EXPLAINED: What is Czechia's new 'unified' social benefit?

A potential change to Czechia's upcoming social benefits system is set to shift how people receive welfare support – in terms of the amount and the eligibility of claimants. It will also streamline the way the benefits are received.

Minister of Labor Marian Jurečka's substantial overhaul of the Czech Republic's social welfare system aims to replace four existing benefits with a single "super dose." This unified benefit (sjednocená dávka) will encompass housing, child, and subsistence allowances. It sets out to simplify applications and introduce stricter asset assessments.

According to Ministry of Labor estimates, the benefit will cover roughly 400,000 households and around 850,000 people. The ministry insists that the new unified benefit is not just the merging of four existing benefits into one, but also changes the conditions for what people can apply for. It must take into account several different situations of applicant households.

Applicants must demonstrate employment or be actively job-seeking to qualify. The support will be tiered based on income and work activity, with adjustments made accordingly. Asset evaluations, including real estate, vehicles, and savings, will influence eligibility. Families with income up to 1.43 times the subsistence minimum qualify for various benefits.

The new unified benefit is calculated through an assets test and consists of four components. Applicants must meet specific asset criteria, including owning no more than two properties per household and adhering to specified savings limits based on household size.

The benefit’s components include: living, based on household income up to 1.43 times the subsistence minimum; housing, determined by energy costs and rent (if housing expenses exceed one-third of income, a household will be eligible); and child support, varying by income level and school attendance. Additionally, a work-motivation component is available when claiming other parts of the benefit.

An eligible household could have two properties, two cars, or savings of up to CZK 400,000.

Under the proposed plans, unemployed people in Czechia will only be able to receive the benefit (after six months of having claimed it) provided they work 30 hours monthly for the state. If a benefits claimant refuses to do this, they will lose their state payments.

The reform is slated for interdepartmental review before proceeding through the legislative process. Minister Jurečka targets implementation by January 2025, but the Chamber of Deputies and Senate must first approve the change. As debates continue, the reform's timing and effectiveness remain subjects of ongoing scrutiny and discussion.

The transition to the new unified benefit is anticipated to include a six-month grace period for current benefit recipients. Within this time frame, individuals must apply for the new benefit within three months of its implementation. Once applied, existing benefits will be extended until the transition is complete. It's projected that clients will begin the shift from the old system to the new unified benefit around July 2025.