Czech Labor and Social Affairs Ministry plans to abolish existing housing benefits

Czech Labor and Social Affairs Minister Maláčová visited the MPs serving on the Committee for Social Policy in the Chamber of Deputies yesterday to communicate that her ministry has decided to abolish both housing benefits in the welfare system as of 2021. Both the housing contribution and the housing subsidy will end.

Without any warning, and without providing an outline of the legislation that is meant to be given to the ministry’s customary partners for comment, the wording of an absolutely new law has already been drafted about a benefit being called the “housing supplement”. The lawmakers were certainly surprised by this because, until just last week, the ministry had said it would not be combining both of the current benefits into one new benefit.

Useless round tables about changing the laws

After discussions at round tables were held in vain about revising the laws on state social support and on aid to those in material distress, what is now being planned is something that has so far remained behind the closed doors of the minister’s cabinet. It has especially been hidden from those who will be the most affected by this particular innovation.

Anywhere between 8 000 and 10 000 of the current households depending on the current housing benefits will not be eligible for the new housing supplement. A minimum of 6 000 of those households currently are living in residential hotels, arrangements to which not one more crown from the state budget will flow toward keeping a roof over their heads.

People living in residential hotels, in garden cottages, and in other non-residential spaces are meant to move into quality apartments, according to the draft provisional regulations of the law, by 2023 at the latest – on their own. What is essential here is that “on their own” part.

The new “housing supplement” is not meant to be anything more than a somewhat beefed-up housing subsidy, i.e., aid of a purely financial nature for families living in standard housing. The law as it is currently designed does not offer any aid to those accessing such housing.

A new benefit for those who already rent just fine

The housing supplement will be designed for people who:

1) Live in apartments on the basis of a lease or a sublet, a condominium or a service relationship, or in apartment units that they own, or who are clients of residential social services (shelters, etc.);

2) Are able to document that they have already paid for their housing for the last three months;

3) Live in a good quality apartment unit (people living in units that are not of good quality will either never receive the benefit or will lose their benefits);

4) Have their permanent residency registered in the same location where their benefits are disbursed (members of households without permanent residency will just be counted according to their incomes, not according to their entitlement for benefit, and the “norm” will be considered a three-member family at the most);

5) Actually live in that particular apartment unit (this will be audited) – plus, household members living elsewhere will be fictionally added as residents provided that the person applying for the benefit is obligated to maintain them (e.g., children studying elsewhere, older parents, etc.);

6) Do not own another apartment unit, either in whole or in part (anywhere else and of any kind);

7) Are in education or employment, if they are at the level of job-seekers (otherwise they will lose their eligibility).

End to the housing subsidy, price ceilings determined by municipalities

The housing subsidy will be canceled without being replaced. Apart from the usually poor quality accommodation to which the subsidy currently applies, even accommodation contracts for quality housing will no longer be eligible for the subsidy in future.

Households for whom the subsidy currently makes up for their inability to cover the costs of their housing will, as a consequence, be deprived of that fictional income, at least in the minimum subsistence amount. The value of the subsidy will be downgraded to fall under the new “ceilings” for the new “housing supplement”.

Those ceilings will now become the still-incomplete, and therefore unusable, price/value maps of rents produced by the Regional Development Ministry that will also, however, be augmented by other ceilings set by the municipalities themselves. The local assembly of a municipality will decide, for example, that the customary rental price for the purposes of disbursing housing supplements will be X amount of crowns for housing in Bohumín, or in Kadaň, and the local authority of a municipality with expanded powers will then be able to issue a “measure of a general nature” – yes, the same kind of measure that the Regional Court in Prague already declared unconstitutional and that the Constitutional Court is currently reviewing – and after the deadline for objecting to that measure has expired, it will become the case that the “housing supplement” in Bohumín, or in Kadaň, will be determined by the rental rates established by local politicians.

Is this Labor and Social Affairs minister worse than the worst one ever?

It is unrealistic to anticipate that anywhere between 8 000 and 10 000 households who are currently “not properly housed” will be able to relocate over the next three years into good quality apartment units. The municipalities and nonprofits will have to accommodate at least 6 000 households relocating from residential hotels into apartment units that are not available.

The municipalities do not even have the financing available for the social workers needed for this work – they are fighting tooth and nail to keep hold of the ones they have been using for this so far. It is true, however, that the number of municipalities that will essentially be burdened by the abolition of the housing contribution is relatively small.

Half of the roughly 40 000 beneficiaries who will be affected live in just 22 municipalities. One-quarter live in just four cities (Brno, Karviná, Ostrava and Prague) that decidedly are unable to deal with this change.

It is abundantly clear – again, after the similar attempts made by Jaroslava Němcová of the ANO party in the spring of 2018 – that reducing the costs of housing for the impoverished by introducing stricter standards for their housing can happen only after the initial establishment, by means of a law on affordable/social housing, of the mechanisms for accessing apartment units though a housing system controlled by local authorities and the state, and even then only after the establishment of the financing for the essential social work associated with stabilizing these families during and after their relocation. Anybody unable or unwilling to accept those facts is worse than the worst Labor and Social Affairs Minister we have ever had here, Jaromír Drábek.