Working all your life and then straight into retirement with 20,000 crowns a month? This is how it works in the Czech Republic

Few people realize that within the scope of their employment or self-employment they are also earning the conditions they will have in retirement. For example, it may happen that a self-employed person paying only minimal advances will also receive a low pension. Conversely, an employee with an average salary will be relatively well off.

It’s not that easy

But what about people who don’t want to work too much, even if they could? They are those who are usually registered for a long time at the Labor Offices, where they always go only to confirm that they have not been hired in the next job found for them by the office. Of course, no one wants an unmotivated individual unwilling to work. Just make it clear at the interview.

Those concerned can then collect relatively interesting contributions from the state, especially if they have children. However, the assumption that once they reach the age of 65, they can retire without a problem, let alone draw it in an average amount exceeding today’s 20 thousand crowns, does not meet reality for most of them.

“The period of unemployment during which a person is or was kept in the records of the ÚP CR as a job seeker is the so-called replacement period of insurance. It means that this period, within a certain extent set by law, is counted towards the right to a pension and its amount, even if the insurance premium was not paid for it,” states the Czech Social Security Administration.

From this, it could be concluded that if an unemployed person registers at the Labor Office, the period of unemployment will be included in the so-called excluded period. So the state will pay social insurance for him, which means that the right to a pension would arise by default.

You have to work

But there is one significant catch. A maximum of three years when a person does not receive unemployment benefits are counted as an excluded period. And even just one year before the 55th year of age.

If you have been at the Labor Office for a long time, even for life, you have no chance of reaching the required 35 years, when social insurance is paid for you, either by the employer or the state. If you then go for a pension, they will simply tell you that you are not entitled, because you did not work and only three years were counted from your time as a “worker”.

There are a number of ways in which unemployed people can receive significant funding from the government. However, pensions are surprisingly quite strictly limited in this regard.

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