Government to Cut Unemployment Benefits: Over-50s to Be Hit Hardest

Starting next year, the government of Andrej Babiš (ANO) will overhaul the unemployment benefits system — a system introduced only this year by the previous cabinet. According to the Ministry of Labour, the maximum monthly payout will shrink by roughly 10,000 crowns, and older jobseekers will receive the higher benefit rate for just two months instead of the current three.

Data from the Labour Office show that in August, 373,891 people were registered as unemployed in Czechia — up 40,000 from a year earlier. The unemployment rate climbed from 4.5% to 5%. Particularly notable is the rise among jobseekers over 50: their numbers now stand at more than 142,000, compared to nearly 123,000 a year ago.

What's changing

The benefit ceiling is being lowered from 80% of the average wage (38,537 crowns this year) to 60% (28,903 crowns). The payment scale itself is also changing: for the first two months, an unemployed person will receive 65% of their average net earnings, the next two months 50%, and the remaining period 45%. Currently the scheme runs at 80%, then 50%, then 40%.

For older people, who are eligible for the higher rate over a longer stretch, the timeline is also being cut — instead of three months at 80%, they'll get two months at 65%, another two at 50%, and then, depending on age, up to seven months at 45%. The benefit for retraining periods is likewise being reduced from 80% to 60% of the average wage.

As Labour and Social Affairs Minister Aleš Juchelka (ANO) put it in a press release, "such generous support isn't necessary in a stabilized labour market," adding that the point of the benefit is to help people get through a spell of unemployment, not to give them an incentive to stay on it as long as possible. The ministry estimates the changes will save the budget between 4.5 and 5 billion crowns a year.

Experts warn of risks for the older generation

Experts consulted for this article broadly agree that the cuts will hit older people hardest. Tomáš Ervín Dombrovský, an analyst at Alma Career who helped design the reform now being scrapped, argues that trimming benefits will weaken vulnerable groups and simply shift the burden onto non-insurance social benefits — meaning there will be no real savings at all.

Kateřina Musilová, coordinator of the "Zlatá práce" project run by the Krása pomoci foundation, says the number of people over 50 seeking her help has surged over the past two years — and now they come to her just a couple of months after losing their job, rather than after many fruitless months of searching. She says the higher benefit in the initial months used to give people the peace of mind to focus on finding a suitable position. The new cuts, she warns, will trigger panic among older jobseekers — they'll grab whatever job they can just to have money coming in, while those who lack motivation may end up with nothing at all.

The reform's explanatory note states plainly that its main goal is to push the unemployed to return to the labour market faster. According to Alma Career's JobsIndex, 20% of people have no financial cushion at all in case of job loss, and 28% say they can't afford to change jobs because of the risk of going even briefly without a paycheck.

Why it's harder for older people to find work

Labour Office figures for July show that 27% of people leave the unemployment register within three months — nearly 98,000 out of 367,000 registered. Long-term unemployment affects around 19%, or 70,500 people. For those over 50 the picture looks different: a fifth also find work within three months, but the largest group — 29%, or 40,500 people in July — remain out of work for more than two years.

Martin Jánský, CEO of Randstad Czech Republic and president of the Union of Recruiters, attributes this to employer stereotypes about older workers being inflexible and slow to adapt to new technology. Yet, he notes, Randstad's own surveys show the opposite: older employees are the most stable, quit less often, show strong loyalty, and three-quarters of them actively learn new tools — including artificial intelligence — from younger colleagues.

Experts also point to structural shifts in the labour market: automation is pushing people out of some industries, forcing them to move into others, such as healthcare and social services. The Ministry of Labour itself acknowledges the importance of supporting people over 50, betting on retraining programmes. Yet the numbers tell a different story: while nearly 4,800 people went through retraining in July last year, only 911 did so this year. The ministry attributes this to the budget provisional regime, stricter course selection, and the wind-down of the National Recovery Plan programme, which allocated more than 1.8 billion crowns for digital retraining last year.

Read also: Free Czech courses for foreigners: where to learn

Source: seznamzpravy.cz