Estonia: The Bill on increasing pensions passed the second reading in the Riigikogu

NordenBladet — The Bill on amendments to the State Pension Insurance Act and other acts passed the second reading in the Riigikogu. The purpose of the Bill is to decrease poverty among the elderly and to raise their subsistence and welfare.

According to the Bill (253 SE), initiated by the Government, the base amount of the national first pillar pension will be increased by additional 16 euro on 1 April 2021. The pension rise will concern around 320,000 people. The pension supplement for rearing children will also be increased. This will concern around 203,000 people. For example, a pensioner who has two children will receive a pension supplement of 7.104 euro. The Bill will increase the rate of national pension by 30 euro. This will concern slightly more than 3000 people.

In the course of the second reading, several amendments were made to the Bill. For example, the periods that would be used as the bases for the calculation of the insurance part and the combined part of the sum of the insurance components were defined. Equal bases were provided for for the calculation of the old-age pension of the old-age pensioners with respect to whom there are no data on individually registered social tax due to employment abroad. When a person assumes employment in Estonia, his or her old-age pension should be recalculated and it may decrease. In the future, the payment of old-age pension will be continued in the current amount in such cases. An amendment was also made according to which the Social Insurance Board will be able to supplement the pension calculator with the data of the second pension pillar to which it has no access under the current law. According to an amendment, in the future a person will receive more information on his or her data entered in his or her pension account and the data relating thereto.

During the debate, Aivar Kokk (Isamaa), Helmen Kütt (Social Democratic Party) and Keit Pentus-Rosimannus (Reform Party) took the floor.

The Riigikogu passed two Acts

The Act on the Ratification of the Agreement on the Amendment and Termination of the Agreement between the Government of the Kingdom of Sweden and the Government of the Republic of Estonia on the Promotion and Reciprocal Protection of Investments (240 SE), initiated by the Government.

The Act provides for the ratification of the agreement on the amendment and termination of the agreement between the Estonian and Swedish Governments on the promotion and reciprocal protection of investments, which will be concluded by exchanging notes after the adoption of the Act on ratification in the Riigikogu.

The agreement between Estonia and Sweden was signed in Stockholm on 31 March 1992 and it entered into force on 20 May 1992. With its note of 27 February this year, Sweden proposed to Estonia to amend the agreement and to terminate it. The Agreement must be amended before it is terminated, because it provides that, in respect of investments made during the time that it is in force, the Agreement remains in force for twenty years after the termination of the Agreement. Termination of the agreement is necessary in order to ensure that investors from all EU Member States are accorded equal treatment based on European Union legislation.

90 members of the Riigikogu voted for the passing of the Act.

The Act on the Ratification of the Agreement for the Termination of Bilateral Investment Treaties between the Member States of the European Union (218 SE), initiated by the Government.

The purpose of the Agreement for the termination of bilateral investment treaties between the EU Member States is to terminate the intra-EU bilateral investment treaties in a coordinated manner. There are approximately 300 bilateral investment treaties in force between EU Member States. When the treaties concluded, their aim was to promote investments by offering mutual guarantees against political risks that may have a negative impact on investments.

After the accession to the EU, the Member States no longer need such additional guarantees because similar EU single market rules, including ones concerning cross-border investments, apply in regard to all Member States. According to the case law of the European Court of Justice, the possibility of access to arbitral tribunals as provided in the treaties is not in conformity with EU law.

The agreement terminates eight of the twelve intra-EU investment protection treaties Estonia has concluded. They are with Spain, the Netherlands, Greece, Latvia, Lithuania, France, Germany and the Belgium–Luxembourg Economic Union.

The treaties with Finland and Sweden will be terminated bilaterally. Austria has also announced that it wishes to conclude the bilateral agreements on termination with the Member States with whom Austria has investment protection treaties in force. It is not definitely clear yet what will become of the agreement between the Government of the United Kingdom of Great Britain and Northern Ireland and the Estonian Government for the Promotion and Protection of Investments. This will become clear in the process of the UK exiting the EU.

88 members of the Riigikogu voted for the passing of the Act.

Three other Bills passed the second reading

The Bill on Amendments to § 28 the Citizenship Act (217 SE), initiated by the Government, will amend the Act by including commission of serious criminal offences against the state as a new ground for deprivation of citizenship. Section 28 of the Act will be amended by adding a new subsection under which the Government may deprive a person of Estonian citizenship if a judgment of conviction in treason, intelligence activities or terrorist offence has entered into force with regard to him or her.

Under the Bill on Amendments to the Organic Farming Act and the Plant Propagation and Plant Variety Rights Act (260 SE), initiated by the Government, in the future, the holdings of the persons who sell unpacked organic products to the final consumer in small quantities, for example small organic shops, will no longer need to have the recognition currently required of them. In the future, it will be sufficient if they inform the Agricultural and Food Board, which will be established on the basis of the Agricultural Board and the Veterinary and Food Board, of their activities.

The exemption will be granted to operators that sell unpacked organic products to the final consumer, provided that they do not produce, prepare, store other than in connection with the point of sale, or import such products from a third country, or subcontract such activities to another operator. The sale of unpacked organic products must not exceed 5 000 kg per year; such sales must not represent an annual turnover in relation to unpacked organic products exceeding EUR 20 000; or the potential certification cost of the operator exceeds 2 % of the total turnover on unpacked organic products sold by that operator. In order to prevent fraudulent use of the indications referring to organic farming, the bases for the repeal of decisions on recognition will be changed and the fine for selling non-organic products as organic products will be increased.

The Bill will bring the Act into conformity with the European Union organic farming Regulation to be applied from 1 January 2022 which aims to eliminate the obstacles to the development of organic farming in the EU, to ensure fair competition to farmers and operators, to increase consumers’ trust in organic products and to bring legislation into conformity with the Lisbon Treaty. According to the explanatory memorandum, the result should be simpler provisions, more effective procedures and products that are reliable for the consumer.

The purpose of the Bill on Amendments to the Feed Act (225 SE), initiated by the Government, is to bring the Feed Act into conformity with the European Union Regulation establishing a list of intended uses of feed intended for particular nutritional purposes and the modes of use necessary to achieve them applicable as of 25 December. The provisions of the Bill and the provisions of the current Act do not differ in terms of content. The amendments are of a technical nature – references to the directly applicable Regulation will be included. The amendments will involve no new obligations for feed business operators or supervisory officials.

Two Bills passed the first reading

The Bill on Amendments to the Occupational Health and Safety Act and Other Acts (257 SE), initiated by the Government, will define at the level of Act the aim of the working environment database, the data collected and the retention periods of data on the basis of the Personal Data Protection Act. The Bill provides for a new requirement for the employer to draw up a risk assessment of the working environment in the working environment database or to forward the risk analysis to the Labour Inspectorate in a format which can be reproduced in writing.

The Bill will also include into the scope of application of the Act service providers, such as persons working under an authorisation agreement or a contract for services to whom certain provisions of the Act are applied. In addition, the Bill sets out an obligation for the employer to investigate occupational accidents that occur with service providers. The Bill will increase the employer’s liability for violation of the requirements established for the parties of an employment relationship.

The purpose of the Bill is to facilitate the creation of a safe working environment and to reduce the administrative burden for employers in complying with occupational health and safety requirements. For this, the working environment database will be developed, facilitating the communication of agencies and businesses with the state and offering new services. The Bill will increase the extent of the liability of the employer and the employee in the working environment.

The purpose of the Bill on Amendments to the Local Government Financial Management Act (282 SE), initiated by the Finance Committee, is to enable local governments to increase their net debt burden, in order that, in the emergency situation due to the spread of the coronavirus disease (COVID-19) and in the period following it, local governments could take larger loans as necessary to stimulate economy and make investments in the circumstances of a slowdown of revenue growth in 2020–2027, without breaching the upper limit for net debt burden provided for by law. In ordinary circumstances, the upper limit for net debt burden for each local government is a sixfold value of its operating result or 60 per cent of its operating revenue. At present, the upper limit for net debt burden has been set at the tenfold value of operating result or 80 per cent of operating revenue as an exceptional case for 2020 and 2021. The Bill will extend the exemption for the upper limit for net debt burden until the end of 2024. From then on, the upper limit will gradually decrease in 2025–2028.

Lauri Läänemets (Social Democratic Party) took the floor during the debate.

Due to the end of the working hours of the sitting, the Bill on Amendments to the Social Tax Act and the Occupational Health and Safety Act (244 SE), initiated by the Social Democratic Party Faction, will be deliberated at tomorrow’s plenary sitting.

The Bill provides that the employee will be paid sickness benefit to the extent of 80 per cent for the first eight days of his or her sick leave in the cooperation of the state and the employer, so that the Estonian Health Insurance Fund will compensate for 40 per cent of the average wages of the person who falls ill and the employer will compensate for the remaining 40 per cent. Starting from the ninth day, according to the Bill, the Estonian Health Insurance Fund will bear the costs as per current regulation. The explanatory memorandum justifies that the compensation of the days of sick leave on the first eight days will help ensure that persons who fall ill or come into contact with an infection do not go to work but stay home.

The sitting ended at 1.53 p.m.

Members of the press,

In view of the COVID-19 virus disease outbreak, the Chancellery of the Riigikogu is taking the necessary precautionary measures. Members of the press are asked to wear face masks and maintain social distance from interviewees where possible when visiting Toompea Castle.

Thank you for your understanding.

Source: Parliament of Estonia