Platform for Social Housing: Czech Govt is failing, welfare reform as passed by the lower house will harm the most vulnerable

The organization said the bill as adopted by the lower house is “worse than we thought”. According to experts, its impacts on some households would therefore be catastrophic.

New server Romea.cz was informed of that prediction through a press release from the Platform for Social Housing. “The Chamber of Deputies has even rejected the amendments supported by its own Committee on Social Policy. For instance, while the subsistence level for eligibility is now higher than what was originally proposed, it is still just a minimalist version and does not correspond in the least to the price rises for necessities over the last few years. As a consequence, poor people will therefore be even poorer and their prospects for improving their living situations will be meager,” Mikoláš Opletal, an advocacy expert with the Platform for Social Housing, criticized the bill adopted by the lower house.

According to Opletal, when this welfare reform was being discussed, an unfortunate scenario was repeated that is becoming more and more frequent when it comes to legislation. Bills are first consulted with experts and people with practical experience, adjustments are recommended which are specific, but ultimately those adjustments fall by the wayside during the political negotiations.

“The Chamber of Deputies rejects almost all of those elements as a result of the inter-party negotiations and the bill passes in terrible shape. This is a shame, because the governing coalition politicians are just tripping themselves up by doing this,” Opletal said.

The amount of support shrinks while the cost of housing remains high

In its analysis, the Platform for Social Housing shows what the specific impacts will be on single mothers with one child who rent in Prague, for instance. According to the new rules, their housing support will significantly shrink if the reform is undertaken, including in cases where such women work and have stable incomes.

For single mothers with one child who rent in Prague and make a gross wage of CZK 23,109 per month [EUR 925], the support will shrink by CZK 1,808 [EUR 72] per month. After paying fees, rent, and utilities, they will have just CZK 10,587 [EUR 425] left.

To cover basic expenses, the single mother would need CZK 6,800 [EUR 270] more per month. She will be spending 67 % of her income on housing, which means she will be seriously at risk of losing her housing.

That is just one example given by the Platform for Social Housing. Even more significant shrinking of support awaits such a woman with a higher gross monthly wage of CZK 30,700 [EUR 1,230].

If the current bill passes the Senate unchanged and is signed into law, the state will be sending that single mother CZK 2,711 [EUR 110] less than it does today. Despite having a higher income, she will still be in a difficult situation – after paying her expenses she will have just CZK 12,462 [EUR 500] left over and will be CZK 1,100 [EUR 44] short of covering her basic needs.

The proportion of her income that this single mother would spend on housing would also be alarming in such a case: 64 %.

Bírová: The state ignores affordable housing, collections proceedings, and inflation

According to the director of the Platform for Social Housing, Barbora Bírová, the resulting form of the bill is practically identical to what the Government originally submitted to the lower house. The organization has long criticized the bill for its negative impacts on those most vulnerable in the population.

The reform as adopted by the lower house will not recognize many housing-related costs as factors for eligibility and ignores collections proceedings and insolvencies as factors, while the increased subsistence level for eligibility does not correspond to the current prices of basic necessities. “In the reform, few housing costs count toward eligibility for welfare, and those costs will not be covered by the new bonus for employment; collections proceedings and insolvencies are not being taken into account at all, and the subsistence level, which is crucial to calculating welfare, will not correspond to the current prices of basic necessities, even after being increased,” Bírová said.

According to the director of the Platform for Social Housing, lawmakers obviously do not realize that the costs of housing have been rising much faster in recent years than have wages, and that this is a problem that is already affecting the middle class, too. “Since the state is not yet determined to address this unaffordability systemically, welfare benefits are the only way that it can address the crisis in housing. Now it will be fundamentally lowering and limiting those benefits,” she said.

The reform is now heading to the Senate. According to the Platform for Social Housing, there is a chance that the upper chamber will reject at least the most problematic parts of the bill, such as the fact that it ignores insolvencies as factors, or that it works with normative housing costs which are too low.