Fewer people receive subsistence aid as benefit costs rise

Fewer people are applying for subsistence benefits in Estonia this year, but rising living costs and a higher subsistence threshold have kept spending high, ERR reports. Local governments will receive an additional 1.1 million euros to ensure the benefits can be paid through the end of the year.

The Ministry of Regional Affairs and Agriculture plans to distribute the money among 46 local governments. A total of 20.6 million euros was spent on subsistence benefits in the first seven months of the year, one percent less than during the same period last year.

The number of applications in July was seven percent lower than a year earlier, while spending per application was six percent higher.

The 2026 state budget allocated 42.5 million euros to reimburse local governments for subsistence benefit payments. Last year, the corresponding amount was 36.7 million euros.

Andrus Jõgi, an adviser in the ministry’s local government department, said the additional funds would go to local governments that risk running out of the money allocated to them at the beginning of the year.

“At the beginning of the year, we allocated 30 million euros to local governments for subsistence benefit payments. The data from the first half of the year now shows that some local governments will not have enough and need additional money,” Jõgi said.

Jõgi attributed the higher cost per application to inflation, including increased heating and electricity costs, as well as the higher subsistence threshold introduced in 2026.

The amounts needed vary between local governments. Some will receive only 1,000 euros in additional funding, while the largest allocation to a single local government will be 115,000 euros.

Smaller local governments generally need more additional support because, with fewer residents, each additional applicant or reduction in the number of applicants has a greater impact on the total amount.

Kati Nõlvak, head of economic subsistence policy at the Ministry of Social Affairs, said it had been agreed last year that the subsistence threshold would rise in 2027 in line with the consumer price index under the state budget strategy.

Under the agreement, the threshold is expected to be 231 euros for an adult and 277 euros for a child.

The forecast allocation for reimbursing subsistence benefit payments next year is 36.5 million euros. Nõlvak said the lower figure did not necessarily mean spending would fall, as the full amount of more than 40 million euros allocated this year was also unlikely to be used.

The ministry had expected a somewhat larger budget this year because several legislative changes came into force.