Sickness benefit
Sickness benefit is a financial compensation paid by the Health Insurance Fund to an insured person (an employee, a civil servant, a person receiving remuneration or
service fees on the basis of a contract under the law of obligations, a member of the management or controlling body of a legal person, a self-employed person, a spouse participating in the activities of a self-employed person) on the basis of a certificate for sick leave in case the person does not receive income subject to individually registered social tax due to a temporary release from their duties or economic or professional activity. You can claim sickness benefit in case of illness, an accident at work, traffic or personal injury.
When an employed person falls ill and needs to be away from work, the doctor will issue a certificate for sick leave to prove it. Based on this certificate, the employer and the Health Insurance Fund will pay to the person the benefit for temporary incapacity to work. Please note that in case of illness the employee will not be compensated for the first three days of illness. In case of illness, quarantine, and domestic or traffic injuries (and any resulting illness or complication), the employer will pay the benefit from the fourth day of illness. The Health Insurance Fund starts paying the benefit from the ninth day of illness.
The employer calculates the amount of the sickness benefit on the basis of the average wage in the last six months. The Health Insurance Fund calculates the benefits for incapacity to work based on the data of social tax (received from the Tax and Customs Board) calculated or paid for the beneficiary in the calendar year preceding the start date of the incapacity to work indicated in the incapacity certificate. Both the employer and the health Insurance Fund calculate the employee's average daily wage based on the above data. The sickness benefit is paid at the rate of 70% of daily income. The sickness benefit is subject to income tax.
An insured person has the right to receive the sickness benefit for 182 consecutive calendar days (240 consecutive days in case of tuberculosis). If necessary, a doctor may issue a certificate for sick leave for a longer time, but the person will not receive any benefit for that time.
An example of sickness benefit
Calculation of sickness benefit for an insured person working under an employment contract
Kalle is working under an employment contract. He has been released from work due to illness, the period of release is 01.07–18.07. For the days 1–3 of illness Kalle will not be paid sickness benefit. Kalle's employer submits the data to the Health Insurance Fund within 7 days.
The employer calculates and pays the benefit for the period 04.07 - 08.07 by pay day, but not later than 30 calendar days from the submission of the duly completed sick leave certificate.
Kalle’s daily income is 32 euros, calculated based on the last 6 months wages.
The employer will calculate the amount of sickness benefit by calculating 70% of 32 multiplied by 5 days: 32 x 0.7 x 5 = 112 euros.
Income tax of 20% is withheld from the benefit: 0.20 x 112 = 22.40.
The employer will pay Kalle the sickness benefit in the amount of: 112 - 22.40 = 89.60 euros.
The Health Insurance Fund pays Kalle the sickness benefit as of the day 9, for the period 09.07 - 18.07.
According to the Tax and Customs Board, the amount of social tax paid for Kalle in the preceding calendar year was 2530.90 euros, thus in the previous year Kalle had an income of 2530.90 / 0.33 = 7669.39 euros.
For daily income calculation the annual wages is divided by 365: 7669.39 : 365 = 21.01.
The amount of benefit is calculated by calculating 70% of the daily income multiplied by the number of days to be reimbursed: 10 x 21.01 x 0.7 = 147.07 euros.
Income tax is withheld from the benefit: 0.20 x 147.07 = 29.41 euros.
Thus, the Health Insurance Fund will pay Kalle the sickness benefit in the amount of 117.66 euros: 147.07 - 29.41 = 117.66.
Calculation of sickness benefit in case an employee has worked less than six months and no social tax has been paid for him/her in the calendar year that serves as the basis for the calculation of average daily income
Maria is hired part-time under a 2-month fixed-term employment contract based on which her agreed monthly wage is 330 euros.
She has been released from work due to illness, the period of release is 01.07.–14.07.
For the days 1–3 of illness Maria will not be paid sickness benefit.
For days 4–8 the benefit is paid by the employer who calculates the amount of benefit on the basis of Maria’s wage in the month preceding her illness.
The benefit is calculated as Maria's average daily wage (330/30 = 11.00 euros) multiplied by the number of days reimbursed by the employer (5) and the benefit rate (70%): 11.00 x 5 x 0.7 = 38.05 euros.
Income tax is withheld from the sum 0.20 x 38.05 = 7.61 euros
The Health Insurance Fund will pay Maria the sickness benefit in the amount of 38.05 – 7.61 = 30.44 euros
Since Maria did not work in the calendar year preceding her illness and no social tax was paid or calculated for her, her average income per calendar day is deemed to be equal to the negotiated wage divided by 30, but not more than the amount of the minimum monthly wage established by the Government of the Republic divided by 30.
This means that Maria’s daily wage is 330/30 = 11.00 euros.
The Health Insurance Fund pays sickness benefit as of the 9th day of incapacity to work at the rate of 70% of average daily income, so Maria is entitled to receive the benefit for 6 days at the rate of 70%:
11.00 x 6 x 0.7 = 46.20 euros.
Calculation of sickness benefit when the employee's daily income, as calculated from the previous year's wages, is lower than the minimum monthly wage divided by 30.
An employee's basic wage is higher than the minimum wage
Pavel has an accident at work.
The release from work period indicated on his sickness leave certificate is 11.06 - 21.06.
His negotiated wage as of 10.06 is 511 euros per month.
In case of an accident at work, sickness benefit is paid only by the Health Insurance Fund.
In the preceding calendar year, the amount of social tax calculated for Pavel was 506.18 euros and the income taxed with social tax was 1533.88 euros.
Pavel’s average daily income was therefore 1533.88 / 365 = 4.20 euros.
As Pavel's average daily income of 4.20 euros is less than the average income per calendar day of 16.67 euros calculated based on the minimum monthly wage (i.e., the minimum monthly wage rate in 2018 is 500/30), the benefit is calculated on the basis of the latter. The minimum monthly wage established by the Government of the Republic serves as a basis for the calculation of average daily wage in the event when an employee’s average wage in the previous year is less than the minimum monthly wage but the basic wage in the day before the employee falls ill is higher than the said minimum.
In case of an accident at work, the sickness benefit is paid as of the second day of incapacity to work at the rate of 100%, thus Pavel is entitled to receive the benefit for 10 days at the rate of 100%:
10 x 16.67 x 1.0 = 166.70 euros.
Income tax of 20% is withheld from the benefit:
An employee's basic wages is lower than the minimum wage:
Martin is an insured employee. He is diagnosed with an occupational disease. The period of release from work is 2.07- 30.07. In case of an occupational disease, sickness benefit is paid only by the Health Insurance Fund.
Martin’s negotiated wages as of July 1 is 192.00 euros per month. In the preceding calendar year, Martin worked for half a year and received a total of 1533.88 euros as remuneration which was subject to social tax of 506.18 euros.
Thus, in the previous year, Martin's average daily income was 4.20: 1533.88 / 365.
Since Martin’s average daily wage (4.20 euros), as calculated from the previous year's income, is less than the average daily wage calculated based on the minimum monthly wage, but his basic wage on the day before the day of the release from work is also less than the minimum monthly wage established by the Government of the Republic, the benefit is calculated based on the average daily income calculated from his basic wage: 192 / 30 = 6.40 euros.
Sickness benefit is paid as of the second day of incapacity to work at the rate of 100%, thus Martin is entitled to receive the benefit for 28 days at the rate of 100%: 6.40 x 28 x 1.0 = 179.20 euros.
Income tax of 20% is withheld from the benefit.
An employer calculates the sickness benefit on the basis of an employee’s last six months average wages.
The Health Insurance Fund calculates the benefit for incapacity to work on the basis of the data on the social tax calculated or paid for the beneficiary for the previous calendar year, as received from the Tax and Customs Board.
Average income for calendar day when calculating the amount of benefit, is deemed to be equal to the income calculated on the basis of the social tax calculated for the insured person during the calendar year preceding the calendar year of the date on which release from the performance of their duties commenced as specified in the certificate of incapacity to work, divided by 365.
The benefit rate % is calculated from the daily income and multiplied by the number of days to be reimbursed (see the examples of benefit calculation). Income tax is withheld from the benefit amount.
After the receipt of the benefit you can view the information underlying the calculation at the state portal eesti.ee.
Calculation of per-calendar day income by the Health Insurance Fund
Daily income of a person working under employment contract or in the public service is deemed to be equal to the income calculated on the basis of the social tax calculated for the insured person during the calendar year preceding the calendar year of the date on which release from the performance of their duties commenced as specified in the certificate of incapacity to work, divided by 365.
If during the previous year a person had no income or his/her income was less than the minimum monthly wage, then the daily income = basic wage / 30 but not more than the amount of the minimum monthly wage divided by 30.
The calculation is based on the basic monthly wage or the minimum monthly wage applicable on the day before the date of the start of the release from work specified in the certificate of incapacity to work.
If a person did not have any income in the previous year and his/her basic wage is lower than the minimum monthly wage, then daily income = basic wage / 30.
Daily income of a person receiving remuneration or service fees on the basis of a contract under the law of obligations, a member of a management body, or a self-employed person is deemed to be equal to the income calculated on the basis of the social tax paid for the insured person during the calendar year preceding the calendar year of the date on which release from the performance of their duties commenced as specified in the certificate of incapacity to work, divided by 365.
In case there was no income, the daily income = the monthly rate established in the Social Tax Act / 30.
If a self-employed person was not obliged to pay advance payments of social tax and in the previous no social tax was paid for or by him/her, then he/she has no daily income and will not receive any benefit.
If the data serving as basis for the benefit calculation have been changed at the Tax and Customs Board, a person has the right to submit an application to the Health Insurance Fund for the recalculation of the benefit within 3 years from the date of receipt of the certificate of incapacity to work by the Health Insurance Fund.
Specifications for different types of insurance
If a person is insured at the same time as an employee and a self-employed person or as a member of a management body or as a person who is a contracting party under the law of obligations, the daily income is calculated on a more favourable basis for the insured (either on the basis of the amount of the social tax calculated or the amount of social tax paid).
Examples
Robert is a self-employed person.
Last year, the employer paid a social tax of 894.76 euros for him, and he himself as an entrepreneur paid 442.91 euros. In total, the amount of social tax paid was 1337.67 euros, and the income calculated from that is 4053.55 euros.
4053.55 / 365 = 11.11 euros of daily income
Old-age pensioner Karl is a self-employed person. He falls ill. No social tax was paid for him in the previous year. As an old-age pensioner, he is not obliged to pay advance payments of social tax. Therefore, he will not receive any benefits.
Maria works under an employment contract and also operates as a self-employed person and has both health insurance coverages.
Last year, her social tax was calculated in the amount of 3302.95 euros, but paid in the amount of 2292.51 euros. Since the amount of social tax calculated is higher, it is more profitable for Maria to calculate the benefit on the basis of the calculated social tax.
If necessary, a doctor may issue a certificate for sick leave for a longer time than the reimbursable period. In the event of an illness or injury, an insured person has the right to receive sickness benefit until the date on which their capacity for work is restored as specified in the certificate for sick leave, but not for more than 240 consecutive calendar days in the event of tuberculosis or 182 consecutive calendar days in the event of any other illness.
This limitation applies only to the period for which the benefit is paid, and not the duration of the sick leave certificate.