Government measures fall short of addressing rising living costs and widening inequality for households with children
The Latvian Large Families Association (LDĢA) has expressed strong disappointment with the approach taken by the government led by Prime Minister Evika Siliņa in addressing the country’s demographic crisis, as well as with the real outcomes of the “4 × 4 Plan” introduced for 2025.
According to LDĢA Chairperson Elīna Treija, the indexation of financial support was indeed necessary in the context of sharp inflation in recent years, yet such support should have been extended to families raising children of any age, not only to those with infants. Instead, the government has opted for short-term measures benefiting families only until their child reaches 1.5 years of age.
Contrary to Point 36 of the government’s own Declaration—which pledges to use tax policy to reduce income inequality—the 2026 budget allocates €67 million to raising the general personal non-taxable allowance. The government has not directed these funds towards increasing the allowance for dependants or enhancing child and family benefits. LDĢA argues that this decision further widens the income gap between households with children and those without.
The package of changes for 2026 does include some adjustments to child-related support. The childcare (parental) benefit will now be paid until the child reaches 1.5 years of age, and the monthly rate will increase from €171 to €298. For children born before 2 November next year, the benefit from 1.5 to 2 years will be maintained at €42.69 per month.
However, LDĢA notes that this increase still does not adequately compensate for the income loss many families face following the birth of a child—particularly for single-income households on an average salary. With support ending at 1.5 years, families with older children will be left in a materially weaker position.
LDĢA also highlights that fiscal policy has become increasingly unfavourable to families with children since 2019. At that time, both the non-taxable minimum and the allowance for dependants stood at €230. Since then, the non-taxable minimum has increased by 240% (an increase of €320), while the dependant allowance has risen by only €20. As a result, the relative value of support for families with children has markedly declined.
Additionally, family state benefits have lost substantial purchasing power since their last adjustment in 2022. Due to rising household costs—up by at least 30%—the real value of these benefits has eroded significantly.
According to LDĢA, the government’s decisions for the 2026 budget contradict its own stated priorities, especially its commitment to supporting families with children and reducing inequality. The association maintains that with the resources already available, it would have been possible to establish a balanced support system combining services, benefits, and tax relief. Such a system would genuinely encourage families to have more children and reduce the risks of poverty, neglect, or domestic violence linked to financial hardship.
LDĢA warns that the measures planned in the 2026 budget may push many large families closer to poverty, undermining social equality efforts and threatening Latvia’s long-term demographic sustainability.