Revolutionary proposal for welfare reform makes it through the first step toward adoption in the Czech lower house, opposition warns of problems
The Czech Chamber of Deputies has supported the total revision of the welfare system in the opening phase of the adoption process. The bill, drafted by the Government, presumes that instead of paying separate contributions and subsidies for housing, subsistence and the per-child contribution, the Labor Offices will pay out just one new state social aid benefit starting in July. All applicants would have to document their assets and income and would file just one application. The lawmakers appreciated the bill's plan to require people who are able to work to do so. However, reservations were also expressed, referencing the comments and motions for possible adjustments to the bill which have yet to be dealt with. The Social Affairs Committee in the lower house will now assess the bill further.
“This bill is quite a watershed moment,” said Czech Labor and Social Affairs Minister Marian Jurečka (Christian Democrats – KDU-ČSL). The new support system, in his opinion, should be more motivational, simpler, more effective and more targeted. “We want to send this aid where it is needed,” the minister said. According to the ministry’s projections, the impact on the budget will range from reducing some expenses by about CZK 2.5 billion [EUR 99 million] to increasing other expenses by roughly CZK 7.4 billion [EUR 292 million]. “This change is not motivated by savings,” emphasized Jurečka.
“Whoever has healthy arms and legs should certainly work,” said the shadow minister for the Association of Dissatisified Citizens (ANO), Aleš Juchelka. However, he said he considers it problematic to combine the aid to those in material distress with the state social support benefits. “Welfare for the poor will become mixed up with pro-family benefits,” he said. According to Lucie Šafránková of the “Freedom and Direct Democracy” (SPD) party, it is important to take action against people who abuse the welfare system. Consistent control mechanisms are missing from the bill, in her view, and she also takes exception to asset testing. She believes per-child benefits should remain a separate category of support as well.
Opposition legislators pointed out that in addition to the comments on the bill submitted by other ministries, unions or municipalities, there is also an impact study that, according to them, recommends adjusting, for example, the housing benefit norms, defining what a vulnerable household means, and in cases involving debt relief and debt treatment, making it possible for the authorities to access personal bank records of applicants. Olga Richterová, Vice-Chair of the Chamber of Deputies for the Pirates, said her party submitted 60 comments on the bill when they were still part of the coalition cabinet, some of which still apply and should be discussed further.
The new benefit will have four parts – subsistence, housing, per-child contributions and a bonus for being in work or seeking work. The amount should be phased according to income and labor market activity. What should be eliminated is the “breaking point” whereby a person whose income crosses the line by just one crown loses their state aid. The support should also differentiate between households making up to 1.43 times the minimum income needed to live and those making more than that. A household would be able to own two pieces of real estate and still qualify for welfare, but would have to sell one property within three years. Each adult family member would be able to own a vehicle and still qualify for welfare. Personal savings could be between CZK 200,000 and 400,000 [EUR 8,000 and EUR 16,000], depending on the number of household members, and the applicant would still qualify.
Money for subsistence would only be allocated to households with incomes less than 1.43 times the minimum income for living. Housing support should continue to be for those people paying more than 30 % of their income for an apartment or other accommodation; the amount awarded would be based on normative costs and deposits paid for energy. Those families whose incomes are less than four times the minimum would be eligible for the per-child contribution; currently only families whose incomes are less than 3.4 times the minimum qualify. The condition for receiving the per-child contribution would be that the applicant work or look for work and that the children attend compulsory schooling. The state welfare benefit as a whole would then be increased through the bonus for working.
