Czech Senate passes welfare reform, Platform for Social Housing warns of its negative impact

The changes will be introduced by the reform to social welfare adopted by 49 of the 71 senators who were present for the 30 April 2025 session out of 81 members total. The bill, which the Government says will make the system more effective, simpler, and targeted, as well as motivating more people to work, will now go to the President to be signed into law.

Senators expressed appreciation for the plan in general but took exception to some of its parameters. They plan to review, for instance, the situations of people who care for their relatives full-time.

“It is also in our interest to support informal caregivers,” Czech Labor and Social Affairs Minister Marian Jurečka (Christian Democrats – KDU-ČSL) said. In an accompanying resolution, the upper chamber requested the Labor and Social Affairs Ministry assess the impacts of the reform.

The budgetary impacts of introducing the so-called “super-benefit”, according to the ministry’s projections, range from reducing expenditures by about CZK 2.5 billion [EUR 100 million] to increasing them by roughly CZK 7.4 billion [EUR 300 million]. However, the budgetary impact of the bill as amended in the lower house has not yet been calculated.

Lower house lawmakers expanded the circle of vulnerable persons eligible for more support to include persons entitled to a widower’s or widow’s pension and to surviving partners or spouses for one year. However, they lowered the across-the-board utility subsidy.

Some proposed amendments were also in play in the Senate. For example, its Committee on Social Affairs wanted single parents of children under 10 to be considered vulnerable persons, instead of just those with children under the age of seven.

The Senate ultimately did not vote on any such proposed amendments and adopted the bill in the wording approved by the lower house.

Four aspects to the new benefit

According to the bill, the new benefit will comprise four parts: money for housing, money for subsistence, a per-child bonus, and a bonus for looking for work or working. The amount of the benefit depends on a person’s income and labor market activity.

The “tipping points”, whereby a person loses their state assistance if their income exceeds the threshold by even a single crown, will be eliminated. The actual amount of the benefit will differ for households with incomes up to 1.43 times the subsistence minimum and for those whose incomes exceed 1.43 times the subsistence minimum.

Households owning two pieces of real estate would still be eligible for the benefit, but only if they sell one property within three years. Each adult family member would be allowed to own a personal vehicle and still be eligible for welfare.

The amount of savings would also determine eligibility. Depending on the number of members of the household, those holding savings between CZK 200,000 and CZK 400,000 [EUR 8,000 and 16,000] would still be eligible for the benefit.

Only households whose members’ incomes are less than 1.43 times the subsistence minimum will qualify for the subsistence part of the benefit. Housing support will continue for those who spend more than 30 % of their income on an apartment or other accommodation.

The amount of the benefit disbursed will be based on normative costs and the across-the-board utilities contribution. Aiming to cut expenditures, the Chamber of Deputies has restricted the amount of the utilities contribution to CZK 1.2 billion [EUR 48 million] per year.

The condition for the per-child contribution will be that the child’s guardians look for work or perform work and that the child attends compulsory education. The benefit in its entirety can also be increased through the work bonus, which people on parental leave will also be able to receive.

Persons on disability leave will also be able to apply to the Labor Office for the benefit and will have their state of health reviewed 380 days after receiving it. According to current rules, 29 % of the population of the Czech Republic qualifies for welfare benefits.

In reality, such support is drawn by about 8 % of the population. After the reform is adopted, the circle of persons eligible for aid from the state will be narrowed, per previous estimates, to about 22 %.

Platform for Social Housing: This version of the law will intensify social inequality

The Platform for Social Housing has criticized the reform. According to them, organizations working on social issues and providers of social services in the Czech Republic have repeatedly warned lower house lawmakers, Minister Jurečka, and senators of the grave negative impacts of the reform on the most vulnerable households, including poor working families.

According to experts, the impacts on some households could be catastrophic. “The adopted revision fundamentally reduces the amount of the benefit for persons whose market rents are usually expensive, in many cases by as much as CZK 3,000 to CZK 6,000 [EUR 120 -EUR 240] per month. Those who will be impacted the most by this change will be families with a parent on parental leave, single mothers with school-aged children, or individuals declaring bankruptcy,” warns Mikoláš Opletal of the Platform for Social Housing.

According to Opletal, those affected will predominantly be working people and the slump in the amount of the benefits disbursed to them is caused by the idea that the people drawing on the state housing contribution are supposed to be living in housing rented at below-market rates. However, Opletal says that is not possible in the Czech Republic’s social situation, where hundreds of thousands of regular lower middle class people draw housing benefits, not just persons at risk of homelessness.

Jan Klusáček, an analyst with the Platform for Social Housing, warns that these projected grave negative impacts are based on models of all the regional capitals in the country with the exception of Ostrava and Ústí nad Labem. According to him, strong impacts can be anticipated, for example, on auxiliary personnel in the schools, on social services staffers, and on other basically low-income professions essential to the operation of local authorities, as well as on manual laborers in agriculture and industry or employees in retail and services.

“The Labor and Social Affairs Ministry knows about this projected slump, and its representative argues that low-income professionals should not live in the municipalities for which they work, but should commute for work. However, even apartments out in the suburbs are gradually becoming unaffordable for more and more people. If people will not be able to live near their place of work, they will become unemployed more often,” explains Klusáček.

Opletal also points out that in the Senate, many amendments were submitted trying to achieve crucial, feasible fixes to the reform. “There was an attempt to expand the vulnerable groups and the partial inclusion of bankruptcy payments as a cost being taken account of when calculating the total benefit. Currently, bankruptcy and collections are not reflected by the system at all, which actively demotivates people from working legally. To legally work just fictively increases the income of such a person and significantly lowers the benefit amount drawn by their household, while the real income they take home from legal work does not rise. The only logical outcome is that people will not legally work,” he says.

According to Opletal, the law in this version will just contribute to intensifying social inequality. He said the Platform will call for it to be amended as soon as possible.