The basic assessment of Czech pensions rises by 110 CZK since January 2017
Starting from the January 2017 pension payment, the so called basic assessment of a pension rises in case of pensions, which were awarded before 1 January 2017. The rise will be made by the Czech Social Security Administration automatically, there is no need to ask for it. The clients will get a written notice informing about the rise, irrespective of the way of payment of their pension.
The rise concerns old-age pensions including pre-retirement benefits, all three degrees of disability pensions, widows’, widowers’ and orphans’ pensions. The basic assessment, which is unified for all types of pensions, has been raised by 110 CZK (from 2440 CZK to 2550 CZK). The percentage assessment, which is individual and depends on the number of insurance periods and earnings gained, remains unchanged.
In case of concurrence of pension payments (e.g. old-age and survivors’ pensions), the basic amount is always due just once, as a result of which the rise is 110 CZK as well.
The rise applies also to the so called partial pensions under the EU coordination regulations and bilateral agreements on social security. In these cases, the basic assessment will be raised proportionally depending on the length of the Czech insurance period towards the overall insurance periods.
One-off allowance to pensions in February 2016
Allow us to inform you of the adoption of Act. No. 381/2015 Coll., on a one-off allowance for pensioners, on grounds of which the state will provide pensioners with a lump sum of 1200 CZK.
Every natural person that will be entitled to a pension payment from the Czech pension system (in whole or in part) at least for a part of February 2016, will get the abovementioned allowance, under the condition that the entitlement to the benefit originates before 1 January 2016. In case of concurrence of pensions, the allowance is due just once. The allowance is also due in full to pension beneficiaries who are entitled to the so called partial pensions under the EU coordination regulations and bilateral agreements on social security.
The allowance will be paid out together with the February 2016 payment or with the nearest payment due after February 2016.
Pensioners having residence abroad and receiving pension payments upon presenting the certificate of living, will get the allowance retroactively upon presenting the abovementioned certificate, together with the respective pension payment.
The allowance will be provided to entitled pensioners by the Czech Social Security Administration automatically, there is no need to ask for it except for cases where the entitlement ceases during February 2016 and this date precedes the payment day of the original pension. In these cases an application for the allowance payment has to be made in written on a prescribed form, see the attachment.
Cancellation of the second pension pillar (pension savings)
The second pension pillar was cancelled as of 1 January 2016. The act comes from the results of the Professional Committee for Pension System Reform.
The insurance rates will come back to the state of affairs before the introduction of the second pillar, i.e. the insurance rate for all emloyees will be again 6,5% from the assessement base. The rate for employers remain unchanged.
For the self-employed persons, who participated before 1 January 2016 in pension savings will now be valid the insurance rate of 29,2% from the assessment base.