The government approved the draft amendment with the reduction of the June extraordinary pension valuation

The government approved the draft amendment with the reduction of the June extraordinary pension valuation

The government approved the draft amendment to dream of June extraordinary ;dayé pension valuation´

Illustrative photo – Minister Marian Jurečka (left) at a press conference after the balance visit of Prime Minister Petr Fiala (ODS) to the Ministry of Labor and Social Affairs, November 3, 2022, Prague.

Prague – Today, the government approved a draft amendment with a reduction in the June extraordinary pension valuation. Cabinet spokesman Václav Smolka informed ČTK about the approval. According to the amendment, the merit percentage part of pensions should increase by 2.3 percent due to inflation, and on top of that by 400 crowns. The average old-age pension would thus increase according to the documents to the law by 760 crowns instead of 1,770 crowns, by which it would increase according to the current rules. The Cabinet justified the restriction of the addition by trying to slow down borrowing.

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The opposition, trade unions and employers criticize the change in extraordinary valorization. According to them, it could be unconstitutional. The House of Representatives should approve the norm at an extraordinary meeting on February 28. ANO and SPD MPs have already announced that they want to defend the adoption. The President of the Constitutional Court, Pavel Rychetský, assumes that his institution will deal with the matter, so he refused to comment on the topic today. After a visit to the newly elected president, Petr Pavel, he told journalists that he could not comment on the matter, because the proposal will certainly be challenged and the court will decide on it.

According to the amendment, the limitation of extraordinary valorization should be one-time. According to the documents for the standard, according to the current settings, this year's expenses would amount to 34.4 billion crowns, after the adjustment they should be 15.4 billion. The amount is for debt. Last Wednesday, the government agreed to limit the pension growth in June. “We felt the need to reach into that mechanism (valuation) also from the point of view of general justice, intergenerational solidarity and sustainability for the future,” Prime Minister Petr Fiala (ODS) said in a press release today.

According to trade unionists and employers, the standard could violate constitutionality. They mentioned possible retroactivity and the weakening of merit. The Ministry of Labor stated in the documents for the amendment that higher and medium pensions should rise less in favor of people with lower pensions. However, the rule remains that higher pensions are increased by a higher amount.

The government has already stated that it is not concerned that the change in valuation could be unconstitutional. Minister of Labor Marian Jurečka (KDU-ČSL) mentioned in a press release today that last year's extraordinary valuations meant, on the contrary, a below-average addition for people with a below-average income. He pointed out that pensioners with a lower pension thus had a harder time coping with inflation. According to the documents for the proposal, it would also be optimal for the amendment to come into effect by March 22. According to constitutional lawyers contacted by ČTK last week, the standard would probably pass a constitutionality review.

MPs from the opposition movements ANO and SPD have already announced that they want to prevent the adoption of the standard during deliberations in the House of Representatives. They mentioned obstruction and blocking. Some stated that if the law were approved, they would turn to the Constitutional Court.

The pension consists of a solidary fixed part of 4,040 crowns and merit percentages based on years of service, the amount of levies from earnings and the number of raised children. In case of extraordinary valorization, the merit percentage is raised. It has been rising for five months after price growth exceeded five percent over the period under review. The increase in the consumer price index is rising. 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 had an old-age pension. The ministries of the interior, defense and justice have their pension systems.