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The explanatory letter accompanying the government-initiated bill said that the legislation makes the regulation of the payment of welfare benefits more flexible and will be conducive to the recipients of benefits entering into employment. The amendments also abolish the need-based family allowance, spokespeople for the Riigikogu said.

To facilitate the taking up of employment, the law envisages a two-month transition period in the course of which payment of the subsistence allowance to the person in the usual amount will continue. During the next four months half of the person's pay will be excluded from the size of the income that serves as basis for the calculation of the subsistence allowance to increase the income of the person entering into employment.

In order to create more flexible conditions for pupils to work during school holidays, in the future the income earned by a minor attending school will be excluded from the income of a household that serves as basis for the calculation of the subsistence allowance.

The law will restore the payment of a funeral allowance, or death grant, via the budgets of municipalities. The size of the allocation to the budgets of municipalities for that purpose is based on the principle that 250 euros on the average could be paid out per died person. Municipalities will be entitled to take a need-based approach to the payments, deciding how much momey and to whom is paid. The money can also be used by municipalities to pay for the interment of dead who have no relatives and whose interment has to be paid for by the municipality.

The amendments were passed in the 101-seat chamber by votes 57 to three.