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February 22, 2019
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Czech Labor and Social Affairs Ministry plans revision of welfare within several months

13.1.2019 18:34
The logo of the Labor and Social Affairs Ministry of the Czech Republic.
The logo of the Labor and Social Affairs Ministry of the Czech Republic.

The Czech Labor and Social Affairs Ministry is planning to revise the social welfare system. The results of the plan should be ready to implement within the next several months.

Czech Labor Minister Jana Maláčová (Czech Social Democratic Party - ČSSD) informed journalists of the plan on 9 January. She also said she believed tax breaks should be simultaneously assessed and optimized along with the benefits and contributions system.

"Revising the welfare benefits system is a rather demanding task. We have 16 kinds of benefits. It is impossible to just adjust one of them, on the contrary, all of the benefits, those involving insurance schemes and those not, should be interconnected and related to each other," the minister said.

On Monday the Government discussed increasing the "living minimum", the baseline that serves to establish the monetary value of many benefits and the eligibility of applicants for them. Maláčová proposed raising that baseline for the first time in seven years by 11 % as of this month.

The cabinet rejected that idea. The Finance Ministry was opposed to it.

Czech Finance Minister Alena Schillerová (ANO) said she was not opposed to raising the baseline in theory, but not until January 2020. Maláčová, however, believes it is necessary to revise the benefits rapidly because of the planned increase to the "subsistence minimum" for able-bodied working-age adults and the planned introduction of free school lunches.

According to the current Education Ministry proposal, children attending nursery and primary schools whose families receive childcare supplements because their incomes are less than 2.7 times the living minimum should be entitled to free meals. Maláčová believes those with even higher incomes should also be eligible for free lunches.

Making that change would increase the number of families entitled to supplements and therefore the number of children eligible for free lunch. "We already announced that [the household income level for eligibility] should be increased to three times the living minimum for the childcare supplement, especially if we will be introducing free lunch at school for children whose families are eligible for the supplement," the Labor and Social Affairs Minister said.

In her view, money for social affairs could be found after the eventual process of "clarifying and simplifying tax breaks", which should be assessed along with the revision to the welfare system. "It makes no sense to look at welfare in isolation, it must always be seen association with tax breaks. We must look at, for example, how the childcare supplement relates to the per-child tax break, the dependent spouse tax break, or the nursery school tax break so that this makes sense altogether," she said.

The Labor and Social Affairs Minister added that the Czech Republic's tax breaks for families are the highest of all the OECD countries, but the country is significantly behind the others when it comes to providing childcare services such as nursery schools. The coalition Government of ANO and the ČSSD, supported by the Communists, have committed in their program declaration to assess the changes to the welfare system that have been instituted over the past few years.

According to that declaration, the Government wanted to mainly focus on childcare supplements, contributions to families, persons living with disabilities, and housing benefits. According to the legislative plan,  in April and May Maláčová should submit to the Government her proposals for amendments regulating the housing contribution and housing supplement.

The Labor and Social Affairs Ministry recently received price maps showing customary rents in different parts of the country from the Regional Development Ministry. According to those maps, the maximum amount of state aid for housing is to be established locally.

The measure is meant to prevent "trafficking in poverty", which involves paying thousands of crowns in housing benefits per tenant to the landlords of housing that is frequently substandard. A likely outcome of the amendments will be a reduction to the monetary value of such benefits.

Staffers from organizations aiding impoverished people have previously warned against reducing the monetary value of the benefits. They have pointed out that people living in overpriced rental apartments and residential hotels have nowhere else to go because there is no social housing available in the country.

According to the Labor and Social Affairs Minister, these adjustments must be made cautiously so those victimized by the business in impoverished tenants eligible for this kind of welfare do not see their situations deteriorate further. "It is not possible to anticipate that we might realize savings of several billion crowns all at once just because we adjust these benefits," she said.

ČTK, translated by Gwendolyn Albert
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