A significant change in the housing subsidy system will occur in the Czech Republic. Starting from January, the housing standards, which serve as the basis for calculating housing benefits, are expected to decrease by 1400 to 2800 crowns. This change will drastically affect the number and amount of subsidies people receive. Thousands are projected to lose their benefits entirely, while many others will see a reduction.
This shift results from the cessation of the increased housing standards approved for 2022 and 2023 due to the energy crisis. According to Jakub Augusta, a spokesperson from the Ministry of Labor and Social Affairs, the situation with energy is expected to improve, hence the change.
Currently, the housing benefit is calculated by subtracting a household’s net income, multiplied by a coefficient of 0.3, from the actual housing costs or standard costs, whichever is lower. For example, a single mother with one child, earning 23,000 crowns and spending 16,000 crowns on housing, currently receives 8,237 crowns monthly. With the new change, this amount will be reduced to 6,837 crowns.
While the energy prices have stabilized, they remain higher than before, coupled with the ending of fixed tariffs for many people, which will have a significant impact. Lenka Desatová, Chairwoman of the Council of Seniors, warns that these households could have benefitted based on the old standards but not the new ones.
Despite the anticipated negative consequences, Alena Zieglerová from the Institute for Social Inclusion views the change as understandable. In her view, it is necessary to curb the circle of applicants so that the benefit is not too high in income. High-income earners will not reach it when the standards are constrained.
The Ministry of Labor and Social Affairs offers several options for households struggling to meet housing costs. One option is to utilize the housing supplement. While there is currently no plan for another increase in standards, the situation is being continually analyzed, and the ministry is ready to respond adequately.
Changes in the system are underway, with plans to consolidate four benefits into one. The new support will replace the housing benefit and supplement, the subsistence contribution, and child benefits. In addition to the applicant’s income, their assets will be scrutinized. A requirement for receiving the money will be work or a job search. This new change in the Czech Republic’s social system is a stark reminder of the changing social dynamics in the face of economic challenges.