People of retirement age have recently experienced a really big upheaval within their existing security. While in previous years they quickly got used to aggressive increases in their pensions, now they have to quickly get used to it and adapt to the new economic conditions in which the Czech Republic and its pension system find themselves. And in short, any larger increases in pensions do not go together at all, in fact, quite the opposite.
A shaky decision
However, the state is not doing the best in many respects, and certainly not professionally. A shining example was the reduction of extraordinary valorization for June of this year. The fact that it will have to be paid out was already decided by the January inflation figures. Then an automatic mechanism comes into play, which calculates the new amount of the pension adjusted to the increase in prices. It was designed so that pensioners would not lose their standard of living in times of high inflation, which could put them in big trouble.
It was suddenly discovered that after the high January valuation, another one should come, in the amount of CZK 1,770, by which the average pension would increase. However, the Ministry of Labor and Social Affairs found that there is simply no more money for such a thing. And so it was decided that this June valuation will be reduced to 760 crowns, i.e. approximately one thousand crowns.
This is, however, a highly debatable solution that can easily be attacked. The reason is the retrospect of this step, which usually creates big problems. The June valuation was simply decided in previous months on the basis of high inflation. However, the state reversed it with its decision.
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How could it have happened?
People therefore turned to the Constitutional Court, which is already dealing with this matter. According to experts, it is far from impossible that the state will have to return the money, and that would be very serious for it. On the contrary, pensioners could rejoice, because they would get back what they were entitled to, and their pensions would also be valued at a significantly higher amount. Since the decision will take some time, it could easily be a year, during that time a large amount is accumulated that will potentially have to be paid to each pensioner.
“I really didn’t understand this. They were supposed to increase our pensions to match inflation, but they reversed it. That is inadmissible. They took the money we were entitled to and now they will have to pay it back,” says Mrs. Drahomíra from Benešov.
Read also: Pensions in the Czech Republic will skyrocket again. That is perhaps no longer true, they should decrease
This is not the only thing that is contested in court on behalf of pensioners. The state has now completely canceled the extraordinary valorization of pensions and replaced it with a special contribution that will be paid in the event of increased inflation. This too is a questionable decision and will have to be reviewed.
Foto: Shutterstock
2023-09-22 09:58:20
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