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Increase in minimum living and subsistence wages from 1st April 2022

As of the 1st April 2022, the government raised, as an extraordinary measure, the levels for the minimum living and subsistence wages by 10%.

According to a government statement, the 10% increase reflects the estimated growth in consumer prices of essential costs for groceries and other basic needs.

Czech legislation defines the living minimum wage as the socially recognised base threshold of monetary income needed to ensure sustenance and other basic personal needs. In contrast, the minimum subsistence wage is defined as the base threshold of monetary income considered as essential to ensure sustenance and other basic needs at a purely survival level. The minimum subsistence wage cannot be used for a dependent child, recipients of old-age pension, recipients of the invalid pension of the third degree or people over 68 years of age.

The main use of the minimum living and subsistence wages is stated in Act No. 111/2006 on Assistance in Material Need. The minimum living wage plays a decisive role in the assessment of material need and of the cost of state social support. Therefore, the increase in the minimum living wage will specifically apply to those who draw child support, a maternity allowance, basic allowance, housing supplement, foster care benefits or emergency assistance. In addition, the increase in the minimum living wage is used in actual court cases to set the legal nutritional requirements or to calculate, in the case of distraint, unseizable minimums. However, it is crucial, with regards to minimum living and subsistence wages, to point out that neither cover essential costs for housing because housing protection should be covered by a combination of the housing allowance from the state social support system and the housing supplement from the material need assistance system.

There were a number of grounds for the aforementioned increase. The main reason was the persistent acceleration in prices. The rate of inflation has already exceeded the 5% limit set by the Act on the Minimum Living and Subsistence Wages, whereby an emergency adjustment could be made. Growth in consumer prices was initially fuelled by the coronavirus pandemic, followed by the energy crisis and now by uncertainty arising from the war in Ukraine.

The last time the minimum living wage was adjusted was in April 2020. After this current adjustment, the living minimum wage for a single adult stands at 4,250 CZK. The amount for an adult and child in a family is lower, with the first adult in the household receiving 3,910 CZK, and second and subsequent adults in the household receiving 3,530 CZK. The living minimum wage is 2,170 CZK for a child under six years, 2,670 CZK for a child 6 to 15 years and 3,050 CZK for a child 15 to 26 years. The living minimum wage for a household is thus calculated as a sum of all the minimum living wage payments for each member in the household. The minimum subsistence wage is set at 2,740 CZK. The Ministry of Labour and Social Affairs has an application for the precise calculation of the minimum living wage. The application will calculate the living minimum wage for a given household according to the entered parameters. This application can be found here.

Lucie Popelíková
Junior Payroll Consultant

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