Illustrative photo – Headquarters of the Ministry of Labor and Social Affairs (MPSV) in Prague.
Prague – If the Constitutional Court decided to cancel the limited June valorization of pensions, the state would then pay people the difference in pensions after the reduction. They would probably receive the additional payment at the beginning of next year. However, the possible planned opposition constitutional complaint will not affect the approved lower addition in June. Eva Davidová, spokeswoman for the Ministry of Labor (MPSV), told ČTK.
According to the adopted amendment, the average retirement pension in June will rise by 760 crowns instead of 1,770 crowns due to inflation. The percentage of pensions will increase by 2.3 percent and on top of that by 400 crowns. According to the existing rules, it would be 11.5 percent. The measure is intended to slow down borrowing. Instead of 34.4 billion crowns for the debt, the addition should cost 15.4 billion this year.
Today, President Petr Pavel signed the law with a one-time reduction of extraordinary valorization. The ANO opposition movement wants to file a constitutional complaint. He believes that the constitutional judges will consider it as a matter of priority and will cancel the limited valorization. Political Deputy Minister of Labor Šárka Jelínková (KDU-ČSL) estimated in the program Events, comments that the court could make a decision in the summer or September. In June, pensions will be adjusted according to the adopted standard, i.e. less. According to ANO MPs, the limitation of valorization can end in embarrassment, so the state would have to pay the difference.
“We have to be prepared for all options,” said a spokeswoman for the Department of Labor. According to Davidová, if the Constitutional Court were to abolish the limitation of valorization, the pensions would probably be settled in January or in the following months. It would depend on the date of the decision. The social administration would have to process the additional payments.
The difference between the original and the reduced valuation amounts to 7,070 crowns for the average old-age pension from June to the end of the year. For people with a below-average pension, the amount is lower, for people with an above-average pension, on the contrary, it is higher. At the end of last year, over 2.84 million people received a pension from the Czech Social Security Administration (ČSSZ), of which 2.37 million received old-age pensions. The ministries of the interior, defense and justice also have their pension systems.
Minister of Labor Marian Jurečka (KDU-ČSL) said on Wednesday that a possible court ruling could take many forms. He pointed out that in some earlier decisions the Constitutional Court recognized the reservations, but did not change the essence.
This year, according to the approved budget, pension expenses exceed income from insurance premiums by 62.5 billion crowns, and that is without the extraordinary addition in June. After him, this year's pension deficit could be almost 78 billion, without him almost 97 billion crowns. The difference between the more economical and the original valuation is 19 billion crowns this year. By 2030, according to the National Budget Council, thanks to the following valuations, it would rise to a total of 250 billion crowns.
The state had to pay pensioners money years ago. For the year 2013, working seniors could deduct a tax discount only if they did not receive a pension. The Constitutional Court canceled this part of the austerity package of the then government. People then received a one-time supplement. There were three years to apply for top-up payments. In four months after the court verdict, 146,000 working pensioners requested the return of 600 million crowns.