In the Estonian social protection system, the role of the minimum income scheme is primarily carried by subsistence benefit. Subsistence benefits are calculated based on the minimum expenses for food, clothing, footwear, and other goods and services to satisfy basic needs. The challenge for a minimum income protection system is to ensure that it is sufficiently generous and economically and socially viable, but at the same time to encourage the move towards employment and independent subsistence to avoid unemployment poverty traps.
The study aims to assess the impact of subsistence benefits and debts on labour market activity and socio-economic coping. To achieve the aim, we will describe and analyse the profile of the recipients of subsistence benefits, their participation in the labour market, the incurrence of indebtedness of the recipients of subsistence benefits and the assistance of the subsistence benefits and debt counselling service in alleviating it. Additionally, we assess the impact of the changes in the subsistence benefits system (income from work exemption) implemented in 2018.
To fulfil the research objectives, a literature review and document analysis are performed, foreign practices are studied, registry data, survey data and data from expert interviews are analysed.
The results of the analysis help to make considered decisions in the development of the subsistence benefits system to improve people’s socio-economic coping and increase their labour market activity.