The Act on Amendments to the State Pension Insurance Act and Other Acts (253 SE), initiated by the Government, will increase the base amount of the national first pillar pension 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 Act will increase the rate of national pension by 30 euro. This will concern slightly more than 3000 people.
The Act also determines the periods that are used as the bases for the calculation of the insurance part and the combined part of the sum of the insurance components. Equal bases are 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. Under the Act, the Social Insurance Board is also able to supplement the pension calculator with the data of the second pension pillar to which it has had no access under the law so far. 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, Marika Tuus-Laul (Centre Party), Helmen Kütt (Social Democratic Party), Aivar Kokk (Isamaa) and Siim Pohlak (Estonian Conservative People’s Party) took the floor.
88 members of the Riigikogu voted in favour of the Act and one was against.
Three Bills passed the second reading
The purpose of the Bill on Amendments to the Animal Protection Act and the Bankruptcy Act (226 SE), initiated by the Government, is to protect the life and health of animals when the obligations of an animal keeper need to be taken over from him or her because of his or her activities. These are rare cases, for example, when an animal keeper is facing bankruptcy and he or she is no longer able to take care of animals. Under the current procedure, the local government must take over the obligation to keep animals. Under the amendment, this task will be given to the Agricultural and Food Board from 2021, and the necessary funds will be provided in its budget.
The expenses incurred by the state in such situations are collected from the animal keeper from whom the obligation to keep the animal in compliance with the requirements is overtaken. This amendment will be applied in respect of all animals: farm animals as well as pet animals, circus, experimental and zoo animals and other animals. The amendment will not concern stray animals.
The Bankruptcy Act will also be amended by providing for the obligation of trustee in bankruptcy to ensure the keeping of the animal in compliance with the requirements when the debtor’s assets include an animal. In addition, the cooperation obligation of the Agricultural and Food Board and the trustee in bankruptcy will be provided for.
The Bill on Amendments to the Alcohol, Tobacco, Fuel and Electricity Excise Duty Act (207 SE) initiated by the Estonian Conservative People’s Party Faction, the Estonian Centre Party Faction and the Faction Isamaa, provides for a suspension of the charging of excise duty on tobacco liquids until the end of 2022. During this time, the Alcohol, Tobacco, Fuel and Electricity Excise Duty Act will not be applied either in the case of tobacco liquids. During the period when no excise duty will be charged on tobacco liquids, no obligation to pay excise duty on tobacco liquid revenue stamps will arise. In addition, the tax authority will be given a basis for refusing to accept orders for revenue stamps. The acceptance of orders for revenue stamps will start no later than two months before the excise duty on tobacco liquids will begin to be charged again.
The amendments are planned to enter into force on 1 April 2021. The suspension of the collection of the excise duty will give undertakings an opportunity to reduce the price of tobacco liquid and thereby to create a stimulus for users to acquire products from Estonian places of sale and not from border trade.
During the debate, Jürgen Ligi (Reform Party), Riina Sikkut (Social Democratic Party), Tarmo Kruusimäe (Isamaa), Mart Helme (Estonian Conservative People’s Party) and Jevgeni Ossinovski (Social Democratic Party) took the floor.
The Estonian Reform Party Faction and the Social Democratic Party Faction moved to suspend the second reading of the Bill. 41 members of the Riigikogu voted in favour of the motion and 50 voted against. Thus, the motion was not supported and the second reading of the Bill was concluded.
The Bill on Amendments to the Funded Pensions Act and Amendments to Other Associated Act (287 SE), initiated by the Finance Committee, is related to the reform of the second pillar pension scheme. The Bill will make the necessary improvements particularly to the regulation concerning the pension investment account and will correct reference errors and inaccuracies.
In relation to the investment account, specifications will be made in the movement of the money and data relating to the account. For example, the procedure for the entry into a pension contract will be specified, where it will be recommended to use the money on the pension investment account to pay insurance premiums. The Bill will also specify the procedure for making the lump-sum payment made to the pensioners in the second pension pillar scheme and the partial lump-sum payment due to be added on 1 January 2022 under the reform Act where the payment will also include the money on the pension investment account.
The Bill will also make some simplifications to the processes of the payment of money from the second pension pillar. If a person retires from the second pension pillar scheme and uses all his or her money contributed to the pillar to do so, under the Bill, the registrar of the pension register will be allowed to simply pay the person the money accrued on the person’s pension account later or to transfer such money to his or her pension agreement, depending on which payment option he or she has used.
The Investment Funds Act prohibits charging a fee for the redemption of the units of a pension fund from unit-holders who have attained the old-age pension age or who are going to attain such age in no more than five years. The Bill will extend the prohibition to unit-holders who are assessed as having no ability to work and who are already equal to pensioners in the second pillar pension scheme anyway under the reform of the second pillar pension scheme. In the Guarantee Fund Act, the regulation of the compensation for any loss caused to unit-holders of the second pension pillar will be amended by including references to the pension investment account to which the amount of compensation should be transferred once the person no longer makes contributions to the pension fund but uses a pension investment account instead.
According to an amendment made to the Bill during the second reading, until 2023, it will be impossible to submit to the registrar of the pension register a claim to seize a payment to be made to a debtor in the case of succession, in the event of retirement, or in case the person leaves the pension scheme before pension age. By 2023, it is planned to establish a technical solution enabling the bailiff to send an instrument of seizure to the pension register after which the registrar will first have to meet the claim in the instrument of seizure and only then make the payment to the debtor who is the holder of the pension account. Until then, the current practice will remain in place where the payment is made to the current account of the holder of the pension account that the bailiff can seize.
Another amendment was made to the Bill that will enable sole proprietors to deduct up to 5000 euro additionally, besides documented business-related expenses, from their income derived from the sale of self-produced agricultural products. The amendment will have a positive impact on Estonian sole proprietors who are small farmers. Also, the requirement according to which self-produced agricultural products must be unprocessed will be omitted from the Bill. Abandonment of this requirement will enable farmers to gain more added value from their products and will ensure engagement outside the growing season as well.
Two Bills were rejected at the first reading
The Bill on Amendments to the Credit Institutions Act (248 SE), initiated by members of the Riigikogu Eerik-Niiles Kross, Mart Võrklaev, Annely Akkermann, Heiki Kranich, Valdo Randpere, Taavi Rõivas, Keit Pentus-Rosimannus, Vilja Toomast, Kalle Laanet, Erkki Keldo, Johannes Kert, Andrus Seeme, Kristina Šmigun-Vähi, Signe Kivi and Jüri Jaanson, aims to bring the principles of freedom of contract relating to current accounts in credit institutions into conformity with the Constitution and to ensure compliance with the obligation provided for in the fundamental rights of persons under which property may not be used in a manner that contravenes the public interest.
The explanatory memorandum notes that holding a current account and making payments through it, making card payments, making cash payments to a current account and withdrawing cash from a current account are vital services and consequently the availability of a current account agreement is part of a vital service. As a result of the amendment, credit institutions will be obligated to serve customers who are Estonian nationals and residents and legal persons registered in Estonia.
The Finance Committee moved to reject the Bill at the first reading. 48 members of the Riigikogu voted in favour of the motion and 21 voted against. Thus, the Bill was dropped from the legislative proceedings.
The Bill on Amendments to the Riigikogu Rules of Procedure and Internal Rules Act (249 SE), initiated by the Social Democratic Party Faction and Member of the Riigikogu Raimond Kaljulaid, will specify the conditions for holding a referendum in the Riigikogu Rules of Procedure and Internal Rules Act in order to ensure conformity of the regulation with the Constitution. The explanatory memorandum notes that the possibility to submit Bills to a referendum as other national issues will be eliminated. This will ensure compliance with the requirement provided for in the Constitution that, in the event of a rejection of a Bill submitted to a referendum, extraordinary Riigikogu elections will be held.
Hanno Pevkur (Reform Party) took the floor during the debate.
The Constitutional Committee moved to reject the Bill at the first reading. 63 members of the Riigikogu voted in favour of the motion and 10 voted against. Thus, the Bill was dropped from the legislative proceedings.
Verbatim record of the sitting (in Estonian)
The video recording of the sitting is available to watch on-demand on the Riigikogu YouTube channel.
(Please note that the recording will be uploaded with a delay.)
Link uudisele: The Riigikogu passed an Act on an increase in pensions