Pensions will increase by CZK 825 from January, Labour and Social Affairs Minister said

The average old-age pension will rise by CZK 825 on average from next January. Labour and Social Affairs Minister Marian Jurečka (KDU-ČSL) announced this on Twitter.

“Today, the government decided on another valorization in January, an average CZK 825. All those who receive one of the pensions are a very vulnerable group that is currently being affected by the rising prices. Pension valorization is a basic tool to help at this time,” said Minister Jurečka.

The solidarity part of all old-age, invalidity, and survivors’ pensions will be raised by CZK 140. In addition, the “merit percentage” of pensions will increase by 5.1 percent, depending on years of service and earnings.

This year, pensions have been increased three times—at the beginning of the year, in June, and in September.

The labor ministry said in the documents for the regulation: “As a result of the extraordinary valorization and the so-called education bonus in January 2023, the average self-employed pension in January 2023 will be approximately CZK 19,500, according to the latest estimates.”

The pension consists of two parts. The solidarity fixed amount is the same for everyone and corresponds to ten percent of the average wage.

It currently amounts to CZK 3,900, but from January, it will be increased for all by CZK 140, up to CZK 4,040. According to the documents for the regulation, average earnings should reach CZK 40,324 next year.

The merit percentage reflects the number of years of service and the number of levies on earnings. However, payments are only counted towards the pension paid up to a certain amount. Hence, people with higher wages or salaries only take part of the amount paid into the account.

Allowances for foster carers will also increase

On Monday, the government also approved another proposal by the ministry, according to which allowances for foster parents and children growing up in foster families will increase from the beginning of October this year.

The government decree foresees that the allowance to pay for the child’s needs will increase by 27 percent, while the one-off funding when a child is taken in, which has not been increased since 2008, will rise by 35 percent.

The maintenance allowance, which helps young people leaving institutional, foster, or guardianship care, will increase by 15 percent.

“We have had a big debt to several people in this area. Indeed, some of these allowances were last adjusted in 2008, 14 years ago. These are groups that are largely dependent on income from the state. Given rising prices, we have decided to increase them significantly,” said Minister Jurečka.