Senior – wallet – pension – money – senior – pension. Illustrative photo.
Prague – The extraordinary increase in pensions in June will be more than half lower than under normal legal rules. The controversial government amendment on limiting valorization was signed by President Petr Pavel. The president's spokeswoman Markéta Řeháková told ČTK. The average monthly pension will thus increase by 760 crowns instead of the expected 1770 crowns. According to the government, the reduction in valuation is necessary to stabilize public finances, the state will save 19.4 billion crowns this year alone. The opposition, on the other hand, talks about the impoverishment of pensioners and intends to challenge the amendment in the Constitutional Court, due to its retroactivity and the way it was discussed in the House of Representatives.
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Pavel announced on Wednesday that he has decided to sign the amendment, but according to him it is necessary for the Constitutional Court (ÚS) to review it. If the opposition did not eventually go to court, he would do so himself. The President understands the legal objections of the opposition, which, according to him, is convinced that the government enforced the amendment in an unconstitutional manner due to retroactivity and discussions in a state of legislative emergency in the House of Representatives.
However, he also credits the government with being right. “Her arguments, as well as the arguments of economic experts, speak clearly about the fact that slowing down the growth of pensions in the current situation is necessary,” Pavel said on Wednesday. According to him, extraordinary valorization would mean an increase in pensions especially for seniors with the highest incomes.
The opposition criticized Pavel's move. The president told reporters today during his visit to Poland that he expected the decision to provoke reactions. According to him, it would be surprising if this were not the case. “Many people thought it was right to carry out the extraordinary valorization at the amount that was based on the current law, and about the same number of people thought it was a wrong decision that will have consequences in the future,” he noted.
He said he spent a lot of time consulting with various experts. In the end, economic criteria prevailed for him. According to him, allowing an extreme increase in pensions this year would necessarily mean a significant strangulation of pension growth in the following years. “When I counted all the pros and cons, it really worked out slightly in my favor to sign the law even with the risk that there is a suspicion of a possible conflict with the constitution,” he added. According to him, the Constitutional Court must decide that.
At Wednesday's press conference, where he announced his decision, Pavel also called on the government to negotiate with the opposition on its proposal to freeze the salaries of constitutional officials. He told journalists today that he considers it correct and wants to talk to the representatives of the parliamentary parties about it. “In a situation where we want departments to cut their budgets so that people are humbled, it is not possible for politicians' salaries to increase. They should do it at least out of a sense of solidarity with others. I will insist that we do it,” he added.
In the case of extraordinary valorization, which by law occurs with higher price growth, the merit percentage part of the pension is raised. Under normal rules, the increase from June would be 11.5 percent. The bill will increase the percentage of the pension by 2.3 percent and, on top of all that, by 400 crowns, which, according to the reasoning, should slightly favor pensioners with the lowest pensions.
The parliamentary approval of the pension growth restriction was accompanied by extensive opposition obstruction. Doubts about the constitutionality concern the possible retroactivity of the move, government officials do not agree with them. Controversies are also raised by the accelerated approval of the draft in a state of legislative emergency. The cabinet pointed out that the draft must be published in the collection by March 22, which is the last day for the issuance of the government order to increase pensions in June according to the current rules. If Pavel vetoed it, the House of Representatives would probably not have time to overrule his position in time.
By adjusting the June valuation, the state will spend an extra 15 billion crowns on pensions this year, according to the reasoned report. If normal rules were to apply, state budget expenditures would increase by 34.4 billion crowns. The smaller budget impact will continue in the following years. According to the rationale, next year will be a saving of 33 billion crowns from the originally anticipated 58.8 billion crowns spent on additional pensions.
