In Slovakia 80% of parents to receive higher child allowance as of 2020

About 80% of parents will receive a higher child allowance as of 2020, FinMin Alena Schillerova (ANO) told the state TV channel on Tuesday evening (May 21). She said that only parents whose allowance was depleted at the time when the increase is applied would be denied higher payments. She expressed regret that the measure was not discussed more by the coalition parties, but she shifted the blame to labour minister Jana Malacova (CSSD), who has reportedly forwarded her preferred version of the measure to the interministerial working group before it could be discussed by the cabinet or the ruling coalition council. It is what made Schillerova and PM Andrej Babis announce a compromise version before being discussed by the cabinet, even though the cabinet promptly approved it after the fact. To be fair, the compromise version came first also from Malacova, so there was some dialogue, but ANO decided to go ahead with the announcement, catching the CSSD by surprise. Schillerova went ahead to say that more changes to the measure were possible in parliament, so discussion is far from over. For instance, it is expected that parliament may double the hours when a child may visit day care without parents losing their allowance, from 48 to 96 hours a month.

We remind that in the original version of the measure, proposed by the CSSD, all parents should have received access to the increase, which would have left to a considerable increase in allowance for parents who have already used most of their leave as of the beginning of 2020 (we calculate a triple increase for those with one third of their leave left). However, that version would have cost the budget CZK 11.2bn, something that ANO was not willing to accept. A couple of months ago, ANO countered with a proposal to increase child allowance only for parents who go on leave after 2020, which would mean parents currently being on leave would get nothing. However, this proved to be very unpopular, which is why we reached the current version, namely that parents will get an increase proportional to the amount of leave they have as of 2020 onward, which will cost CZK 8.6bn.

In our opinion, Schillerova was trying to do some damage control, since the CSSD was visibly unhappy that a version of the child allowance increase was announced by ANO unilaterally. She has been trying to point out that it was the CSSD who first went ahead with their version, but what ANO did on Monday (May 20) was essentially the same, so we believe both sides are to blame. We also believe that ANO is trying to claim a bigger input in designing the measure than they actually have, something the party has been doing in the government of Bohuslav Sobotka, where it was also in a coalition with the CSSD (though the CSSD had a leading role). Judging from election results, ANO’s strategy has been very successful, and we see no reason that it won’t continue to be in this government. It is one of the reasons why so many CSSD members we reluctant to enter a coalition with ANO again, because it has been ANO that is reaping the benefits, while the CSSD remains behind.

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