Czech lower house passes welfare reform, only the Pirates voted against it

People will submit just one application for that benefit and their assets will be taken into account more. Compared to the Government’s original bill, lawmakers in the lower house have expanded the circle of vulnerable people entitled to higher support while reducing the flat rate for the utilities part of the benefit.

The bill will now go to the Senate for consideration; if it passes, it will take effect in October. Labor and Social Affairs Minister Marian Jurečka (Christian Democrats – KDU-ČSL) says that the new support system should be more effective, simpler, and targeted, and that it should provide more motivation for applicants to work.

Representatives of opposition parties – the Association of Dissatisfied Citizens (ANO), the “Freedom and Direct Democracy” party (SPD), and the Pirates – agreed with the general principles of what is now being called the “superbenefit”. However, they did comment on some of its parameters.

“I’m worried that we’re throwing the baby out with the bathwater,” said ANO’s shadow labor minister Aleš Juchelka. According to SPD chair Tomio Okamura, some amendments to the bill were based on the SPD’s earlier proposals to prevent welfare abuse by “inadaptables”.

“We don’t have a ‘calculator’ that would allow us to compare the current situation with the one being proposed,” said Pirate lawmaker Olga Richterová. She said she feels Jurečka is hiding from the public what the real impacts of the reform will be.

According to the minister, however, these are not trivial calculations. The ‘calculator’ will be able to be developed once the adopted form of all the parameters is known, he said.

The Chamber of Deputies approved the bill with 97 votes out of 184 deputies present. Representatives of the governing Civic Democratic Party (ODS), Mayors and Independents (STAN), KDU-ČSL, and TOP 09, as well as non-aligned lawmaker Ivo Vondrák (formerly ANO), all raised their hands in favor.

The opposition ANO and SPD leaders abstained from the vote, while four Pirate members voted against it. The opposition justified their position by saying their amendments had not been accepted.

According to the ministry’s original projections, the impact of the Government’s proposal on the national budget range from an annual reduction in spending of about CZK 2.5 billion [EUR 100 million] to an increase in spending of about CZK 7.4 billion [EUR 296 million]. However, the impact of the bill on the budget after the amendment process is not yet known.

The new benefit will consist of four parts: money for children, housing, living expenses, and a bonus for job searching or work. The amount is graduated according to income and work activity.

The “tipping points”, where a person loses state aid if their income exceeds the minimum wage by even a single crown, should be eliminated. Support should be differentiated for households with incomes up to and above 1.43 times the subsistence minimum.

A household could own two properties and still qualify for welfare as long as it sells one of them within three years. After amendments to the Government’s bill were adopted, each adult in a family would be allowed to own a vehicle and still be eligible for benefits.

The amount of savings would also be decisive. Depending on the number of household members, savings could be between CZK 200,000 and CZK 400,000 [EUR 8,000 – EUR 16,000] and applicants would still be eligible for welfare.

The Chamber of Deputies did not adjust the eligibility thresholds, although the Social Affairs Committee did recommend raising some of them. Just part of the living allowance would go to households with an income 1.43 times the subsistence minimum.

Housing support should continue to be available to people who spend over 30 % of their income on an apartment unit or on other accommodation; the amount of support would be based on normative costs and on the flat rate for utilities. According to an amendment authored by Martin Dlouhý (TOP 09), the Chamber of Deputies reduced the flat rate amounts for such support by up to CZK 1.2 billion [EUR 48 million] per year.

Lawmakers also included people entitled to a widow’s or widower’s pension and surviving partners or spouses for one year among the vulnerable persons entitled to higher support, as advocated by the Social Committee and Jan Bauer (ODS). The conditions for receiving money per child would be that guardians look for work or do work and that the child attend the compulsory schooling required by law.

The total benefit would be increased by a work bonus, which, according to the approved amendment of the Social Committee, would also be available to people on parental leave. According to the approved amendment authored by Lucie Šafránková (SPD), the Labor Office would be able to invite people receiving social benefits due to their long-term incapacity for work to have their health status reviewed after 380 days.

Šafránková said it should not be possible for someone to live on welfare for years by claiming they are sick. “They should either apply for disability or go back to work,” she said.

The opposition SPD did not push through the retention of the per-child benefits in their current form. The inclusion of per-child benefits in the so-called “superbenefit” was also criticized by the opposition ANO party, because, according to shadow labor minister Juchelka, to do so confuses benefits for families with benefits for the impoverished.

According to the current rules, up to 29 % of the Czech population qualify for social benefits. In reality, about 8 % of people receive such support.

After the reform, the number of people eligible for state assistance should narrow to about 22 %, according to earlier estimates.