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What will the 2023 state budget bring for people in Estonia?

On the 29th of September, the Government approved next year's state budget and the next four years' state budget strategy, and is submitting these to the Riigikogu for deliberation. Next year's state budget will focus on ensuring Estonian national security and helping its people and organisations cope with the crises caused by war which Russia is waging. We will provide a brief overview of the priorities of the state budget.

State support for families and guarantees for family planning 

Starting in 2023, the state will increase contributions to the economic well-being of families with children, and provide more assurances to those planning to have children. For this, in 2023 an additional approximately 164 million euros will be invested in increasing family benefits, and another 1.7 million euros for IT development and labour expenses. In total the state will invest approximately 466 million euros in family allowances. By 2026, the added cost of family allowances will increase to approximately 226 million euros – a total estimated cost of 521 million euros. 

Starting January 1st 2023, the first and second child allowance and single parent's child allowance will increase to 80 euros per month. The monthly allowance for a family with many children will increase to 600 euros for 3–6 children, and 800 euros for 7 or more. Furthermore, the gradual discontinuation of the allowance for a family with many children as the children reach age 24 will go into effect on January 1st 2023, and this allowance will be indexed similarly to state pensions starting from April 2024. For a family with three children, the total amount of family allowances will be 860 euros per month next year. Families with 3–6 children make up 14% of all families in Estonia, and include 28% of all children.  

The state helps make care homes and home care more affordable 

In 2023, the state will invest 40 million euros in improving the availability and quality of general care services provided both institutionally as well as at home. The amount contributed from the state budget to local governments for general care services will be close to 57 million euros in 2024, and will increase to 62 million euros by 2026. In the future, local governments will contribute the care-associated portion of the care home cost, with the rest contributed by the person themselves - including costs of housing, food, and additional personal comforts. 

Starting in July next year, there will be an option of offsetting care home accommodation cost by the average pension. Estimates for 2023 show that the average care home accommodation cost for a person with severe care needs will be 1300 euros/month, of which half will be paid by the local government, and the other half by the person themselves from the approximately 700-euro average pension estimated for April. Each family with a person requiring care will thereby save 6000 euros per year on average. 

The reform will also reduce the burden on care workers, helping them provide more individual attention and care and improve service quality. The salaries of care workers will also be increased to keep up with inflation. The state will support development of at-home care services in municipalities, in order to help the elderly lead independent and full lives at home for as long as possible.  

Development and improved availability of mental health support 

A total of 4.7 million euros of extra funding has been allocated to mental health services next year. With the first-time resources allocated last year, the total amount dedicated to mental health in the 2023 budget is 7 million euros, enabling the provision and development of various activities supporting mental health for an even wider target group. In addition to ongoing support for community therapists and municipality-based mental health services, there are plans to introduce brief psychological interventions provided by psychologists as well as other specialists, extend mental health support for children in need, launch a Children's Home service for sexually abused children in Western Estonia, hire more victim support workers and continue support for adult victims of home violence. The state will increase its support for cessation of violence services which help perpetrators of violence change their behaviour. 

There will be a focus on maintaining the availability of healthcare services and raising healthcare workers' salaries

In order to ensure availability of healthcare services at the current level or better, we need to invest in healthcare workers. Therefore, we have included funding in the budget of the Estonian Health Insurance Fund for a future collective agreement, in order to provide a salary increase of at least 15% to healthcare workers next year. The increase in social tax collections and the contributions for non-working pensioners will provide approximately 273.3 million euros of extra healthcare funding. Furthermore, the state will provide additional funds for increasing doctors' relocation grants and is planning to finance nurses' field training according to the consensus agreement signed in February.  
The 1.1 million euros necessary for storing genetic samples, which previously had to be applied for every year, will be provided as a yearly guaranteed grant from 2023.  

More funding for care services 

Starting in 2023, the state will invest an additional 12.3 million euros to support persons with special needs and children requiring foster care; this will be used to improve availability and to help service providers with the increased costs, including increased labour costs. Furthermore, the added funds will support increased quality of foster care and the training of adopting families, foster families and other foster care providers. The largest additional funding of approximately 6.9 million euros will be provided for rehabilitation services. 

Investing in crisis preparedness 

We invest in making the healthcare sector more prepared and ready to cooperate in crisis situations, considering both any future pandemics as well as Estonian national security. This includes an additional 2.6 million euros for the Health Board to further improve resilience. In order to help healthcare institutions with the unexpectedly high energy costs, we are price-indexing the overhead component of the healthcare services paid by the Estonian Health Insurance Fund retroactively from July 1st 2022. 

An important aspect of resilience is the ability of citizens to stay at home when ill, without losing significant income. For this we are planning to turn the provisional measure of payment for sick days starting from the 2nd day into a permanent one. This helps people who fall ill stay at home and get better without worrying about a significant loss of income. 

Last updated: 17.10.2022