State Audit Office: the system of payment of the parental benefit must be improved

Toomas Mattson | 8/11/2005 | 12:00 AM

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TALLINN, 11 August 2005 - Upon auditing the organisation of application, allocation, payment and supervision of the parental benefit the State Audit Office did not find cases where the parental benefit had been allocated incorrectly, but did find some shortcomings and thus made suggestions for improving the system.

The system of payment of the benefit does not rule out the possibility that the benefit is paid to the parents of children who have been placed in an orphanage or who have been temporarily placed in a shelter. By questioning the employees of orphanages and a shelter and comparing their data with the data of parental benefits the State Audit Office discovered that the payment of the benefit had been continued in eight events even when the child had been placed in an orphanage (five events) or a shelter (three events).

Before February 2005 social welfare institutions did not have a direct obligation to notify on a monthly basis the Social Insurance Board about children without parental care who have been permanently placed in a social welfare institution. The State Audit Office recommends that the Minister of Social Affairs strongly insist that the social welfare institutions always provide the Social Insurance Board with such data, in order to improve the supervision over the payment of the benefit to the parents of children who have been placed in an orphanage and prevent payment of the benefit to those who do not actually raise the child.

However, so far no solution has been found regarding payment of the benefit to the parents of children who have been placed in a shelter, because although a shelter is meant as a temporary solution for children, they often remain there for a longer period. At the same time, their parents receive the benefit for raising the child. This scheme does not support one of the aims of payment of the benefit – harmonisation of work and family life.

The State Audit Office also investigated whether the number of children below the age of 18 months who have been placed in an orphanage has changed recently. In recent years the figure has been stable, but in the first seven months of 2005 the number of children placed in an orphanage amounted to 79% of the entire figure of 2004. However, the period is still too short to draw any far-reaching conclusions and the audit of the State Audit Office has not investigated whether the parents of these children have received any parental benefit and if yes, during what period.

According to the data of the orphanages it is certain that after termination of the payments of the parental benefit 14 children in total have been placed in an orphanage. To these parents the Pension Boards have paid 113,586 kroons of parental benefits, mostly at the rate of 2200 kroons a month.

The State Audit Office also considers it a problem that during the period of receiving the parental benefit persons earning income do not notify the Pension Board thereof, as a result of which the benefits paid exceed the permitted level and must be reclaimed later. The data moves slowly and reclaiming the benefit is problematic. The agreements, which are made with the recipients of the benefit, often have too long a repayment period. For example, the period of repayment of overpaid parental benefit in the Tartu Pension Board is too long in six cases and the last payment payable in these cases must be made between 2006 and 2010. The current regulation does not establish any limits to the repayment term stipulated in the repayment agreement.

The parental benefit is paid by the Social Insurance Board through its regional Pension Boards as of the beginning of 2004. In 2004 the total parental benefits paid amounted to 441 million Estonian kroons.

A permanent resident of Estonia and an alien residing in Estonia on the basis of a temporary residence permit who is a parent, an adoptive parent, a step-parent, a guardian or a caregiver raising a child and is not receiving a similar benefit from another country has the right to receive the benefit. The right to receive the benefit arises as of the date following the final date of the period for payment of maternity benefit or adoption benefit. If the beneficiary does not have the right to receive maternity benefit, the right to receive parental benefit arises as of the birth of the child. The purpose of the Parental Benefit Act is to compensate for the income foregone due to raising children and to support combining work and family life.


Toomas Mattson
Communication Manager of National Audit Office
Telephone: 6400 777
Mob: 51 34900
E-mail: toomas.mattson@riigikontroll.ee

  • Posted: 8/11/2005 12:00 AM
  • Last Update: 9/22/2015 8:01 AM
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