Ombudsman challenges Estonia’s calendar-year pension age

Estonia’s Chancellor of Justice Ülle Madise says the law treats people born in the same year differently by allowing some to start receiving an old-age pension several months later than others, ERR reported.

Madise asked the Riigikogu’s Social Affairs Committee for explanations after being asked to assess whether it is constitutional for people born in the same year to become eligible for an old-age pension at different ages from 2027.

The months whose residents are treated equally or differently vary from year to year. Professor Lauri Leppik has described the issue in Tallinn University’s demography blog, according to the Chancellor of Justice.

Under the calendar-year-based system, people born in January may have a pension age one to three months lower than those born in December of the same year, unless the pension age calculated for that calendar year happens to be a whole number of years. The dividing line can shift between months from one year to the next.

The difference also has financial consequences. Based on the current average old-age pension, a one-month difference would mean that people born at the beginning of the year receive one monthly pension payment, or an average of 825 euros, more than those born at the end of the year. A two-month difference would amount to 1,650 euros, while a three-month difference would amount to 2,475 euros.

Madise said Parliament’s political decision to link the old-age pension age to changes in the expected life expectancy of 65-year-olds falls within the framework of Section 28, Subsection 2, of the Constitution.

However, she questioned whether setting the pension age by calendar year is constitutional when it can cause people born in the same year to begin receiving an old-age pension at different ages.

The pension age is set in years and months and may differ from one calendar year to another. As a result, some people born in the same year could reach pension age at 65 years and three months, while others reach it at 65 years and six months.

Madise said it was understandable for people to ask whether the state has convincing evidence that, for example, those born in December 1962 have an average life expectancy two months longer than those born between January and November of that year, or that those born between October and December 1963 live one month longer on average than those born between January and September.

For these reasons, the Chancellor of Justice asked the Social Affairs Committee to take up the issue soon.