Covid has emptied the sickness benefit wallet

In the first few months of this year, the social budget spent €154 million on sickness benefits, which is more than half of the funding foreseen for the whole year. This is due to the huge expenditure on paying sick leave for Covid-19 patients.
21.06.2022. Inga Paparde
 
BENEFITS. The effects of the Covid-19 pandemic are still being felt in the special budget: although the social budget is running a surplus overall, there may not be enough money in the special budget for diseases ©Kaspars KRAFTS, F64 Photo Agency

Given the significant expenditure on sickness benefit payments, there is a significant risk of financial insufficiency for sickness benefit payments this year, the Ministry of Welfare has concluded. The government should decide on an additional allocation of at least €47 million.

Millions rolling in for sickness benefits

Two documents from the Ministry of Welfare are to be examined at a government meeting on Tuesday, June 21 - both related to a request for additional money from contingency funds. The Ministry of Welfare explains that the extra money is needed to address the negative impact of the spread of Covid-19 on sickness benefit expenditure in the special budget for state social insurance. In total, expenditure of €303.6 million has been approved in the special sickness budget for this year. However, at the beginning of this year, i.e. in the four months

when the Covid-19 epidemic was at its peak, expenditure on sickness benefit amounted to €153,769,310, or 50.6% of the expenditure planned for the whole of 2022.

According to the State Social Insurance Agency, not all, but a large proportion of sickness benefits were directly related to coronavirus-related illness - €52.7 million or 34.3%.

Sickness benefit. Payment period January 2022 - April 2022. Number of benefits given - 143,796. Average amount of benefit granted - €327.21. Total expenditure 47,052,034 / Neatkarīgā

It should be recalled that, unlike other diseases, in the case of Covid-19, sickness benefits are granted and paid from the first day of incapacity for work. Analyzing these challenges and assessing what the situation with sickness benefits could be in the second half of the year, the Ministry of Welfare points out that, given the significant execution of expenditure for sickness benefit, there is a significant risk of a financial gap for sickness benefit payments in 2022. The Ministry of Welfare also points out that the sickness benefits granted as late as the end of 2021 have also been paid in 2022.

There has never been such a large expenditure on sickness benefit

The government has already allocated additional money for sickness benefits on several occasions, for example €1.15 million for November 2021 or €3.9 million for December. However, part of the special budget also needs funds for December last year, so the government will have to decide on the allocation of €260,130 from the contingency money.

However, the biggest additional expenditure was at the beginning of this year, so the most money is also needed for this year. The actual expenditure for the four months of 2022 (sick pay for the shorter period from January 17 to February 28) is more than €47 million, an unprecedented amount of money paid in sickness benefits in such a short space of time. It is true that the average benefit in euros was not very high: it was €327. In total, 143,789 benefits were calculated and paid.

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