• Pension reform
  • Health reform
  • Social reform
  • Tax reform
  • Anti-corruption measures

Social reform

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The Czech Republic faces a series of problems on the labour market which, in the longer-term, could lead to the irrecoverable loss of competitiveness of our country. These include low employment rates for women with children, a low share of part-time work and low numbers of children placed in childcare facilities.

Over the long term it will therefore be necessary to ensure services that are as accessible as possible and protection for socially sensitive groups of citizens. The system will be significantly simplified and services will become more accessible. On the other hand, the fight against the abuse of benefits will intensify so that they can only be collected by those who are genuinely in need.

Social reform will also try to meet the needs of parents with children as much as possible, in particular mothers for whom the choice between the family and working life is very difficult under current conditions. Thanks to the changes in the social system they will have more opportunities to find the optimal harmonisation between their family and working lives.

The main changes

  • The abuse of unemployment benefit will be made more difficult. If a person terminates his employment, which was found for him by a labour office, without a serious reason or he is fired by his employer for a gross breach of working obligations, he may only register as unemployed again after six months have passed.
  • Unemployment benefits will be reduced for those who resign themselves or who end their employment by agreement. Exceptions to this are serious family or medical reasons as defined by legislation.
  • The decisive period for entitlement to support will be shortened by one year. A person who has worked for at least 12 months in total over the last two, not three, years before registration as a job seeker will be entitled to unemployment benefit.
  • There will be an obligation for some selected unemployed people to register with CzechPoint. Otherwise the job seeker will lose his unemployment benefits, the state will stop paying his health insurance and he will be deleted from the register of job seekers. The aim of this measure is to prevent illicit work.
  • Students will be entitled to unemployment support. In the event that they have already worked for at least 12 months in the previous two years and thus paid contributions to social insurance, they will be entitled to support.
  • Job seekers will be able to choose requalification. A labour office will then evaluate whether the offer is suitable from the perspective of the state of health or opportunities for application on the labour market, and may pay for the selected requalification.
  • Employers will no longer be obligated to announce available jobs to labour offices. They can however do so completely voluntarily.
  • The motivation of employment agencies to find better jobs for job seekers will be increased. The state will pay agencies a contribution for finding a job for a job seeker if he remains in the arranged job.
  • Companies employing handicapped people will get more money. An employer who has more than half handicapped employees will get 75 per cent of its salary costs from the state, and this up to the amount of CZK 8,000 monthly per employee. After one year this contribution may increase by another CZK 2,000 a month.
  • Sanctions for illegal work will be stricter. Fines for illicit work will be increased from CZK 10,000 to CZK 100,000. Companies that provide illegal work could be fined between CZK 250,000 and CZK 10,000,000. At the same time they could also lose the opportunity to get a public tender or state subsidy.
  • The amount of the redundancy payment will depend on the time that the employee worked at the employer in question. People who worked for less than one year will be entitled to a redundancy payment of one month’s salary. Employees who work at a given company for between one and two years will then be entitled to an amount equal to two monthly salaries. A redundancy payment to the value of three months’ salary will be received by employees who have worked for the same employer for more than two years.
  • The state will compensate job seekers for unpaid redundancy payments, severance payments or settlements. It will thus pay 65 per cent of the average monthly net earnings from the previous employment. This is because in practice it is common that employers do not pay and these people remain without work because they are not entitled to unemployment support for this period of time.
  • All social benefits will be paid by the Labour Office of the Czech Republic. In addition to unemployment support and support for requalification, this also involves state social support benefits (child allowance, parental allowance, housing allowance, foster benefits, maternity benefits, funeral benefits), material need benefits (subsistence allowance, housing supplement, extraordinary immediate help), benefits for handicapped persons (mobility allowance, contribution towards a special medical aid) and care allowance.
  • The parental allowance system will also change. Applicants will now also be able to choose the duration and amount of the allowance during the drawing period.
  • The total amount of the parental allowance will be harmonised. Up to CZK 220,000 per child can be drawn. The parental allowance will be paid out until this amount is exhausted, but only up to the child’s fourth year of age.
  • Parents will not lose their parental allowance if they place a child over two years of age into a childcare facility. Parents of children aged less than two years will also be able to continue to draw the parental allowance if these children attend a childcare facility for 46 or less hours a month.
  • The housing allowance will increase. This is calculated according to normative costs for housing, which are now higher.
  • Special cards will be introduced for the payment of social benefits. Handicapped persons will thus be able to draw their benefits at ATMs. These so-called social cards should also serve for communication with state administration and as identity cards for handicapped persons, for example at employers. They can also function as payment cards, although they are not tied to the client’s private account in any way. Their use will be voluntary.
  • Benefits for handicapped persons will be harmonised. So far it has been necessary to fill in a significant number of forms and provide a series of differing assessments. The system will be simplified to only two benefits, namely for mobility and a contribution towards a special medical aid.
  • The contribution for the operators of protected jobs will change. After 12 months of operation of a job for the handicapped, the employer will be able to apply for a contribution towards the partial payment of the operating costs of the protected job.
  • The contribution towards care for some handicapped children will increase. The state will give children up to 18 years of age with 2nd degree disability CZK 1,000 more, meaning CZK 6,000 a month.

Reform targets

  1. will curb abuse of the system
  2. increased level of checks and sanctions
  3. greater incentives for employers to hire new staff
  4. greater incentives for job seekers to actively look for work
  5. savings on administrative costs during the payment of benefits
  6. simplification of the social protection system
  7. support for the extension of the range of childcare services on offer
  8. reconciliation of work and family life for parents

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