Social Affairs Minister Karmen Joller (Reform Party) told ERR Friday that the €100 million in annual savings from making family benefits means-tested from 2028, as written into the State Budget Strategy (RES), will not materialize.

Finance Minister Jürgen Ligi (Reform Party) also said on Tuesday this week that universal family benefits would not be reduced.

Kallas told ERR that she could not explain Joller's remarks and that the issue had not been discussed within the coalition.

"To my knowledge, nobody has proposed reopening the State Budget Strategy and changing these important items," Kallas said.

"We have absolutely no intention of removing this €100 million cut in benefit spending for 2028 from the State Budget Strategy. We do not agree with that because the agreement exists. It reduces our deficit. If we put that €100 million back in, our budget deficit will exceed 4.5 percent. We would be increasing the budget deficit," Kallas said.

"But I believe the savings would actually be greater than €100 million. We have the data. Eesti 200 will certainly stand for making our state more personalized for people, so that benefits are paid and targeted to those who genuinely need support," she added.

"This is simply not sound public financial management. It is not a sensible way to redistribute taxpayers' money and that is why these benefits must be means-tested," Kallas said.

According to Kallas, upcoming state budget discussions with the Reform Party will be heated.

"For us, the agreement remains in force and during the budget process we will see what has become of those agreements," she said.

"This is a disagreement that must be resolved. But one coalition partner has simply backed away from a plan that is critically important from the perspective of the state budget. For me, this adds up to a larger question. It is not only about means-tested benefits. It is a question of whether the Reform Party is prepared to manage the country sustainably. Or will we continue handing out free benefits and large-scale subsidies to everyone from a helicopter, which is completely unsustainable? Eesti 200 is not willing to make decisions that push the country in an unsustainable direction," Kallas said.

Joller cited limitations in government databases as one reason why benefits cannot be made means-tested.

"The reason is our databases, which currently do not allow us to determine, for example, where a person lives or with whom they live," Joller said.

Kallas rejected that explanation.

"I find it especially embarrassing to hear claims that our digital state, which actually possesses far more information about individuals than most countries do, is unable to use that data intelligently to provide services to people," Kallas said, adding that the excuse Estonia lacks data capabilities and cannot, within three years, integrate the data the state already has to determine people's support needs and not give money to people who don't need it does not stand to up to scrutiny.

"Unfortunately, that is how things work today. And that is exactly what developing a personalized state means. A digital state cannot be one that scatters money from a helicopter while continuously increasing losses and deficits," the Eesti 200 leader said.

The coalition agreement between the Reform Party and Eesti 200 includes the following pledge: "To better reach those who need assistance most, we will develop principles for personalized and means-tested benefits. Deadline: first quarter of 2027."

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