The government is about to approve a draft amendment limiting the June valorization of pensions

The government is about to approve a draft amendment limiting the June valorization of pensions

The government is going to approve the draft amendment with the limitation of June pension valorization

Illustrative photo – Prime Minister Petr Fiala at a press conference in Prague after the government meeting, December 21, 2022.

Prague – Today, the government is preparing to approve a draft amendment with a restriction extraordinary June valorization of pensions. Ministers should vote on the draft per rollam, i.e. remotely. According to the documents for the law, the average old-age pension should increase from June due to inflation by 760 crowns instead of 1,770 crowns, by which it would have increased under the current rules. According to the cabinet, the reduction is necessary to maintain the pension system, otherwise its deficit this year would reach CZK 90 billion. The opposition refuses to support the change.

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According to the law, pensions are exceptionally increased due to inflation if the increase in the consumer price index exceeded five percent during the monitored period. The merit percentage part of the pension is raised. It grows by as many percentages as the price increase has reached. However, according to the amendment, the percentage of the pension should increase less in June, namely by 2.3 percent and, on top of all that, by 400 crowns. An additional 15 billion crowns is needed for this this year. The expenses are for debt.

On Wednesday, the government agreed to limit the increase in pensions in June. According to the amendment, the smaller addition should be a one-off. Opposition politicians from ANO and SPD as well as trade unions reject the change. According to them, it could be unconstitutional. According to constitutional lawyers contacted by ČTK, the standard would probably stand up to constitutionality review.

The House of Representatives should approve the amendment at an extraordinary meeting on Tuesday, February 28. The government coalition has a majority in the lower house. After that, the Senate should receive the norm and the president should sign it.