Resolution CM/ResCSS(2010)5
on the application of the European Code of Social Security
by Estonia
(Period from 1 July 2008 to 30 June 2009)

(Adopted by the Committee of Ministers on 29 September 2010
at the 1094th meeting of the Ministers’ Deputies)

The Committee of Ministers,

In the exercise of the functions conferred upon it by Article 75 of the European Code of Social Security (hereinafter referred to as the “Code”) and with a view to supervising the application of this instrument by the Contracting Parties;

Whereas the Code, opened for signature on 16 April 1964, entered into force on 17 March 1968 and since 20 May 2005 has been binding on Estonia which ratified it on 19 May 2004;

Whereas, when ratifying the Code, the Government of Estonia stated that it accepted, in addition to the parts which must be applied by every Contracting Party (Parts I, XI, XII, XIII and XIV), the following parts of the Code:

- Part II on “medical care”;

- Part III on “sickness benefit”;

- Part IV on “unemployment benefit”;

- Part V on “old-age benefit”;

- Part VII on “family benefit”;

- Part VIII on “maternity benefit”;

- Part IX on “invalidity benefit”;

- Part X on “survivors’ benefit”;

Whereas, in pursuance of paragraph 1 of Article 74 of the Code, the Government of Estonia submitted its 4th annual report on the application of the Code, for the period from 1 July 2008 to 30 June 2009;

Whereas, in accordance with paragraph 4 of Article 74, that report was examined by the ILO Committee of Experts on the Application of Conventions and Recommendations at its 80th meeting in November and December 2009,

Notes:

I. concerning Part III (Sickness benefit), Article 14 in relation to Article 68.f, that, according to section 60.1.a of the Health Insurance Act, an insured person shall not receive benefits for temporary incapacity for work if a doctor establishes that the illness or injury was caused by intoxication by alcohol, drugs or toxic substances. In its previous resolutions, the Committee of Ministers has pointed out that withdrawal of the benefit in such cases would be allowed under Article 68.f of the Code only when intoxication resulted from the wilful misconduct of the person concerned. In response, the report indicates that though the Ministry of Social Affairs has prepared an amendment to the Health Insurance Act, it was not approved by the government. However, relying on the decision of the Supreme Court (17 January 2009, judgement No. 3-3-1-80-07), the Health Insurance Fund determines in each particular case whether the examination of the state of intoxication was carried out by a competent authority and investigates the causal relations between the state of intoxication and the damage caused. The Committee of Ministers considers that, in the course of such investigation, it would not be difficult for the Health Insurance Fund to establish also whether the state of intoxication which caused the illness or injury in question resulted from the wilful behaviour of the person concerned;

II. concerning Part IV (Unemployment benefit), Article 68.e and f, that, according to section 6.2.2 of the Unemployment Insurance Act, the right to unemployment benefit is withheld if the employment was terminated due to a breach of duties of employment or service, loss of confidence, an indecent act or an act of corruption. With regard to the disciplinary offences committed by the persons protected, Article 68.f of the Code allows suspension of unemployment benefit only when dismissal resulted from the wilful misconduct of the person concerned and thus does not allow the suspension of the benefit when the dismissal was motivated by the employee’s acts which, though blameable, cannot be qualified as wilful. The government states in this respect that, even though an insured person has no right to receive unemployment insurance benefit in such cases, he or she has the opportunity to receive unemployment services and the unemployment allowance paid from the state budget and thus still has social protection.

The Committee of Ministers considers that withholding the unemployment insurance benefit, which is financed by the employee’s contributions, as a sanction for his misconduct, while at the same time granting him the unemployment allowance financed out of the state budget, would actually make the state pay for the sanction imposed by the insurance scheme, which would in turn reduce its effectiveness. In contrast, the approach advocated by the Code consists in that, in order to be effective, the regime of sanctions has to apply to the social security system as a whole, including both social insurance and social assistance benefits. For this reason Article 68 is placed in Part XII of the Code, which contains common provisions applicable to all nine social security branches covered by it. It is also because sanctions may indeed deprive the person concerned of all social protection that this article authorises their application only when it is established that the person’s misconduct was wilful, that is in full understanding of the consequences of his or her acts. Moreover, the severity of sanction is limited to the suspension of the benefit to such extent as may be prescribed, which means that the person concerned conserves the right to the benefit, but its amount and duration could be reduced proportionately to the gravity of the offence committed. Finally, by establishing a limitative list of offences which may lead to the suspension of social security benefits, Article 68 prevents situations of double punishment, where the suspension of the social security benefit is imposed following a sanction already imposed under other legislation.

The Committee observes that the principles established by Article 68 of the Code have not yet been fully incorporated into the Estonian legislation regulating unemployment insurance as well as health insurance considered above, both of which apparently sanction the employee’s misconduct and even loss of confidence not caused by misconduct by the full withdrawal of the right to the benefit, irrespective of whether the employee acted wilfully or not;

III. concerning Part V (Old-age benefit), Article 28.a, that in reply to its previous resolutions, the government confirmed that the old-age pension of the person retiring in 2007 after 30 years of service is calculated for the 21 years worked before 31 December 1998 according to the old rule (base amount plus 21 years of service, multiplied by the value of a year of pensionable service) and for the nine years worked after this date according to the new rule (the sum of the annual factors of the insured person for nine years, multiplied by the value of a year of pensionable service);

IV. concerning Part VII (Family benefit), Article 42, that in determining the benefits to be taken into account for the purpose of application of Part VII of the Code, the report refers to Article 42.b, which covers the provision to children or in respect of children, of food, clothing, housing, holidays or domestic help. The report does not specify, however, which of these benefits in kind are provided by the national legislation and refers also to cash benefits, such as parental benefit, childcare allowance, maintenance allowance and child allowance;

V. concerning Part VIII (Maternity benefit), Article 52, that in its previous resolution the Committee of Ministers noted that contrary to Article 52 of the Code, which requires prenatal medical care to be provided to protected women free of charge from the moment pregnancy is medically determined, in Estonia they were entitled to medical care starting only from the 12th week of pregnancy (section 5.4.1 of the Health Insurance Act). The report indicates in this respect that, from 1 July 2009, the Health Insurance Act stipulates that all pregnant women in Estonia, including those who did not have previous health insurance on any other basis, are considered to be equal to insured persons and have the right to free prenatal medical care from the moment of medical confirmation of pregnancy. The Committee of Ministers notes with satisfaction this amendment of the Health Insurance Act;

VI. concerning Part X (Survivors’ benefit), Article 60.1, that, according to section 20 of the State Pension Insurance Act, a widow has the right to receive a survivor’s pension if she is pregnant (from the 12th week of pregnancy) and not working; if she is permanently incapacitated for work or of pensionable age; or if she is not employed and is raising the breadwinner’s child who is under 3 years of age. Seeing the lacunae in these provisions in comparison with the Code, the Committee of Ministers has asked the government to explain what social protection is available to a widow who, after being for many years maintained by her late husband, is incapable of finding employment and becoming self-supporting either because of her age or because she has a dependent child over 3 years of age. With regard to making eligibility for the survivors’ benefit conditional upon attainment of a prescribed age, the government stated that a widow has the right to receive a survivor’s pension if she is of pensionable age (63 years) and was married to her late husband for at least one year; having previously resided in Estonia for at least five years, she is also entitled to the national pension. With regard to making eligibility for the survivors’ benefit conditional upon a widow having a dependent child, the report stated that a widow under pensionable age with a dependent child over 3 years of age does not have the right to the survivors’ pension, but is entitled to family benefits and subsistence allowance; the municipality also has an obligation to ensure the child a place in a kindergarten, which would enable the widow to work.

The Committee of Ministers wishes to emphasise that the above provisions of the national legislation are insufficient to ensure the level of protection of widows incapable of self-support which is required by the Code. Indeed, it has become customary in European social security law to presume widows to be incapable of self-support and therefore entitled to survivors’ benefit when they have attained a certain prescribed age, which shall normally be lower than the pensionable age, and irrespective of the age requirement, when they have to care for at least one dependent child under school-leaving age;

Finds that the law and practice in Estonia give full effect to Parts II, V, VII, VIII and IX of the Code and that they also apply Parts III, IV and X of the Code, subject to bringing the regime of sanctions and the protection of widows in line with the Code;

Decides to invite the Government of Estonia:

I. concerning Part III (Sickness benefit), in order to give better effect to Article 68.f of the Code, to instruct the Health Insurance Fund to carry out an investigation of the causal relations between the state of intoxication and the damage caused and to apply the sanction proportionately to the established gravity of misconduct. Statistics should be provided on the total number of cases examined under section 60.1.a of the Health Insurance Act each year since 2005, in comparison with the number of cases in which the benefit was refused;

II. concerning Part IV (Unemployment benefit), to give more thought to bringing the regime of sanctions in social security law in line with the approach advocated by Article 68.f the Code and followed in other ratifying countries;

III. concerning Part V (Old-age benefit), to calculate in its next report the replacement level of the old-age pension according to this double formula;

IV. concerning Part VII (Family benefit), to refer to its resolution of 2008 for the determination of the types of family benefits covered by Part VII and to indicate which benefits were included by it in the calculation of the total expenditure on family benefits (1 598.4 million Estonian krooni (EEK) in 2007) and whether it intends to apply Part VII on the basis of a combination of the benefits in cash and in kind, as provided for in Article 42.c of the Code;

V. concerning Part VIII (Maternity benefit), Article 52, to supply a copy of the amendment of the Health Insurance Act;

VI. concerning Part X (Survivors’ benefit), Article 60.1, to commission actuarial studies on the additional resources necessary to sustain the progressive introduction of the improved protection of widows (or widowers).



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