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Czech Republic: a national snapshot of poverty. Over-indebtedness, housing costs and low salaries

Last year over 100thousand people burdened with over-indebtedness turned to Caritas for support.  With their low wages they couldn’t afford to pay the rent, the electricity and gas bills, nor extraordinary expenses. A report drawn up by the close network of church structures actively providing solidarity services drew a balance of the situation in the Czech Republic.

Over 800 structures for social services, 85 healthcare services, 308 services of other kinds: these are some of the figures on Caritas Czech Republic, one of the most important “players” in the field of social assistance, devoted to the uprooting of poverty in the Country, with almost 105 thousand registered beneficiaries in 2015. The Report “Caritas Cares” highlights the major challenges concerning poverty and social exclusion at national level: “Our survey includes in-depth interviews with 34 social workers from 69 Caritas centres in the Czech Republic. The survey questions were sent to all the structures and activities run by Caritas”, said Lucie Benesova, Caritas social analyst, an author of the Report.

Three major problems. “Over-indebtedness” is the number one poverty-trap. “The number of insolvency petitions by individuals has increased to previously unheard of levels. Many single parents are affected. The number of insolvency petitions by individuals increased dramatically from less than 2000 in 2008 to 31 thousands in 2014” explained the authors of the Report. Caritas counselling services registered over 27,000 beneficiaries, of which 60% were women and 40% men. Two in five Caritas beneficiaries asked for help with their debt issues. Another area of concern is the housing situation, that has deteriorated dramatically for large sections of the population in recent years.

“Housing has become unaffordable and inaccessible.”

The tragic situation was confirmed by 44% of social workers that took part in the Caritas survey. The dramatic loss of housing has become the primary concern for national Caritas, whose services are mostly directed to the homeless and to people with wages below the minimum threshold. In general, the availability of decent housing has decreased in the Czech Republic due to the trend towards higher deposit requirements for rental homes, the new right of landlords to terminate a tenancy or lease agreement without the consent of the court. The third problem that should be addressed more effectively, Caritas points out in the Report, is that of low salaries. In fact, in some areas of the Country the minimum wage is often less than social benefits, which leads to demotivation in those who are looking for work. The minimum wage in the Czech Republic remains the lowest in the EU.

Social brackets at risk. For the Caritas experts “many groups of citizens are at risk of poverty.” These are: the elderly (65 years and over); the long-term unemployed; the homeless people; people with physical and intellectual disabilities; single parents (mostly mothers). These groups are “with the most urgent need for political action” not only in terms of social assistance, as they should be the object of comprehensive political interventions. What are the most effective policies needed to address poverty and social exclusion? In the Czech Republic, Caritas replied, it is necessary to change the conditions of debt relief, in order to ensure that also people at risk of poverty and social exclusion can apply. For this reason, it is of utmost importance to revise legislation in order to reduce the high levels of private over-indebtedness. These include the Insolvency Law and the Law on Court Executors and Execution. The Act on Social Housing “needs to enter into force without delay”, namely, by January 1st 2017.

Salaries and protection. In the area of employment Caritas experts recommend increasing the level of the minimum wage to CZK 12,000 (approximately 440 euro) and impose stricter controls on employers’ compliance with labour legislation.

Iva Kuchynkova, coordinator of Caritas social services, one of the authors of the Report, remarked: “The recommendations are based on an analysis of the grass-roots experience of people who have had to face critical social situations that led them to seek support in our social service centres.”

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