Government Approves 8.8% Increase In Minimum Subsistence and Living Wages
Based on the increase in the consumer price index, the government decided to raise the metrics for minimum subsistence and living standards by an extraordinary 8.8%, effective from 1 July, reflecting the actual increase in consumer prices. Photo credit: vlada.cz
Czech Republic, 30 June (BD) – The measure was approved by Petr Fiala’s Cabinet at a meeting on 29 June. The living wage for individuals will thus stand at CZK 4,620 as of July and the minimum subsistence wage at CZK 2,980. The government also issued a new regulation on family solidarity allowance for the second half of 2022.
The minimum subsistence wage is the income threshold considered necessary to provide food and other basic personal needs for survival. The subsistence wage will rise to CZK 2,980 from CZK 2,740 from July, an increase of 8.8%, reflecting the high inflation in the Czech Republic.
This figure is used to determine eligibility for certain tax credits and benefits. After this increase, for example, more families than today will be eligible for child benefits. The quota will also play a key role in allocating increases in care allowance or determining the amount of emergency benefits.
According to Marian Jurečka, Minister for Labour and Social Affairs, there are currently around 360,000 people receiving the allowance, but by July there could be around 400,000. According to government estimates, an additional CZK 415.2 million will be needed for subsidies in the second half of the year. In total, spending on family allowances will increase by CZK 112.2 million, subsistence allowances by CZK 144 million, housing supplements by CZK 78 million, allowances for foster relatives by CZK 69 million, emergency aid by CZK 7.8 million, and childbirth allowances by CZK 4.2 million.
The minimum subsistence level for an adult living alone will be increased from CZK 4,250 to CZK 4,620. The amount for adults and children in a family is lower. For the first adult in the family it is CZK 3,910, for the second CZK 3,530. The level for dependent children varies between age groups, from children 0-6 (CZK 2,170), 6-15 (CZK 2,670) and 15-26 (CZK 3,050). For a parental couple with a child aged eight and sixteen, the income threshold will rise from CZK 44,744 net to CZK 48,654. Families with an income up to 3.4 times the minimum subsistence level are eligible for family allowances.
According to the law, the government may further increase the minimum from January if the cost of food and personal needs has risen by at least 5% during the reference period. Photo credit: vlada.cz