fbpx

Czech pensions will increase by 839 crowns from January

Czech pensioners will receive higher pensions from January. Czech pensions will increase not only for the elderly, but also for the disabled, widows and widowers and orphans. You will no longer have to ask for an increase in pensions, as it will increase automatically.

The Czech Social Security Administration pays 3.5 million monthly pensions. For the first time in history, indexation is based, in particular, on the consumer price growth indices of pensioners’ households.

All pensioners will increase the threshold, which is the same for all. Pensions will also be increased depending on the years worked and the amount of earnings. The threshold will be raised by 60 crowns, that is, from the current 3490 crowns to 3550 crowns. The percentage threshold will increase by 7.1%

Since January, the average senior pensioner, who now receives a pension of 14,497 crowns per month, will receive a pension of 839 crowns more. Thanks to the indexation, his pension will increase to 15 336 crowns per month from January 2021.

Development of pension indexation since 2015

Year

Increase in pension in crowns

Increase in %

2021

60

7,1%

2020

220

5,2% + 151 CZK

2019

570

3,4%

2018

150

3,5%

2017

110

2,2%

2016

40

0%

2015

60

1,6%

Czech pensions consist of a basic pension and an interest rate pension. Its resulting amount is the sum of these pensions.

Czech pensions

Read also Labor Taxation and Retirement Benefits

Basic pension and interest pension – what is it?

What is the basic pension calculation: The basic pension calculation is a fixed part of the pension that is the same for all pensioners. The basic pension does not depend on the length of work or the amount of earnings.

What is pension percentage: the pension percentage depends on the specific insurance rate, and it is true that the higher the income in the corresponding period and the longer the insurance period is received, the higher the pension percentage. The minimum statutory percentage of pension is 770 CZK per month.

An example of the valorization of an individual pension for seniors

  • For example, an old-age pensioner receives a pension of 16,096 crowns per month this year (basic pension 3,490 crowns + interest pension 12,606 crowns = 16,096 crowns)
  • Starting from the January pension benefit in 2021, the basic pension will increase by 60 crowns to 3,550 crowns. The interest pension will increase by 7.1%, that is, by 896 crowns (the increase is always rounded up).

Example of indexing a disability pension

  • For example, a pensioner with a 1st degree disability receives a pension of 8,216 crowns per month (Basic pension 3 490 crowns + interest pension 4 726 crowns = 8 216 crowns).
  • From the January payment of the pension in 2021, the basic pension of this pension will increase by 60 crowns to 3,550 crowns, the interest pension will increase by 7.1%, that is, by 336 crowns (the increase is always rounded up to whole crowns)
  • From January 2021, the amount of this pension will be 8,612 crowns per month and will increase by 396 crowns).

Czech pensioners will receive the first increased pensions in early January 2021.