Czech Social Security Offers Debt Relief Program

Since its launch in early July, the Czech Social Security Administration (CSSA) has seen hundreds of debtors take advantage of its new debt relief program. Meanwhile, the Customs Administration has only had three takers. The Financial Administration will release its first interim data next month. The program, which could be used by hundreds of thousands of people and businesses, aims to provide advantageous repayment terms for debts incurred up until the end of September 2022.

According to a survey conducted by Právo, the program has been widely welcomed. The “new merciful summer” runs from the beginning of July until the end of November. It allows people to rid themselves of interest, fines, penalties, and enforcement costs, such as taxes and social security. The condition is that they pay the original debt, known as the principal. The same advantage is available to individuals and companies.

CSSA spokesperson Jitka Drmolova told Právo that as of July 18, 690 payments and 819 payment notifications in installments had been received. If all the notified principal amounts are paid, an amount of CZK 31.4 million ($1.5 million) can be expected to be paid based on notifications of payment, and CZK 131.7 million ($6.2 million) based on reports of payment in installments, for a total of CZK 163.1 million ($7.7 million).

When the Ministry of Labour and Social Affairs sent the amendment to the Chamber of Deputies, it said the new merciful summer could apply to more than 700,000 people, primarily entrepreneurs, and more than 260,000 companies.

According to Drmolova, “The numbers of notifications and financial amounts to which the notifications relate will gradually increase as debtors submit notifications. It is only necessary to remind you that it is not enough to pay the principal debt. To receive forgiveness of unpaid accessory fees, the debtor must always submit a notification of payment or payment in installments. This is one of the conditions for forgiveness under the law.”

Individual debtors also have a similar opportunity for advantageous repayment of debts to the Financial and Customs Administration, the Ministry of Finance, courts, and the prison service. For example, in the case of financial or customs administration, small tax arrears not exceeding CZK 200 ($9) or CZK 30 ($1.4) for property tax are automatically waived for individuals and companies. If a debtor had several small arrears, their total could not exceed CZK 1,000 ($47).