Czech Govt proposes new rules for unemployment support, adjusting the proportion of net earnings to be covered and changing rules for older workers
The Czech Labor and Social Affairs Ministry is proposing that as of 2026, unemployment support will be increased during the first months of joblessness from 65 % to 80 % of net earnings. During the final months, the support would decrease from 45 % to 40 % of net earnings. The same level of support would be paid to those who are let go and those who voluntarily change jobs. People would also not qualify for longer unemployment benefits from the state until age 55, instead of age 50 as they currently do. During the requalification time, the amount of support drawn would also be higher. The planned adjustments were presented to the press by Czech Labor and Social Affairs Minister Marian Jurečka (Christian Democrats - KDU-ČSL). According to him, the four parties in the coalition government all agree on these changes, and lawmakers should now propose adding them to the flexible amendment to the Labor Code currently under discussion in the Chamber of Deputies.
“We have prepared this revision to unemployment benefits so that we will be able to support people who want to change jobs. We see from the data that people who change jobs on their own increase their earnings by 12 %. When a job change is involuntary and is done with the support of the Labor Office and perhaps requalification, their incomes rise by just 8 % in the new job,” Jurečka said. According to him, people fear changing jobs because unemployment support is too low. The adjustments are meant to lead to greater worker mobility and a more flexible labor market such that the state will have more income from its levies and taxes on higher earnings.
According to the minister, these adjustments were negotiated by the coalition over the past few months and consensus was reached on them. His intention is that the changes should be added to what is called the flexible amendment to the Labor Code in the Chamber of Deputies. Lawmakers are meant to propose them now. Jurečka rejected the idea that a proposal to make it possible for employers to fire employees without saying why would also be submitted to the Labor Code along with the new setup for unemployment support.
The plan is for unemployment support to be increased during the first few months to 80 % of average net earnings from its current level of 65 %. That means that this year it would have been worth CZK 33,942 [EUR 1,340] per month. It would be worth four-fifths of net earnings during the requalification time as well. Currently unemployment support is worth CZK 24,608 [EUR 970] at the most and CZK 27,578 [EUR 1,090] during requalification.
During the later months, the unemployment support would stay the same as it is now, at 50 % of income. For the rest of the time it would then decrease from the current 45 % to 40 % of average net salary or wages. People under 50 are currently allowed to draw unemployment support for just five months, those age 50 to 55 draw it for eight months, and those 55 and over draw it for 11 months. Those ages would be increased by five years – people under 55 would be allowed five months of unemployment support, between 55 and 60 they would be allowed eight months of unemployment support, and those over 60 would be allowed to draw 11 months of unemployment support. According to Jurečka, this change is a response to the aging population and the increase in the retirement age.
According to this proposal, people over 55 would have the time during which they draw both the highest possible amount of unemployment support and the amount that is half of the average net salary or wage increased from two months to three. The final phase of support, during which they get the lowest amount from the state, would be reduced for unemployed persons between 55 and 60 from four months to two, and for those 60 and over it would be reduced from seven months to five.
About CZK 10 billion [EUR 395 million] is disbursed in unemployment support annually. People contribute an insurance deposit from their earnings for the employment policy. According to calculations, after these changes, the expenditures on unemployment support will increase by roughly one-fourth, or by CZK 2.4 billion [EUR 95 million]. The state would also subsequently receive about CZK 6 billion [EUR 240 million] in levies and taxes on the higher incomes people will make after changing jobs.
According to Tomáš Ervín Dombrovský, an analyst with Alma Career, the Czech labor market is “the most constrained” in the EU. “The likelihood that somebody will change their job in our country is one-third that of the Netherlands or Scandinavian countries. People there change jobs of their own accord much more often and seek a career,” Dombrovský said. According to him, 14 % of people in the Czech Republic changed their jobs in the last year. Just one-tenth of those said it was a change for the worse. The obstacles to finding a better way to apply oneself are financial, the analyst said. More than one-fifth of people have no savings to draw on should they decide to look for another job.
According to the Deputy Director of the IDEA Institute, Filip Pertold, this “freeze” on the labor market impacts the Czech economy and its competitiveness. “If we don’t change this, we will have the wrong people in the wrong positions,” he said. Pertold added that increasing the unemployment support can provide people with financial backup and motivate them to seek better positions.
