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Child andfamily benefits

The question of the appropriate age at which out-of-home childcare will benefit children is one of the most controversial issues in the childcare debate. Some see nothing wrong with out-of-home childcare starting from three months of age - as long as the care is high quality. Others consider that the critical developmental needs of the first year of life demand nothing less than the constant, loving, one-to-one interaction of parental care. For millions of working parents in OECD countries this is a question that must be answered under pressure from career demands and household budgets (OECD, 2007, 2011; UNICEF, 2008). It is therefore a question that is almost inseparable from the issue of parental leave and other child-related benefits.

In Latvia, a number of these benefits, i.e. state family benefit, childcare benefit and childcare grants, are universal benefits provided to parents at the same rate regardless of income, while the country’s degree of income redistribution is relatively low (OECD, 2015a). In 2014, Latvia amended the Law on State Social Allowances in 2014, increasing parents’ entitlements to child and parental benefits. Women are now entitled to 19 weeks of maternity leave at a rate of 100% of the usual salary. Fathers get two days at a rate of 80% of the usual salary. The amendment also raised child benefit to EUR 171 per month, making it universal for parents whose children have yet to reach the age of 1.5 years. Parents are entitled to this benefit regardless of their employment status (State Social Insurance Agency, 2015).

Some OECD countries provide a prolonged period of paid leave (around two years or more) either as parental leave alone or in conjunction with separate child/home care. For example parents can take prolonged paid leave of around 100 weeks or more in Finland, Hungary, Norway, Poland and the Slovak Republic. In many OECD countries, including Latvia, periods are considerably shorter. Latvian parents are entitled to prolonged parental leave for a period of up to 1 year at a rate of 60% of the beneficiary’s average insurance contribution wage, or up to 1.5 years at a rate of 43.75%. There is flexibility in the use of benefits, however, as parents can also continue working and receive parental benefits equal to 30% of the granted benefit during the period of prolonged parental leave.

 
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