The average old-age pension will rise by an average of CZK 1017 from June, while the merit part of the pension will increase by 8.2 %. The Ministry of Labour and Social Affairs (MLSA) will propose to the government an extraordinary valorization, which is set by law in the event of high inflation. Minister Marian Jurečka (KDU-ČSL) announced this at a press conference on Monday.
January’s average indexation was CZK 805 more, so the average pension will increase by CZK 1,822 this year. According to Jurečka, the total budgetary impact on the state treasury will exceed CZK 20 billion. The minister does not foresee further increases beyond the statutory indexation this year. At the end of the year, 2.86 million people received old-age, disability, and survivors’ pensions from the social administration. There were 2.38 million old-age pensioners.
According to the Pension Insurance Act, the extraordinary increase follows the fifth month after the month in which the price increase for the reference period exceeds the five percent threshold. The merit portion of pensions, the so-called percentage assessment, is adjusted. It will rise by the same percentage as the price has increased since last July. The cabinet then issues a decree on the extraordinary valorization within 50 days.
Due to high inflation and the energy crisis, the MoLSA also offers households assistance through the housing allowance. “We will also try to do an information campaign, and we expect that the biggest increase in applicants should come at the end of March and the beginning of April,” Jurečka said.
According to the ministry’s latest data, more than 17 000 households have so far applied for the increased housing allowance.