The Child Leave System and Family Benefits Will Become More Flexible

On April 1 of this year, several amendments to both the Employment Contracts Act and the Family Benefits Act entered into force. The changes are related to changes in the arrangements for maternity and parental leave, while at the same time allowing families the flexibility to stay at home with the child, work and share the burden of care more evenly between parents. From the employer's point of view, the most important changes are that in the future the employee will apply to the Social Insurance Board for parental leave, as well as the fact that unused child leave will no longer expire at the end of the calendar year. The following is a summary of the most important changes. 

Maternity leave and maternity benefit
Maternity leave, formerly known as maternity leave for pregnancy and labour, will last up to 100 calendar days. Although previously maternity leave lasted up to 140 calendar days, 40 days of the current maternity leave and the period covered by maternity benefit will be transferred to the parental benefit system from April 1. This means that in addition to the maternity benefits for the days spent on maternity leave, which can be received for up to 100 calendar days, there is also a shared parental benefit that can be used by the parents for 475 days. As a result, the number of days off will not change, but the period for receiving parental benefits will be extended. It is possible to receive maternity benefit during the period of maternity leave. 

During maternity leave, the mother is entitled to parental benefit for up to 100 consecutive calendar days, of which up to 70 calendar days before the child's expected date of birth. The period for which the mother receives parental benefit is reduced by the number of calendar days by which the mother is on maternity leave less than 70 calendar days before the child's expected date of birth. 

Example 1: Child’s expected date of birth is June 23, 2022. This means that the mother is entitled to parental benefit from the 70th day before the birth of the child, i.e. April 14, 2022, provided that she has taken maternity leave on April 14, at the latest. However, if the mother decides to take maternity leave later, for example on April 23, she will be entitled to parental benefit from the day she goes on maternity leave. 

If the mother starts to exercise the right to receive maternity benefit no later than on the 31st calendar day before child’s expected date of birth, the calendar days between the date of acquisition of the mother's right to maternity benefit and the date of exercise shall be added to the period of shared parental benefit. For example, if the mother becomes entitled to maternity benefit on June 23, but decides not to start using it until July 23, the period of shared parental benefit paid to her will be extended by that time, i.e. by 30 days. 

Persons who acquire this right after April 1, 2022 are entitled to maternity leave. For mothers entitled to maternity leave before April 1, the current system will continue after April 1. The employee shall notify the employer of the maternity leave at least 30 calendar days in advance, unless the parties have agreed otherwise, unless prior notice cannot reasonably be expected due to the circumstances. 

Paternity leave and paternity benefit
There are no changes to paternity leave. The father will continue to be entitled to paternity leave of 30 calendar days in one instalment or in several instalments 30 days before the child’s expected date of prescribed by a doctor or midwife until the child is three years old, and the employer has the right to refuse to grant paternity leave for a duration of less than seven calendar days.

The employee shall notify the employer of the paternity leave at least 30 calendar days in advance, unless the parties have agreed otherwise, unless prior notice cannot reasonably be expected due to the circumstances. 

Parental leave
As of April 1, 2022, the Employment Contracts Act also provides for parental leave as a new type of leave. In essence, this is the current parental leave. A parent raising a child in Estonia is entitled to parental leave.

Both parents are entitled to take parental leave for 60 days at a time. In this case, however, the total period for which parental benefit is paid is reduced in proportion to the number of days on which the parents received parental benefit at the same time. On all other days, only one person is entitled to parental leave at a time. Parental leave can be used until the child reaches the age of three. The employee shall notify the employer of parental leave or interruption of parental leave at least 30 calendar days in advance, unless the parties have agreed otherwise. There is no right to parental leave if the parent's right to custody has been revoked or restricted and if the parent fails to fulfil the obligation to raise and care for the child. An employee is entitled to receive parental allowance during the period of parental leave on the basis of the Family Benefits Act.  

If a child is stillborn or dies within 30 calendar days of birth, the mother and father are entitled to parental leave of up to 30 calendar days from the day following the death of the child. The right to maternity and paternity leave expires on the date of the child's death. For example, if a child dies 29 days after birth, both parents are entitled to parental leave of up to 30 days, but if the child dies 31 days after birth, the parents cannot take parental leave. 

The right to parental leave arises from April 1, 2022.  For those who have already used part or all of their parental leave, it will be carried over from April 1, as days used as parental leave. The employee shall notify the employer of parental leave or interruption of parental leave at least 30 calendar days in advance, unless the parties have agreed otherwise. 

Shared Parental benefit
The child's parent is entitled to shared parental benefit. If the maternity benefit and the paternity benefit are an individual right of the parents, the shared parental benefit is a shared right between the parents, allowing the parents to decide which of them will receive the benefit. It is allowed to work and earn income during the shared parental benefit period. The shared parental benefit is covered by state health and pension insurance. The parent on parental leave receives first the shared parental benefit. If neither parent is on parental leave, the parents choose which of them will receive the shared parental benefit.

The parent's spouse or registered partner is entitled to shared parental benefit if one of the child's parents is deceased, fails to fulfil the obligation under the Family Law Act to raise and care for the child or if the child's parent submits a written notice to the Social Insurance Board. A parent is generally entitled to 475 calendar days of shared parental benefit. 

If the mother was not entitled to the maternity benefit before the birth of the child because she was not working at that time, she is entitled to 515 calendar days of shared parental benefit. The mother is entitled to shared parental benefit after the end of the mother's right to maternity benefit, i.e. after 100 days of maternity leave, and the father is entitled to shared parental benefit after the end of the father's right to paternity leave, i.e. after taking 30 days of paternity leave.

Child leave and child leave benefit
There are also some very important and fundamental changes to the arrangements for child leave. Both parents are entitled to 10 working days of child leave per child until the child reaches the age of 14, but for a maximum of 30 calendar days in one calendar year per several children of the family. Previously, it was possible to take three days of child leave per child per year, but not more than six days in the case of several children. 

Example 2: An employee gives birth to quartets on June 23, 2022. Thus, the employee is entitled to child leave and therefore child leave benefit for a total of 40 days, but during the same year she can only use a maximum of 30 days of child leave. 

If one of the child's parents is deceased or there is no entry in the population register for the child's father, the parent has the right to child leave for up to 20 working days per child until the child reaches the age of 14, but not more than 30 calendar days in one calendar year. There is no right to child leave if parental custody has been revoked or restricted and the parent does not fulfil his or her obligation to raise and care for the child. Child leave is granted in the year in which the child reaches the age of 14, regardless of whether the child's birthday is before or after the child leave. 

What changes must the employer take into account?
If the employee is currently required to notify the employer of parental leave or the interruption of parental leave 14 calendar days in advance, the notice period will henceforth be at least 30 calendar days of maternity leave, paternity leave and parental leave. This change was included in the draft thanks to the Chamber of Commerce and Industry, who stood for it. 

It must also be remembered that child leave no longer expires in one year. If in the past an employee could take child leave up to 6 days a year depending on the number of children, now it is possible to take it up to 10 days per child until the child reaches the age of 14. No more than 30 days of child leave may be taken in one calendar year, regardless the number of children. The employer also does not have to keep records of the employee's leave days - this is done by the automated system of the Social Insurance Board, which does not allow to submit an application for parental leave or child leave, to which the employee is not entitled. 

All benefits are paid through the Social Insurance Board, so employers need to worry about them as little as possible. However, concerns may arise if social tax is not paid for employees, because the less it is paid, the lower the employee benefits. 

However, an important change is, for example, that according to the new procedure the employee applies to the Social Insurance Board to apply for parental leave or child leave. The employer will then receive information by e-mail. The employer has the right to refuse the leave if there are reasons to do so (for example, if the employee has not complied with the notice periods in the application).  

The employer must also take into account that the time spent on parental and child leave is also taken into account in the general calculation of vacations. This means that when calculating the length of the annual leave, the days on which the employee was on parental leave or child leave must be regarded as days worked. 

If you have any questions about changes to the family benefits system, write to the Chamber of Commerce's lawyers at juristid@koda.ee. 

Check out the new version of the Employment Contracts Act HERE. 

Check out the new version of the Family Benefits Act HERE.