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August 22, 2018 12:00 am | FILED UNDER: politics

Lower House Approves Bill Raising Pensions

By ČTK Czech Lower House

Prague, Aug 22 (CTK) – The Chamber of Deputies, the lower house of Czech parliament, approved again a government amendment to raise all pensions as of 2019 today.

 

Deputies rejected the Senate’s draft, proposing another method of raising pensions.

 

Under the bill submitted by the coalition government of ANO and the Social Democrats (CSSD), mainly people with low pensions will see a considerable rise, while pensions of the others will be increasing at a slower pace than to date.

 

The pension amendment raises the fixed pension base by 320 crowns a month. Together with its regular indexation, the average monthly pension would rise by 918 crowns. In addition, pensioners over 85 would see their pension increase by 1,000 crowns.

 

The Senate, on its part, wanted the 1000-crown monthly increase for the people who were drawing pension for over 25 years and not for those over 85, which is why it returned the bill to the lower house for reappraisal in mid-July.

 

The pension bill is yet to be signed by President Milos Zeman into law to take effect.

 

The Chamber of Deputies passed the government bill unanimously. All 170 MPs present voted for it, while 69 deputies supported the Senate’s draft, 69 were against it and 31 abstained from the vote.

 

The Chamber of Deputies debated the pension amendment for about three hours. Deputies were in dispute about the government and Senate drafts.

 

While Labour and Social Affairs Minister Jana Malacova (CSSD) considers the government amendment fairer, the opposition Civic Democrats (ODS), TOP 09, Mayors and Independents (STAN) and the anti-EU Freedom and Direct Democracy (SPD) prefer the Senate version.

 

The 1000-crown pension bonus should apply to some 200,000 seniors. It is to cost about 2.4 billion crowns from the state budget in 2019. The Senate-proposed bonus would apply to 400,000 people and require twice higher expenditures.

 

So far the monthly pension has been raised automatically by 2000 crowns to those who turned 100. This bonus was introduced in 1969 and it has been gradually rising.

 

The old age pension consists of a fixed and a percentage parts. The former is the same for all pensioners, the latter differs depending on the principle of merit, or the time for which people worked and the height of their previous salary and contributions to the pension system.

 

The pension bill slightly reduces the principle of merit for the benefit of the fixed part of the pension. As a result, people with lower pensions will see them rise more steeply than those with higher pensions.

 

Next year, pensions are also to be subject to regular indexation, which would mean their average increase by 600 crowns a month, on which the state will spend a total of 24 billion crowns.

 

Besides, the cabinet wants to add further 300 crowns to every pensioner next year. This would cost the state budget about 11 billion crowns.

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