Average Czech pension crosses 15,000 crowns per month

The average pension for senior citizens in the Czech Republic crossed 15,000 crowns for the first time this year, reveal stats from the Czech Social Security Administration (CSSZ). The CSSZ paid out an average of 15,351 crowns monthly to retirees by the end of the first quarter.

In a year-on-year comparison, CSSZ expenditures grew while the total number of allocated old-age pensions dropped, largely due to effects of the Covid-19 pandemic.

Czech pensions rose in January 2021, increasing by an average of 839 crowns in accordance with recent legislation.

CSSZ expenditures for the first quarter of 2021 were 5.5 billion crowns higher than the same time last year, totaling 106.2 billion crowns. The administration distributed 2.39 million pensions, 26,900 fewer than last year.

The total number of pensions had been on the increase in recent years, but this trend reversed last year due to the coronavirus epidemic, according to experts. Significantly more elderly people died in 2020 compared with the preceding years.

At the beginning of its tenure,the Czech government led by Andrej Babiš's ANO party promised to reach a 15,000-crown threshold by October this year. The government increased pensions twice as high as stipulated by law; on average, retired people saw their pensions increase by 749 crowns in 2020 and 600 crowns in 2019.

In accordance with recent pension regulation, old-age pensions always grow each January in accordance with rising prices, and increase half as much as real wages.

The National Budget Council warned against the pension rises, arguing that these steps destabilize the sustainability of the pension system in the future.

Old-age pensions make up about 30 percent of the total state budget expenditures. Last year, CSSZ paid 60.2 billion crowns (17 percent) more than in 2018.

Finance Minister Alena Schillerová said in late April that the pensions might rise again by an average of 450 crowns next year. Labor and Social Affairs Minister Jana Maláčová argued that was not enough. Maláčová's office recently told CTK it might suggest another rise above the legal limit, or an extra bonus.

The government pushed through a one-time 5,000 crown bonus for senior citizens last year, saying that elderly people were stressed due to the pandemic and the inflation rate.

In addition to raising old-age pensions, Babiš's government also promised pension reform. Maláčová said on Friday that she sent her proposal on pension reform to the government and is convinced that it can be approved before the Czech general election in the autumn.