Czech government plans to cut unemployment benefits from January 2027

The Czech government is reconsidering parts of its plan to cut unemployment benefits from January 2027, with single parents and older workers potentially exempted from the reductions following criticism from coalition partners.

Labour and Social Affairs Minister Aleš Juchelka (ANO) has proposed a compromise that would maintain higher payments for certain vulnerable groups, Czech Radio reported on Nov. 7. The changes come as the government seeks to reduce spending on unemployment support by billions of crowns annually.

Under the government's original proposal, unemployment benefits during the first two months without work would fall from 80 percent to 65 percent of a person's previous net monthly earnings.

However, the latest negotiations could see the initial rate reduced further to 60 percent for workers who do not qualify for an exemption.

Payments would remain at 50 percent for the following two months, before increasing from the current 40 percent to 45 percent for the remaining eligible period.

The maximum benefit would also fall from 80 percent to 60 percent of the national average wage.

According to the Ministry of Labour and Social Affairs, the original changes could save the state approximately CZK 4.5 billion to CZK 5 billion annually.

Following objections from the Freedom and Direct Democracy (SPD) party, Juchelka is preparing adjustments that would preserve existing support levels for some groups.

These could include single parents and unemployed people over 52, who may face greater difficulties finding new employment.

The minister also wants to maintain retraining benefits at 80 percent of previous net earnings, regardless of age.

SPD representatives have raised concerns that reducing payments could disproportionately affect lower- and middle-income households.

Foreign nationals who have worked legally in Czechia and meet the relevant insurance and registration requirements may also qualify for unemployment benefits.

Any approved reductions could therefore affect eligible international workers who lose their jobs in 2027.

Those seeking information about eligibility and applications can consult the Czech Labour Office's guidance on unemployment.

However, the proposed exemptions and final payment rates remain subject to negotiations.

The legislation has not yet been approved by Parliament, meaning the current benefit rules remain in place.

Further discussions among coalition representatives and lawmakers will determine whether the revised proposal can secure sufficient support before its planned January implementation.