This week the Government was set to approve a bill regulating a one-off child allowance of CZK 5,000, which should help families.
It is about help in these times of rapidly increasing prices. Although, in the end, the debate was postponed, the allowance should still be paid during August.
The allowance will be payable for children under 18, which means that the parent of a child who comes of age on 1 August 2022 will not be eligible to make a claim. The reason for this condition is that children over 18 can earn some extra money, in which case – for the purposes of the entitlement to the allowance – family income will include only the parents’ income, not that of other members of the household. Parents of children who are born from 1 August until 31 December this year will also be able to claim the allowance.
This income will be assessed for the calendar year 2021 and it should not exceed CZK 1 million gross. Based on the last update of the bill, any income from various social benefits should not be included for the purposes of calculating the allowance. For the purposes of entitlement to social benefits, this one-off allowance will be disregarded. Total assets should be similarly disregarded.
Income will be assessed according to the base for social security contributions for 2021 or, in the case of self-employed persons, according to their tax base, i.e. after declaration of costs. Another way the measure might be considered positive is that this allowance will not be subject to tax, and will be disregarded for the purposes of income for the following year. Nor will it be subject to enforcement.
Adoptive parents and legal guardians will be also entitled to the allowance; foster parents, though they are not the children’s legal representatives, should get the allowance as well, since their costs have also increased during this time.
For the time being, it has been stipulated that the allowance will be payable to everyone entitled in July to claim child allowance for June, without having to apply for it; the one-off allowance will be paid by regional labour offices.
Parents who are not entitled to child allowance but satisfy the condition of income not exceeding one million Czech crowns, will be able to apply for the one-off allowance as well, using an interactive form available from the Ministry of Labour and Social Affairs, or at public administration contact points (Czech Point). Parents will be able to apply until mid-2023, and the allowance will be paid in the month following the filing of the application.
Besides income, the Ministry of Labour and Social Affairs have determined some additional conditions which must be satisfied in order to be eligible for the one-off allowance. First, the child must be domiciled and resident in the Czech Republic (having a long-term residence permit is also acceptable). The allowance will not be paid to a foreign bank account, nor to parents whose child has been placed in an institutional facility where they are fully and directly provided for.
The bill includes an option for the Government to repeat the allowance if necessary.
We will keep you informed about the passing of this bill and post more details with regards to assessing eligibility for the allowance.
