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January 20, 2019
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Czech Govt rejects SocDem proposal to increase welfare system baseline

11.1.2019 10:26
Czech Labor and Social Affairs Minister Jana Maláčová being interviewed by journalists prior to the cabinet session on 20 November 2018. (PHOTO:  www.vlada.cz)
Czech Labor and Social Affairs Minister Jana Maláčová being interviewed by journalists prior to the cabinet session on 20 November 2018. (PHOTO: www.vlada.cz)

The Social Democrats (ČSSD) have not succeeded to raise the officially-recognized "living minimum" in the country's welfare system by CZK 380 [EUR 14.85]. The cabinet rejected a proposal by Labor and Social Affairs Minister Jana Maláčová (ČSSD) earlier this week.

The proposal would have increased the living minimum, which is used to establish calculations for alimony and child support, income not subjected to collections, and welfare benefits, by 11 % for the first time in seven years. For a single adult household the baseline would have been raised to CZK 3 790 [EUR 148] per month.

The Czech Finance Ministry opposed the increase but is planning revisions to the consumer price index and the welfare system itself that may eventually result in an increase to the baseline. Czech Finance Minister Alena Schillerová (for ANO) made that announcement after the cabinet session.

The idea of raising the baseline as of this month had already failed at the Government's pre-Christmas session. Maláčová announced the plan to increase both the living minimum and the even lower "subsistence minimum" applied to able-bodied, working-age adults last summer just after taking office.

The official baseline was last adjusted in January 2012. It has been CZK 3 410 [EUR 133] per single adult ever since and is even lower for adults sharing a household with others or per child in a family, ranging from CZK 1 740 [EUR 68] to CZK 3140 [EUR 122].

The official "subsistence minimum" in the Czech Republic is CZK 2 200 [EUR 86] per month. At the end of November the plan for an official increase was discussed by the governing coalition.

Raising the baseline has yet to be agreed on. The Finance Minister has said she is not opposed to the idea but would like to postpone it until January 2020.

On Monday, the Finance Minister reiterated that it is necessary to first reassess the consumer price index according to which the baselines are determined, which was established 28 years ago. Expenditures for welfare benefits could, according to the background materials on the regulation, be increased by CZK 454 million [EUR 17.7 million] annually if the baseline were increased as proposed.

Maláčová's proposal did not seek to draw further on the state budget for the increase and said finances already allocated to the Labor and Social Affairs Ministry would have covered it. The Finance Ministry still considers increasing the value of welfare and expanding the circle of those eligible for it to be undesirable and inappropriately timed, as an increase could reduce people's motivation to find official employment.

Increasing the value of welfare benefits, according to the Finance Minister, would also further encumber the country's Labor Offices. Maláčová, however, argued that increasing their value would mainly aid people who are unable to earn their own money in any event, such as children, persons living with disabilities and senior citizens.

Increasing the baseline would also provide more relief to debtors undergoing collections proceedings. The "living minimum" establishes the amount of a debtor's income that cannot be garnished.

Welfare applicants' incomes are compared to the living minimum to ascertain whether they are eligible for state aid. Childbirth or childcare supplements are disbursed to families whose incomes are less than 2.7 times the minimum.

The baseline also determines the support provided to asylum-seekers and other foreign nationals seeking temporary protection. It is also used to waive the fees for radio and television for certain households.

ČTK, translated by Gwendolyn Albert
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MPSV, Sociální dávky, Vláda, Zaměstnanost



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