Analysis: Welfare abuse in the Czech Republic is minimal, but in the runup to elections, politicians talk tough about it

The cost of welfare benefits in the Czech Republic amounts to almost one trillion crowns [EUR 40 billion] annually and is the most significant expenditure made from the state budget by far. The feeling that this money makes its way to alleged “abusers”, however, is not based in reality. 

The vast majority of these benefits are pensions, which are considered welfare in the budget categorization. The parental benefit, caregivers’ contribution, and unemployment benefits are in this same category.

It is difficult to find evidence of the “welfare abuse” that is so frequently emphasized by politicians. For example, the aid to those in material distress benefit, which is so closely watched politically, is intended for the most impoverished households, and in recent years its volume has just been about five billion crowns [EUR 195 million] annually.

At the beginning of June, an interesting coalition of MPs in the lower house approved the introduction of a “three strikes and you’re out” principle with respect to those benefits. The punishment for committing three misdemeanor offenses will be that exactly such benefits will become subject to collections.  

“We do not want to keep on ignoring the fact that some people make a living by drawing benefits and show their gratitude for the solidarity of those around them by committing serious misdemeanors,” said the vice-chair of the Committee for Social Policy in the lower house, Czech MP Jan Bauer of the Civic Democratic Party (ODS), which proposed the bill, after the votes were cast. People who repeatedly fail to pay the fines levied by local authorities as punishment for a selected list of misdemeanors could then lose part of their housing benefit and subsistence contribution through the collections process.

This subject has sparked quite an oppositional response among those who work with people in need, or who attempt to aid them. The problem is that even though politicians speak of “serious misdemeanors”, in reality these are offenses that one can de facto be charged with rather easily.  

“Let’s say you whistle at [Czech President] Zeman while he’s giving a speech. Or you fail to obey police instructions to stop causing a disturbance. Or you’re celebrating something past 10 PM. You’ll lose your benefits,” says Daniel Hůle, an expert from the People in Need organization.

A feeling of injustice predominates

The state has a sufficiently repressive bureaucratic apparatus in place to be able to address different kinds of misdemeanors involving the disruption of coexistence with one’s neighbors, or failing to pay fines, or failing to make sure one’s children attend school. To associate such offenses with cuts to welfare benefits, which naturally will also impact one’s children – who did not choose the environment into which they were born – is, according to critics of this law, a misstep and an example of pre-election populism. 

However, as a recent poll by the STEM agency shows, this subject is one to which some voters in the Czech Republic have long been attuned. For some people, who were labeled in that poll as “critics”, an emphasis on safety and social security is typical, and they are especially bothered by “intensifying social differences, the external threat posed by immigrants, and the internal threat posed by inadaptables/Romani fellow citizens.” 

“A feeling of injustice predominates and comes above all from the attitude that there are groups here who do not have to work and whom the state takes care of nonetheless,” write the authorial team at STEM, who also offered selected quotes from the people with whom they spoke for the poll:

“Our social system is set up all wrong. Working does not pay off for young people. It’s easier for them to remain on the Labor Office [unemployment] rolls. They don’t force people to go to work. In our day it was the case that if one doesn’t work, one doesn’t eat. This is discrimination against the whites.” (Critic, male, age 72)

“One could argue that there is freedom today, so one doesn’t have to work. There are enough jobs, but I don’t comprehend why it’s not a duty to work. It used to be safe here, too.” (Critic, female, age 56)

“We work half the year to pay taxes for those who do not work. Back then, everybody had to work. Also, there is enough work here today for everybody.” (Critic, male, age 49)

Although the letter of the recently-adopted law does not explicitly target “abusers”, such a purpose is apparent when one reads between the lines. For example, according to Czech MP Jana Černochová (ODS), this is about making a move against those who “abuse social solidarity or don’t send their children to school and evade justice.” 

A previous poll conducted by the PPF Factum agency demonstrated that most people in the Czech Republic are convinced that those who apply for aid to those in material distress are not very well vetted. “A total of 75 % of Czechs are convinced that people who more or less do not deserve benefits receive them,” that poll found. 

Almost all Czechs (93 %) agreed with the thesis that welfare abuse happens irrespective of the kind of benefit. A total of 60 % of the population were “decidedly” convinced that welfare abuse happens. 

Even Czech Prime Minister Andrej Babiš, or the head of the “Freedom and Direct Democracy” (SPD) movement, Czech MP Tomio Okamura, resort to remarking that “welfare is abused here”. Is this alleged welfare abuse happening in the Czech Republic?

Political effect guaranteed

If it is possible to find problems in the welfare system, it would be in the area of benefits that are termed “non-insurance” benefits. There are a total of 11 of those.

The biggest share of the expenditure on such benefits, however, involves the parental contribution, which essentially cannot be abused. The next largest is the contribution for caring for a disabled person.

That case, too, is one where it is difficult to defraud the system. Altogether those expenditures comprise more than 90 % of all the “non-insurance” benefits.

Similiarly, it is basically not possible to cheat, for example, with respect to the birth benefit or the death benefit. Housing benefits and subsistence contributions are the ones that can be considered potentially problematic. 

“We know there are pseudo-single mothers here, and it also happens that parents lease apartments to their own children for falsely expensive rents so the children will be entitled to the housing contribution,” Czech Labor and Social Affairs Minister Jana Maláčová has previously reported. However, in the total package of benefits, such cases represent just a fraction of the total amount spent by the state.

Such cases cost significantly less than the amount paid from the state budge to support, for example, cheaper public transportation fees for senior citizens and students. Moreover, a significant portion of the housing contribution ends up in the pockets of the “traffickers in poverty” who lease what are frequently quite substandard apartment units to those who qualify for such benefits. 

Accurate, complete data on how many people abuse welfare here, or how they do so, or how much that abuse costs the taxpayer does not exist. It is apparent that at a macroeconomic level, welfare abuse is insignificant, but the political and psychological effect of it as a subject on the voters is guaranteed nonetheless.

First published in Czech for the Institute of Independent Journalism (Ústav nezávislé žurnalistiky).