At the beginning of the year, paid pensions are regularly valorised. It will not be different this year either. Nevertheless, this year the valorisation will take place differently than in previous years. Pensions will increase for everyone at the same time, so some will stop paying more for having a retirement date later than others.
There is a difference from January 1 or from the pension payment
The vast majority of pension payments, which are usually allocated, are set on even days in the month from the 2nd to the 24th day. With a few exceptions, a change is not possible, although a specific date can be requested before the pension payment begins (the decision, however, is up to the CSSA, which tries to ensure that the payments are sent evenly in the month). Our pensions are paid in advance. So far, they have been valorised not since the beginning of the month, but since the repayment of the pension. This created differences between people who have a pension at the beginning of the month and those who have it later. The later the date of the month, the greater the difference compared to pension recipients with a pay period at the beginning of the month.
In 2020, but also in 2019, we added an average of CZK 900 to pensioners ‘from January’. Add 900 CZK ‘per month’, that is about 30 CZK per day. They added the CZK 900 to Pepík from January 2. Frant was not added until January 24, so he did not receive 23 × 30 = 690 CZK for January 1 to 23. And so it was in 2020, but also in 2019 and similarly in previous years until 1990, when it began to valorise due to inflation,
pointed out the inequality of mathematicians Karel Zítek in the article The state deprives pensioners of a billion every year provided that although all retirees receive the same number of valorised pension benefits per year, not all will receive money calculated according to the same rules.
But from the beginning of next year, there will be a change and everyone’s pension will increase from January 1, 2022. So everyone will reach a higher pension from the same moment. With this in mind, beneficiaries will also receive a supplement to the valorisation increase for the period from 1 January 2022 to the day preceding their January maturity date as part of the collective increase in pensions. This supplement will be paid on the same date and in the same way as the increased pension,
informed the spokesperson of the Czech Social Security Administration (CSSA) Jitka Drmolová.
Current valorization
The pensioner has a pension of CZK 15,000 in 2020, the payment date on the 24th day of the month and the valorisation from the January installment (= January payment date) in 2021 is CZK 900, ie approximately CZK 30 per day:
- On the payout date of November 24, 2020, he will receive CZK 15,000 for the period from November 24, 2020 to December 23, 2020.
- On the payout date of December 24, 2020, he will receive CZK 15,000 for the period from December 24, 2020 to January 23, 2021.
- On the payout date of January 24, 2021, he will receive CZK 15,900 for the period from January 24, 2021 to February 23, 2021.
New valorisation
The pensioner has a pension of CZK 15,000 in 2021, the payment date on the 24th day of the month and the valorisation from 1 January 2022 is CZK 900.
- On the payout date of November 24, 2021, he will receive CZK 15,000 for the period from November 24, 2021 to December 23, 2021.
- On the payday of December 24, 2021, he will receive CZK 15,690 for the period from December 24, 2021 to January 23, 2022. The CZK 690 “extra” is the valorization from 2022 for the first 23 days of January. In the current system, it was denied to pensioners.
- On the payout date of January 24, 2022, he will receive CZK 15,900 for the period from January 24, 2022 to February 23, 2022.
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According to him, tomorrow’s mistake came in 1995, and since 2011 he has been suing the state for it. He even initiated the action of 41 deputies who filed a constitutional complaint (Pl. USE 47/18) and wanted to repeal the provision that pensions are increased until the date of its payment. However, the proposal was rejected by the plenary of the Central Committee.
You can also find more mathematics considerations on this topic in the articles:
Ferjenčík’s sticker straightened the situation
Mikuláš Ferjenčík (Pirates), one of the deputies filing a constitutional complaint, therefore proposed an amendment to the law in the form of a sticker on the so-called veil, which the lower house approved October 30, 2020. Ferjenčík pointed out that if you have a later pension payment date, you will get less money than the one who has it earlier, and the difference will never pay you. You will receive the remaining money at the end of the annual cycle, when the recipient of the pension with an earlier term receives a higher pension for further valorisation.
It is worth recalling that Mr Ferjenčík is only 33 years old, so he is far from retiring. Nevertheless, he acknowledged the inequality of the current system and sought to eliminate it,
he commented on the novelty Zítek at the time.
Czechoslovak “patent”
The author of Měška and the mathematician also pointed out that in Europe, pensions are paid for a period of a calendar month, with the exception of Malta, where it is for a week.
So where, when and why did a slippery moon arise here? Nobody knew that, not even the MLSA or the CSSA. So I kept looking and found that it was already during the reign of the king. The sliding month was introduced on the territory of the Czech Republic on 16 December 1906 (Act No. 1/1907 Coll., On pension insurance), which was effective from 1 January 1907,
Zítek explained that all the states of the former Austria-Hungary had already abandoned the principle of a sliding month and remained only in the Slovak Republic and the Czech Republic. Slovaks have abandoned this concept with effect from 2004.
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How much will the pension increase?
On average, the paid pensions will increase by CZK 805 from 1 January 2022. Valorisation will follow the following rules:
- basic pension assessments will increase by CZK 350 to CZK 3,900 per month,
- the percentage acreage of all types of pensions will increase by 1.3% of their amount,
- the percentage acreage of all types of pensions will increase by an additional amount of CZK 300 (or by a partial amount). In the case of entitlement to multiple pensions, this amount is added only once.
How do you calculate how much your pension will increase?
Suppose you, as a pensioner, receive a monthly pension of CZK 14,000 this year. If this year’s basic area is CZK 3,550, the percentage must correspond to CZK 10,450.
If the percentage acreage increases by 1.3%, it will amount to CZK 10,450 × 1.3% = CZK 10,585.85 after valorisation. The amount of the increase is always rounded up to whole crowns, so we adjust it to CZK 10,586 and at the same time add a 300 crown bonus. So we get CZK 10,886.
At the same time, we know that the basic area will increase to CZK 3,900 next year.
The monthly pension will therefore increase from CZK 14,000 to CZK 14,786 from the January payment.
Read more in the article How much will pensions increase in 2022? Calculate how yours will increase.
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The described valorisation applies to pensions granted by the end of this year. The pensions granted in 2022 will not be valorised until the following year 2023. Unless the conditions for the so-called extraordinary valorisation occur, which we will talk about next time.
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