Monday, 25 June 2018

Czechs' pensions to rise swiftly in 2018

ČTK |
2 January 2018

Prague, Dec 30 (CTK) - The pensions in the Czech Republic will be growing this year faster than in the past years because the calculation of their indexation will change and as of the beginning of next year, they will be increased by one-half of the growth in real wages instead of the current one-third and by the inflation rate.

Due to this, the average monthly pension will rise by 475 crowns in January. If it were to be raised as now, the average sum would be 65 crowns lower.

Prime Minister Andrej Babis's government is also planning other changes in the pensions.

The fixed part of the pension, which is the same for everyone and amounts to 9 percent of the growth salary, will rise from 2550 to 2700 crowns. The proportion of the pension that is set down according to the years spent at work and paid sums will be increased by 3.5 percent.

There will be also a 35 percent rise in the additional payments to the pensions of resistance fighters and their families.

Along with old-age pensions, disability and survivors' pensions will increase as well.

The considerable increase in the pensions is due not only to the modified indexation model. It is also influenced by the growth in prices and salaries in the Czech Republic.

However, the Council of the Elderly of the Czech Republic argues that the rise is still insufficient and that the gap between pensions and earnings will keep widening as only one-half of the growth in the real wages is taken into account.

The Labour and Social Affairs Ministry says the prices rose by 2.3 percent between June 2016 and 2017. To this, one-half of the 3.3 percent growth in real wages is added. Taken together, this results in the growth in the pensions by 4 percent under the new calculation, while according to the current one, there would only be a 3.4 percent growth.

This January, the elderly received a rise by 309 crowns.

At the end of September, the Czech Social Security Administration paid some type of pension to the total of 2.88 million people. The old-age pension was received by almost 2.4 million people. Its average sum was 11,828 crowns.

The Babis government is preparing other changes, too. It wants people over 85 to receive 1,000 crowns more than now.

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