In Estonia, a universal system of family allowances is in use: every child is valuable and has the right to state support. The right to receive family benefits comes with the birth of a child as well as a child joining the family in other ways, for example, adoption and care of a child or taking a child under guardianship. The definition of family benefits includes state family allowances, parental benefits, and maintenance allowance.
The most important rule is that Estonian family benefits have a territorial principle; that is, they can only be granted to a person living in Estonia. "Estonian citizenship, having a place of residence in the population register or working in Estonia does not give the right to receive Estonian family benefits if a person actually lives in a foreign country," emphasizes Panov. Family benefits are only granted if the child is actually living in Estonia together with a parent or guardian.
According to the basic rules of the European Union, the primary country that pays family benefits is determined. If there is a right to family benefits from two countries, the priority country will first pay its benefits in full, and the second country will pay additional benefits if their amounts are greater than in the priority country. Panov cited as an example that if a parent has the right to receive child support from Finland and Estonia, and Estonia is a priority country, Estonia pays child support first, and Finland adds the difference if Finland's support is higher.
Determining the priority:
- Working: The primary payer is always the country where the parent physically works. In the Estonian context, parental leave and being registered as unemployed are also equated with working. If both parents work in different EU countries, the child's country of residence is the primary one.
- Pension: If the parents do not work, but one of the parents receives a state pension, the state paying the pension is the primary payer of family benefits.
- Place of residence: If the parents do not work and do not receive a pension, the determining factor is the child's place of residence.
People cannot choose which EU country they receive family benefits from. "The countries exchange information and determine which country is the primary payer of family benefits and determine the allowances accordingly," explains Panov.
According to the Estonian Family Benefits Act, a person must immediately inform the Social Insurance Board of the following circumstances: if the applicant or a child starts to live or study in another country, interrupts or completes studies in another country, if one family member starts work in a country of the European Economic Area or the Swiss Confederation. In addition, it must be reported if the family receives benefits from a foreign country.
If a person leaves Estonia and continues to receive family benefits from Estonia, an overpayment is incurred. The overpaid amount is claimed retroactively for up to ten years, and the new country of residence may not pay the missed periods retroactively. If the entire family has left for abroad and there is no on-site work in Estonia, benefits are not paid in Estonia. "Therefore, timely notification is very important to avoid possible problems and financial obligations," warns Panov.
It is often asked whether it is possible to travel while receiving family benefits and whether this will result in an overpayment. According to Panov, people are allowed to travel while receiving family benefits, but no specific time limit has been set by law. "If the parents decide, for example, to go to Thailand for the entire winter and stay there for three months, it is recommended to stop the payment of family benefits and apply for the restoration of the benefits after returning to Estonia," adds Panov. "Short-term trips lasting a few weeks are perfectly acceptable and do not cause problems in receiving benefits. However, if the trip lasts for a longer period of time, several months, it is reasonable to suspend the payment of benefits in order to avoid possible overpayments."
Family benefits are an important support for families in Estonia, but when moving within the European Union, it is important to know and follow the rules in order to avoid problems with receiving benefits. One must always inform the Social Insurance Board or the competent authority of a foreign country about changes in one's place of residence or work so that family benefits are granted correctly and to avoid possible refunds. "Understanding the family benefit system and timely notification is important for a smooth transition to a new living environment," Panov concluded.
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