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Unemployment and health insurance benefits

Unemployment insurance benefits

Unemployment insurance is provided by the Estonian Unemployment Insurance Fund who also pay unemployment insurance benefits, unemployment allowance, redundancy payments, and bankruptcy benefits.

The purpose of unemployment insurance is to:

  • Ensure partial compensation of income in case of unemployment for the time of searching for new employment;
  • ensure compensation for the cancellation of the employment contract or termination of the service relationship in case of a lay-off;
  • protect the employee in case of the insolvency of the employer.

The benefits are funded from unemployment insurance payments. In 2015–2018, the unemployment insurance premium rate paid by the insured person is 1.6%. In 2015–2018, the unemployment insurance premium rate paid by the employer is 0.8%.


Health insurance benefits

The Estonian medical system is based on mandatory health insurance collected from social tax payments. The employer pays 13% of the employee’s gross wages as health insurance.

Health insurance is based on the principle of solidarity: the service provided does not depend on the amount of social tax paid by the person. In case of temporary incapacity to work due to illness, caring for an ill person, or childbirth, the Health Insurance Fund will pay temporary disability benefits.

The Health Insurance Act provides insurance coverage to:

  • Employees working under an employment contract with a longer than one-month term;
  • people receiving payment for work or services under a contract under the law of obligations with a longer than three-month term, on the condition that they are not self-employed persons and the other party to the contract is obligated to pay monthly social tax on their behalf;
  • members of a legal person’s management and supervisory organ.
Last updated: 6 November 2017