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Social insurance and pension

Social insurance

Social security covers different areas: pension, medical insurance and unemployment insurance.
The Ministry of Social Affairs prepares international social security agreements and participates in international cooperation, such as the European Union and the Council of Europe committees.
In order for people to be able to freely choose a country in the European Union, Switzerland, Norway, Liechtenstein and Iceland to live and work in, they must be guaranteed certain social insurance rights. These include sickness and maternity benefits; invalidity (incapacity for work), old age and survivor’s pensions; occupational accident and illness benefits; death grants; benefits payable to the unemployed; and family benefits.

The payment of the social insurance benefits mentioned above is organised by the Estonian Social Insurance Boardthe Estonian Health Insurance Fund and the Estonian Unemployment Insurance Fund


The Estonian pension system is divided between three different pillars:
  • I pillar: State pensions
  • II pillar: Funded pensions
  • III pillar: Supplementary funded pensions
The government sets specific rules for the three-pillar system, administering the 1st pillar, guaranteeing the 2nd pillar and providing an effective supervision and regulation system for both the 2nd and 3rd pillars. Employers make contributions (through the national social tax) to the 1st pillar. Employees make mandatory payments into the 2nd pillar and are free to choose whether to contribute to the 3rd pillar.

I pillar - state pensions

State pension insurance guarantees an income for people when they retire or in the event of their becoming incapacitated or losing their provider. State pensions are paid out from the social tax calculated on salaries.

Old-age pension

Old-age pension is a type of state pension.

The following persons have the right to receive old-age pension:

  • permanent residents of Estonia;
  • aliens residing in Estonia on the basis of temporary residence permits or temporary right of residence.
Persons who have attained 63 years of age and whose pension qualifying period earned in Estonia is 15 years have the right to receive old-age pension.

Pension for incapacity for work

Persons of at least 16 years of age who are declared permanently incapacitated for work with the 40 to 100 per cent loss of the capacity for work, and who have earned a following pension qualifying period in Estonia by the commencement date of establishment of permanent incapacity for work:

Age                                 Required pension qualifying period

16-24 years                     No requirement for length of service
25-26 years                     1 year
27-28 years                     2 years
29-30 years                     3 years
31-32 years                     4 years
33-35 years                     5 years
36-38 years                     6 years
39-41 years                     7 years
42-44 years                     8 years
45-47 years                     9 years
48-50 years                   10 years
51-53 years                   11 years
54-56 years                   12 years
57-59 years                   13 years
60-62 years                   14 years

If the reason for the permanent incapacity for work is a work injury or occupational disease, pension for incapacity for work shall be granted with no requirement for length of service.

For the persons declared permanently incapacitated for work, pension for incapacity for work shall be granted for the entire period of incapacity for work but not for longer than until attaining pensionable age. 

Survivor's pension

Upon the death of a provider, family members who were maintained by him or her have the right to receive a survivor’s pension. Survivor’s pension shall be granted to the children, parents and the widow or widower irrespective of whether they were maintained by the provider or not.

Calculation of survivor’s pension

The greatest of the following shall be the basis for calculation of a survivor's pension:

  • Old-age pension calculated on the basis of the provider’s accumulation period and insurance components;
  • old-age pension if the person has completed thirty years of pensionable service.

The amount of survivor’s pension depends on the number of family members.

The amount of survivor’s pension is as follows:

  • to three or more family members, 100 per cent of the old-age pension that served as a basis for calculation;
  • to two family members, 80 per cent of the old-age pension that served as a basis for calculation;
  • to one family member, 50 per cent of the old-age pension that served as a basis for calculation.

To apply for survivor’s pension one should contact the Social Insurance Board.

National pension

National pension is granted to the following persons:
Persons who have attained 63 years of age and who have not earned a pension qualifying period required for the grant of old-age pension and who have been permanent residents of Estonia or have resided in Estonia on the basis of a temporary residence permit or temporary right of residence for at least five years immediately before making a pension claim. 

The rate of national pension is 158,37 €.

National pension is not paid to employed persons, with the exception of children under 18 years of age and persons under 24 years of age who are enrolled in daytime study or, for medical reasons, in another form of study or full-time study.

National pension is not paid to persons who receive pension from another state.

To apply for the national pension one should contact the Social Insurance Board.
You can ask for additional information from the Social Insurance Board's hotline 16 106. 

II pillar - funded pensions

The funded pension is based on preliminary financing – a working person himself or herself saves for his or her pension, paying 2% of the gross salary to the pension fund. The state adds 4% from the 33% social tax calculated on the salary of the employee.

If the 33% social tax is calculated from the salary of an employee who has not subscribed to the funded pension, 13% of it is directed to health insurance and 20% to state pension, which will be paid out to today’s pensioners. When subscribing to the funded pension, 4% of that state pension will be transferred to insure everyone’s personal future and that part will not be paid as state pension.

The state pension insurance component of the person who has subscribed to the funded pension, is also respectively smaller (for the years when 16% was received for state pension instead of 20%).

Subscribing to the funded pension is mandatory for the persons who were born in 1983 and later. The right and obligation to pay the contributions arises on 1 January of the year following the year when a person becomes 18 years old.

Persons who were born between the years 1942 and 1982 had the option to voluntarily subscribe to the funded pension system. The deadline for subscribing was 31 October 2010. With the submission of the application for subscribing, the persons took a binding obligation – there is no possibility to unsubscribe from the funded pension.

The right to receive funded pension payments becomes effective when a person reaches the retirement age.


III pillar - supplymentary funded pensions

Supplementary funded pensions are additional voluntary pensions which enable you to save more and maintain your standard of living during your retirement.

Today, the supplementary funded pension allows:

  • determining the amount of contributions with the possibility of changing the size of the contribution at any time,
  • receiving a 20% income tax incentive on the contributions made during the year, which do not exceed 15% of the gross income (as of 1 January 2012, the absolute maximum for the contributions is €6,000),
  • changing a pension fund to another pension fund or insurance contract,
  • grace periods (also the option to suspend the contract).

In the future, the supplementary funded pension will allow:

  • maintaining the established standard of living also at old age,
  • taking the accrued sum into use already from the age of 55,
  • receiving monthly or quarterly lifetime payments tax free.

The supplementary funded pension can be subscribed through one of the following options:

  • by concluding a pension insurance contract with a life insurance company or
  • by making contributions to the voluntary pension fund.
Last updated: 27 July 2015