The government’s austerity measures will also affect pensioners. Those with lower pensions will have to pay more for medicines and higher health insurance, while wealthier pensioners will lose thousands of crowns monthly.
The new government’s measures include increasing the value-added tax by one percentage point and increasing taxes on alcohol and tobacco. In addition, health insurance contributions will increase, and medicines will become more expensive.
Retirees with low pensions will feel the effects of these measures as they will have to pay more for medicines and higher health insurance. On the other hand, wealthier pensioners will lose thousands of crowns per month as they will be subject to a progressive tax on pensions.
The tax rate will increase from 15% to 19% for those with a monthly pension above 25,000 crowns and 22% for those with a monthly pension above 40,000 crowns. For example, a pensioner with a monthly pension of 50,000 crowns will lose about 3,300 crowns monthly.
The government’s austerity measures aim to reduce the budget deficit, which is expected to reach 105 billion crowns this year. However, critics argue that the calculations are too harsh and will hit the most vulnerable groups the hardest.