As the Czech Republic steps into the new year of 2024, seniors and minimum wage earners can anticipate a welcome boost in their incomes. However, the ripple effects of this growth extend to health insurance costs, particularly impacting individuals without taxable incomes, such as older full-time students and homemakers.

Starting January, pensions will experience an increase for the majority of pensioners, encompassing retirement, disability, widows’, and orphans’ pensions, with a rise of 360 crowns. The introductory pension rate will reach 4400 crowns, while the merit or percentage part remains unchanged due to the previous extraordinary valorization. Consequently, the average old-age pension is expected to reach 20,635 crowns. Notably, pensioners reaching the age of 85 in January will witness an additional increase of a thousand crowns in the percentage rate, a benefit applicable throughout the year for all reaching this age.

Simultaneously, the minimum wage is set to rise from 17,300 to 18,900 gross monthly crowns, translating to a net salary of approximately 16,442 Kč. While this marks positive news for minimum wage earners, the consequent impact on health insurance costs for individuals without taxable incomes becomes apparent.

People without taxable incomes, including housewives, certain university students over 26 years old (excluding doctoral students), and the unregistered unemployed, will experience an increase in health insurance costs ranging from 2336 to 2552 crowns. This adjustment is contingent on the state or an employer not covering their insurance. Similarly, the minimum insurance for employees will also witness an increase.

The uptick in the average wage also influences minimum prepayments for entrepreneurs and self-employed individuals. For social insurance, they will contribute 3852 crowns for the main activity and 1413 crowns monthly for the secondary activity. Those commencing a primary activity will have a minimum prepayment of 3210 Kč. Health insurance costs for entrepreneurs in the main activity will rise from 2722 to 2968 crowns. Secondary activity participants, however, are exempt from prepayments. The minimum voluntary monthly sickness insurance for 2024 is set at 216 crowns.

While the income boosts are a positive start to the year, the adjustments in health insurance costs underscore the intricate balance between economic growth and its nuanced impact on various segments of the population.

Article by Prague Forum