Parental leave benefit rises, value drops

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The Labour and Social Affairs Ministry on Monday announced its plan to increase the total parental leave benefit from 220,000 to 300,000 crowns. Despite the increase, the real value of the allowance will be lower than twelve years ago, Czech Radio’s data journalism team reported on Wednesday.

Photo: Pixabay CC0
The parental leave in the Czech Republic is paid monthly for a period of up to four years. Parents can choose how quickly they want to draw the whole sum. The higher the monthly allowance, the shorter the period when it is paid will be. The monthly allowance is currently capped at 32,640 crowns.

The parental leave allowance was last raised in 2007, during the government of Jiří Paroubek of the Social Democratic Party. Over the past twelve years, its real value has been significantly diluted by inflation. As a result, parents will actually buy less today than in 2007 for the same amount of money.

According to an analysis carried out by Czech Radio’s data journalism team, the monthly allowance from 2007, paid out over the period of three years, was 7,582 crowns while its real value in 2018 was 9,359 crowns.

In comparison, the monthly allowance parents are receiving in 2019 is 7,097 crowns while its real value in 2018 was 6,951 crowns.

Even after the increase to 9,677 crowns a month, the real value calculated for 2018 would be 9,328 crowns, which is still lower than in 2007.

Under the original proposal of the Labour and Social Affairs Minister Jana Maláčová, the planned increase in parental leave benefit should have concerned all families with children of up to four years of age.

On Monday, however, Mrs Maláčová said the raise would only concern families that will have children as of January next year.

After criticism on the social media, Mrs Maláčová said she would try to find additional eight billion crowns in the state budget to raise the parental leave benefit even to families with children up to the age of four.

Daniel Prokop, sociologist from the Faculty of Social Sciences at Charles University says one solution to problem would be an inflation adjustment of parental benefit allowance.

In an interview for Czech Radio’s flagship station Radiožurnál, Mr Prokop said it would spare the government from having to decide about one-off increases in parental allowance in the future.