In a positive development for pensioners, starting from June, all pensions in the Czech Republic will see an increase in response to inflation. The Czech Social Security Administration (CSSA) has announced that various types of pensions, including old-age, disability, widows’, widowers’, and orphans’, will undergo exceptional valorization. This increase will be automatic and does not require any specific request from the pensioners.

The average old-age pension will witness an increase of 755 crowns, resulting in an average monthly pension of 20,216 crowns. Pensions consist of two components: the essential part and the percentage part. The essential part is a fixed amount that remains the same for all pensioners, set at 10 percent of the average wage and determined by government regulation for the following calendar year. During the exceptional valorization, the essential part does not increase.

On the other hand, the percentage part of the pension is individual and dependent on the insurance course of each individual. It is influenced by factors such as the income earned and the duration of the insurance period. For the June exceptional valorization, the percentage part of the pension will increase by 2.3 percent. Additionally, there will be a fixed amount increase of 400 crowns, or a proportionate amount based on the ratio of Czech insurance periods to the total insurance periods acquired both domestically and abroad.

This increase will be effective from the date of the June pension payment and will apply to pensions granted in 2023, even if they were awarded after the exceptional valorization period between June 1, 2023, and December 31, 2023.

It is important to note that in cases where multiple pensions are received, each pension’s entitlement to a 2.3 percent increase is assessed individually. However, the fixed amount of 400 crowns is paid only once to the percentage part of the pension that is paid in full or not reduced for multiple pension payments.

Pension recipients will receive notifications regarding the pension increases and supplements according to the scheduled due dates of their pensions. The CSSA ensures that pensioners are informed about these changes to keep them updated on their entitlements and benefits.

Article by Prague Forum