new system changes the current transfer speeds.

There will be five settlement cycles instead of the current ten. Instead of the current hour to hour and a half, money will be transferred from one bank to another five times a day - in about 3 to 5 hours.

For instance, money used to be transferred from one bank to another around 9 or 10 o'clock, at the earliest, but from 1 February 2014 the money transferred from one bank will be received at the other not before 11 to 13 o'clock.

Intrabank payments will continue to operate as before. Payments within the same bank are effected around the clock, including over the weekends and during holidays.

Due dates for bank transfers of pensions, allowances and benefits

 

Type of payment

     Date of bank transfer

Pensions, social benefits of the disabled, social benefit for persons relocated from a foreign country to Estonia

The 5th day of each month

Family benefits, parental benefit

The 8th and 9th day of each month

Maintenance support

The 9th day of each month

Compensations related to occupational accidents and illnesses, compensations to victims of crime

The 12th day of each month

If the bank transfer date is a national holiday or other day off, the payment date shall be the business day preceding the day off.

  

 

 

 

Riigi Teataja - Legal Acts in English

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Updated translations of Estonian legislation in English are available at https://www.riigiteataja.ee/en/search or right here:

 

 

Updated translations of Estonian legislation

Title:
Within text:
 
Help
Help
 

 

As from April 1, the average monthly retirement pension amounts to EUR 334.42

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As from April 1, the average monthly retirement pension amounts to EUR 334.42

The state pensions were indexed using the coefficient 1.05 which means that as from April 1 the base amount of the pension is EUR 126.8183, the value of a year of pensionable service is EUR 4.718 and the national pension amounts to EUR 140.81.
Recalculation using the new values resulted in an average monthly pension increase of EUR 16. As from April 1, the average monthly retirement pension is EUR 334.42.

In addition to the indexation of all pensions, for 131 445 pensioners who were employed last year and paid social tax from their income, the personal annual coefficient was calculated with reference to the national pension insurance register’s data. Depending on the amount of the annual coefficient, the pension insurance component and thus the entire pension increased. In this context, it is irrelevant whether the person worked for the entire year or a couple of months, whether full time or less. The pension increased in accordance with the pension insurance component of the social tax calculated on the basis of the person’s income.

For the preceding year, factor 1 was attributed to a person whose monthly average income subject to social tax in 2012 was EUR 792.75 provided that he or she had not joined the second pension pillar.
If the average taxable income for the preceding year remained below the said amount, the annual factor is smaller than 1 and the pension increased by a relatively small amount. However, for persons who earned income exceeding EUR 792.75 and thus paid more social tax, the annual factor was greater than 1 and their pensioned increased more.

The value of annual factor 1 is equal to the currently applicable value of a year of pensionable service – EUR 4.718.

 

 

 
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