Jan Husák: Czech Government approves revolutionary welfare reform, poor people have more traps to look forward to

On top of that, a new “motivational bonus” will be added that allegedly is meant to support households whose members work. At first glance, this seems to be a reform that will finally yield the anticipated positive change.

As is usually the case, however, the devil is in the details. In this case, the details are so essential that what one reads from the proposal as a whole is more an attempt to limit the number of benefit recipients than to actually aid them.

If we look at each benefit condition and the proposed control mechanisms for this proposal, we learn that the new superbenefit will actually mean the systemic reduction of social support, that applications will be rejected en masse, and that it is an elegant way to exclude as many people as possible from the system. While many experts and institutions have already warned of the basic flaws in the law, there are still many traps in it.

It’s as if it weren’t enough that even without this law, the state has already instituted rules which are just silently waiting for somebody to trip up over them. Now the state is adding yet another layer of refined obstacles to the system, carefully packaged in phrases about “responsible financial management” and “motivation to work”.

In reality, however, this is nothing more than a sophisticated system for methodically drawing a noose around the most vulnerable. The biggest tragicomedy of this is that it is exactly the people who do not understand this change who will be defending it most loudly, as long as they fail to understand that even employment will not guarantee you better housing, or why so many families are ending up in overpriced residential hotels or apartments where the landlord charges them for the mold on the walls.

That doesn’t matter, though – at least those supporting this bill will be able to say they are standing on the “right side”.

Collective liability as the new social policy standard: How the state punishes whole households for their individual members’ mistakes

One of the most alarming elements of the new law is the application of the principle of collective liability within the framework of a single household. The Government has decided that social support will no longer be assessed just according to an applicant’s situation as an individual, but according to the combined incomes of all their household members.

If, for example, an adult son goes to work in a different town and rents an apartment there, but keeps his permanent address at his parents’ home, his income will be included in the calculations for his parents’ benefits. Even if the son never sends his parents money and does not contribute to their household, the state will consider him their household member and his earnings might mean his parents are no longer eligible for benefits.

The law does not much differentiate between whether a person really physically lives in a household or whether he is just formally listed there. The situation is even more absurd, though.

If a household member forgets to submit the necessary documents, for instance, and does not resolve that error in time, or does not cooperate with the Labor Office, then the state, or rather the Labor Office, will have no choice but to reject the application for welfare for the entire household. This is an approach that punishes not just a specific individual, but all the other persons sharing an address or housing with that individual irrespective of their own situations.

This means families with children, people living with disabilities, or senior citizens will lose their welfare just because one household member made an administrative mistake or failed to fulfill a condition of the law. This is a direct assault on our basic legal principles.

Both the Constitutional Court and the European Court of Human Rights (ECtHR) have repeatedly ruled that the state cannot penalize people in need just on the basis of their shared housing. In the case of FEANTSA vs. the Czech Republic, the ECtHR said the collective penalization of persons in need of housing is unacceptable and violates fundamental human rights.

Constitutional Court finding Pl. ÚS 40/17 has clearly rejected attempts to exclude entire groups in the population from welfare on the basis of formal criteria without assessing their actual, individual situations. Similarly, the judgment in Wallová and Walla vs. the Czech Republic confirmed that the state cannot automatically apply across-the-board sanctions without taking into consideration the specific situations of individuals.

Now for the biggest irony. Collective punishment has long been criticized in the Czech Republic as an unacceptable principle, and Romani people have particularly unpleasant experiences with it.

However, if that same principle is packaged in officialese and expanded to include all low-income households, suddenly many people can be found, including Romani people, who will applaud this proposal and even defend it. Once the law hardens against somebody else, many people forget that tomorrow they could be its next target.

If this approach is pushed through, the state will be officially introducing a system in which people will be punished for something they are unable to influence. The legal logic that has always applied up to now in assessing eligibility for welfare will end.

Instead of assessing individual needs, what will be introduced is collective liability, and whoever has bad luck when it comes to their housemates or relatives will pay the price together with them. That doesn’t matter, though, the main thing is that this appears to be “responsible management of public funds”.

Normative costs: The state has found a way to tell you that you are paying too much for your housing

The Government claims the new social benefit will be more effective and fairer. In reality, however, it will introduce a mechanism for announcing to impoverished people that they are paying too much for their housing and therefore are not entitled to support.

The chief instrument for this is the idea of normative housing costs, i.e., the maximum amounts the state will recognize for welfare eligibility. If you exceed those limits, the state will simply tell you: “Your housing costs are higher than we are willing to recognize. If your income isn’t high enough to cover them, that’s your problem.”

This absolutely ignores the reality in which a large number of low-income households find themselves. Such people frequently have no choice as to where they will live, but the state tells them they have to adapt to its ideas of a proportionate rent.

These normative housing costs are meant to represent the average expenditure for housing that the state considers proportionate, and according to these norms, it then establishes the maximum amounts which it will be willing to recognize when calculating welfare. However, in reality, this again hides the fact that people in impoverished localities paradoxically frequently pay some of the highest rents, which exceed these established normative limits.

This problem existed long before the introduction of this new benefit, but the state has intentionally ignored it. Instead of recognizing that impoverished people have to pay most of their income for housing, the state has just quietly watched them cover those costs from other social benefits.

The new law will not improve this situation, but make it even worse. Instead of responding to the reality of the housing market, it will introduce normative costs which will be totally unrealistic in some areas.

People in the worst housing need will receive even less aid than before because their costs simply will not correspond to the model the state itself has created. This is also confirmed by expert analyses, according to which a family will have, in some cases, as much as CZK 6,000 [EUR 240] less per month for rent than they currently do.

The state, therefore, is presenting a prescription for society according to which people should find themselves affordable housing, but the current reality is totally different. There are no social apartments, there is not enough affordable housing, and those who should move into such non-existent housing often run into rejection by landlords and a lack of unoccupied apartment units.

What is the state’s answer to that problem? It’s a classic one.

Instead of the state creating a functional system, it shifts this responsibility to the municipalities, which already now are not managing to address the consequences of their previously dysfunctional policies. Why should the state get involved with where people end up living when they can simply send them to the local authority with a smile and this advice: “You take care of them.”

Municipalities, therefore, will have to address a growing number of homeless people, families who will not be able to afford their rent, and individuals who will end up on the street with no chance of returning to normal housing. The municipalities have no tools with which to actually solve this problem, though.

There is almost no social housing available, private landlords select tenants according to their own criteria, and households with less income are systematically expelled from the standard market. This scenario is no surprise.

In the past, the Czech state has already shifted the responsibility for its own incomplete laws to the municipalities countless times, and this is particularly apparent in the area of housing. As if that weren’t enough, the new system gives Labor Offices and municipalities the opportunity to manipulate access to welfare such that they themselves will establish what “average” housing costs are locally.

In other words, if Labor Offices decide the housing costs in a certain area are too high, the people living there will be considered to not need welfare. What does it matter that the reality is totally different?

What does it matter that the rents in the most impoverished areas are, paradoxically, frequently the highest rents in town? The consequence of this is clear: The exclusion of those who do not fit into the tables and the unobtrusive displacement of poorer households from more expensive areas.

This is not the direct announcement of benefit-free zones, but a cleverer way to achieve the same aim – the elimination of “undesirable” tenants from certain localities. This approach has already been quashed once by the Constitutional Court, which called the administrative limitation of access to benefits on the basis of one’s address unconstitutional (Pl. ÚS 40/17).

Despite this, the state has decided to return to its tried-and-true methods, just doing so under a new name and with different formulations. Instead of the state seeking a genuine solution to the housing crisis, it prefers to set up the rules in such a way that responsibility for social problems is shifted to individuals and to the municipalities.

Those who cannot afford housing will simply be excluded from the system and the state can pretend it has solved the problem.

The asset test as a tool to deny aid

The Government claims social aid is just meant for the most needy. How can it ascertain who “deserves” support, though?

The answer is easy – introduce an asset test that will establish firm boundaries, instead of assessing applicants individually, and whoever exceeds the limits is out of luck. This test will not take into account the actual situation of the household.

The law says a household must not own “excessive” property in order to qualify for welfare. What is excessive in this context?

According to the new rules, for instance, more than two cars is excessive irrespective of their purpose or value. The details will not be reviewed, such as whether one parent needs their own car to commute to work while the other parent needs a car to drive children to school or to care for an elder.

The law also does not take into account specially adapted vehicles for people living with disabilities, which are frequently more expensive than ordinary vehicles, but are absolutely essential to their owners. Strict assessments of real estate sales are another problem.

If somebody in the last year has sold an apartment or house, the state automatically assumes that the sale yielded enough money for the applicant to cover their cost of living and therefore rejects their application for benefits. The law ignores whether that money was really used to pay off collections agents, debts or other obligations.

The state will also ignore situations where the sale was court-ordered and the sellers remained practically without any money. In other words, whoever does their best to actively resolve their financial situation might be punished more than those who do nothing.

People’s real social situations will not be assessed, the rules of the tables will be mechanically applied, and this could lead to absurd decisions. If people do their best to actively solve their situations, for instance, by selling their property to pay their debts and avoid collections, they can easily end up in a worse position than those who do nothing.

Unclear definitions, legal chaos, and future lawsuits

Imagine that you are living in a sublet or sharing an apartment with somebody else. Before now, that circumstance was not considered a problem by the welfare system, but under this new law, your home might not correspond to the required standards, and therefore you will not be eligible for welfare.

The conditions for recognizing housing for welfare eligibility are established so vaguely that Labor Offices will have a free hand to decide who is eligible and who is not. If their interpretations will not be uniform, that will lead to legal uncertainty and lawsuits against the state.

The exact rules for what type of housing will be recognized for eligibility for welfare will not even be established together with this law, which has been confirmed by the comments of the Ministry for Regional Development, which is warning of the discrepancies between these new terms for welfare eligibility and the existing legal regulations in the field of housing. The Czech Statistical Office is warning in its analysis that the changes could lead to different interpretations at the level of each Labor Office, which will cause legal chaos.

If the Labor Offices start arbitrarily deciding on eligibility for welfare according to unclear administrative criteria, there is the danger that applicants may be repeatedly excluded without a proper assessment of their situations. The consequence will not be a better-functioning welfare system, but the exact opposite.

There will be chaos, uncertainty, and more lawsuits which the state will have to address because its own rules are so unclear that people will have to take legal action to defend themselves.

An elegant trap for the poor

This law is not about aid to the needy. It is a coherent system for getting rid of as many welfare applicants as possible without seeming to be a social purge at first glance.

Collective liability for people registered at the same address, housing normative cost limits, a rigid asset test and legal ambiguities will create a perfect trap for anybody doing their best to survive who does not meet these artificially established terms. Once this law takes effect, we can expect a wave of lawsuits and another round of litigation, because it is already apparent now that some of its regulations are coming up against the limits of constitutionality.

This law does not address the affordability of housing, ignores applicants’ individual needs, and creates a system that punishes people instead of aiding them. Should anybody object that this law is merely one step toward a more effective welfare system, just tell them: “Yes, it decidedly will be effective in stopping aid to as many people as possible, as quickly as possible, who genuinely need assistance.”