Czech Republic Proposes Expanding Care Allowance Eligibility to Include Entrepreneurs and Sole Traders

The Ministry of Labour and Social Affairs in the Czech Republic is advocating for a substantial extension of the group eligible to claim care allowance, encompassing not only employees but also individuals working under a contract for work or job performance, entrepreneurs, and sole traders.

The primary objective of this proposed change is to provide support to parents of young children. The Ministry argues that it would be inequitable to deny these policyholders entitlements to all sickness insurance benefits, including the care allowance, especially considering they contribute the same amount of sickness insurance as other individuals.

Anticipating an impact on over 100,000 people annually, the Ministry’s proposal estimates a financial effect on the state budget of approximately 24 million crowns. This cost is expected to be partially offset by the benefit of encouraging parents to return to work sooner, knowing they will be assured support if their child falls ill.

The Ministry of Finance has given its approval to the proposal, a notable development considering its historical resistance to similar initiatives from the Ministry of Labour. However, the approval comes with a condition that the proposing body must identify the required funds within its budget.

While the proposal aims to address a pressing societal need, employers have voiced concerns. They contend that applying for care allowance for individuals working under a work or job performance contract, as well as those in small-scale employment, will escalate the administrative burden on employers without commensurate compensation.

The proposed amendment introduces additional changes, including the elimination of the condition of permanent residence for the second partner concerning long-term care. It also does away with the requirement for written consent from the cared-for person to provide long-term care. Currently undergoing a commenting procedure, the amendment awaits approval from the government and parliament. If approved, the change could be implemented as early as next year.

Article by Prague Forum

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